United States Court of International Trade

Remand Required in Frozen Warmwater Shrimp from Thailand Case

In Pakfood Public Limited et al v. United States, Court No. 14-230, Slip Op. 16-90 (October 4, 1996) the court decided to remand the case back to Commerce.  This action involved the final results of an administrative review conducted by the U.S. Department of Commerce (“Commerce”) for the antidumping duty order covering Certain Frozen Warmwater Shrimp from Thailand, 79 Fed. Reg. 51,306 (Dep’t Commerce Aug. 28, 2014) (“Final Results”); see also Issues and Decision Mem. for Certain Frozen Warmwater Shrimp from Thailand, A-549-822 (Aug. 21, 2014, ECF No. 22 (“Decision Mem.”). During the administrative review Commerce selected Pakfood and Thai Union for individual review, and then collapsed them into a single entity (“Collapsed Entity”) two and a half months into the review period, effective April 23, 2012 (“Collapsing Date”). Commerce calculated separate dumping margins for Pakfood and Thai Union before (and excluding) the Collapsing Date, as well as a separate margin for the Collapsed Entity after (and including) the Collapsing Date. In those calculations Commerce truncated—on the Collapsing Date—its normal 90/60-day sales comparison window under 19 C.F.R. § 351.414(f) in which it tries to match contemporaneous sales.  Plaintiff questioned the need for truncating the sales comparison window, where collapsing entities would have already prevented the manipulation of sales and production among parties. The case was remanded to Commerce to question the truncated sales comparison window. 

Triable Issue of Fact Regarding Classification of Ford “Transit” Vans

Triable issues of fact need to be resolved in order to determine the proper classification of certain imported Ford “Transit” cargo vans, the Court of International Trade recently held, rejecting summary judgment motions by Ford and the Government.

In Ford Motor Co. v. United States, Slip Op. 92-16 (October 5, 2016), Ford imported certain “Transit” vehicles from Turkey, equipped with a “reduced cost” back seat. The vans had been modified to meet US safety regulations, with features like a reinforced side door panel and impact-reducing foam insert, but did not have other features such as side door air bags. Ford entered the items as motor vehicles for the carriage of persons, under HTS Heading 8703, paying duty at a rate of 2.5% ad valorem.

Customs classified the vans as vehicles for the carriage of merchandise, and subject to duty at a rate of 25% ad valorem. In this regard, Customs noted that while the goods were still in the limits of the port of entry, Ford had a contractor remove the reduced-cost rear seat, install covers to make the floor flat, and sold the products as two-seater cargo vans.  Customs considered the removal of the rear seats to be an artifice. Ford contends that it is legitimate tariff engineering.

After discussing a large number of points which were not in dispute, the Court, per Judge Mark Barnett, concluded that it lacked essential information regarding the construction and function of the reduced cost rear seat, and that these facts were material to its determination. As triable fact issues existed, the Court denied the summary judgment motions, and will set the remaining issues down for trial.

Court of Appeals for the Federal Circuit

CAFC Affirms Classification of Wooden Door Stiles and Rails

In a nonprecedential summary affirmance, the Court of Appeals for the Federal Circuit affirmed the Court of International Trade’s decision that certain wooden door stiles and rails featuring 9.5mm pine caps could not be classifiable as “plywood, veneered panels and similar laminated wood” of HTS Heading 4412.99.51.

In Composite Technology International, Inc. v. United States, No. 2016-1256 (October 3, 2016) the Federal Circuit let stand a CIT holding which said that veneers generally do not exceed 6mm in thickness, and that the 9.5mm pine caps on the products in question could not be considered “veneers”. 

Canadian International Trade Tribunal

“Safeway” Child Safety Gate Not Classifiable As a “Structure” Or “Part Of Structure”

A “Safeway” wall mount safety gate is properly classified under tariff item 7236.90.90 as “other articles of iron or steel” rather than as “other structures and parts of structures of iron or steel” under tariff heading 7308, according to a recent decision of the Canadian International Trade Tribunal (CITT). 

In Toys “R” Us (Canada) Ltd. v. President, Canada Border Services Agency, AP-2015-024, the Tribunal held that while the wall mount safety gate might be considered to be “incorporated into a structure”, they were not necessary and integral to the structure and common trade usage and practice did not consider them to be integral to a structure, such as a wall or staircase baluster. 

The product in question was a child safety gate which could be mounted with hardware to a wall or balustrer.  A swiveling gate section could then be deployed to block off a doorway or staircase.  The gate portion could be removed temporarily by depressing on a switch.  Toys R Us suggested that the items were parts of structures, since the Explanatory Notes to Heading 7308 specifically mention “gates” as structures. 

Relying on a test set out in the case of Les Industries et Equipements La Liberte Ltee. v. Deputy MNR (1998),  the Tribunal held that the gate could not be considered a part of a structure under the three part test in question, namely: (1) is the good incorporated into the structure? (2) is the good a necessary and integral part of the structure? and (3) does common usage, trade usage or practice consider the product to be part of a structure?  The Tribunal held that not every gate was a structure or part of a structure.  A structure, the tribunal noted, is something which is constructed, but not everything that is constructed is a structure.  The Tribunal held that given the physical characteristics of the gates, their size, the fact that they do not support anything and do not have the same degree of permanency as a building, edifice, bridge or the like, the gates could not be considered to be “structures” themselves. 

As to whether the gates were “parts” of structures, the tribunal held that even though the swinging portion of the gate could be temporarily removed by pressing a lock tab, the hardware remains in place and the gate had a degree of permanency required of part of a structure.  However, the gate is neither necessary nor integral to a structure, such as a wall or staircase baluster and common usage and practice does not consider them essential to the functioning of a house, stairway or wall.  Thus, upholding the government’s classification, the tribunal held that the products were classified under the “basket” provision for other articles of iron or steel.