The U.S. Supreme Court turned down the chance to take up a pair of high-profile international trade cases.
The justices denied review March 4 for a case challenging the Commerce Department’s authority to punish noncooperative foreign respondents in duty investigations, and another case dealing with how U.S. Customs and Border Protection classifies goods “not otherwise specified” in the U.S. tariff schedule.
Food distributor Well Luck Co. claimed the CBP misclassified its entries of sunflower seeds under a tariff provision for fruits, nuts, and other edible plant parts that are “prepared or preserved,” because of how they were processed, flavored, and packaged. As a result, the imports faced 17.9 percent import duties.
Well Luck said the imports should be classified under a provision for “sunflower seeds,” which can enter the U.S. free of duties.
Well Luck claimed the case went far beyond sunflower seeds. The company said it could affect how the CBP interprets a host of tariff provisions covering goods “not elsewhere specified or included” in the Harmonized Tariff Schedule of the U.S., covering a total of 493 different products representing $166.6 billion in annual U.S. imports.
German paper manufacturer Papierfabrik August Koehler SE challenged the level of antidumping duties assigned to its lightweight thermal paper, which is typically used for printed receipts. More broadly, the company challenged the scope of Commerce’s authority to use “adverse facts available.”
If Commerce thinks a foreign party didn’t cooperate in the department’s antidumping or countervailing duty investigations to the best of its ability, Commerce can fill any gaps in the company’s information with otherwise available data. This tends to result in higher duty rates, and thus is intended to encourage parties to cooperate in these proceedings.
Commerce used this authority to raise duties against Papierfabrik from just 4.33 percent to 75.36 percent.
Papierfabrik argued that even when the department uses adverse facts available, it has to corroborate that the information it uses will lead to a fairly accurate assessment of the company’s business practices. Five professors specializing in international trade law filed an amicus brief with the court, saying that Commerce’s broad use of AFA was contrary to Congress’s intent.
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