United States Court of International Trade
LED Candles are Lamps and Light Fittings of Heading 9405.
In Gerson Company v. United States, Slip Op. 17-96, Court No. 11-225 (August 2, 2017), the Court determined that light emitting diodes or LED candles may not be classified under Chapter 85. Instead of providing illumination by means of a wick and the combustion of candle wax, as does an ordinary candle, each of these subject articles provides illumination by means of an internal semiconductor that is a “light-emitting diode,” or “LED,” powered by a battery contained within the article. When the LED is energized by the battery, the illuminated article resembles a lit candle. However, the Court does not see these articles as classifiable under Chapter 85, because (1) the LED candles are not components within a larger system like articles of Heading 8541, which describes light emitting diodes or semiconductor devices; and (2) the LED candles, while they may be considered electrical appliances, are described more specifically as lamps of Heading 9405. The Court did not want to consider Heading 8543 broadly to encompass “all electric, luminescent lamps.” The Court held, “In summary, when considered together, the ENs relating to HS chapter 85, to certain headings therein, and to HS heading 94.05 support the conclusion that goods such as Gerson’s articles, which are self-contained, i.e., “independently used,” lamps suitable for household use as illuminating and decorative articles, were intended by the Harmonized System drafters to fall within HS heading 94.05, not HS heading 85.43.” Slip Op., pg. 15.
Sustained Commerce Decision
In Morex Ribbon Corp., Papillon Ribbon and Bow Inc., and Ad-Teck Ribbon, LLC v. United States, Slip Op. 17-95, Court No. 15-00141 (August 1, 2017) the Court heard challenges to the 137.20% antidumping margin assigned to Hen Hoa Trading Co. Ltd. in the third administrative review of the antidumping duty order covering narrow woven ribbons with woven selvedge from Taiwan. Hen Hao Trading was named in the administrative review as a mandatory respondent and withdrew without submitting any information. Consequently, they were given a 137.20% antidumping margin based on the adverse facts available. Plaintiffs imported Hen Hao’s ribbons, and challenged the margin as unreasonable, and not corroborated by evidence before Commerce. For the following reasons Commerce’s determinations were upheld by the Court.
The first issue was the reasonableness of the assigned rate. Commerce must use substitutes when a respondent drops from a review because no information has been submitted. These substitutes must be “reasonably accurate estimate of the respondent’s actual rate, albeit with some built-in increase intended as a deterrent to noncompliance.” Id. at 5. In selecting the rate Commerce choose between (1) 137.20% the highest rate in the petition, (2) 4.37% the rate from the less then fair value investigation, or (3) 30.64% a cooperative mandatory respondent’s rate. Commerce determined that at the 4.47% Hen Hao would continue to import and that using the 30.64% was not deter noncompliance because it belonged to a party that cooperated in the review. Commerce felt that the 137.20% was the only rate sufficient to deter non-compliance with the respondent request. The Court agreed with these determinations. Plaintiffs also challenged the rate was unreasonably high because as independent importers would need to pay the amount on Hen Hao’s products. The Court rejected this because the argument “would allow an uncooperative foreign exporter to avoid the adverse inferences permitted by statute simply by selecting an unrelated importer.” Id. at 8.
The final issue is if Commerce had corroborated the dumping margin with facts before the agency. When basing dumping margins on adverse facts available “Commerce may not select unreasonably high rates having no relationship to the respondent’s actual dumping margin.” Id. at 5. To corroborate the 137.20% rate, Commerce reviewed transaction-specific margins submitted by other respondents regarding hundreds of U.S. sales of ribbons during the POR. Plaintiffs argued that the number of sales examined was not satisfactory, however the Court disagreed and found numbers of transactions provided were sufficient. In addition, the 137.20% rate was relevant to Hen Hao because the company previously supplied ribbons to a Canadian reseller who Commerce found to be dumping at the same rate in the first administrative review. The Court found the rate to be corroborated by evidence before the agency.