Friday, October 23, 2015

AEC Files Scope Clarification and Circumvention Case against China Zhongwang Holdings Ltd.

The Aluminum Extruders Council (AEC) has filed a petition against China Zhongwang Holdings Ltd. alleging the company has systematically and illegally evaded duties on aluminum extrusions imported into the United States.  The alleged scheme involves hundreds of millions of pounds aluminum extrusions that are simply cut and welded into aluminum slabs.  Upon entering the U.S. these extrusions are being identified as ‘pallets’ even though the testimony the Council has gathered makes it clear the sole purpose of these extrusions is to re-melt them back into billets.

“In late July, the AEC released a statement to the press calling on the United States Government, as well as others identified in the Dupre Analytics report, to investigate issues of transshipment and circumvention by Zhongwang.  We have made our case to U.S. Customs regarding the transshipment allegations, and now we are filing our circumvention case with the Department of Commerce,” said Jeff Henderson, Director of Operations at the AEC.

The circumvention and scope clarification case also alleges that China Zhongwang has been exporting 5xxx series alloy extrusions into the U.S. in order to avoid U.S. antidumping and countervailing duties.

Once filed, the Department of Commerce has forty-five days to review and decide whether or not to launch a full investigation.  “Given the severity of this case to our domestic industry, we call on the Department of Commerce to investigate this case,” said Henderson.

Monday, October 5, 2015

Circumvention Has Become Biggest Issue with AEC Fair Trade

Our trade case continues to be extremely active, especially with the big news generated from the Dupre Analytics report.  There are several issues to report that are changing with each week.

Administrative Reviews

The Department of Commerce (DOC) has still not published the preliminary results from the 3rd annual administrative review. As you may recall, the rates published in June were incomplete and contained a major error.  The DOC says they will come out with those rates in October, but it is looking like they may not do that, and instead, just publish their final numbers in December.
The fourth administrative review has begun.  The DOC is selecting mandatory respondents now.  They rejected our request to select ZhongWang (ZW).  Their reasoning is that ZW is not the exporter of record in the trade data, so they can’t justify selecting them.  Therefore, it is likely we will see some of the same Chinese extruders we’ve seen before.

Scope Issues

We lost a couple of decisions involving tubular products (handles, poles, etc.).  If those parts come in with ‘substantial’ hardware, fasteners, etc. the DOC is excluding them.  If it’s a simple pole with no extraneous parts, it is included.  There was a scope request made for solar mounting systems.  Given the department’s previous ruling on mounting systems, we did not fight this one.  That’s a shame, but we have virtually no chance of winning.  We did win one against a request for extrusions used in automotive.  The DOC characterized them as an incomplete subassembly (metal bushings).  We are still awaiting a decision on 5xxx alloy extrusion (slated for early October).

Circumvention

The Fair Claims Act case out of Florida was finalized with the last of the involved parties cutting their deal with the government. Fines/duties of approximately $500,000 were levied against Wingfield Industries.  This was the fourth of the four companies that were transshipping product through Malaysia.  This case was blown open by a whistleblower that came forward to report the scheme.

The Puerto Rico case is still in the sentencing phase.  Now, the ring leader that was sentenced to jail has joined the other defendants in requesting a jury trial.  We will need to work hard to follow this case in the event we have a chance to testify.  Since our letter writing campaign that caused the judge to issue jail time, the plea deals have been torn up.  So now, the case will essentially start over.

The Zhongwang issue has stolen all the headlines recently.  Dupre Analytics released a report via the Internet exposing ZW fraud on a number of levels.  This report not only validated our concerns, but went even farther.  The AEC is reviewing its options to find the best way to respond.  It is clear that Dupre’s allegation of transshipment through third countries is deeply concerning.  We sent a press release calling for investigations into these allegations.

Summary

Overall the case is going well.  Even though the scope issues have settled into something less than what we wanted, the base case is still unchallenged and effective.  Circumvention has become the biggest issue, and with our added work in D.C. we are starting to gain traction in getting help from the government.  Your continued support and time make all of this happen.