China Petroleum Wax Candles: Commerce Clarifies Scope of 'Utility Candle' AD Duty Exemption
The Commerce Department further clarified the requirements for “utility candles” to qualify for an exception from antidumping duties on petroleum wax candles from China (A-570-504). In a final scope ruling issued Jan. 29, the Commerce Department found candles imported by HSE USA qualify for the “utility candle” scope exclusion, and also defined the physical characteristics, consumer expectations, and ultimate use of “utility candles” for future scope decisions.
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2011 Scope Clarification Didn’t Add Enough Clarity
The issue of what kinds of candles are covered by the scope of the China petroleum wax candles AD duty order has long been a topic of contention. Although no such language was written into the scope of the order in 1985, Commerce has consistently found utility candles, birthday candles, and figurine candles to be exempt from AD duties in subsequent scope rulings. Faced with hundreds of scope ruling requests because of the ambiguity of the scope, Commerce in 2010 set out to clarify the scope exclusions (see 10081321). In its final clarification in 2011, Commerce defined “utility candles” excluded from the scope of the AD duty order as “those candles known variously as ‘household candles,’ ‘emergency candles,’ or ‘utility candles,’ (which are typically white in color, 5 inches long, .75 inch in diameter, and come in packs of two or more).”
The scope clarification evidently didn’t ease the confusion, because HSE filed a scope ruling request shortly afterward. HSE’s candles are 3.875 inches tall and 0.75 inches in diameter, white in color, and come in packages of 10 marked as “utility” or “household” candles. It argued the candles it imports should be outside the scope of the order. Although the candles are less than five inches long, the 2011 scope clarification only said that utility candles are “typically” five inches long. The characteristics of HSE’s candles were the same as “utility candles” for all other purposes, it said. Just because one dimension is atypical doesn’t mean the candles should be subject to AD duties, argued HSE.
New Parameters Address Characteristics, Expectations, End Uses
Finding the need to clarify once again, just as it had done with birthday candles in March 2013 (see 13051620), Commerce set forth a more specific list of criteria. Relying on prior scope rulings, statements from domestic industry, and a 1986 agency memo that the agency now thinks was the origin of the exclusion, Commerce defined “utility candles” as having the following characteristics:
Physical characteristics: Utility candles are within a height parameter of 3.5 inches through 5 inches, a diameter of 3/4 inches, white in color, and unscented.
Expectation of the ultimate purchasers: The ultimate purchaser of a utility candle is looking for an economical, plain, white, unscented candle with a significant amount of burn time.
Ultimate use of the product: The ultimate use of a utility candle is for home or commercial use. In addition, because of their size, utility candles are not suitable for keeping foods warm as are tea lights.
Applying these criteria to HSE, it said the imported candles meet them in every respect, and found HSE’s candles are “utility candles” that are not subject to AD duties.
Email ITTNews@warren-news.com for a copy of the preliminary and final scope rulings.