Aluminum Sheet Importer Challenges Commerce's Scope Ruling in EAPA Referral at CIT
The Commerce Department didn't "consider the plain language of the scope" when it found a type of aluminum sheet imported from Turkey by AA Metals to be covered by the antidumping duty and countervailing duty orders on common alloy aluminum sheet from China, the importer said in a Feb. 22 complaint challenging a scope ruling issued by Commerce in response to a CBP covered merchandise referral in an AD/CVD evasion investigation (AA Metals v. United States, CIT #22-00051).
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The case stems from an Enforce and Protect Act investigation CBP began in May 2021 to see whether goods imported by AA were evading the AD/CVD orders on CAAS from China by way of Turkey. Unable to find whether certain products in two different scenarios were in the scope of the orders, CBP then asked Commerce for a scope ruling. The goods described in "Scenario 2" are defined as “Chinese-origin aluminum sheet of a thickness covered by the scope re-rolled in Turkey to a thickness covered by the scope."
During the scope proceeding, AA Metals defined the product as "continuous cast coil with a thickness of 3-20 mm, which is considered primary unwrought aluminum." AA Metals said that the Chinese product that's shipped to Turkey is not subject to the orders since the input is continuous cast coil, which is unwrought aluminum made by casting without hot- or cold-rolling, and that a "certain temper product is non-subject merchandise."
Nevertheless, Commerce said that the goods under Scenario 2 are subject to the orders since the goods shipped to Turkey are within the scope of the orders "as flat-rolled aluminum sheet having a thickness of 6.3 mm or less, but greater than 0.2 mm, in coils or cut-to-length, regardless of width." The Scenario 2 products were not excluded based on their temper. Commerce also based its decision on later AD/CVD orders on CAAS from Bahrain, Brazil, Croatia, Egypt, Germany, Greece, Italy, Indonesia, Italy, South Korea, Oman, Romania, Serbia, Slovenia, South Africa, Spain, Taiwan and Turkey, the complaint said.
In its seven-count complaint, AA Metals said that the scope decision violated the law since it found that the Scenario 2 products were not continuous cast coil goods. Commerce did not ask if the goods were continuous cast coil at the time of entry into Turkey, but rather asked how the continuous cast coil is primary unwrought aluminum and thus not subject to the orders, AA Metals said. "In instances where there is a deficiency in the information of record, Commerce is required to let interested parties know that Commerce deems the information deficient and allow the party to place information on the record to correct the deficiency, particularly in instances, as is the case here, where an interested party has provided Commerce with voluminous information and actively participated throughout the proceeding," the complaint said.
Commerce also erred by ignoring the plain language of the scope, AA Metals argued. "Commerce’s determination to only exclude tempers meeting the aluminum can stock exclusion is contrary to the plain language of the Orders and unlawfully expands the scope of the Orders," the complaint said. "Moreover, in its improper failure to analyze the (k)(1) factors in this case, Commerce unlawfully rejected substantial evidence from the original investigation, including the descriptions of the merchandise contained in the petition, the initial investigation, and the ITC’s injury determinations that certain tempers were not subject to the underlying investigation."