United States Court of International Trade

Instructions Issued Pursuant to Mandate

Before the court in Albemarle Corporation v. United States, Court No. 11-45, Slip Op. 16-84 (September 7, 2016) was the mandate issued by the United States Court of Appeals for the Federal Circuit (“Court of Appeals”) in Albemarle Corp. & Subsidiaries v. United States, 821 F.3d 1345 (Fed. Cir. 2016) (“Albemarle III”).  To implement the mandate of the Court of Appeals, the court issues instructions to the International Trade Administration, United States Department of Commerce (“Commerce” or the “Department”).  The underlying decision in this case was Certain Activated Carbon from the People’s Republic of China: Final Results and Partial Rescission of Third Antidumping Duty Administrative Review, 76 Fed. Reg. 67,142 (Int’l Trade Admin. Oct. 31, 2011) (“Final Results”).

The remaining issue was the antidumping duty margin to be assigned to Ningxia Huahui Activated Carbon Company Ltd. (“Huahui”), which was a “separate rate,” i.e., non-individually-examined, respondent in the third administrative review, at the conclusion of which Commerce assigned de minimis margins to the two mandatory respondents. The rate assigned was $.44/kilogram which was found for Huahui in the second administrative review.  The Court of Appeals concluded that “[i]t was unreasonable in this case for Commerce to choose to limit its review to the two largest volume exporters, refuse to collect additional data from Huahui, and then draw inferences adverse to Huahui based on the lack of data available in the record.” Slip Op., pg. 5, citing Albermarle III, 821 F.3d at 1358. The court therefore held that the appropriate instructions were to have Commerce redetermine a margin for Huahui in accordance with the holding of the Court of Appeals in Albemarle III.

Remand Ordered in Wood Flooring Antidumping Case

At issue in this case is Commerce’s determination in Multilayered Wood Flooring from the People’s Republic of China: Final Results of Antidumping Duty Administrative Review; 2011-2012, 79 Fed. Reg. 26,712 (May 9, 2014) (“Final Results”).  Because Fine Furniture was the only respondent assigned a margin in the Final Results that was not de minimis, Commerce assigned a margin of 5.74% to the separate rate respondents as the all-others rate. Id., 79 Fed. Reg. at 26,714-15. The PRC-wide rate remained unchanged from the Preliminary Results at 58.84%.  The court decided to remand the Amended Final Results for reconsideration of the deduction for value-added taxes VAT, the choice of financial statements, and the valuation of electricity, and denied relief on Fine Furniture’s remaining claims.

As for the VAT, Fine Furniture did not contest either the Department’s practice of treating irrecoverable Chinese VAT as an export tax for purposes of § 1677a(c)(2)(B) or its calculating the deduction from the CEP starting price as the difference between the two rates, i.e., 8%. However it did contest on what value VAT deduction of 8% should be applied. According to Fine Furniture, Commerce rejected Fine Furniture’s true export price upon which VAT was refunded upon export and instead,  recalculated VAT based on a distorted theoretical value which included mark-ups after exportation. This rejection was because Commerce found that the sales value between Fine Furniture and its affiliated reseller was a “domestic sales value.” Id. at 11. However, this value, according to Fine Furniture, was not a domestic sales value because the VAT it reported (and Commerce rejected) was based on the invoiced value from Fine Furniture to the reseller “when the subject merchandise left China.”  As such, the value according to Fine Furniture was the true FOB export price of the goods, and accurately reflected the amount of VAT assessed by the GOC [Government of China] pursuant to article 5 of the Provisional Regulations on VAT of the PRC. The Final Decision Memorandum, however, failed to reconcile the deduction for irrecoverable VAT that Commerce calculated from the prices paid by Double F to the importer with the amounts of irrecoverable Chinese VAT that actually were incurred.  Accordingly, the court asked for more explanation to support Commerce’s findings.

In regards to the financial statements, the court asked for a remand decision to reconsider Mount Banahaw statements.  In excluding the Mount Banahaw statements from the calculation of Fine Furniture’s financial ratios, Commerce failed to address Fine Furniture’s argument, which was raised in the underlying proceeding by another respondent, Layo Wood, and adopted by Fine Furniture, that Mount Banahaw actually was an integrated producer.

Finally, in regards to the electricity valuation, the court remanded the decision for Commerce to consider the arguments posed by Fine Furniuture namely that there was a lack of record evidence that the Camarines Sur Doing Business rates were exclusive of taxes and duties.

Importer who failed to sue not entitled to benefit of lower cash deposit rate

An importer whose entries of Aluminum Extrusions from China were assessed with countervailing duties at a high “China wide” rate was not entitled to the benefit of a lower rate fixed after litigation to which it was not a party, according to a new decision of the United States Court of International Trade.

In Capella Sales & Service Inc. v. United States, Slip Op. 86-16 (September 14, 2016), an importers entries of extrusions were charged a CVD deposit rate of 374% ad valorem, and its entries were subsequently liquidated without change (save for one whose liquidation was enjoined). As a result of separate litigation to which the plaintiff was not a party, the “China wide” CVD rate was subsequently reduced to 7.37%. The plaintiff sought to have the lower rate applied to its entries. Repeating a decision made in a substantially identical earlier case by the plaintiff, the CIT held that the importer, having failed to take action to prevent the issuance of liquidation instructions as to its entries, could not now seek to take advantage of the lower CVD rate.

Canadian International Trade Tribunal

Dental Gloves Not “Medical Instruments or Appliances”

Rubber gloves designed for use by dentists, to prevent contact with patient bodily fluids, are classifiable as rubber gloves of HTS Heading 4015, rather than as medical instruments or appliances of Heading 9018, the Canadian International Trade Tribunal has ruled.

In Eastern Division, Henry Schein Ash Arcona v. President, Canadian International Trade Tribunal, No. 2013-029R, the Federal Court of Appeal, having considered a prior decision of the CITT, remanded the matter with instructions for the Tribunal to consider whether a Note to Chapter 40, which excluded from coverage therein “goods of Chapter 90” affected the outcome of the case. Reviewing the note, the CITT concluded that while the gloves are worn during dental work, they do not do the work themselves, and could not be classified under Heading 9018. The Canada Border Service Agency’s classification in Heading 4015 was again upheld.