A petition filed July 23 could result in the imposition of antidumping and/or countervailing duties on imports of freight rail couplers and parts thereof from the Czech Republic and India. There are already AD and CVD orders in effect on freight rail couplers from China and Mexico.
Scope
FRCs are used to connect freight railcars together and absorb shocks during braking. They are composed of two main parts, knuckles and coupler bodies, but may also include other items (e.g., coupler locks, lock lift assemblies, knuckle pins, knuckle throwers, and rotors).
The scope of this petition covers freight railcar couplers (also known as fits or assemblies) and parts thereof. Subject couplers and parts are included within the scope whether finished or unfinished, imported individually or with other subject or non-subject parts, assembled or unassembled, mounted or unmounted, or joined with non-subject merchandise, such as other non-subject parts or a completed railcar. Coupler parts are included when imported individually.
Subject merchandise includes coupler parts that have been further processed or assembled, including those attached to a railcar in third countries. Further processing includes arc washing, welding, grinding, shot blasting, heat treatment, painting, coating, priming, machining, and assembly of various parts.
Subject goods may be classified under HTSUS subheadings 8607.30.1000, 8607.30.1010, 8607.30.1050, 8607.30.1090, 7326.90.8688, 8606.10.0000, 8606.30.1000, 8606.91.0000, 8606.92.0000, 8606.99.0130, 8606.99.0160, or 9803.00.50.
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 23.07 to 419.55 percent for India and 52.69 to 166.67 percent for the Czech Republic.
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. Lower rates are often assigned to imports from cooperative entities.
The petition also argues that subject goods are being subsidized by the government 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 Sept. 8 for the ITC and Oct. 16 (CVD) and Dec. 30 (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 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, 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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