Court of International Trade Clarifies Antidumping Scope Exclusion and Remands to Commerce – Aluminum Extrusions
In Rubbermaid Commercial Prods. LLC v. U.S., Slip Op. 14-113, the Court of International Trade ordered that the Department of Commerce provide a
clearer definition of the “finished merchandise” and “finished goods” exclusions of goods otherwise subject to the broad scope of imported goods covered by antidumping and countervailing duties because they contain from “aluminum extrusions from China.”
The antidumping and countervailing duty orders apply AD and CVD duties to products described within the Scope of the order, which states:
Subject aluminum extrusions may be described at the time of importation as parts for final finished products that are assembled after importation, including, but not limited to, window frames, door frames, solar panels, curtain walls, or furniture. Such parts that otherwise meet the definition of aluminum extrusions are included in the scope. The scope includes the aluminum extrusion components that are attached (e.g., by welding or fasteners) to form subassemblies, i.e., partially assembled merchandise unless imported as part of [a] finished goods “kit” . . . . The scope does not include the non-aluminum extrusion components of subassemblies or subject kits.
Subject extrusions may be identified with reference to their end use, such as fence posts, electrical conduits, door thresholds, carpet trim, or heat sinks . . . . Such goods are subject merchandise if they otherwise meet the scope definition, regardless of whether they are ready for use at the time of importation.
In 2011, Rubermaid sought a scope ruling to determine whether certain imported products wold be subject to the AD / CV duties. Rubbermaid’s imported items were described as mop frames and handles that allow the user to attach interchangeable damp or dry mops and cleaning cloths. Some of the frames and handles were imported separately, while others were imported together in a kit (but without the mop). Rubbermaid argue the imported articles are exempt “finished merchandise” and / or excluded “finished goods kits” when the frames and handles were imported together.
Rubbermaid relied upon language of the Scope of the AD and CVD orders that “excludes finished merchandise containing aluminum extrusions as parts that are fully and permanently assembled and completed at the time of entry, such as finished windows with glass, doors with glass or vinyl, picture frames with glass pane and backing material, and solar panels,” and exempts “finished goods containing aluminum extrusions that are entered unassembled in a ‘finished goods kit.’” Finished goods kits are defined as “a packaged combination of parts that contains, at the time of importation, all of the necessary parts to fully assemble a final finished good and requires no further finishing or fabrication.” They need to be assembled “as is” into a finished product.
Commerce’s scope ruling to Rubbermaid found that the mops and handles imported separately are not “finished merchandise” because they don’t include everything
necessary for a mop. It also found that even when imported together as “kits,” the mophandles and frames would not be exempt from the antidumping scope because they don’t include the interchangeable mop heads, which would be part of the complete kit to be assembled “as is” into a finished product.
The Court ruled that Commerce incorrectly held that the “finished merchandise” and “finished goods kits” exemptions are basically the same. Essentially, Commerce’s ruling indicated that the two exemptions are the same except that one is assembled and the other is ready for assembly. The court remanded and held that combining the two exemptions was legally incorrect.
Importantly, the Court ordered Commerce upon remand to consider whether the finished merchandise exemption covers products that are designed to work in conjunction with other merchandise. The Court noted that although Commerce had found while Rubbermaid’s mop handles and frames were not a complete mop they are designed to work together, and the scope of the AD / CVD orders contain exclusions for windows and doors which are designed to work but must be attached to frames.
The Court also remanded to the agency so that it consider whether goods with interchangeable parts, like Rubbermaid’s handles and frames that accept
different mop heads, are covered by exemptions from duties for finished merchandise and finished goods kits.