Due to the breadth of the antidumping (AD) and countervailing
(CVD) duty orders on aluminum extrusions from China, many
importers, although they initially imported their aluminum parts
without AD and CVD cash deposits, are finding that their aluminum
parts are being subjected to AD and CVD cash deposits of over 400
percent. As explained below, importers have the opportunity this
month to initiate a strategy to reduce their liability for these
potential crippling duties.
In May 2011, the Department of Commerce (DOC) and the
International Trade Commission finished their AD and CVD
investigation of imports of aluminum extrusions from China. As a
result of the investigations, DOC required almost all importers of
aluminum extrusions to post: (1) AD cash deposits of approximately
33 percent, and (2) CVD cash deposits of 374 percent.
Scope of the Orders
Since that time, many importers have submitted scope
determinations to see whether their products are included within
the scope of the AD and CVD cases. The reason is that the scope of
the case is quite broad and covers many goods that importers did
not believe were covered. Essentially, any part that was made from
an aluminum extrusion in China is covered unless it is subject to
one of the exclusions.
Finished Goods and Kits Exclusions
Many companies believe that their products were exempt based on
the "finished merchandise" and "finished kit"
exclusions. However, DOC has interpreted these exclusions very
narrowly and almost all products that they have examined have been
determined by DOC to be within the scope.
Although many products may be sold to retailers as finished
parts, DOC has found that if they are incorporated into some larger
product, then they do not qualify for the finished merchandise
exclusion. For example, DOC found that, although an importer may
sell fence posts as a stand-alone product, the fact that they are
used to produce a fencing system means that they are not finished
In addition, DOC has taken a very stringent view of what
constitutes a finished goods kit. For example, although drapery
rail kits are sold independently to retailers, DOC found that they
are not finished goods kits because they did not include
Many companies have entered aluminum parts without AD or CVD
cash deposits because they did not realize they were included
within the scope. Customs knows this and is aggressively
investigating whether importers' products are included in the
scope of the AD and CVD orders. We know of several on-going
investigations. Therefore, it is prudent for companies that import
products containing aluminum to use due diligence to determine
whether their parts are included with the scope of the AD and CVD
Reducing Your Liability
400 percent AD and CVD duties are significant by any measure. If
you determine that your products are covered by the scope of the AD
and CVD orders, you can reduce your liability by having your
Chinese supplier participate in the upcoming administrative
reviews. Almost all of the companies will have to supply very
little information. Therefore, the burden, along with the legal
fees to participate, is not high. However, the deadline for
participating is the end of May 2012.
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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