Commerce Extends AD/CV Duties on Aluminum Extrusions to New Alloy

The Commerce Department will order suspension of liquidation and impose antidumping and countervailing duty cash deposit requirements on imports of heat-treated 5050-grade aluminum alloy extrusions from China, it said in the preliminary results of an anti-circumvention inquiry. The agency preliminarily found Chinese companies have recently started exporting 5050 alloy extrusions in an attempt to avoid duties on aluminum extrusions from China (A-570-967/C-570-968). Though 5-series extrusions aren’t listed in the scope of the AD/CVD orders, the merchandise is nearly identical to products listed in the scope and was developed after the scope was written, Commerce said.

Suspension of liquidation and cash deposit requirements will apply to all imports of “extruded aluminum products that meet the chemical specifications for 5050-grade aluminum alloy and are heat-treated, regardless of producer, exporter, or importer,” entered on or after March 21, 2016, the date Commerce published the initiation of its anti-circumvention inquiry.

The Aluminum Extrusions Fair Trade Committee (AEFTC) had requested the inquiry, alleging that series 5050 alloys existed at the time of the original AD/CVD investigations on aluminum extrusions in 2010 and 2011, but that they were used for rolling or plate applications and were not heat-treated. The scope of duties on aluminum extrusions written during the investigations only covers series 1, 3 and 6 extrusions. However, since Commerce issued its orders, Chinese companies have developed heat-treated 5-series extrusions that were nearly identical to the series 1, 3 and 6 extrusions subject to duties. The 5-series alloy extrusions are now widely produced, AEFTC said, arguing duties should be applied to all 5-series extrusions, not just those exported by the Chinese exporter named in the inquiry.

That exporter, China Zhongwang Holdings, did not respond to questionnaires Commerce sent as part of the anti-circumvention inquiry. As a result, Commerce found Zhongwang did not cooperate and, relying on “adverse facts available,” assumed the worst. Commerce also found the 5050 alloy extrusions share the same general physical characteristics, expectations of ultimate purchasers, means of advertising and display, and channels of trade as aluminum extrusions otherwise covered by the AD/CVD orders.

Commerce is currently set to issue its final determination by Jan. 9, though it may extend that deadline. The agency will also consider whether to impose a certification requirement on importers of certain extrusions who claim their merchandise is not subject to AD/CV duties. Importers would have to certify “that their aluminum extrusions were not produced from heat-treated 5050 grade aluminum alloy.” Commerce intends to seek comments on possible certification requirements.

The AEFTC’s lawyer, Alan Price of Wiley Rein, praised Commerce’s preliminary decision as a step to “begin to shut down what has been a significant avenue of circumvention for Zhongwang and other Chinese producers,” in an AEFTC press release (here). He also noted Zhongwang’s decision “once again” to refuse to participate. “Zhongwang has no interest in participating at Commerce and has instead looked for ways to exploit the system from the beginning,” Price said.

For its part, Zhongwang said it declined to participate because it no longer produces 5-series extrusions. “Participation in the DOC inquiry conducted about a year ago is voluntary, and among the reasons we chose not to participate include that China Zhongwang ceased production of those products,” the company’s president, Lu Changqing, said in a press release (here). “China Zhongwang is an independent, non-state owned and market-driven company. We always strive for compliance with relevant trade regulations in markets we operate, and support fair business competition,” Lu said.

Meanwhile, two scope inquiries continue on whether 5050 alloy extrusions are covered by the scope of AD/CVD duties on aluminum extrusions. Commerce preliminarily found the scope does not cover the 5-series extrusions in a scope ruling issued in March, saying an anti-circumvention inquiry is the correct way to address the issue (see 1603180030). Though the final scope rulings were due Nov. 7, Commerce has now extended the deadline for the final rulings to Jan. 9 to coincide with the final results of the anti-circumvention inquiry, said Craig Lewis of Hogan Lovells, who represents Trending Imports, a participant in one of the scope inquiries.

Email ITTNews@warren-news.com for a copy of the preliminary results of the anti-circumvention inquiry.