Scope Rulings Must Identify Specific Products, Cabinet Exporters Argue
Wooden cabinet importers referring to themselves as Cabinetworks Companies made a number of arguments Feb. 26 opposing a Commerce Department scope ruling, culminating in an attack on the department’s country-wide antidumping and countervailing duty determinations (ACProducts v. United States, CIT #s 24-00155, -00156).
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They also argued that scope rulings must be conducted for specific products, not processes.
The importers, ACProducts, Inc., ACPI Wood Products, Cabinetworks Group, Master Woodcraft Cabinetry and Smart, argued that Commerce was wrong to rule wooden cabinets that underwent one of three different manufacturing processes originated in China, not Vietnam or Malaysia. Each manufacturing process involved finished or semifinished frames, drawer fronts and wooden drawers from China being combined in Vietnam or Malaysia with Vietnam- or Malaysia-origin wooden cabinet boxes, vanity boxes and drawers.
Commerce’s scope ruling, which had been requested by petitioner American Kitchen Cabinet Alliance, didn’t adequately define the merchandise it was examining, the importers argued. The request “failed to identify specific products and instead pertained to hypothetical production cycles,” they said.
They claimed that Commerce’s regulations allow for inquiries into “a product,” not, as the petitioner had requested be investigated, “any and all merchandise that meets the scope of the Orders that is further processed in Malaysia and that continues to meet the scope of the Orders after further processing [in] Malaysia and upon entry into the United States.” AKCA then “inexplicably provided a ‘non-exhaustive’ list of scenarios under which hypothetical products may be produced.”
This didn’t meet the actual standard of scope ruling requests, which require a product description that “will reflect the ‘particular product’ at issue,” they said. They noted that Commerce has also stated in other litigation that it will not conduct scope inquiry or make a scope ruling on “a purely hypothetical product.”
They disagreed with Commerce that AKCA couldn’t have narrowed its request because it didn’t have access to the actual production processes of Vietnamese cabinet producers. That meant that the department “acknowledges the failure of AKCA to satisfy the requirements to initiate a scope proceeding,” they said.
Further, they claimed that the department’s final ruling wasn’t based on substantial evidence. They argued the record “lacks critical data such as actual cost details, investment specifics, or detailed assembly processes beyond AKCA’s broad descriptions of hypothetical scenarios.” This, they said, made it impossible for Commerce to conduct an adequate transformation analysis.
The petitioner’s information was also distortive, they argued; for example, it provided input consumption rates in different stages, but didn’t include byproduct rates, resulting in a “significantly overstated” cost percentage, they said.
And the department offered only a “cursory response” to the importer’s counterarguments even though it is required to provide a proper “reasoned explanation,” they said.
Like others have before it, the importers also said the department wrongly reached a country-of-origin decision based on only three of seven total factors.
Finally, they pushed back on Commerce’s implementation of a “country-wide certification regime for all wooden cabinets exported from Vietnam,” saying that the department wasn’t statutorily authorized to create such certifications. Certification requirements, or other methods of checking importers’ representations, are the responsibility of CBP, not Commerce, they claimed. They said the department justified its requirements by claiming that they allowed it to determine whether in-scope merchandise that “is not facially discernable from non-subject merchandise” is an evasion risk -- but that is CBP’s role, not Commerce’s.
And they claimed that the department had also failed to create a proper process so that an importer could “regain the right to certify after losing it.”
“As a result, Commerce’s self-anointed role to also enforce antidumping and countervailing duties ... is impermissible because CBP already has the authority to address the misdeclaration of imports and importers must certify the accuracy of declarations made to CBP,” they said.