Export Compliance Daily is a Warren News publication.

Commerce Wrongly Emphasized Just Two Country-of-Origin Factors, Foil Exporter Says Again

An aluminum foil importer added its own motion for judgment to a stack of cases, primarily coming from the foil and solar panel industries, challenging the Commerce Department’s alleged overemphasis on only one or two factors out of the five used to analyze a product’s country of origin in evasion investigations (see 2407030064, 2406140059 and 2401230041) (Hanon Systems Alabama Corp. v. U.S., CIT # 24-00013).

Sign up for a free preview to unlock the rest of this article

Export Compliance Daily combines U.S. export control news, foreign border import regulation and policy developments into a single daily information service that reliably informs its trade professional readers about important current issues affecting their operations.

Importer Hanon filed its most recent complaint in February claiming that the department had only focused on the patterns of trade and the value added factors to determine that Korean processing of the foil wasn’t substantial, even though the other three -- level of investment, level of R&D and extent of production facilities in Korea -- had actually been found by Commerce to weigh in favor of substantial processing (see 2402210062).

Thai and Cambodian solar cell exporters, meanwhile, claim that Commerce looked only to the R&D levels factor or the value added factor instead of all five.

In Hanon’s case, “Commerce’s analysis effectively rendered three out of the five statutory factors meaningless,” the importer said in its motion for judgment.

Further, Commerce calculated the value added by third-country process incorrectly, almost all of the briefs claimed.

Hanon and the Thai solar panel exporters said that Commerce had failed to conduct a qualitative analysis when it calculated the value-added factor, even though it was directed to by Congress after the Uruguay Round Agreements.

But Commerce’s determination in Hanon’s case conducted a solely quantitative analysis, the importer argued; the determination said it “summed the per-unit costs incurred in Korea by Dong-IL for non-Chinese material inputs used during the Korean processing of inquiry merchandise, labor, fixed and variable overhead, selling, general, and administrative items, and interest, and divided the sum by the per-unit weighted-average value of Dong-IL’s U.S. sales of inquiry merchandise during the inquiry period.”

Conducting qualitative as well as quantitative analyses to value processing is “a matter of common sense and can never be as simple as mere counting,” it said. Some processes are more important, sophisticated or time-consuming, it said.

“The plain language and the legislative intent support a narrow interpretation of the statute,” Hanon said. “A narrow application is proper, especially given the extraordinary action of an anticircumvention proceeding, which brings nonsubject merchandise under the scope of an order.”