Background

HPDP is a sustainable raw material generally derived from hardwood or softwood species and processed to isolate nearly pure cellulose. It is used in a variety of applications, including eyeglass frames, pharmaceutical products (as an excipient), foods (as a bulking agent), and cellulose film and filtration products.
The HPDP subject to this petition is a dissolving pulp with an alpha cellulose of 90 percent by weight or higher on an oven dry basis. It may be derived from any virgin or recycled cellulose fiber source (including those sourced from hardwoods, softwoods, woody crops, agricultural crops/byproducts/residue, and agricultural/industrial/other waste). It may be produced from a chemical pulping process including a kraft (sulfate) pulping and/or sulfite pulping process.
HPDP can be shipped in any form, including a liquid slurry or in any dried form such as flakes, powder, granules, pellets, shreds, rolls, and sheets.

The scope includes HPDP that has been finished, packaged, or otherwise processed in a third country, including processes such as commingling, blending, diluting, or repackaging.

HPDP products are typically classified under HTSUS 4702.00.0020 and 4702.00.0040 but the HTSUS subheading is not determinative as to whether products are covered by the scope.

HPDP with an intrinsic viscosity under 455 milliliters per gram is excluded from the scope of this petition.

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 226.88 percent from Norway and 168.09 percent from Brazil.

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 government of Brazil 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 Sept. 25 for the ITC and Nov. 4 (CVD) and Jan 18. (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 dates 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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