CIT Sustains Aluminum Foil Circumvention Finding Based on 2 of 5 Country-of-Origin Factors
Court of International Trade Judge Joseph Laroski held July 21 that importer Hanon Systems’ aluminum foil originated from China, not South Korea, sustaining a Commerce Department decision that analyzed the five mandatory factors in a country-of-origin analysis and found only two weighed in favor of China.
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Several importers and exporters have argued a similar point to the trade court -- that Commerce must find all or a majority of the five factors weigh in favor of a country when determining country of origin in a circumvention investigation -- but all have failed (see 2505160045, 2505190059 and 2505190054). In each case, CIT held Commerce acted reasonably or within its discretion when weighing each of the factors.
Hanon was likewise unsuccessful. Its case had argued that Commerce wrongly found circumvention when only two of the five factors, patterns of trade and value added, weighed in favor of China as its foil's country of origin (see 2408010044).
“The statute requires simply that Commerce ‘shall take into account’ each of the enumerated factors,” Laroski ruled. “Commerce has done so here and has fully and reasonably explained its analysis.”
Based on Loper Bright, Hanon also argued in its own case that the department misinterpreted the circumvention investigation statute’s “minor or insignificant” provision, saying the provision was only intended to prevent screwdriver operations (see 2411070042).
Laroski disagreed. Circumvention inquiries are factually intensive, he said, and Commerce has significant discretion in conducting them. This includes the discretion to determine what manufacturing processes are “minor or insignificant,” he said.
“As the Supreme Court recently observed in the context of the National Environmental Protection Act, ‘courts should afford substantial deference and should not micromanage ... agency choices so long as they fall within a broad zone of reasonableness’ when the agency faces ‘fact-dependent, context-specific, and policy-laden choices about the depth and breadth of its inquiry,’” he said, citing the 2025 case Seven County Infrastr. Coal v. Eagle County.
This discretion is “confirmed” by the five-factor test laid out in the circumvention investigation law, he said.
He also disagreed that the Uruguay Round Agreements Act’s Statement of Administrative Action is meant to restrict circumvention inquiries to screwdriver operations, saying that was “nowhere” in the actual language of the SAA.
Hanon also took issue with Commerce’s consideration of record evidence, arguing that the record showed substantial aluminum foil manufacturing processes occurred in South Korea. But Laroski found that the department’s analysis was reasonable and supported by substantial evidence. He said the importer was asking the court to reweigh the evidence, and declined to do so.
And though Hanon claimed that Commerce had instituted an additional requirement that its aluminum foil undergo a chemical change in South Korea to be considered of South Korean origin, the department didn’t actually say this, Laroski said. Rather, consistent with its past practice, Commerce merely “observed the many changes that the product goes through in Korea,” he said.
The importer’s argument that Commerce wrongly evaluated the value-added country-of-origin factor “on a strictly quantitative basis” was similarly unproductive, he held. He said the department “clearly” did consider qualitative factors such as the complexity of the manufacturing processes in China and South Korea.
(Hanon Systems Alabama Corp. v. United States, Slip Op. 25-94, CIT # 24-00013, dated 07/21/25; Judge: Joseph Laroski; Attorneys: William Marshall of Sandler Travis for plaintiff Hanon Systems Alabama Corp.; Christopher Berridge for defendant U.S. government; Joshua Morey of Kelley Drye for defendant-intervenor Aluminum Association Trade Enforcement Working Group)