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CAFC Says Solar Panel Mounts Not 'Finished Merchandise' for Aluminum Extrusions AD/CVD Orders

Solar panel mounts made by China Custom Manufacturing do not qualify for the "finished merchandise" exclusion from the antidumping and countervailing duty orders on aluminum extrusions from China, the U.S. Court of Appeals for the Federal Circuit ruled in a March 2 opinion. Upholding the Court of International Trade, judges Pauline Newman, Raymond Chen and Tiffany Cunningham said the matter is "governed squarely" by the appellate court's ruling in Shenyang Yuanda Aluminum Indus. Eng'g Co. v. U.S., which said a "part or subassembly ... cannot be a finished product."

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"We are extremely pleased with today’s decision," said Robert DeFrancesco, counsel for petitioner Aluminum Extrusions Fair Trade Committee. "The Federal Circuit’s opinion confirms once and for all that aluminum extrusions that are part of a subassembly are covered by the scope of the orders. Importers will no longer be able to game the system by including minor non-extruded parts to try and avoid duties."

In a scope ruling issued in 2020, the Commerce Department had ruled CCM's RockIt 3.0 solar roof mounts didn't qualify for the finished merchandise exclusion because they did not include all of the components of the downstream product, a solar panel mounting system. Other components besides the roof mounts were necessary to mount the panels. CIT upheld the ruling, finding CCM's solar mounts do not constitute finished merchandise (see 2112070031). Both Commerce and the trade court cited the Federal Circuit's decision in Shenyang, where CAFC found the finished merchandise exclusion was not applicable for curtain wall units that were not complete upon entry and were meant to be attached to other units to form a completed curtain wall.

On appeal, CCM argued the Shenyang decision was limited to curtain wall units and cannot be applied here, and that the decision was wrongly decided. CCM said the Shenyang decision is "contrary to the plain language of the [finished merchandise] exclusion," which excludes parts from the orders that are fully and permanently assembled and complete upon import.

Chen, the author of the opinion, said that same argument was rejected in Shenyang and "misreads the exclusion." The exclusion says the orders exclude "finished merchandise containing aluminum extrusions as parts that are fully and permanently assembled and completed at the time of entry." CCM focused on the last part of the phrase -- aluminum extrusions as parts that are fully and permanently assembled -- and ignores the first part that the finished merchandise must contain the fully assembled aluminum extrusions, the judge said.

CCM also argued that the scope ruling merged the finished merchandise and finished goods kits exclusions by requiring all components of the RockIt system to be fully and permanently assembled at the time of entry, creating a "final finished product" for the finished merchandise exclusion instead of a part.

"First, we fail to see how Commerce merged the two exclusions," the opinion said. "Commerce explained that CCM’s solar panel mounts (1) were not eligible for the finished merchandise exclusion because the mounts do not constitute a fully and permanently assembled and completed solar panel mounting system, and (2) were not eligible for the finished goods kit exclusion because the mounts do not include, upon entry into the United States, all the parts necessary to fully assemble a finished solar panel mounting system. Thus, Commerce kept the two exclusions separate."

(China Custom Manufacturing Inc. v. United States, Fed. Cir. # 22-1345, dated 03/02/23, Judges: Pauline Newman, Raymond Chen and Tiffany Cunningham; Attorneys: George Tuttle of Law Offices of George R. Tuttle for plaintiff-appellants China Custom Manufacturing and Greentec; Jamie Shookman for defendant-appellee U.S. government; and Robert DeFrancesco of Wiley Rein for defendant-appellee Aluminum Extrusions Fair Trade Committee)