Justia International Trade Opinion Summaries

Articles Posted in US Court of Appeals for the Federal Circuit
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A 2005 Customs ruling letter stated that Kent’s imported bicycle seats would be classified as “accessories of bicycles” under HTSUS heading 8714, with a 10% ad valorem duty. In 2008, after Customs classified a competitor’s bicycle seats as “seats” under duty-free heading 9401. Kent started filing protests, post-entry amendments, and an application for further review. Customs approved the protests and reliquidated Kent’s merchandise under heading 9401. Kent sought revocation of the 2005 Ruling but continued to make entries through New York and lodged protests for each. Customs stopped granting those protests. Kent began to import the same merchandise through Long Beach under heading 8714. Long Beach Customs treated these entries as bypass entries and liquidated them under heading 8714 without examination or Customs officer review. Kent protested. Although the New York protests were granted, Kent’s Long Beach protests were denied. In 2014, Customs revoked its earlier decisions classifying Kent’s competitors’ merchandise under heading 9401, concluding that the merchandise would be classified under heading 8714. Customs declined to revoke the 2005 Ruling.The Trade Court rejected Kent’s claims that the classification violated 19 U.S.C. 1625(c) by departing from a “treatment previously accorded” and was contrary to a de facto “established and uniform practice” (EUP) under section 1315(d). The Federal Circuit reversed. The Trade Court erred in approving Customs’ use of bypass entries to show the absence of treatment previously accorded but properly found no de facto EUP. View "Kent International, Inc. v. United States" on Justia Law

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Wanxiang is a U.S. importer for Wanxiang Group, an automotive parts manufacturing company headquartered in China. In 1994-2001, Group and Wanxiang IE participated in Department of Commerce administrative reviews that covered entries of wheel hub assemblies that were subject to a 1987 antidumping duty order. Group and IE were assigned company-specific antidumping duty rates of zero percent. Wanxiang Q did not receive a company-specific antidumping duty rate because it did not participate in the reviews. Following a 2012 audit of Wangxiang, Customs found that some of the audited entries were imports from Q, subject to the China country-wide rate of 92.84%, and that, based on the sampling results, Wanxiang had underpaid dumping duties. In 2019, Customs issued a Penalty Notice.Wanxiang did not protest under 19 U.S.C. 1514 and has not made any payment but filed a complaint before the Trade Court, asserting jurisdiction under 28 U.S.C. 1581(i)(2) and (4). The court dismissed, concluding that it lacked “residual” jurisdiction because relief could have been available under a section 1581(c) action. Wangxiang has not shown that such relief would have been manifestly inadequate. The Federal Circuit affirmed. Wanxiang could have challenged the assessments by a protest under 19 U.S.C. 1514 and, if unsuccessful, by appealing to the Trade Court under 1581(a). Alternatively, Wanxiang could have initiated a test shipment and sought, as a new shipper, an administrative review, during which it could have argued the issues it raised in its complaint; the results of that review could have been challenged under 19 U.S.C. 1516a, invoking Trade Court jurisdiction under 1581(c). View "Wanxiang America Corp. v. United States" on Justia Law

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In an antidumping duty investigation on U.S. imports of cold-drawn mechanical tubing from India, the Department of Commerce rejected Goodluck’s submission of supplemental data and relied on “adverse facts available” under 19 U.S.C. 1677e(b) for its less-than-fair-value analysis, which resulted in an antidumping margin of 33.8% ad valorem applicable to Goodluck’s imports. The Court of International Trade agreed with Goodluck that its submission was a permissible correction of a minor clerical error and that it was entitled to submit supplemental information up to the day of verification. Commerce, under protest, conducted a new less-than-fair-value analysis resulting in a zero-percent antidumping margin for Goodluck, which theTrade Court affirmed.The Federal Circuit reversed. Commerce’s initial determination—rejecting Goodluck’s supplemental submission on grounds that it constituted new factual information and not a minor or clerical correction of the record, and that the submission was unverifiable as it was submitted on the eve of verification—was supported by substantial evidence and not otherwise contrary to law. Goodluck’s revisions were a systemic change to the entire reported database. The revisions were not singular, such as a missing word or an error in arithmetic. View "Goodluck India Ltd. v. United States" on Justia Law

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Imported goods are generally subject to tariffs, duties, fees, and taxes, such as an excise tax. A “drawback” is a customs transaction involving the refund of payments made upon the importation of a good. The most common drawback occurs when duties that are paid when a good is imported are refunded when the same good is exported. A “substitution drawback,” involves the refund of duties, taxes, or fees that were paid upon importation and refunded when similar goods, normally merchandise classified under the same tariff schedule subheading, are exported. Since 2008, substitution drawback has been allowed for wine where the imported wine and exported wine are of the same color and the price variation does not exceed 50 percent. Substitution drawbacks could result in a near-total refund of both tariffs and excise taxes paid on imported wine where the substituted exported wine was either not subject to excise tax (having been exported from a bonded facility) or had received a complete refund of previously paid excise taxes, a “double drawback.”Treasury and Customs promulgated Rule.1, an interpretation of 19 U.S.C. 1313(v), intended to prevent “double recovery,” limits drawbacks to the amount of taxes paid and not previously refunded. The Federal Circuit affirmed the Trade Court in finding the Rule invalid. The Rule is contrary to the clear intent and structure of the statute. View "National Association of Manufacturers v. Department of the Treasury" on Justia Law

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Borusan claimed that it was entitled to a post-sale price adjustment based on the total value of penalties it paid for late delivery of products (large diameter welded pipe) to a customer. The Trade Court agreed and remanded to the U.S. Department of Commerce with instructions to grant the claimed post-sale price adjustment and recalculate the resulting antidumping duty margins. On remand, “Consistent with the [CIT’s] remand, and under protest,” Commerce granted Borusan a post-sale price adjustment based on Borusan’s final allocated share of the penalty, which produced a de minimis antidumping duty rate.The Federal Circuit reversed, concluding that the Department of Commerce’s original post-sale price adjustment was supported by substantial evidence and in accordance with law. Commerce determined, in the course of applying the proper factors provided in its regulations, that a potential existed for manipulating the postsale price adjustment because the claimed adjustment was not tethered to what was established and known to the client at the time of sale. Consistent with its legitimate goal of avoiding such manipulation, Commerce correctly set the post-sale price adjustment in a reasonable manner, based on evidence that existed at the time of sale, that addressed its manipulation concerns. View "Borusan Mannesmann Boru Sanayi Ve Ticaret A.S. v. American Cast Iron Pipe Cp." on Justia Law

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The Department of Commerce initiated a less-than-fair-value investigation into the importation of welded line pipe from Korea, focused on sales by two Korea-based respondents, SeAH and HYSCO. Commerce issued a preliminary determination that SeAH likely was selling welded line pipe in the U.S. at less than fair value during the relevant period. SeAH filed a case brief challenging Commerce’s statistical analysis and citing academic literature in support of that challenge. Commerce rejected SeAH’s case brief for violating procedural regulations and issued a final determination. Commerce calculated SeAH’s weighted-average dumping margin to be above the de minimis threshold for less-than-fair-value investigations by applying its differential pricing analysis to SeAH’s sales and selecting the hybrid approach for calculating SeAH’s weighted-average dumping margin. The Trade Court affirmed.The Federal Circuit affirmed in part, upholding Commerce’s rejection of portions of SeAH’s case brief and aspects of the analysis Commerce used to derive the dumping margin. The court vacated and remanded to give Commerce an opportunity to explain whether the limits on the use of the Cohen’s d test to evaluate whether the test group differs significantly from the comparison group were satisfied or whether those limits need not be observed when Commerce uses the test in less-than-fair-value adjudications. The court “invited” Commerce to clarify its argument that having the entire universe of data rather than a sample makes it permissible to disregard the otherwise-applicable limitations on the use of the Cohen’s d test. View "Stupp Corp. v. United States" on Justia Law

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TRI filed entries of citric acid, identifying India as the country of origin, which allowed TRI to file the subject entries as type 01 “consumption” entries, which are not subject to duties, rather than type 03 “consumption—antidumping (AD)/countervailing duty (CVD)” entries. Customs requested information regarding the entries. TRI responded with documentation of the purchase and receipt of citric acid monohydrate from suppliers in India and the processing of the citric acid monohydrate into citric acid anhydrous. TRI admits that the origin of the citric acid monohydrate is unknown. Customs extended liquidation of the entries, 19 U.S.C. 1504(b)(1). Customs’ Office of Laboratory and Scientific Services investigated the processing of the citric acid in India; Customs determined that the product was not substantially transformed and therefore not a product of India. The entries would be liquidated with the applicable consumption, anti-dumping and countervailing duties.TRI filed suit in the Court of International Trade, asserting residual jurisdiction under 28 U.S.C. 1581(I). Separately, TRI also protested Customs’ liquidation of its entries. The Federal Circuit affirmed the Trade Court’s dismissal of the suit for lack of jurisdiction because jurisdiction was available under other section 1581 subsections. Where a plaintiff asserts section 1581(i) jurisdiction, it “bears the burden of showing that another subsection is either unavailable or manifestly inadequate.” TRI has not established that a scope determination or a protest were unavailable or manifestly inadequate. View "TR International Trading Co., Inc. v. United States" on Justia Law

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Under 19 U.S.C. 1862, if the President receives, and agrees with, a finding by the Secretary of Commerce that imports of an article threaten to impair national security, the President shall take action to alleviate the threat. Section 1862(c)(1) specifies a period within which the President is to concur or disagree with the Secretary’s finding and to determine the necessary action and another period within which the President is thereafter to implement the chosen action.In January 2018, the Secretary found that imports of steel threatened to impair national security by causing domestic steel-production capacity to be used less than the level needed for operation of the plants to be profitably sustained. In March 2018, within the period prescribed, the President agreed with that finding and announced a plan (Proclamation 9705) that imposed some tariffs immediately, announced negotiations with specified nations, and stated that the immediate measures might be adjusted as necessary. Within months, the President determined that imports were still too high to meet the Secretary’s identified target and raised the tariff on steel from Turkey, Proclamation 9772.The Trade Court found Proclamation 9772 unlawful. The Federal Circuit reversed. The President did not depart from the Secretary’s finding of a national-security threat; the March 2018 presidential action announced a continuing course of action that could include adjustments. The President’s decision to take one of several possible steps to achieve the goal of increasing utilization of domestic steel plants’ capacity for national security reasons meets the rational-basis standard. View "Transpacific Steel LLC v. United States" on Justia Law

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The Department of Commerce conducted an antidumping investigation into “Pneumatic Off-The-Road Tires" from China and published results in 2008. In investigations concerning countries with non-market economies (NMEs), such as China, Commerce applies a presumption that all exporters are subject to government control and uses a single antidumping rate for an NME-wide entity. Commerce found DC had overcome the presumption of government control and assigned a separate weighted-average margin. The “entity,” (exporters that failed to overcome the presumption) was assigned a rate of 210.48%, based on facts available with an adverse inference. DC’s assigned margin was 12.91%. During subsequent administrative reviews, those rates remained in place. DC fully cooperated during a fifth review but Commerce determined that it failed to demonstrate the absence of de facto government control and was not eligible for its separate rate. DC had provided its verified sales and production data (resulting in the calculated rate of 0.14%); no other portion of the entity had provided data. Commerce averaged the previous entity-wide rate and DC’s calculated rate, arriving at a final rate of 105.31% applicable to the entity, including DC. The Trade Court concluded that Commerce must assign DC the calculated individual rate.The Federal Circuit reversed. A country-wide NME entity rate may be an “individually investigated” rate under 19 U.S.C. 1673d(c)(1)(B)(i)(I), which Commerce may assign to the unitary group of exporters that have failed to rebut the presumption of government control. Commerce may carry forward an initial NME entity rate, including adverse inferences built into that rate, in subsequent reviews, even where a respondent cooperates but fails to rebut the presumption of government control. View "China Manufactureres Alliance v. United States" on Justia Law

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S.C. Johnson imported, from Thailand, Ziploc® brand reclosable sandwich bags, manufactured from polyethylene resin pellets, and tested to ensure compatibility with food contact. Customs classified the bags under Harmonized Tariff Schedule of the United States (HTSUS) subheading 3923.21.00, covering “[a]rticles for the conveyance or packing of goods, of plastics; stoppers, lids, caps and other closures, of plastics: Sacks and bags (including cones): Of polymers of ethylene.”The Federal Circuit affirmed the Trade Court in rejecting an argument that the bags should have been classified under HTSUS subheading 3924.90.56, covering “[t]ableware, kitchenware, other household articles and hygienic or toilet articles, of plastics: Other” The court concluded that “the majority of the Carborundum factors support[ed] classification under HTSUS Heading 3923” and also determined that the bags were prima facie classifiable under heading 3924, noting that “[t]he sandwich bags are designed in a manner consistent with household food storage.” Because the sandwich bags were prima facie classifiable under both headings, the court applied General Rule of Interpretation 3, which dictates that goods should be classified under the heading that provides the most specific description. The sandwich bags were properly classified under HTSUS heading 3923 because that heading “has requirements that are more difficult to satisfy and describe the article with a greater degree of accuracy and certainty.” View "SC Johnson & Son Inc. v. United States" on Justia Law