Zhongwang Found Circumventing AD/CVD Orders

November 8, 2016; Washington, DC - On Friday, the Department of Commerce (“Commerce”) preliminarily determined that Zhongwang used heat-treated 5050 alloy grade aluminum extrusions to avoid duties. In its determination, Commerce concluded that this alloy grade was never intended to be used in extrusion applications and that Zhongwang had engaged in this activity solely to avoid duties.

In response to the Department’s preliminary determinations, Alan Price, counsel to the Petitioners and head of Wiley Rein LLP trade group, said that “we are gratified by the Department of Commerce’s preliminary determination to take steps to begin to shut down what has been a significant avenue of circumvention for Zhongwang and other Chinese producers.”

Mr. Price indicated that “regardless of what it has said publicly, rather than address the Commerce’s concerns, Zhongwang once again refused to participate in this proceeding.” The evidence provided by Petitioners showed that almost as soon as the orders went into effect, Zhongwang began circumventing the duties through this and other schemes. “Zhongwang has no interest in participating at Commerce and has instead looked for ways to exploit the system from the beginning. The Department’s determination is a step in the right direction to correct Zhongwang’s blatant attempts to cheat and evade the orders.”

“The AEC is pleased to see this decision from the Department of Commerce. We know Commerce has worked very hard on this case, and we thank them for that,” said Jeff Henderson, President of the Aluminum Extruders Council.

Background:
On Friday, the Department of Commerce (“the Department”) preliminarily determined aluminum extrusions that meet the chemical specifications for 5050-grade aluminum alloy, regardless of producer, exporter, or importer constitute later-developed merchandise and are circumventing the antidumping (AD) and countervailing (CVD) orders on Aluminum Extrusions from the People’s Republic of China. Within the industry the 5050-grade alloy is a rolling alloy and is not intended for use as an extrusion. To use it as an extrusion, the product must be heat-treated following extrusion. This is not a recognized practice for this particular alloy within the industry. The Department found that 5050-grade aluminum alloy extrusions were not commercially available at the time when the petition was filed and that these 5050-alloy aluminum products were developed after the orders went into effect with the purpose of evading the payment of AD and CVD duties. Because of Chinese producers’ widespread practice of circumventing the AD and CVD orders using 5050-grade aluminum alloys, the Department has applied its ruling on a country-wide basis to all Chinese producers and exporters. The Department’s preliminary affirmative circumvention determination clears the way for Customs and Border Protection to suspend liquidation and collect cash deposits on 5050-grade aluminum alloy extrusions that have entered the United States on or after March 21, 2016.

The Department intends to issue its final circumvention determination no later than January 9, 2017.

The Aluminum Extruders Council (AEC), established in 1950, is an international association dedicated to advancing the effective use of aluminum extrusion in North America. AEC is committed to bringing comprehensive information about extrusion's characteristics, applications, environmental benefits, design and technology to users, product designers, engineers and the academic community. Further, AEC is focused on enhancing the ability of its members to meet the emerging demands of the market through sharing knowledge and best practices. Advocacy programs ensure that aluminum extruders, suppliers and their products remain relevant and viable in an ever-changing legislative and regulatory climate. More than 120 member companies represent primary aluminum producers and other industry suppliers in addition to aluminum extruders operating hundreds of extrusion presses in hundreds of plants worldwide. For more information, visit the website at www.aec.org; contact AEC at mail@aec.org.

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For more information please contact:

Nancy Molenda
Communications Manager
AEC/ET Foundation
nmolenda@tso.net
847.416.7227