3.20.2023 China 301 Litigation Update - Grunfeld, Desiderio, Lebowitz, Silverman & Klestadt LLP
On March 17, 2023, the U.S. Court of International Trade (CIT) issued a decision in In Re Section 301 Cases, Court No. 21-00052, sustaining the promulgation of the List 3 and List 4A additional tariffs by the United States Trade Representative (USTR).
The CIT had previously found that USTR acted within its statutory authority when it modified the original Section 301 determinations on certain goods from China by adding List 3 and List 4A. However, in the previous decision, the CIT found that USTR had not demonstrated that it had satisfied the procedural requirements of the Administrative Procedure Act (APA) when it promulgated List 3 and List 4A. Specifically, the CIT found that USTR had not provided adequate explanations of how it considered the thousands of comments that it received during the notice and comment periods that preceded its imposition of the additional duties. The CIT issued a remand to USTR to give the agency an opportunity to provide a fuller explanation and USTR responded by filing a 90-page remand report.
Plaintiffs argued that the remand report constituted impermissible post hoc rationalizations and that USTR had failed to show that it considered several of the concerns raised in the comments. However, in ruling for the government, the CIT found that the remand report was an adequate “amplified articulation” of USTR’s rationales at the time that it imposed List 3 and List 4A. Additionally, the CIT held that USTR was not required to provide additional explanations of why it concurred with the President that additional tariffs were appropriate.
The decision by the CIT is now final. We expect that plaintiffs will appeal to the U.S. Court of Appeals for the Federal Circuit (CAFC). The CAFC will apply a de novo standard of review to the legal findings by the CIT, which means that such issues will be reviewed by the CAFC as if the CIT had not issued a decision. Plaintiffs have 60 days from the date of the CIT’s entry of judgment to file an appeal.
Should you have any questions, please do not hesitate to contact one of our attorneys.
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Federal Register Notices:
• Antidumping or Countervailing Duty Investigations, Orders, or Reviews: Certain Cold-Drawn Mechanical Tubing of Carbon and Alloy Steel From the People's Republic of China, the Federal Republic of Germany, India, Italy, the Republic of Korea, and Switzerland: Final Results of the Expedited First Sunset Review of the Antidumping Duty Orders
• Common Alloy Aluminum Sheet From the People's Republic of China: Final Results of Antidumping Duty Administrative Review; 2021-2022
• Paper File Folders From India: Preliminary Affirmative Countervailing Duty Determination and Alignment of Final Determination With the Final Antidumping Duty Determination
• Investigations; Determinations, Modifications, and Rulings, etc.: Certain Mobile Telephones, Tablet Computers With Cellular Connectivity, and Smart Watches With Cellular Connectivity, Components Thereof, and Products Containing Same; Commission Determination Not To Review an Initial Determination Terminating the Investigation Based on Settlement and To Review and Take No Position on an Initial Determination Granting in Part a Motion for Summary Determination Concerning the Economic Prong of the Domestic Industry Requirement; Termination of the Investigation
• Antidumping or Countervailing Duty Investigations, Orders, or Reviews: Antidumping and Countervailing Duty Orders on Certain Aluminum Foil From the People's Republic of China: Preliminary Affirmative Determinations of Circumvention With Respect to the Republic of Korea and the Kingdom of Thailand
• Antidumping or Countervailing Duty Investigations, Orders, or Reviews: Certain Crystalline Silicon Photovoltaic Products From Taiwan: Notice of Court Decision Not in Harmony With the Final Results in the Antidumping Duty Administrative Review; Notice of Amended Final Results
• Oil Country Tubular Goods From Ukraine: Final Results of Antidumping Duty Administrative Review; 2020-2021
• Tin Mill Products From the People's Republic of China: Postponement of Preliminary Determination in the Countervailing Duty Investigation
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Circumvention Inquiry on Aluminum Sheet from China Completed in Korea - Grunfeld, Desiderio, Lebowitz, Silverman & Klestadt LLP
I. Type of Action: Circumvention Inquiry pursuant to Section 781(b) of the Tariff Act of 1930, as amended to determine that U.S. imports of common alloy aluminum sheet (“CAAS”) from China that are completed or assembled in Korea are circumventing the antidumping duty (“AD”) and countervailing duty (“CVD”) orders on CAAS from China.
II. Scope of the Orders: The merchandise covered by the Order is aluminum common alloy sheet (common alloy sheet), which is a flat-rolled aluminum product having a thickness of 6.3 mm or less, but greater than 0.2 mm, in coils or cut-to-length, regardless of width. Common alloy sheet within the scope of the Order includes both not clad aluminum sheet, as well as multi-alloy, clad aluminum sheet. With respect to not clad aluminum sheet, common alloy sheet is manufactured from a 1XXX-, 3XXX-, or 5XXX-series alloy as designated by the Aluminum Association. With respect to multi-alloy, clad aluminum sheet, common alloy sheet is produced from a 3XXX-series core, to which cladding layers are applied to either one or both sides of the core.
Common alloy sheet may be made to ASTM specification B209-14, but can also be made to other specifications. Regardless of specification, however, all common alloy sheet meeting the scope description is included in the scope. Subject merchandise includes common alloy sheet that has been further processed in a third country, including but not limited to annealing, tempering, painting, varnishing, trimming, cutting, punching, and/or slitting, or any other processing that would not otherwise remove the merchandise from the scope of the Order if performed in the country of manufacture of the common alloy sheet.
Excluded from the scope of the Order is aluminum can stock, which is suitable for use in the manufacture of aluminum beverage cans, lids of such cans, or tabs used to open such cans. Aluminum can stock is produced to gauges that range from 0.200 mm to 0.292 mm, and has an H-19, H-41, H-48, or H-391 temper. In addition, aluminum can stock has a lubricant applied to the flat surfaces of the can stock to facilitate its movement through machines used in the manufacture of beverage cans. Aluminum can stock is properly classified under Harmonized Tariff Schedule of the United States (HTSUS) subheadings 7606.12.3045 and 7606.12.3055.
Where the nominal and actual measurements vary, a product is within the scope if application of either the nominal or actual measurement would place it within the scope based on the definitions set for the above. Common alloy sheet is currently classifiable under HTSUS subheadings 7606.11.3060, 7606.11.6000, 7606.12.3090, 7606.12.6000, 7606.91.3090, 7606.91.6080, 7606.92.3090, and 7606.92.6080. Further, merchandise that falls within the scope of the Order may also be entered into the United States under HTSUS subheadings 7606.11.3030, 7606.12.3030, 7606.91.3060, 7606.91.6040, 7606.92.3060, 7606.92.6040, 7607.11.9090. Although the HTSUS subheadings are provided for convenience and customs purposes, the written description of the scope of the Order is dispositive.
III. HTS classifications: Common alloy sheet is currently classifiable under HTSUS subheadings 7606.11.3060, 7606.11.6000, 7606.12.3090, 7606.12.6000, 7606.91.3090, 7606.91.6080, 7606.92.3090, and 7606.92.6080. Further, merchandise that falls within the scope of the Order may also be entered into the United States under HTSUS subheadings 7606.11.3030, 7606.12.3030, 7606.91.3060, 7606.91.6040, 7606.92.3060, 7606.92.6040, 7607.11.9090. Although the HTSUS subheadings are provided for convenience and customs purposes, the written description of the scope of the Order is dispositive.
The Domestic Industry notes that the HTSUS subheadings identified in the scope of the most recently issued decision memorandum in this proceeding include statistical subheadings that are now defunct. In particular, HTS subheading 7606.12.3090 has been retired, and it has been replaced by HTS subheadings 7606.12.3091 and 7606.12.3096.
IV. Date of Filing: March 15, 2023
V. Requestor: Aluminum Association Common Alloy Aluminum Sheet Trade Enforcement Working Group and its individual members (collectively, the “Domestic Industry”)
VI. Named Chinese Exporters: The Chinese exporters of the merchandise completed or assembled in Korea are:
Henan Mingtai Al. Industrial, Co., Ltd.
Zhengzhou Mingtai Industry, Co., Ltd.
Y19-3, No.11 Changchun Rd,
High & New Tech Zone, Zhengzhou
Henan 450001, China
Mingtai’s Korean subsidiary Gwangyang’s full name and address are:
Gwangyang Aluminum Industries Co., Ltd.
266 Sepungsandan Road
Gwangyang Eub, Gwangyang Si
Jeollanam Do, Republic of Korea
VII. Projected Publication and Schedule:
A. The default date for ADD/CVD cash deposits upon an affirmative circumvention determination is retroactive to when DOC’s Notice of Initiation published in the Federal Register, pursuant to 19 C.F.R. § 351.226(l).
B. Projected date that DOC publishes its Notice of Initiation: April 14, 2023. Based on this projection, the circumvention inquiry is expected to proceed as follows:
• Comments and factual information due May 14, 2023 (rebuttal due May 28, 2023);
• DOC’s Preliminary Determination due September 11, 2023; and DOC’s Final Determination due February 8, 2024 (can be extended to April 13, 2024).
If you have questions regarding how this investigation may impact current and 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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CBP Chicago Stops Counterfeits that May Fund Organized Crime - U.S. Customs & Border Protection
CHICAGO – At the Chicago O’Hare’s International Mail Branch, U.S. Customs and Border Protection (CBP) officers intercepted two shipments containing a total of 354 counterfeit designer products on March 20.
Both parcels were arriving from Thailand and, had the items been authentic products the Manufacturer Suggested Retail Price (MSRP) would have been over $398,000. Proceeds from the sale of counterfeit goods have been found to fund criminal organizations who are often also involved in money laundering, drug trafficking, and other illicit trade.
CBP officers examined the first shipment to determine its admissibility and discovered the following counterfeit designer items: sunglasses bearing trademarks owned by Chanel, Louis Vuitton, Burberry and Fendi; watches bearing Louis Vuitton, Chanel, and Rolex trademarks; necklaces bearing Louis Vuitton, Chanel, and Tiffany trademarks; earrings bearing Chanel, and Versace trademarks; and pendants and bracelets bearing Chanel trademarks. This shipment was heading to a residence in Mumford, Tennessee and would have been had a MSRP of $231,333, had the merchandise been genuine.
In the second package, heading to a residence in San Juan, Texas, officers found the following counterfeit designer items: earrings bearing trademarks owned by Versace, Yves Saint Laurent, Prada, Christian Dior, Fendi, Hermes, Michael Kors, Gucci, Chanel, Tory Burch, and Louis Vuitton; scarves bearing Louis Vuitton and Gucci trademarks; and belts bearing Gucci and Louis Vuitton trademarks. The MSRP for these items would have been $147,000 if the merchandise were genuine.
All the merchandise was seized for bearing counterfeit marks when imported into the United States.
“This is just another example of the work our officers do to protects consumers and the U.S. economy,” said LaFonda D. Sutton-Burke, Director, Field Operations, Chicago Field Office. “As consumers increasingly purchase from online or third-party vendors, our officers are at the frontline to guard against defrauders expecting to make money selling fake merchandise.”
The rapid growth of e-commerce enables consumers to search for and easily purchase millions of products through online vendors, but this easy access gives counterfeit and pirated goods more ways to enter the U.S. economy. U.S. consumers spend more than $100 billion every year on intellectual property rights (IPR) infringing goods, falling victim to approximately 20% of the counterfeits that are illegally sold worldwide. The proceeds from the sale of counterfeit goods have been found to fund criminal organizations who are often also involved in money laundering, drug trafficking, and other illicit trade.
Commonly, these goods are sold in underground outlets and on third party e-commerce websites. Online listings will often use images of the genuine designer product, defrauding purchasers who are expecting to receive the real thing.
CBP Trade protects the intellectual property rights of American businesses through an aggressive Intellectual Property Rights enforcement program, safeguarding them from unfair competition and use for malicious intent while upholding American innovation and ingenuity. CBP has the authority to detain, seized, forfeit, and ultimately destroy merchandise seeking entry into the United States if it bears an infringing trademark or copyright that has been recorded with CBP through the e-Recordation program. https://iprr.cbp.gov/s/.
Every year, CBP seizes millions of counterfeit goods from countries around the world as part of its mission to protect U.S. businesses and consumers. These goods include fake versions of popular products, such as smartphones and related accessories, electronics, apparel, shoes, cosmetics, and high-end luxury goods, as well as goods posing significant health and safety concerns, such as counterfeit pharmaceuticals, bicycle and motorcycle helmets, medical devices, supplements and other consumables. Sold online and in stores, 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.
Nationwide in Fiscal Year 2022, CBP seized over 24.5 million shipments of IPR violations that would have been worth just shy of $3 billion, had the goods been genuine. CBP has established an educational initiative to raise consumer awareness about the consequences and dangers that are often associated with the purchase of counterfeit and pirated goods. Information about the Truth Behind Counterfeits public awareness campaign can be found at https://www.cbp.gov/FakeGoodsRealDangers.
CBP encourages anyone with information about counterfeit merchandise illegally imported into the United States to submit an e-Allegation. The e-Allegation system provides a means for the public to anonymously report to CBP any suspected violations of trade laws or regulations related to the importation of goods in the U.S.
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“Ships from the USA” doesn’t always mean “Made in the USA” - Federal Trade Commission
So, you’re scrolling through Facebook or Instagram and spot an ad for clothing. Or maybe you’re shopping for gadgets on Etsy or Amazon. When the seller says the product “ships from the USA,” what does that really mean?
What it doesn’t necessarily mean is that a product is also made in the USA. Let’s say there’s a product that was made overseas. Sometimes, stores will ship that product to U.S. distribution centers. No problem. Sometimes, stores will let customers know that the product is shipping from within the U.S. Again, no problem — as long as it’s clear those products aren’t U.S.-made. If a store doesn’t make that difference clear, chances are the products aren’t “made in the USA.”
Here’s what else to know when you shop online:
• Before you buy, check it out. Search online for the name of the store, plus words like “scam” or “complaint.”
• Check the reviews. See if others have had good or bad experiences with the store. Focus on sites you know are credible and that offer impartial reviews from real experts.
• Look up the return policy. Find out if the store takes returns and gives refunds.
• Pay by credit card, if you can. Credit cards offer the most protection against fraud, including the right to dispute charges if there are problems with your purchase.
If you think a store is trying to pass off their products as "made in the USA" when they’re not, report it at ReportFraud.ftc.gov.
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FTC Issues Orders to Social Media and Video Streaming Platforms Regarding Efforts to Address Surge in Advertising for Fraudulent Products and Scams - Federal Trade Commission
FTC issues 6(b) orders to Meta, TikTok, YouTube, Twitter and others seeking information on how the platforms screen for misleading ads for scams and fraudulent and counterfeit products
With fraud on social media surging, the Federal Trade Commission has issued orders to eight social media and video streaming platforms seeking information on how these companies scrutinize and restrict paid commercial advertising that is deceptive or exposes consumers to fraudulent health-care products, financial scams, counterfeit and fake goods, or other fraud.
The amount of money consumers have reported losing to fraud that originated on social media platforms has skyrocketed since 2017. In 2022 alone, consumers reported losing more than $1.2 billion to fraud that started on social media, more than any other contact method, according to FTC data.
The Commission also is seeking information about how the social media and video streaming companies ensure that consumers are able to identify commercial advertising on their platforms as advertising.
The orders, which the companies are required to comply with by law, were sent to: Meta Platforms, Inc.; Instagram, LLC; YouTube, LLC; TikTok, Inc.; Snap, Inc.; Twitter, Inc.; Pinterest, Inc.; and Twitch Interactive, Inc.
“Social media has been a gold mine for scammers who tout sham products and other scams that have cost consumers enormously in recent years,” said Samuel Levine, Director of the FTC’s Bureau of Consumer Protection. “This study will help the FTC ensure that social media and video streaming companies are doing everything they can to keep scammers and deceptive ads off their platforms.”
The orders will collect information about the companies’ standards and policies related to paid commercial ads and their processes for screening and monitoring for compliance with those standards and policies, including through human review and the use of automated systems. The orders also require the companies to report their ad revenue, the number of ad views, and other performance metrics, including for ads involving categories of products and services more prone to deception such as those intended to treat, prevent, or cure substance use disorders and tout income opportunities.
These orders will help the Commission better understand how prevalent deceptive advertising is on social media and video streaming platforms, the consumers who may be harmed by that advertising, and the effectiveness of the platforms’ oversight of advertisers, including whether the companies treat English-language and Spanish-language ads differently. The study also should shed light on how the platforms create ads, including any use of generative artificial intelligence, and track, and classify ads, as well as the ad formats offered to advertisers, including shoppable ads, which allow consumers to purchase products or services directly through the ad, and virtual reality and other extended reality ads.
In addition, the Commission seeks information on how these platforms help consumers distinguish advertising and other commercial messages from other types of content, including disclosure tools for endorsers and influencers.
The orders seek information for the calendar years 2019 through 2023, which allows for the Commission to study relevant business conduct since the start of the COVID-19 pandemic. The orders were sent using the FTC’s 6(b) authority, which authorizes the Commission to conduct wide-ranging studies that do not have a specific law enforcement purpose.
The Commission voted 4-0 during an open meeting to issue the 6(b) orders to the eight social media and video service services.