• HQ H307924
• Aug 21, 2023

• Type : Entry • HTSUS :
•  Related:   H258302; H284348   

OT:RR:CTF:EPDR H307924 ND


Center Director
Industrial and Manufacturing Materials
Center of Excellence and Expertise
U.S. Customs and Border Protection
726 Exchange St., Suite 400
Buffalo, NY 14210

Attn: Nicholas Bishop, Supervisory Import Specialist

Re: Application for Further Review of Protest Number 270418101555; Antidumping Duties; A-570-886; Polyethylene Retail Carrier Bags from the People’s Republic of China; Scope

Dear Center Director,

The purpose of this decision is to address the Application for Further Review (“AFR”) of Protest number 270418101555, filed by AESA International Inc. (“AESA”) on September 26, 2018, regarding the assessment of antidumping duties (“ADD”) pursuant to the ADD order in case A-570-886 (“PRC Polyethylene Bags Order”). This protest is designated the lead protest and addresses the identical facts and issues presented in protest number 270419103053 regarding twelve additional entries.

FACTS:

AESA entered 12 entries of polyethylene plastic rolls (“plastic roll bags”) from the People’s Republic of China (“PRC” or “China”) between March 26, 2017, and July 28, 2017. According to the Automated Commercial Environment (“ACE”) and the entry summaries (U.S. Customs and Border Protection (“CBP”) Form 7501), AESA entered the merchandise as type 01, meaning a formal consumption entry not subject to ADD, and under subheading 3923.29.0000, Harmonized Tariff Schedule of the United States (Annotated) (“HTSUSA”). Additionally, ACE and the entry summaries reflect that the country of origin and export is China, and that the manufacturer of the imported merchandise is Yingkou Longsheng Industrial Co. Ltd.

According to AESA, the plastic roll bags were formed in the PRC into a continuous sleeve or lay-flat tube and printed with various designs. In its condition as imported, the rolls cannot be used as plastic bags because they contain no handles. After importation, the rolls are cut to length, heat-sealed to form the bottom of the bag, and stamped to form the top opening of the bag and, if necessary, a handle. AESA provided the Port with five samples of unfinished plastic roll bags, specifically LDPE produce bags and HDPE produce bags. The Port submitted the samples to the Laboratories and Scientific Services Directorate (“LSSD”) to determine the composition and measurements of the bags. Based on the samples provided by AESA and LSSD’s findings, the Port determined that AESA’s imported plastic roll bags are within the scope of the Anti-Circumvention Determination and therefore fall within the scope of the PRC Polyethylene Bags Order and are subject to ADD.

The Port provided CBP Headquarters (“HQ”) with photos of the rolls. These photos appear to be rolls of plastic tubes, several of which have continuous print of store markings. The two sides of the roll appear to be sealed, and do not indicate any openings. The rolls do not appear cut to length, or to have any slit or cut marks.

Polyethylene retail carrier bags (“PRCBs”) from the PRC are subject to ADD order A-570-886. See Antidumping Duty Order: Polyethylene Retail Carrier Bags from the People’s Republic of China, 69 Fed. Reg. 48,201 (Aug. 9, 2004). The scope of the order is as follows:

The merchandise subject to this antidumping duty order is polyethylene retail carrier bags (PRCBs) which may be referred to as t-shirt sacks, merchandise bags, grocery bags, or checkout bags. The subject merchandise is defined as non-sealable sacks and bags with handles (including drawstrings), without zippers or integral extruded closures, with or without gussets, with or without printing, of polyethylene film having a thickness no greater than 0.035 inch (0.889 mm) and no less than 0.00035 inch (0.00889 mm), and with no length or width shorter than 6 inches (15.24 cm) or longer than 40 inches (101.6 cm). The depth of the bag may be shorter than 6 inches but not longer than 40 inches (101.6 cm).

PRCBs are typically provided without any consumer packaging and free of charge by retail establishments, e.g., grocery, drug, convenience, department, specialty retail, discount stores, and restaurants, to their customers to package and carry their purchased products. The scope of the investigation excludes (1) polyethylene bags that are not printed with logos or store names and that are closeable with drawstrings made of polyethylene film and (2) polyethylene bags that are packed in consumer packaging with printing that refers to specific end-uses other than packaging and carrying merchandise from retail establishments, e.g., garbage bags, lawn bags, trash-can liners.

Imports of the subject merchandise are currently classifiable under statistical category 3923.21.0090 of the Harmonized Tariff Schedule of the United States (HTSUS). This subheading also covers products that are outside the scope of this investigation. Furthermore, although the HTSUS subheading is provided for convenience and customs purposes, our written description of the scope of this investigation is dispositive.

Id.

Additionally, on March 25, 2014, the U.S. Department of Commerce (“Commerce”) issued its final determination of circumvention of the PRC Polyethylene Bags Order, determining “that imports of unfinished PRCBs from the PRC are circumventing the [PRC Polyethylene Bags Order].” Polyethylene Retail Carrier Bags from the People’s Republic of China: Affirmative Final Determination of Circumvention of the Antidumping Duty Order, 79 Fed. Reg. 16,292 (March 25, 2014) (“Anti-Circumvention Determination”). The scope of the circumvention inquiry

[C]overs merchandise from the PRC that appears to be an unfinished PRCB which is sealed on all four sides, cut to length, and which appears ready to undergo the final step in the production process, i.e., to use a die press to stamp out the opening and create the handles of a PRCB. The unfinished PRCBs subject to this inquiry may or may not have printing and may be of different dimensions as long as they meet the description of the scope of the order.

Id. Commerce directed CBP to continue to suspend liquidation and require a cash deposit of estimated duties subject to this inquiry entered on or after May 14, 2013. Id.; see also Commerce Message No. 4086302 (Mar. 27, 2014).

On November 1, 2017, Commerce directed CBP to liquidate entries of PRCBs from the PRC entered for consumption between August 1, 2016, and July 31, 2017, at the cash deposit rate in effect on the date of entry. See Commerce Message No. 7305302 (Nov. 1, 2017). The cash deposit rate in effect on the dates of entry of the protested entries is 77.57%. See Commerce Message No. 4224215 (Aug. 11, 2004).

On January 10, 2018, CBP issued a Notice of Action (CBP Form 29), notifying AESA that its plastic roll bags were subject to the PRC Polyethylene Bags Order based on Commerce’s affirmative final determination of circumvention of the PRC Polyethylene Bags Order. According to ACE, CBP subsequently rate advanced the entry, changed the entries to type 03, meaning a formal consumption entry subject to ADD, and changed the classification to subheading 3917.32.0020, HTSUSA.

On April 6, 2018, CBP liquidated AESA’s entries pursuant to the instructions from Commerce in Message 7305302, applicable to case number A-570-886, at the 77.57% cash deposit rate in effect on the dates of entry. See Commerce Message No. 730503 (Nov. 1, 2017); see also Commerce Message No. 4224215 (Aug. 11, 2004).

AESA filed protest number 270418101555 on September 26, 2018, alleging that CBP incorrectly assessed ADD on its entries. AESA makes two primary arguments. First, AESA argues that the merchandise at issue is not within the scope of the ADD order in case A-570-886 or any applicable anti-circumvention determination. AESA specifically argues that the scope of the PRC Polyethylene Bags Order covers PRCBs imported in their finished state but does not apply to AESA’s imported plastic roll bags because its rolls were continuous sleeves or lay-flat rolls at the time of importation. AESA similarly argues that the Anti-Circumvention Determination applicable to unfinished PRCBs from China is limited to unfinished PRCBs that are sealed on all four sides, cut to length, and ready to be stamped to create an opening and handle but it does not apply to AESA’s imported plastic rolls because its plastic rolls are not sealed on all four sides or cut to length.

AESA describes its plastic roll bags as completed bags that do not have handles and argues that completed bags without handles are not within the scope of the PRC Polyethylene Bags Order. With its protest, AESA has provided invoices that identify AESA as the purchaser of various merchandise. For example, the invoice purportedly accompanying entry number XXX-XXXX013-1 identifies the imported merchandise as “plastic roll bags.” Other invoices identify the imported merchandise as “LDPE roll bags,” “LDPE poly bags,” “HDPE poly bags,” “HDPE plastic roll bag,” “HDPE produce bags,” “LDPE produce bags,” “LDPE ice bags,” “LD produce roll bag,” “LD poly bags,” and “PP bags.”

AESA also argues that the merchandise at issue is not covered by the third-country case number A-583-843 because it is not a product of Taiwan. According to the Port, ADD case number A-583-843 was not applied to the protested entries as the entries were not imported from Taiwan. ACE confirms that the entries were only assessed ADD based on the PRC Polyethylene Bags Order in A-570-886. Therefore, we need not address this issue.

ISSUE: Whether CBP properly assessed ADD on AESA’s entries? LAW AND ANALYSIS: It is the opinion of your office that this protest meets the criteria for further review. We agree and are of the opinion that this protest involves question of fact which have not been ruled upon, namely whether the described imported plastic roll bags may be assessed ADD per the PRC Polyethylene Bags Order. See 19 C.F.R. § 172.24(b).

We also note that the instant protest was timely filed. Pursuant to 19 U.S.C. § 1514(c)(3)(A), a party must file a protest within 180 days after the date of liquidation. CBP liquidated the protested entries on April 6, 2018. AESA filed its protest on September 26, 2018, which is within 180 days of the liquidation date.

Generally, assessed ADD duties properly applied by CBP are not protestable. It is well settled that when assessing and collecting ADD duties, CBP follows Commerce’s instructions. “Customs has a merely ministerial role in liquidating ADD duties.” Mitsubishi Electronics America, Inc. v. United States, 44 F.3d 973, 977 (Fed. Cir. 1994). The courts have consistently held that CBP’s role in the ADD process is simply to follow Commerce’s instructions in collecting deposits of estimated duties and in assessing ADD duties, together with interest, at the time of liquidation. See Fujitsu Ten Corporation of America v. United States, 21 C.I.T. 104, 107 (1997); American Hi-Fi International, Inc. v United States, 19 C.I.T. 1340, 1342-43 (1995).

However, “Customs, incident to its ‘ministerial’ function of fixing the amount of duties chargeable, must make factual findings to determine ‘what the merchandise is, and whether it is described in an order’ and must decide whether to apply the order to the merchandise.” LDA Incorporado v. United States, 79 F. Supp. 3d 1331, 1339 (Ct. Int’l Trade 2015); see also Sunpreme, Inc. v. United States, 946 F.3d 1300, 1320-21 (Fed. Cir. 2020) (internal citation omitted). CBP “is tasked with determining, for every imported product, whether the product falls within the scope of an antidumping or countervailing duty order. 19 U.S.C. § 1500(c). That necessarily entails evaluating both the product and the order.” Sunpreme, Inc. v. United States, 946 F.3d at 1320-21. “In each instance, Customs is statutorily tasked with answering a yes-or-no question as to whether the order applies, in order to fix the duty owed. Id. Pursuant to its ministerial function, though, CBP cannot “affect the scope of the order.” LDA Incorporado, 79 F. Supp. 3d at 1339.

“[W]here the importer claims that Customs erred as a matter of fact by including its goods within the scope of the order, Customs’ determination is the proper subject for a protest.” LDA Incorporado v. United States, 978 F. Supp. 2d 1359, 1367 (Ct. Int’l Trade 2014) (citing Xerox Corp. v. United States, 289 F.3d 792, 795 (Fed. Cir. 2002). On the other hand, if the scope of the order is unambiguous and CBP follows Commerce’s instructions, there is no decision that is made by CBP that would be protestable. See Mitsubishi Elecs. Am., Inc. v. United States, 44 F.3d 973, 977 (Fed. Cir. 1994) (holding that CBP “cannot modify Commerce’s determinations, their underlying facts, or their enforcement”); Headquarters Ruling (“HQ”) H258302 (Sept. 3, 2015) (finding that “. . . . because the scope of the antidumping and countervailing duty orders was clear and CBP acted in accordance with Commerce’s instructions, CBP acted in its ministerial capacity when it liquidated its entries.”); see also HQ H284348 (Aug. 10, 2017).

Accordingly, “where CBP can conclude that a product falls within the words of the order, both the affirmative scope language and any exclusions, CBP properly requires an importer to enter its goods as subject to an order.” Sunpreme, Inc. v. United States, 190 F. Supp. 3d 1185, 1202 (Ct. Int’l Trade 2016). The inquiry “comes down to whether CBP can determine that merchandise falls within the common meaning of the scope language based upon observable physical characteristics.” Id. If the importer believes that CBP has made a mistake of fact and does not want its goods to be covered by the order, the remedy is to seek a scope ruling. See LDA Incorporado, 79 F. Supp. 3d at 1342 n.12.

AESA alleges that the plastic roll bags at issue are not within the scope of the PRC Polyethylene Bags Order or corresponding anti-circumvention determination. AESA specifically argues that the scope of the PRC Polyethylene Bags Order covers PRCBs imported in their finished state but does not apply to AESA’s imported plastic rolls because its rolls are continuous sleeves or lay-flat rolls at the time of importation. AESA similarly argues that the Anti Circumvention Determination applicable to unfinished PRCBs from China is limited to unfinished PRCBs that are sealed on all four sides, cut to length, and ready to be stamped to create an opening and handle but it does not apply to AESA’s imported plastic rolls because its plastic rolls are not sealed on all four sides or cut to length.

First, we look to the plain language of the scope order to determine whether AESA’s entries are subject to the PRC Polyethylene Bags Order. See 69 Fed. Reg. 48,201. The merchandise subject to the PRC Polyethylene Bags Order are non-sealable sacks and bags with handles, without zippers or integral extruded closures, with or without gussets, with or without printing, of polyethylene film. Id. Additionally, to be subject to the scope, the PRCBs must have a thickness between 0.00035 inch (0.00889 mm) and 0.035 inch (0.889 mm), a length between 6 inches (15.24 cm) and 40 inches (101.6 cm), and a depth between 6 inches (15.24 cm) and 40 inches (101.6 cm). Id.

LSSD inspected the samples provided by AESA to determine the composition and measurements of the plastic roll bags as required by the scope order. LSSD first determined that the plastic bag rolls were composed of polyethene, which is a prerequisite to be subject to the PRC Polyethylene Bags Order. Id. LSSD further determined that the measurements of the samples, specifically the thickness, length, and depth, fell within the limits of the scope language. Id. AESA does not contend with either of LSSD’s findings, so neither the composition of the plastic roll bags, nor the measurements of the bags are in dispute. However, AESA argues that only bags with handles are subject to the scope of the PRC Polyethylene Bags Order. The record indicates that the Port agreed with this conclusion notwithstanding the Anti-Circumvention Determination. We similarly agree with AESA’s assertion as evidenced by the previous scope ruling wherein Commerce determined that the scope of the PRC Polyethylene Bags Order excluded bags without handles. See Final Scope Ruling in Part and Initiation of Formal Scope Inquiry of the Antidumping Duty Order on Polyethylene Retail Carrier Bags from the People’s Republic of China; Consolidated Packaging, LLC (June 5, 2006). We note, though, that the scope ruling was issued prior to the Anti-Circumvention Determination.

The only outstanding issue is whether the scope of the circumvention inquiry and subsequent Anti-Circumvention Determination renders AESA’s plastic roll bags subject to the PRC Polyethylene Bags Order. In the Anti-Circumvention Determination, Commerce determined that imports of unfinished PRCBs, specifically unfinished PRCBs that are sealed on all four sides, cut to length, and appear ready to undergo the final step in the production process, from the PRC are subject to the PRC Polyethylene Bags Order. See 79 Fed. Reg. 16,292 (March 25, 2014). Commerce noted that the “final step” entails using a die press to stamp out the opening and creating the handles of a finished PRCB. Id. According to AESA, the Anti-Circumvention Determination applies to PRCBs imported in their finished states and therefore does not apply to its plastic bag rolls, because its roll are continuous sleeves or lay-flat rolls at the time of importation. Additionally, AESA argues that the Anti-Circumvention Determination requires that unfinished PRCBs are sealed on all four sides, cut to length, and ready to be stamped to create an opening and handle, but these operations are inapplicable to its plastic roll bags as imported. According to AESA, its plastic roll bags are imported as a continuous sleeve or lay-flat tube and printed with various designs, and thereafter cut to length after importation and then heat-sealed to form the bottom of the bag and stamped to form a handle and top opening.

Based on the photos and descriptions, we agree that there is no other evidence to suggest that the samples of the imported plastic rolls are cut to length prior to importation. Although the lab reports contain average measurements of the length and width, it appears that the measurements determine the length of the bag after cutting to length. Moreover, the reports do not speak to the “cut to length” language in the scope order beyond the average measurements. In the Anti-Circumvention of the PRC Polyethylene Bags Order, Commerce determined that bags that are sealed and cut to length, appearing to be ready for the final step of opening and creating the handles, are subject to the scope of the order. See 79 Fed. Reg. 16,292. Without being cut to length prior to importation, the imported bags cannot appear “ready to undergo the final step in the production process, i.e., to use a die press to stamp out the opening and create the handles of a PRCB.” Id. Accordingly, we find that as a matter of fact that the tubes of plastic rolls do not fall under the language of the Anti-Circumvention Determination, and subsequently the PRC Polyethylene Bags Order. Therefore, AESA’s entries should be reliquidated without the assessment of ADD pursuant to the PRC Polyethylene Bags Order. HOLDING:

Based on the foregoing, the protest should be GRANTED in full. AESA’s entries of plastic roll bags from the PRC are outside the scope of the PRC Polyethylene Bags Order and accompanying Anti-Circumvention Determination. Accordingly, CBP improperly assessed ADD on AESA’s entries. AESA’s entries should be reliquidated without the assessment of ADD pursuant to the PRC Polyethylene Bags Order.

You are instructed to notify the Protestant of this decision no later than 60 days from the date of this decision. Any reliquidation of the entry or entries in accordance with the decision must be accomplished prior to this notification. Sixty days from the date of the decision, the Office of Trade, Regulations and Rulings will make the decision available to CBP personnel and the public on the Customs Rulings Online Search System (“CROSS”) at https://rulings.cbp.gov/, or other methods of public distribution.

Sincerely,

For Yuliya A. Gulis, Director
Commercial & Trade Facilitation Division