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Circumvention Investigation on Vietnamese Plywood Critically Flawed, Exporters Say

An anti-circumvention inquiry launched by the Commerce Department failed to name mandatory respondents or seek more than minimal information from exporters, a number of lumber importers and exporters of hardwood plywood from Vietnam said Feb. 1 in support of a motion for summary judgment (Shelter Forest International Acquisition v. U.S., CIT # 23-00144).

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Commerce had determined in July, after the anti-circumvention inquiry and a scope ruling, that the companies had attempted to avoid the antidumping and countervailing duty orders on hardwood plywood from China. It applied adverse facts available to 22 out of the 45 Vietnamese exporters of the product, saying that they provided “deficient or contradictory” responses during the investigation.

The consolidated importers and exporters in turn said they were importing plywood from Vietnam that was manufactured using some Chinese components but shouldn’t be considered subject to the orders. Commerce’s anti-circumvention inquiry was procedurally flawed, they said.

Whenever three or more veneers are glued together, the product is considered plywood and is undoubtedly covered by the AD/CVD orders on plywood from China, the companies said. They are more concerned about Commerce’s circumvention finding in regard to one- or two-ply veneers shipped from China to Vietnam to be used as inputs in plywood production, they said.

Plywood consists of three or more thin layers, or “plies,” of wood veneers, which can be of differing qualities. The better outermost layer of a piece of plywood is the “face,” while the worse is the “back.” The “core” is the middle layer of plywood, and often requires extra assembly; it can be two-ply -- made of two veneers glued together -- though it isn’t always. Commerce’s circumvention inquiry only covers cores, the companies said.

The department said that plywood made up of face veneers, back veneers and finished or unfinished cores from China are covered by the orders, and importation of most represented circumvention. It also determined that certain products that only consisted of cores from China, with face and back veneers coming from Vietnam or a third country, were likewise subject to the orders, though it didn't find they circumvented AD/CVD.

“The question is therefore whether individual veneer or two-ply used in Vietnamese production of plywood could -- even hypothetically -- circumvent the Orders on hardwood plywood from China,” they said. “The answer is ‘no.’”

Two-ply is not as stable as finished plywood and cannot be used in construction, the companies said.

The companies named a number of issues they said they had seen in the course of Commerce’s investigation, which began in 2016. The department's fact-finding “consisted of about six pages of questions and a few excel charts over eight months,” they said, and no mandatory respondent was ever named. Commerce used the record of exporter Vietnam Finewood gathered for the original scope inquiry, they said; Vietnam Finewood was dissolved the following year, they said.

They said Commerce instead relied “extensively” on “hypothetical” data that had been submitted by the petitioner in the initial investigation on hardwood plywood from China -- the Coalition for Fair Trade in Hardwood Plywood -- "rather than collect actual information from participating respondents."

“This is shown in Commerce’s summary of its circumvention determination in its Final Issues and Decision Memorandum, where Commerce cites almost exclusively to the Coalition’s submissions in support of its findings,” they said.

The importers and exporters bringing the motion are consolidated plaintiffs American Woodmark, Del Valle Kahman & Company, Ike Trading Company, Pittsburgh Forest Products, Panoply Wood Products USA , American Pacific Plywood, Eagle Industries Company, Golden Bridge Industries, Lechenwood Viet Nam Company, Arrow Forest International, Her Hui Wood, Vietnam Zhongjia Wood Company, Long LUU Plywood Production, and TEKCOM. Shelter Forest International Acquisition is the plaintiff, and Greatriver Wood is another consolidated plaintiff (see 2307260077). The Coalition for Fair Trade in Hardwood Plywood intervened as a defendant with the U.S.