United States Court of Appeals for the Federal Circuit

“Unreliable” Information Results in Loss of “Separate Rate” Status in Antidumping Case

The failure of a respondent in an antidumping case to provide accurate information concerning its affiliations renders all of its submissions “unreliable”, and justified imposition of duties at the “China wide” rate, according to the Court of Appeals for the Federal Circuit.

In Ad Hoc Shrimp Trade Action Committee v. United States, No. 2014-1514 (October 5, 2015), Hilltop International, a Hong-Kong-based exporter of shrimp, had established its status as a company which was not state-controlled, and which was entitled to a separate rate of antidumping duties. As a mandatory respondent in the 4th and 5th annual reviews of the antidumping order against Warmwater Shrimp from the People’s Republic of China, Hilltop and its United States affiliate, Ocean Duke Corp., were assigned de minimis antidumping duty rates.

However the record in those reviews was reopened when it was discovered, in the 6th review, that Hilltop had not accurately reported all of its affiliation, and that it apparently had s subsidiary involved in transshipping shrimp through Cambodia. The 6th review information was placed on the record of the 4th and 5th reviews, which were not final, and Commerce assigned Hilltop a rate of 112.81%, which was based on “Adverse Facts Available”.  Hilltop challenged these determinations.

The first issue before the Federal Circuit – for which extra briefing was requested – was whether Section 502 of the Trade Preferences Extension Act of 2015 applied to this case. Section 502 removed a number of court-imposed restrictions on how the Commerce Department could consider antidumping rates for companies which had not cooperated in the review. The court determined that Section 502 had prospective application only, and did not apply to the review of proceedings which had concluded before the law was enacted.

Next, the Court found that Commerce’s determination to deny Hilltop a separate rate, and to impose the “AFA” rate of 112.81% was supported by substantial evidence on the record. Hilltop’s repeated submission of false information, sometimes in response to Commerce requests for clarification or confirmation, was sufficient to render unreliable all of the information Hilltop submitted – including the affiliation data which had been the basis for the “separate rate” findings and the transaction data which had shown de minimis margins.

The teaching of the case is clear enough; companies which provide false information to Commerce can expect to pay the price by losing separate rates and receiving punitive AFA duty rates. 

Canadian International Trade Tribunal

Various Knives Classified as “Switchblades”, Barred from Entry

A number of different models of folding knives – Zero Tolerance models ZT-0200 and ZT-0350; Tac Force frame lock knives, models TF-625 BK, TF-625 UC, TF-457B; and Tac Force liner lock knives Model TF-693BK – are all “prohibited weapons” within the meaning of Section 84(1) of Canada’s Criminal Code, and are barred from entry under subsection 9898.00.00 of Canada’s Customs Tariff, the Canadian International Trade Tribunal (CITT) recently held.

In Knife & Key Corner Ltd. v. President, Canada Border Services Agency, AP-2014-030 (September 14, 2015), the Tribunal found that all of the knives had “a blade that opens automatically by gravity or centrifugal force or by hand pressure applied to a button, spring or other device in or attached to the handle of the knife”, and were prohibited entry. The Tribunal rejected the importer’s contention that the knives were “torsion bar assisted-opening knives” that did not fall into subheading 9898.00.00. The protrusion on the knives’ blades was held to be a “device” for automatic opening of knives, as they were designed for the purpose of actuating the spring or torsion mechanism to allow rapid opening of the knives.