4.4.2022 China 301 Litigation Update - Grunfeld, Desiderio, Lebowitz, Silverman & Klestadt LLP
On April 1, 2022, the three-judge panel at the U.S. Court of International Trade (CIT) hearing the challenge to the United States Trade Representative’s (USTR) imposition of List 3 and List 4A Section 301 additional duties on certain goods from China (In Re Section 301 Cases, Court No. 21-00052) issued an initial decision on the merits of the case. Slip Op. 22-32, Ct. Int’l Trade. Apr. 1, 2022.
The government had moved to dismiss the case on the grounds that the imposition of the Section 301 duties constituted presidential action that is not subject to judicial review or, alternatively, that the imposition of these duties implicates the political question doctrine, which would also preclude judicial review. The court rejected those arguments, holding that the decision to impose List 3 and List 4A were agency actions subject to the court’s review, and that plaintiffs’ (i.e., importers who have filed actions in this litigation) claims regarding statutory interpretation and compliance with procedural requirements are well-within the court’s authority to review.
On the issue of statutory interpretation, plaintiffs’ position is that USTR exceeded its statutory authority by imposing List 3 and List 4A in response to retaliatory actions taken by China following the imposition of the List 1 and List 2 tariffs. Plaintiffs’ view is that the statute only permits USTR to impose Section 301 duties in response to the practices that were the subject of the Section 301 Investigation, which centered on China’s theft of U.S. intellectual property. On this question, the court found that China’s retaliatory actions were linked to the investigated practices. Having found such a link, the CIT ruled that USTR’s modification of the original Section 301 duties was within the scope of its statutory authority.
Plaintiffs also argued that USTR failed to follow the procedural requirements of the Administrative Procedure Act (APA) when it promulgated List 3 and List 4A. On this issue, the court agreed with plaintiffs. Prior to imposing List 3 and List 4A, USTR received thousands of comments, the vast majority of which opposed the additional tariffs. The court held that USTR had failed to provide an adequate explanation of its decision to impose the additional tariffs or how it considered the comments that it received, and did not explain its decision to remove certain tariff subheadings from the initial versions of List 3 and List 4.
Having found that USTR violated the APA, the CIT remanded List 3 and List 4A to USTR and ordered USTR to provide an explanation of why certain provisions were included on these lists and why others were removed. The court set a deadline of June 30, 2022, for USTR to file an explanation of its actions. The explanation must be limited to the reasons that it took its final action and may not include new or post-hoc reasons. The court declined to vacate List 3 and List 4A (“for now”), pending USTR’s filing of further explanations. The parties are to file a joint status report within 14 days of the USTR filing. It is likely that the court will issue another decision after USTR files its report. As we have reported, an appeal of the final CIT decision to the U.S. Court of Appeals for the Federal Circuit (CAFC) is very likely.
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Commerce Department Initiates Circumvention Investigation on Solar Cells and Modules Exported from Malaysia, Thailand, Vietnam, and Cambodia Containing Parts and Components Produced in China - Grunfeld, Desiderio, Lebowitz, Silverman & Klestadt LLP
On March 28, 2022, the Department of Commerce (“DOC”) initiated a country-wide circumvention investigation on Crystalline Silicon Photovoltaic Cells, Whether or Not Assembled Into Modules, from the People’s Republic of China (“CSPV”), which are further processed in Malaysia, Thailand, Vietnam, and/or Cambodia prior to exportation to the United States. The investigation was requested in a petition filed by Auxin Solar Inc. The petition alleged that CSPV producers are completing production in these third countries to circumvent the antidumping duty (“ADD”) and countervailing duty (“CVD”) Orders on CSPV cells and modules from China. This investigation covers all CSPV cells and modules that have been completed in these four countries using parts and components from China and are exported from these countries to the United States. This investigation is not limited to any specific manufacturer or group of manufacturers (i.e., Chinese-owned companies).
Under the DOC’s current practice CSPV containing Chinese wafers which are doped (i.e., p-n junction created) outside of China are not subject to the Chinese ADD/CVD Orders. If the DOC issues an affirmative determination in this case, CSPV exported from these countries which contain significant Chinse inputs – e.g., polysilicon, wafers, ingots, framing, glass, wires, EVA, silver paste, backsheets, silicone sealant, junction boxes, and inverters – could be subject to the China ADD/CVD Orders, even if the wafers are doped in one of these countries.
Important information on retroactivity: Upon publication of the Notice of Initiation, the DOC will instruct Customs and Border Protection (“CBP”) to continue the suspension of liquidation for any entries that were already suspended. Furthermore, if there is an affirmative preliminary determination of circumvention, the DOC will instruct CBP to suspend liquidation and require a cash deposit of estimated duties of all unliquidated entries retroactive to the date of publication of the notice of initiation. The DOC also has the authority to retroactively suspend liquidation prior to the initiation publication date based upon a request made by an interested party, or at its discretion. The Preliminary Determination is expected 150 days from the publication of initiation (i.e., last week of August 2022). The Final Determination is expected 150 days thereafter (i.e., end of January 2023).
The DOC intends to release CBP import data shortly after the initiation is published, and after reviewing comments, to issue quantity and value (“Q&V”) questionnaires to CSPV exporters from the four countries. Commerce intends to select mandatory respondents whose production processes will be subject to extensive examination based on responses to the Q&V questionnaires.
In light of the potential broad reach and retroactive impact of these investigations, all companies importing solar module products from Malaysia, Thailand, Vietnam, and Cambodia should promptly evaluate their supply chain and potential exposure for antidumping and countervailing duties.
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Petition for the Imposition of Antidumping Duties on Certain Preserved Mushrooms from France, Netherlands, Poland, and Spain - Grunfeld, Desiderio, Lebowitz, Silverman & Klestadt LLP
I. Type of Action: Antidumping Duty (“AD”): France, Netherlands, Poland, and Spain.
II. Product: The merchandise covered by this investigation is certain preserved mushrooms, whether imported whole, sliced, diced, or as stems and pieces. The preserved mushrooms covered under this investigation are the genus Agaricus. “Preserved mushrooms” refer to mushrooms that have been prepared or preserved by cleaning, blanching, and sometimes slicing or cutting. These mushrooms are then packed and heat sterilized in containers each holding a net drained weight of not more than 12 ounces (340.2 grams), including but not limited to cans or glass jars, in a suitable liquid medium, including but not limited to water, brine, butter, or butter sauce. Preserved mushrooms may be imported whole, sliced, diced, or as stems and pieces.
III. HTS classifications: The merchandise subject to these investigations is classifiable under subheadings 2003.10.0127, 2003.10.0131, and 2003.10.0137 of the Harmonized Tariff Schedule of the United States (“HTSUS”). The subject merchandise may also be classified under HTSUS subheadings 2003.10.0143, 2003.10.0147, and 2003.10.0153.
IV. Date of Filing: March 31, 2022
V. Petitioners: Giorgio Foods, Inc.
VI. Foreign Producers/Exporters: Please contact our office for a list filed with the petition.
VII. US Importers named: Please contact our office for a list filed with the petition.
VIII. Alleged Dumping Margins:
France: 116.56-344.77% Netherlands: 126.05-152.36%
Poland: 21.82-31.90% Spain: 6.38-139.83%
IX. Comments:
A. Projected date of ITC Preliminary Conference: April 21, 2022.
B. The earliest theoretical date for retroactive suspension of liquidation for the AD is June 9, 2022. Please contact our office for a complete projected schedule for the AD investigation.
C. Volume and Value of Imports: Please contact our office for a summary of the data filed with the petition.
If you have questions regarding how this investigation may impact future imports of scope merchandise or whether a particular product is within the scope of the investigation, please contact one of our attorneys.
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Federal Register Notices:
• Antidumping or Countervailing Duty Investigations, Orders, or Reviews: Certain Uncoated Paper From Portugal: Preliminary Results of the Administrative Review of the Antidumping Duty Order; 2020-2021
• Strontium Chromate From Austria: Final Results of Antidumping Duty Administrative Review; 2019-2020
• Heavy Iron Construction Castings From Brazil: Final Results of the Expedited Fifth Sunset Review of the Countervailing Duty Order
• Stainless Steel Plate in Coils From Belgium, South Africa, and Taiwan: Final Results of the Expedited Fourth Sunset Reviews of the Antidumping Duty Orders
• Investigations; Determinations, Modifications, and Rulings, etc.: Polyethylene Terephthalate (PET) Resin From Canada, China, India, and Oman
• Antidumping or Countervailing Duty Investigations, Orders, or Reviews: Coated Paper Suitable for High-Quality Print Graphics Using Sheet-Fed Presses From Indonesia and the People's Republic of China: Final Results of the Second Expedited Sunset Reviews of the Antidumping Duty Orders
• Investigations; Determinations, Modifications, and Rulings, etc.: Certain Core Orientation Systems, Products Containing Core Orientation Systems, Components Thereof, and Methods of Using the Same; Institution of Investigation
• Certain Toner Supply Containers and Components Thereof (II); Commission Determination To Review in Part an Initial Determination Granting Complainants' Motion for Summary Determination of Violations of Section 337; Schedule for Filing Written Submissions on Remedy, the Public Interest, and Bonding
• Certain Movable Barrier Operator Systems and Components Thereof; Commission Determination To Amend the Notice of Investigation and Institute a Modification Proceeding; Issuance of a Modified Limited Exclusion Order and a Modified Cease and Desist Order; Termination of the Modification Proceeding
• Antidumping or Countervailing Duty Investigations, Orders, or Reviews: Circular Welded Carbon Steel Pipes and Tubes From Thailand: Preliminary Results of Antidumping Duty Administrative Review and Preliminary Determination of No Shipments; 2020-2021
• Determination of Sales at Less-Than-Fair Value: Raw Honey From Ukraine: Termination of Less-Than-Fair-Value Investigation
• Antidumping or Countervailing Duty Investigations, Orders, or Reviews: Heavy Walled Rectangular Welded Carbon Steel Pipes and Tubes From the Republic of Korea: Final Results of Antidumping Duty Administrative Review; 2019-2020
• Antidumping or Countervailing Duty Investigations, Orders, or Reviews: White Grape Juice Concentrate From Argentina; Institution of Anti-Dumping and Countervailing Duty Investigations and Scheduling of Preliminary Phase Investigations
• Investigations; Determinations, Modifications, and Rulings, etc.: Certain Electronic Candle Products and Components Thereof; Notice of a Commission Determination To Review a Remand Initial Determination; Extension of the Target Date
• In the Matter of Certain High-Potency Sweeteners, Processes for Making Same, and Products Containing Same; Notice of a Commission Determination Not To Review an Initial Determination Granting Summary Determination of No Violation of Section 337; Terminating the Investigation
• Certain Tunable Lenses and Products Containing the Same; Notice of the Commission's Determination Not To Review an Initial Determination Terminating the Investigation on the Basis of Settlement; Termination of the Investigation
• Certain Interactive Fitness Products Including Stationary Exercise Bikes, Treadmills, Elliptical Machines, and Rowing Machines and Components Thereof; Notice of Institution of Investigation
• Antidumping or Countervailing Duty Investigations, Orders, or Reviews: Certain Oil Country Tubular Goods From the Republic of Korea: Final Results of Antidumping Duty Administrative Review and Final Determination of No Shipments; 2019-2020
• Certain Steel Racks and Parts Thereof From the People's Republic of China: Final Results of Antidumping Duty Administrative Review and Final Determination of No Shipments; 2019-2020
• Citric Acid and Certain Citrate Salts From Thailand: Preliminary Results of Antidumping Duty Administrative Review; 2020-2021
• Certain Cold-Rolled Steel Flat Products From the Republic of Korea: Final Results of Countervailing Duty Administrative Review; 2019
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Commerce Adds 120 Entities in Russia and Belarus to the Entity List, Further Limiting the Russian and Belarusian Militaries’ Access to Items That Support Aggression Against Ukraine - Department of Commerce
The U.S. Commerce Department, through its Bureau of Industry and Security (BIS), has taken additional action to degrade Russian and Belarusian defense, aerospace, maritime, and other strategic sectors in response to Russia’s brutal assault on the sovereignty of Ukraine.
BIS is issuing a final rule adding 120 entities to the Entity List. Ninety-five (95) entities are being added as military end-users under the destinations of Belarus (24 entities) and Russia (71 entities) for acquiring and attempting to acquire items subject to the Export Administration Regulations (EAR) in support of Belarus’s and Russia’s militaries. Twenty-five (25) entities also are being added under the destination of Russia for acquiring and attempting to acquire items subject to the EAR in support of Russia’s military modernization efforts.
“Vladimir Putin’s decision to attack Ukraine has isolated his country and economy from global commerce, and today’s action furthers that isolation by adding 120 Russian and Belarusian parties in the aerospace, maritime, and defense sectors to the Entity List,” said Secretary of Commerce Gina M. Raimondo. “These parties are being effectively cut off from the inputs necessary to sustain Putin’s war and shows that the United States has the capabilities to detect, identify, and restrict parties in Russia, Belarus, or elsewhere that seek to support that effort.”
“Today’s action demonstrates America’s resolve in support of Ukraine. We will work to detect, identify, and cut off parties that support Putin’s war effort company by company or person by person if we have to,” said Deputy Secretary of Commerce Don Graves. “The Department of Commerce will leave no stone unturned when it comes to restricting access to U.S. commodities, software, and technologies to the Russian war machine and its enablers.”
“Parties that have thrown in their lot with Vladimir Putin’s horrific assault on Ukraine should not benefit from access to U.S. items,” said Assistant Secretary of Commerce for Export Administration Thea D. Rozman Kendler. “BIS will continue its dogged scrutiny of the defense, aerospace, maritime, and other key sectors in Russia and Belarus. We will not hesitate to revoke access to U.S. items from any party seeking to support Putin’s war.”
This rule applies a highly restrictive policy of denial for the review of license applications for exports, reexports, and transfers (in-country) to the listed entities of all items subject to the EAR and prohibits the use of all license exceptions for such transactions. Additionally, the 95 ‘military end users’ are being designated under Footnote 3 of the Entity List—a designation added in the Russia export control measures that became effective February 24, 2022. Footnote 3 entities are subject to the Russian/Belarusian Military End User foreign-produced “direct product” rule (“Russia/Belarus MEU FDP Rule”) that applies to reexports, exports from abroad, and transfers (in-country) of certain foreign produced items based on controlled U.S. technology, software, or tooling. Application of the Russia/Belarus MEU FDP Rule to these entities tremendously expands the universe of commodities, software, and technologies that they will be unable to obtain in the global market.
These actions strengthen our ongoing efforts to degrade Russia’s ability to acquire the items it needs to sustain its military aggression. These additions follow the recent addition to the Entity List of 91 entities in 10 countries on March 4, 2022, based upon their involvement in, contributions to, or other support of the Russian security services, military and defense sectors, and military and/or defense research and development efforts. In total, BIS has added 260 entities to the Entity List in response to Russia’s invasion of Ukraine.
The 120 entities were added to the Entity List upon a determination by the interagency End-User Review Committee made up of representatives from the Departments of Commerce (Chair), Defense, State, and Energy, who evaluate potential Entity List additions based on applicable legal standards.
These BIS actions were taken under the authority of the Export Control Reform Act of 2018 and its implementing regulations, the Export Administration Regulations (EAR).
The rule is effective April 1, 2022. A link to text of the rule is available on the Feder Register’s website at: https://www.federalregister.gov/public-inspection/2022-07284/additions-of-entities-to-the-entity-list
Additional information on BIS’s actions in response to Russia’s invasion of Ukraine are available here: https://bis.doc.gov/index.php/policy-guidance/country-guidance/russia-belarus
For more information visit: https://www.bis.doc.gov
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OTEXA: Announcements - Office of Textile & Apparel
[04/07/2022] – The European Union (EU) will be putting forward several pieces of legislation in 2022 to achieve its circular economy transition. One initiative, the Sustainable Products Initiative (SPI) will focus on “key product value chains” (including textiles) that the Commission sees as requiring “urgent, comprehensive and coordinated action” to jumpstart the transition to circularity. The EU Strategy for Sustainable and Circular Textiles was published on March 30, 2022. For more information, see the EU Strategy for Sustainable Textiles webpage. For information on how U.S. businesses can engage with the EU on circular economy, see the Service-EU market intelligence article.
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250 Counterfeit Chanel Brooches Seized in Vicksburg - U.S. Customs & Border Protection
Vicksburg, Mississippi — On March 29, U.S. Customs and Border Protection (CBP) Officers at the port of Vicksburg/Jackson, MS selected for inspection a shipment from China containing 250 women’s brooches. The counterfeit jewelry bore the “CC” Chanel trademark, and if genuine would be worth $162,500.00. The shipment was discovered during routine inspections at an express consignment facility located in central Mississippi.
During the 2nd quarter of fiscal year 2022, Vicksburg CBP seized a total of 73 shipments for violation of Intellectual Property Rights worth a staggering $998,889.06. Most of the shipments contained counterfeit shoes, designer handbags, jewelry, and more. During fiscal year 2021, CBP Vicksburg seized a total of 431 shipments worth over 5 million dollars. The shipments were destined to various cities throughout the central Mississippi area.
“People often make the mistake of believing that purchasing counterfeit items is a victimless crime,” said Acting Assistant Director of Field Operations Miguel Garza. “However, these items often fund transnational criminal organizations, and cost taxpayers billions.”
Illicit manufacturers continue to exploit the rapid growth of e-commerce to sell counterfeit goods to unsuspecting consumers in the United States. So far this 2021 Fiscal Year, CBP has seized more than 20,000 shipments containing counterfeit goods that would have been worth over $1.3 billion had they been genuine.
CBP data indicates that handbags, wallets, apparel, footwear, watches, jewelry, and consumer electronics are at higher risk of being counterfeited. Counterfeit watches and jewelry make up almost half of the total MSRP of seized goods. Counterfeit versions of popular brands are regularly sold in online marketplaces and flea markets. Counterfeit goods hurt the U.S. economy, cost Americans their jobs, threaten consumer health and safety, and fund criminal activity. Visit the National IPR Coordination Center for more information about IPR including counterfeiting and piracy.
In addition to posing potential health and safety hazards, counterfeit goods are often of inferior quality. Peeling labels, low-quality ink or printing errors on the packaging, and loosely packed items in the box can be signs that the product you purchased may not be legitimate. Counterfeit apparel and handbags may feature poor or uneven stitching and improperly sized or designed logos. The performance of counterfeit electronics is often marked by short battery life and regular overheating.
Consumers can take simple steps to protect themselves and their families from counterfeit goods:
• Purchase goods directly from the trademark holder or from authorized retailers.
• When shopping online, read seller reviews and check for a working U.S. phone number and an address that can be used to contact the seller.
• Review CBP’s E-Commerce Counterfeit Awareness Guide for Consumers.
• Remember that if the price of a product seems too good to be true, it probably is.
To report suspected counterfeits, visit CBP’s online e-Allegations portal or call 1-800-BE-ALERT. More information about counterfeit goods is available on CBP’s Fake Goods, Real Dangers website and StopFakes.gov.
B-roll of CBP cargo inspections is available here. Photos of counterfeit goods seized by CBP can be found here.