Commerce Says Two-Ply Hardwood Plywood Out of AD/CVD Scope on Remand at Trade Court

The Commerce Department said that hardwood plywood exported to the U.S. by the Vietnam Finewood Company made using two-ply panels imported into Vietnam from China are outside the scope of antidumping and countervailing duties on hardwood plywood from China, in remand results submitted to the Court of International Trade on June 15. The agency said under protest that the goods are not subject to the duties since the trade court ruled that the scope language "unambiguously" shows that the orders do not include Chinese two-ply panels (Vietnam Finewood Company v. United States, CIT # 22-00049).

Commerce imposed the AD/CVD orders in 2018 and later received a scope referral as part of an Enforce and Protect Act investigation on Finewood and its U.S. customers that began later that year. The scope referral concerned whether the two-ply cores further processed in Vietnam were within the scope of the orders. Commerce said they were covered by duties due to ambiguous scope language and the fact that the panels were not substantially transformed in Vietnam.

Finewood, along with Far East American, Liberty Woods and IGF sued, arguing that Commerce should not have read ambiguity into the scope (see 2212300028). Judge Mark Barnett agreed, sending the scope ruling back to the agency. The first sentence of the orders' scope says that the merchandise under investigation is "hardwood and decorative plywood, and certain veneered panels as described below." The second defines hardwood and decorative plywood as a "generally flat, multilayered plywood or other veneered panel, consisting of two or more layers or plies of wood veneers and a core, with the face and/or back veneer made of non-coniferous wood (hardwood) or bamboo."

Commerce said the scope actually covers two products, hardwood and decorative plywood and certain veneered panels, centering its scope ruling on the idea that the phrase "certain veneered panels" was ambiguous since the scope's second sentence only defined hardwood plywood. Barnett said this was "problematic in light of applicable statutory provisions and Commerce's regulation." The law requires Commerce to include a description of the merchandise covered by the orders. Barnett ruled that the agency "failed to address the consequences of its ambiguity determination in the context of these important considerations but took an interpretive approach which was at odds with them."

On remand, the agency said under protest that in light of the court's ruling, Finewood's hardwood plywood exports were excluded from the orders. None of the parties in the case said that the remand results conflicted with Barnett's findings; however, the petitioner requested that the agency confirm that nothing in the remand results precludes its ability to find that two-ply panels are covered by the orders via circumvention. Commerce said that since the question of circumvention is not at issue here, it would be "inappropriate to address that issue in this remand proceeding."