United States Court of International Trade

20-01

Before the Court in Amcor Flexibles Singen GmbH v. United States, Slip Op, 20-01, Court No. 15-00240 (January 3, 2020) was a challenge to Customs denial of a protest regarding the classification under the Harmonized Tariff Schedule of the United States (“HTSUS”) of flexible packaging material commercially known as Formpack. The product consists of multiple layers of plastics combined with a single layer of aluminum foil sandwiched in between the plastic layers. One plastic layer is puncture-resistant and elastic to prevent the aluminum foil layer from cracking during use by customers. The middle layer is aluminum foil which serves as the barrier layer to prevent moisture, light, oxygen and other gases from penetrating the inside of the package. The other plastic layer provides an airtight closure for “sealing” when Formpack is heat-sealed to another material as part of a package. Customs classified the product under Heading 3921, which covers plastics and carries a 4.2% ad valorem duty. Plaintiff argued that the product is correctly classified under Heading 7607, which covers aluminum backed by plastics and is duty free. For the following reasons, the Court determined the product was properly classified as aluminum.

“The General Rules of Interpretation (“GRIs”) of the HTSUS govern the proper classification of merchandise entering the United States.” Id. at 8. “According to GRI 1, classification shall be determined according to the terms of the headings and any relative section or chapter notes.” Id. “A court may rely on its own understanding of terms as well as secondary sources such as lexicographic and scientific authorities, dictionaries and other reliable information to construe a given term.” Id. at 8-9. The Court consulted dictionaries to determine the meaning of the term “backed” under the HTSUS, “was most appropriately construed to mean supporting.” Id. at 15. The Court also consulted the World Customs Organization (“WCO”) Explanatory Notes to determine that “backings” under Heading 7607 were intended to “serve solely to make up for the flimsiness of the foil, which could not otherwise withstand” handling. Id. at 19. The Court found the plastic layers meet this definition because the layers enhanced “the formability of the merchandise, and helped prevent the foil from breaking or fracturing.” Id. As such the good was classified as aluminum, under HTS Subheading 7607.20.50.

20-06

Before the Court in Aireko Constr., LLC v. United States, et. al., Slip Op. 20-06, Court No. 15-00319 (January 13, 2020) was a challenge to Commerce’s scope ruling in its antidumping and countervailing duty (“AD/CVD”) investigations of crystalline silicon photovoltaic (“CSPV”) products from China. Plaintiff argued Commerce’s determination that Aireko’s solar modules are within the scope of the AD/CVD Orders was unlawful and unsupported by substantial evidence. For the following reasons, the Court sustained Commerce’s scope ruling.

The Court held that it does not have jurisdiction over a claim that CBP retroactively assessed dump duties. Next, the Court dealt with the scope rulings. When determining if a product falls within the scope, “Commerce will take into account the descriptions of the merchandise contained in the petition, the initial investigation, and the determinations of the Secretary … and the Commission.” Id. at 7. These are known as the (k) (1) factors. The Court said that “Commerce looked to Aireko’s Scope Ruling Request, which described the merchandise as solar modules assembled in the PRC that contain solar cells not manufactured in the PRC.” Id. at 9. Commerce also “noted that the….. AD/CVD Orders state that subject merchandise includes modules . . . assembled in the PRC consisting of CSPV cells in a customs territory other than the PRC and, therefore, determined that the … Orders explicitly include modules assembled in the PRC consisting of solar cells produced in a third-country.” Id. Finally, Commerce also “explained that, for the Final … Determinations, it had clarified the initial scope language to include all modules, laminates and/or panels assembled in the PRC that contain CSPV cells produced in a customs territory other than the PRC.” Id. Given the Commerce consideration to these factors, the Court found Commerce’s determination that because Aireko’s solar modules are assembled from U.S.-origin solar cells, the modules are within the scope reasonable.