The Court of International Trade (CIT), on June 24, 2015, issued an opinion that could result in a significant increase in the number of products that qualify for an exclusion from the AD/CVD Order on aluminum extrusions from China. In the opinion, the court vacated a previous judgment against importer Meridian Products LLC and remanded the case back to the Department of Commerce for the third time. The case centers around whether Meridian Products’ refrigerator and freezer trim kits meet the “finished goods kit” exclusion of the Order.
Specifically, the court overruled Commerce’s determination that the trim kits were included in the order because they fell under an “exception to the ‘finished goods kit’ exclusion.” Under this exception “an imported product will not be considered a ‘finished goods kit’ . . . merely by including fasteners such as screws, bolts, etc. in the packaging with an aluminum extrusions product” and that a product may not consist entirely of aluminum extrusions and be excluded as a “finished goods kit.” Therefore, Commerce’s position was that because Meridian’s trim kits consist entirely of subject aluminum extrusions, fasteners and “extraneous” materials, the trim kits were subject to the order.
However, the court eschewed this definition of an “exception to the ‘finished goods kit’ exclusion” on several grounds. First, the court held “inclusion of “fasteners” or “extraneous materials” is not determinative when qualifying a kit consisting of multiple parts which otherwise meets the exclusionary requirements, as a “finished goods kit.” The court went on to state “there is nothing in the language that indicates that the parts in an otherwise qualifying kit cannot consist entirely of aluminum extrusions.” In its summary, the court provided its interpretation of the “finished goods kit exclusion,” stating: “it is clear that in order to qualify as a ‘finished goods kit’, a kit must contain every part required to assemble the final finished good, and…some of those ‘parts’ may be fasteners.” The Court then remanded the case to Commerce for the third time to provide an interpretation of the “finished goods kit” exclusion that would comply with the Orders’ scope language.
The effect of this ruling is that Commerce could likely issue a definition of the “finished goods kit exclusion” that will exclude products that upon importation include all of the pieces to assemble the final product. Such an interpretation would result in numerous products that have been traditionally held to the Order’s significant AD/CVD duties being excluded. Results of Commerce’s redetermination are due August 24, 2015.
The Court’s opinion is Meridian Products, LLC v. United States, No. 13-00018, 2015 WL 3853684 (Ct. Int’l Trade June 23, 2015) and can be accessed here.
If you have questions about the AD/CVD Order on aluminum extrusions from China, exclusion from AD/CVD orders or AD/CVD order scope requests, please contact Frohsin & Barger at 205.933.4006 ext. 5.