A petition filed June 25 could result in the imposition of antidumping and/or countervailing duties on imports of oleoresin paprika from India.
Scope
ORP is a viscous, highly-colored liquid with a red or orange tint that is made using solvent extraction to remove color from dried, ground Capsicum peppers. It is used primarily to color food products such as sausage-type products, cheese sauces, gravies, condiments, salad dressings, baked goods, snacks, icings, cereals, shampoos, soaps, and lipsticks. Perhaps the most common use is in spice blends, where the ORP is used to color salt that, in turn, is mixed with spices and peppers to complete the finished spice blend. However, ORP has little if any flavor itself and is not used as a spice to flavor food.
The petition covers all ORP, regardless of pepper variety, with an American Spice Trade Association value of at least 500 or a color unit value of at least 20,000. Subject ORP may be blended with oil or water prior to importation or may be imported in its crude or unstandardized form. The scope includes all ORP meeting the specifications above regardless of whether or not blended with or soluble in oil or water and regardless of weight, pungency, quality, or solvent content. Further, the scope includes crude or unstandardized ORP extracted or produced in India that has been blended, finished, packaged, or otherwise processed in a third country if such processing would not otherwise remove the ORP from the scope if performed in India.
Covered ORP is classified under HTSUS subheadings 3203.00.8000 and 3301.90.1010 and may also enter under HTSUS subheadings 1301.90.9190, 1302.19.9140, and 3205.00.0500.
AD/CV Duty Rates
The petition alleges that subject goods are being sold in the U.S. market at less than normal value, specifically at margins of 181.02 to 222.53 percent.
However, importers are typically liable for the payment of AD duties at the alleged rates only when importing from foreign producers or exporters that fail to cooperate with AD investigations by the Department of Commerce and International Trade Commission. Lower rates are often assigned to imports from cooperative entities.
The petition also argues that subject goods are being subsidized by the government of India but does not assert specific rates.
Next Steps
The Department of Commerce and the International Trade Commission will consider this petition and quickly launch investigations to determine dumping margins/net subsidy rates and potential injury to the U.S. domestic industry, respectively. Preliminary determinations are due around Aug. 11 for the ITC and Sept. 18 (CV) and Dec. 2 (AD) for the DOC, although these dates may be extended.
If these preliminary determinations are affirmative, U.S. importers will be required to post AD and/or CV duty cash deposits for all entries of subject goods entered on or after the date those determinations are published. However, in certain circumstances duties could be owed three months prior to that date. In addition, preliminary cash deposit rates can change in the final DOC determinations.
Many important issues affecting coverage, duty rates, other considerations are argued and decided in the early stages of AD/CV proceedings before preliminary determinations are issued. Companies that strategically engage in these early stages are thus best positioned to protect their interests and mitigate any potential duty liability. For more information, please contact Sandler, Travis & Rosenberg.
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