CIT Orders Commerce Redo of AD/CVD Circumvention Ruling on Hardwood Plywood

The Court of International Trade ordered the Commerce Department to reconsider its determination that certain hardwood plywood with outer veneers of radiata or agathis pine is circumventing antidumping and countervailing duties on hardwood plywood from China. CIT Judge Jane Restani found that Commerce had insufficient evidence to prove that the type of plywood in question was developed after the duties were imposed, in a Feb. 18 decision.

Shelter Forest International Acquisition and Ikea had challenged the anti-circumvention ruling, issued in November 2019 (see 1911270021). Commerce had determined that plywood “with face and back veneers of radiata and/or agathis pine that: (1) has a Toxic Substances Control Act (TSCA) or California Air Resources Board (CARB) label certifying that it is compliant with TSCA/CARB requirements; and (2) is made with a resin, the majority of which is comprised of one or more of three product types -- urea formaldehyde, polyvinyl acetate, and/or soy,” circumvented hardwood plywood duties since it was developed after the AD/CV duty orders were issued but otherwise similar to in-scope merchandise.

Restani determined that Commerce did not have sufficient evidence to make this determination, since the agency made it impossible for the companies in question to prove the plywood was commercially available before the order was put in place. Restani said Commerce was overly strict in its criteria for the allegedly circumventing goods, making it difficult to show that the plywood had been developed before the orders were issued. Commerce also rejected additional evidence that could have proved the plywood was commercially available before the order.

The judge also found that if Commerce comes back finding yet again that importers of these particular plywood types are circumventing AD/CV duties, then Commerce shall provide the importers with a chance to demonstrate whether they qualify for a separate rate rather than the 182.9% China-wide rate for hardwood plywood. The importers had argued that Commerce did not provide any opportunity they had to show they were entitled to any rate other than a China-wide rate.

Finally, the court ruled that Commerce inappropriately applied its anti-circumvention determination to subject merchandise entered after the signature date of its initiation notice. While Commerce may suspend liquidation and require cash deposits on entries beginning on the date of initiation, that date refers to the date that the initiation is published, not when it is signed, the court said.