Commerce Didn't Provide Adequate Notice of Sudden Change in Classification, Coal Exporters Say

In a post-oral argument submission Sept. 20, Chinese exporters of xanthan gum focused on the government’s claim that they had waived their challenge to the Harmonized Tariff Schedule categorization of bituminous coal in a review by failing to meet the exhaustion requirement (Neimenggu Fufeng Biotechnologies Co. v. U.S., CIT # 23-00068)

The government said plaintiffs, led by exporter and mandatory respondent Fufeng, “commits legal error through its myopic treatment of whether Fufeng had adequate notice to exhaust the bituminous coal HTS argument” by claiming that Fufeng had notice “based merely on inconspicuous listing in” a preliminary memo.

Fufeng said its arguments during oral proceedings showed that Commerce had suddenly changed a general policy regarding its classification of coal in the final results of its review. As a result, under precedent set by the U.S. Court of Appeals for the Federal Circuit, Commerce had been “obligated to provide” Fufeng notice “that it was considering diverging from its normal policy and explain the implications thereof.”

The exporter agreed with Commerce’s valuation method used in its preliminary results -- it initially received a zero percent dumping margin (see 2402280072) -- and therefore had no reason raise any challenges until the final results slapped it with a 17.36% rate, it said. It wasn’t until the department changed its valuation method for the final results, based on the recommendation of a petitioner, that the HTS heading became meaningful, it said.

“Hence, it was only Petitioner’s direct briefing that Fufeng was placed on adequate notice that HTS 2701.12.9000 could be triggered in the Final Results to directly value coal,” it said.