November 18, 2008
During the month of January 2009, U.S. importers and Chinese exporters of wooden bedroom furniture (“WBF”) from China will have an opportunity to ask for a Section A rate for their wooden bedroom furniture products. The hope in filing such a request would be to lower the current China-wide rate of 216.10% that is being applied to a specific exporter. The current Section A rate is approximately 18-20%. Requests for Section A rates must be filed and received at the U.S. Department of Commerce during the period of January 1 - 31, 2009, which will also conduct an administrative review for the period of January 1, 2008-Dec. 31, 2008. The Section A rate eventually determined by Commerce may be higher or lower than the current Section A rate.
Requirements For Applying For A Section A Rate
In addition, to filing during the period of January 1 - 31, 2009, in order to be considered for a Section A rate, the exporter must have had at least one commercial sale during the period of review (January 1, 2008-Dec. 31, 2008).
Thus, if the importer/exporter has not made an entry of WBF during this period, they will not be considered for a Section A rate. Therefore, if no shipments have been made up to this date, we believe that there is still time for an exporter to ship an order of WBF to the United States so that it is entered by at least December 31, 2008. The importer would have to pay the China-wide antidumping rate, but this would allow the exporter to apply for the Section A rate.
Under the Commerce rules, only the “exporter” can obtain a Section A rate. Therefore, if a factory sells to an exporter who thereafter sells to a customer in the U.S., the factory will not receive the Section A rate—just the exporter. However, if the factory is the exporter, then the factory can apply for the Section A rate.
If the exporter buys from more than one factory, then the sales from each factory will have to be included in the Section A response. Moreover, Commerce assigns a Section A rate only to approved combinations of exporters and factories. Thus, if Exporter A buys from Factory #1 and this information is disclosed in the Section A application and the Section A application is approved, then the Section A rate applies only to transactions involving Exporter A and Factory #1. If Exporter A subsequently starts purchasing from Factory #2, the Section A rate would not be applicable. Thus, Section A applications can be complicated, both in the information that needs to be provided as well as in their administration.
Consulting with legal counsel specializing in antidumping matters may be advisable when applying for a Section A rate.
Importers, suppliers and manufacturers should also be aware of the fact that “scope requests” can be filed with the Department of Commerce at any time, requesting that Commerce perform a review as to whether a particular furniture product is within the scope of the antidumping order. If Commerce determines that the merchandise is outside the scope, then, pending entries of that product will be liquidated without antidumping duties. Those wishing to file a scope request should consult with the applicable Commerce Regulations and possibly consult with legal expertise prior to filing the scope request.
If you have any questions with regard to any of the issues raised in this newsletter, please contact Stephen Spraitzar at (415) 288-0427, email email@example.com, or George Tuttle at (415) 288-0425, email firstname.lastname@example.org.
Stephen Spraitzar and George Tuttle are attorneys with the Law Offices of George R. Tuttle in San Francisco.
The information in this article is general in nature, and is not intended to constitute legal advice or to create an attorney-client relationship with respect to any event or occurrence, and may not be considered as such.
Copyright © 2008 by Tuttle Law Offices.
All rights reserved. Information has been obtained from sources believed to be reliable. However, because of the possibility of human or mechanical error by our offices or by others, we do not guarantee the accuracy, adequacy, or completeness of any information and are not responsible for any errors, omissions, or for the results obtained from the use of such information.