A petition filed Jan. 28 could result in the imposition of antidumping and countervailing duties on imports of certain fatty acids from Indonesia and Malaysia.
Scope
Subject fatty acids are the product of animal fat or vegetable oil chemical transformations and are found in many food products, animal feed, soaps, candles, detergents, paints, coatings, adhesives, lubricants, rubber, pharmaceuticals, cosmetics, and other personal and homecare products. They are commonly called pure or mixed fatty acids. Pure acids refer to single-chain fatty acids that have been separated from a mixed natural source (like animal fat or vegetable oil) using hydrolysis, commonly known as stearic and oleic acid. Mixed acids refer to blends of different single-chain fatty acids, commonly known as coconut/palm kernel fatty acids.
Subject fatty acids range in viscosity from liquids to solids. The petition covers fatty acids regardless of whether they have gone through a distillation process or their acid content, reactivity, functionality, freeze stability, heat stability, physical form, viscosity, grade, purity, molecular weight, or packaging. It also covers those processed in a third country, including by commingling, diluting, introducing or removing additives, or performing any other processing that would not remove them from the scope of the petition.
The scope excludes subject fatty acids containing 90 percent or more, by weight, of fatty acids with carbon length chains of C6, C8, or CIO (or any combination thereof). It also excludes mixtures with other materials when the fatty acid component comprises less than 80 percent of the total weight of the mixture.
Subject fatty acids are typically classifiable under HTSUS subheadings 2915.70.0120, 2915.70.0150, 2915.90.1050, 2916.15.1000, 2916.15.5100, 3823.11.0000, 3823.12.0000, 3823.19.2000, and 3823.19.4000 and may also enter under 2915.70.0110 and 2915.90.1010.
AD/CVD Duty Rates
The petition alleges that subject goods are being sold in the U.S. market at less than normal value at margins of 20.08 to 94.41 percent.
However, importers are typically liable for the payment of AD/CVD duties at the alleged rates only when importing from foreign producers or exporters that fail to cooperate with AD/CVD 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 governments of Indonesia and Malaysia but does not assert specific rates,
Next Steps
The DOC and the ITC 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 March 16 for the ITC and April 23 (CVD) and July 7 (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 CVD cash deposits for all entries of subject goods entered on or after the date the DOC determinations are published. However, in certain circumstances duties could be owed three months prior to these dates. In addition, preliminary cash deposit rates can change in the final DOC determinations.
Many important issues affecting coverage, duty rates, and other considerations are argued and decided in the early stages of AD/CVD 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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