Case: 20-1501 Document: 23 Page: 1 Filed: 12/17/2020
United States Court of Appeals
for the Federal Circuit
______________________
TAI-AO ALUMINIUM (TAISHAN) CO., LTD., TAAL
AMERICA LTD., REGAL IDEAS, INC.,
Plaintiffs
v.
UNITED STATES,
Defendant
ALUMINUM EXTRUSIONS FAIR TRADE
COMMITTEE,
Defendant-Appellant
______________________
2020-1501
______________________
Appeal from the United States Court of International
Trade in No. 1:17-cv-00216-GSK, Judge Gary S.
Katzmann.
______________________
Decided: December 17, 2020
______________________
ALAN H. PRICE, Wiley Rein, LLP, Washington, DC, for
defendant-appellant. Also represented by ROBERT E.
DEFRANCESCO, III, LAURA EL-SABAAWI, DERICK HOLT,
ELIZABETH S. LEE.
_____________________
Case: 20-1501 Document: 23 Page: 2 Filed: 12/17/2020
2 TAI-AO ALUMINIUM (TAISHAN) CO. v. UNITED STATES
Before PROST, Chief Judge, DYK and WALLACH, Circuit
Judges.
DYK, Circuit Judge.
On May 26, 2011, the United States Department of
Commerce (“Commerce”) issued antidumping and counter-
vailing duty orders on aluminum extrusions from the Peo-
ple’s Republic of China (“PRC”) (“Orders”). On March 21,
2016, Commerce initiated an anti-circumvention inquiry as
to heat-treated 5050-grade extruded aluminum products
exported by China Zhongwang Holdings Ltd. and its affili-
ates. On November 14, 2016, Commerce announced in its
Preliminary Determination that it was applying the anti-
circumvention inquiry to all heat-treated 5050-grade ex-
truded aluminum products from the PRC, including those
of Tai-Ao Aluminum (Taishan) Co., Ltd. and TAAL Amer-
ica Ltd. (collectively, “Tai-Ao”) and Regal Ideas, Inc. (“Re-
gal”), and further determined that all such products were
circumventing the Orders. Commerce accordingly in-
structed the United States Customs and Border Protection
(“Customs”) to suspend liquidation of all heat-treated
5050-grade extruded aluminum products from the PRC en-
tered, or withdrawn from warehouse, on or after March 21,
2016, the date that the original inquiry was commenced.
The Court of International Trade (“Trade Court”) found
that Commerce did not provide adequate notice to Tai-Ao
and Regal that their products were subject to the inquiry
initiated on March 21, 2016, and instead “liquidation
should have been suspended from the date of the Prelimi-
nary Determination,” (November 14, 2016), and remanded
to Commerce to reformulate its liquidation instructions ac-
cordingly. Tai-Ao Aluminium (Taishan) Co. v. United
States (“Tai-Ao I”),
391 F. Supp. 3d 1301, 1315 (Ct. Int’l
Trade 2019). On remand from the Trade Court, Commerce
reformulated its liquidation instructions, instructing Cus-
toms to exclude from the scope of the Orders, and therefore
exclude from duty assessment, entries for Tai-Ao made
Case: 20-1501 Document: 23 Page: 3 Filed: 12/17/2020
TAI-AO ALUMINIUM (TAISHAN) CO. v. UNITED STATES 3
between March 21, 2016, and November 13, 2016. 1 The
Trade Court sustained Commerce’s reformulated liquida-
tion instructions. Tai-Ao Aluminium (Taishan) Co. v.
United States (“Tai-Ao II”),
415 F. Supp. 3d 1391, 1395 (Ct.
Int’l Trade 2019). We conclude that the Trade Court did
not err in its remand decision and affirm.
BACKGROUND
I
The Tariff Act of 1930, as amended, “permits Com-
merce to impose two types of duties on imports that injure
domestic industries.” See Guangdong Wireking
Housewares & Hardware Co. v. United States,
745 F.3d
1194, 1196 (Fed. Cir. 2014). First, Commerce may levy an-
tidumping duties on goods “sold in the United States at less
than . . . fair value.” 19 U.S.C. § 1673. Second, Commerce
may impose countervailing duties on goods that receive “a
countervailable subsidy” from a foreign government.
Id.
§ 1671(a).
In order to effectively combat circumvention of anti-
dumping duty or countervailing duty orders, “a domestic
interested party may allege that changes to an imported
product . . . constitutes circumvention under [19 U.S.C.
§ 1677j].” 19 C.F.R. § 351.225(a) (2020). When such issues
1 The reformulated liquidation instructions state
that Tai-Ao’s entries that “were entered, or withdrawn
from warehouse, for consumption during the period
03/21/2016 through 11/13/2016 . . . are outside of the scope”
of the Orders. J.A. 1237–38. This remedy has the same
effect as suspension of liquidation for entries made on or
after November 14, 2016.
Commerce did not issue reformulated instructions for
Regal because Regal had no entries for the period between
March 21, 2016 and November 13, 2016.
Case: 20-1501 Document: 23 Page: 4 Filed: 12/17/2020
4 TAI-AO ALUMINIUM (TAISHAN) CO. v. UNITED STATES
arise, Commerce may initiate an anti-circumvention in-
quiry and issue “scope rulings” that “clarify the scope of an
order or suspended investigation with respect to particular
products.” Id.; see also
id. § 351.225(g)–(j). As we noted in
Deacero S.A. de C.V. v. United States, Commerce may then
“determine that certain types of articles are within the
scope of a duty order, even when the articles do not fall
within the order’s literal scope.”
817 F.3d 1332, 1337 (Fed.
Cir. 2016); see 19 U.S.C. § 1677j. Anti-circumvention in-
quiries are distinct from “[o]ther scope determinations,”
which clarify whether products fall within the literal scope
of an order. 19 C.F.R. § 351.225(a), (k); see also Target
Corp. v. United States,
609 F.3d 1352, 1362 (Fed. Cir. 2010)
(describing differences between “[c]onventional scope in-
quiries” and anti-circumvention inquiries).
If Commerce makes a preliminary determination that
the products are circumventing duty orders, then Com-
merce will order Customs to “suspend liquidation and to
require a cash deposit of estimated duties, at the applicable
rate, for each unliquidated entry of the product entered, or
withdrawn from warehouse, for consumption on or after
the date of initiation of the scope inquiry.” 19 C.F.R.
§ 351.225(l)(2). “Liquidation means the final computation
or ascertainment of duties on entries for consumption or
drawback entries.”
Id. § 159.1. Generally, “Customs has
one year from the time of filing to liquidate an entry under
19 U.S.C. § 1504(a).” Ford Motor Co. v. United States,
811
F.3d 1371, 1374 (Fed. Cir. 2016). Suspension of liquidation
enables Commerce to impose duties on entries that might
otherwise escape duty liability pending Commerce’s final
determination that the products are circumventing duty
orders. As we discuss in detail below, Commerce must pro-
vide notice of the initiation of the scope inquiry (here, an
anti-circumvention inquiry), which must include “[a] de-
scription of the product that is the subject of the scope in-
quiry” and “[a]n explanation of the reasons for the
Secretary’s decision to initiate a scope inquiry,” 19 C.F.R.
Case: 20-1501 Document: 23 Page: 5 Filed: 12/17/2020
TAI-AO ALUMINIUM (TAISHAN) CO. v. UNITED STATES 5
§ 351.225(f)(1)(i)–(ii). If such notice is not given, Commerce
cannot suspend liquidation of entries entered “on . . . the
date of initiation of the scope inquiry.”
Id. § 351.225(l)(2).
II
On May 26, 2011, Commerce issued antidumping and
countervailing duty orders on aluminum extrusions from
the PRC. See Aluminum Extrusions from the People’s Re-
public of China: Antidumping Duty Order, 76 Fed. Reg.
30,650 (Dep’t of Commerce May 26, 2011); Aluminum Ex-
trusions from the People’s Republic of China: Countervail-
ing Duty Order, 76 Fed. Reg. 30,653 (Dep’t of Commerce
May 26, 2011) (collectively, “the Orders”). The Orders ex-
pressly included products made of alloy with an Aluminum
Association series designation commencing with the num-
ber 6 (i.e., designations of 6xxx) where magnesium ac-
counted for at least 0.1 percent but not more than 2.0
percent of total materials by weight. The Orders expressly
excluded products made of alloy with an Aluminum Asso-
ciation series designation commencing with the number 5
(i.e., designations of 5xxx) and containing in excess of 1.0
percent magnesium by weight.
On October 22, 2015, the Aluminum Extrusions Fair
Trade Committee (“AEFTC”), a trade association of domes-
tic producers of aluminum extrusions, filed a joint Scope
Clarification and Anti-Circumvention Inquiry Request for
certain merchandise from China Zhongwang Holdings,
Ltd. and its affiliates (collectively, “Zhongwang”). On re-
quest from Commerce, AEFTC resubmitted its request on
December 30, 2015, and contended that Zhongwang’s 5050-
grade aluminum alloy extrusion products circumvented
the scope of the Orders. AEFTC contended that 5050-grade
aluminum alloy, which has between 1.1 and 1.8 percent
magnesium by weight and therefore “technically meets the
scope exclusion for 5xxx series,” “behaves like in-scope 6xxx
series subject merchandise” and thereby circumvented the
Orders. Aluminum Extrusions from the People's Republic
Case: 20-1501 Document: 23 Page: 6 Filed: 12/17/2020
6 TAI-AO ALUMINIUM (TAISHAN) CO. v. UNITED STATES
of China: Initiation of Anti-Circumvention Inquiry (“Initia-
tion Notice”), 81 Fed. Reg. 15,039, 15,042 (Dep’t of Com-
merce Mar. 21, 2016); J.A. 610. AEFTC’s application
focused on “Zhongwang and its affiliates’ ‘5050’ alloy extru-
sion imports” and included evidence regarding Zhong-
wang’s advertisements and sales of aluminum products.
J.A. 95; Initiation Notice, 81 Fed. Reg. at 15,044.
On March 21, 2016, in response to AEFTC’s request,
Commerce initiated an anti-circumvention inquiry and
published notice of the initiation of the inquiry in the Fed-
eral Register. As AEFTC acknowledged, Commerce “initi-
ated this anti-circumvention inquiry only on Zhongwang,”
J.A. 1032, even though Commerce stated that AEFTC pro-
vided evidence that was not limited to Zhongwang, such as
“information indicating that domestic producers [were]
competing with Chinese-sourced 5050-grade aluminum al-
loy products” and “evidence showing that such 5050-grade
aluminum alloy extruded products [were] marketed by
Chinese producers to purchasers in the same manner that
6xxx-series [were] marketed.” Initiation Notice, 81 Fed.
Reg. at 15,043.
Commerce’s “Summary” of the Initiation Notice
stated:
In response to a request from [AEFTC], [Com-
merce] is initiating an anti-circumvention inquiry
pursuant to [19 U.S.C. § 1677j(c) and (d)] . . . to de-
termine whether extruded aluminum products that
meet the chemical specifications for 5050-grade
aluminum alloy, which are heat-treated, and ex-
ported by [Zhongwang] are circumventing the anti-
dumping duty (AD) and countervailing duty (CVD)
orders on aluminum extrusions from the People’s
Republic of China (PRC).
Initiation Notice, 81 Fed. Reg. at 15,039 (footnote citing the
Orders omitted).
Case: 20-1501 Document: 23 Page: 7 Filed: 12/17/2020
TAI-AO ALUMINIUM (TAISHAN) CO. v. UNITED STATES 7
Under the heading “Merchandise Subject to the Anti-
Circumvention Inquiry,” Commerce stated, “This anti-cir-
cumvention inquiry covers extruded aluminum products
that meet the chemical specifications for 5050-grade alu-
minum alloy, which are heat-treated, and exported by
Zhongwang.” Initiation Notice, 81 Fed. Reg. at 15,042
(footnote listing the “names of known Zhongwang’s Chi-
nese and U.S. affiliates” omitted). But as pertinent here,
Commerce also stated:
The Department intends to consider whether the
inquiry should apply to all imports of extruded alu-
minum products that meet the chemical specifica-
tions for 5050-grade aluminum alloy and are heat-
treated, regardless of producer, exporter, or im-
porter, from the PRC.
Id.
Following the publication of the Initiation Notice, Com-
merce issued an anti-circumvention questionnaire only to
Zhongwang. Zhongwang failed to respond.
On July 8, 2016, after the deadline for Zhongwang’s re-
sponse passed, AEFTC requested that Commerce “immedi-
ately issue anti-circumvention questionnaires to additional
Chinese producers believed to be circumventing the or-
ders,” including Tai-Ao. J.A. 1033–34. It appears that
Commerce did not issue additional questionnaires. On
September 28, 2016, Endura Products, Inc., a domestic in-
terested party, submitted evidence that “multiple compa-
nies” were “importing inquiry merchandise from multiple
producers/exporters.” J.A. 1060–61. On October 7, 2016,
AEFTC submitted evidence “indicating at least 25 other
Chinese companies that [were] producing and/or exporting
inquiry merchandise.”
Id. at 1060.
In a Preliminary Determination Memorandum dated
November 3, 2016, Commerce “[found] that the record sup-
port[ed] applying [the anti-circumvention] inquiry to all
Case: 20-1501 Document: 23 Page: 8 Filed: 12/17/2020
8 TAI-AO ALUMINIUM (TAISHAN) CO. v. UNITED STATES
imports from the PRC of extruded aluminum products that
meet the chemical specifications for 5050-grade aluminum
alloy and are heat treated.” J.A. 1060–61. In support of its
determination, Commerce cited the information provided
by Endura and AEFTC after the publication of the Initia-
tion Notice and Commerce’s “prior and ongoing scope pro-
ceedings concerning 5050 products,” which demonstrated
that companies including Regal were “likewise producing,
exporting, and/or importing inquiry merchandise.”
Id.
On November 14, 2016, Commerce published its Pre-
liminary Determination in the Federal Register, and, un-
der the heading “Merchandise Subject to the Anti-
Circumvention Inquiry,” stated:
The products covered by this inquiry are heat-
treated extruded aluminum products that meet the
chemical specifications for 5050-grade aluminum
alloy (inquiry merchandise), regardless of pro-
ducer, exporter, or importer, from the PRC.
Aluminum Extrusions from the People’s Republic of China:
Affirmative Preliminary Determination of Circumvention
(“Preliminary Determination”), 81 Fed. Reg. 79,444,
79,445 (Dep’t of Commerce Nov. 14, 2016).
Commerce also preliminarily determined that all such
imports were “circumventing, and should be included
within, the scope of the Orders.”
Id. at 79,445–46. Instead
of applying its Preliminary Determination to product en-
tries made on or after November 14, 2016, Commerce ap-
plied suspension to all entries made on or after March 21,
2016. Commerce accordingly instructed Customs “to sus-
pend liquidation of inquiry merchandise from the PRC (re-
gardless of producer, exporter, or importer), entered, or
withdrawn from warehouse, for consumption, on or after
March 21, 2016, the date of publication of the initiation of
this inquiry” and to “require a cash deposit of estimated
duties at the rate applicable to the exporter, on all unliqui-
dated entries of inquiry merchandise entered, or
Case: 20-1501 Document: 23 Page: 9 Filed: 12/17/2020
TAI-AO ALUMINIUM (TAISHAN) CO. v. UNITED STATES 9
withdrawn from warehouse, for consumption on or after
March 21, 2016.”
Id. at 79,446.
Tai-Ao and Regal challenged Commerce’s liquidation
instructions before the Trade Court, arguing that the anti-
circumvention initiation notice published on March 21,
2016, “did not provide adequate notice that their products
were subject to the inquiry and therefore that liquidation
should not have been suspended as of that date.” Tai-Ao
I,
391 F. Supp. 3d at 1305. Tai-Ao cited previous scope deter-
minations made under § 351.225(k) for Sinobec Resources
LLS, Kota International LTD, and Trending Imports LLC,
which determined that “5050-grade extrusions were non-
scope merchandise,” 2 arguing that “the existence of the
5050-grade scope rulings coupled with the fact that the In-
itiation Notice was limited to Zhongwang engendered a re-
liance interest that [duty] liability would not be assessed
until the circumvention inquiry was expressly initiated as
to Tai-Ao.” Pls.’ Mem. Law in Supp. Mot. J. Agency R. at
44–45, Tai-Ao I,
391 F. Supp. 3d 1301 (Ct. Int’l Trade
2019). Regal made similar arguments.
Commerce determined that the statement that Com-
merce “intend[ed] to consider whether the inquiry should
apply to all imports” including those of Tai-Ao and Regal
was sufficient to make parties “aware of the legal
2 Tai-Ao cited scope rulings made pursuant to 19
C.F.R. § 351.225(k) in 2012 and 2016 for Kota Interna-
tional, Ltd., Trending Imports, LLC, and Sinobec Re-
sources LLS, which found that those entities’ aluminum
extrusions made from 5050 alloy were outside the scope of
the Orders. Commerce later reversed its preliminary rul-
ings as to Trending Imports, LLC and Kota International,
finding in a final determination that issued concurrently
with the Final Determination for Tai-Ao and Regal that
Kota and Trending Imports’ products were circumventing
the Orders.
Case: 20-1501 Document: 23 Page: 10 Filed: 12/17/2020
10 TAI-AO ALUMINIUM (TAISHAN) CO. v. UNITED STATES
consequences of an affirmative determination.” Def.’s
Opp’n Consolidated Pls.’ Mots. J. Agency R. at 43, Tai-Ao
I,
391 F. Supp. 3d 1301 (Ct. Int’l Trade 2019).
On appeal, the Trade Court concluded that “Com-
merce’s decision to suspend liquidation with respect to
[Tai-Ao and Regal] from the date of the Initiation Notice
was impermissible because [Tai-Ao and Regal] did not re-
ceive adequate notice at that time. The Preliminary Deter-
mination [on November 14, 2016] provided the first notice
that [Tai-Ao and Regal’s] products were subject to the in-
quiry, and therefore liquidation should be assessed as of
that date.” Tai-Ao
I, 391 F. Supp. 3d at 1313–14. The
Trade Court remanded to Commerce to reformulate its liq-
uidation instructions accordingly.
Id. at 1316. Commerce
filed reformulated instructions, which the Trade Court sus-
tained as “consistent with the remand order.” Tai-Ao
II,
415 F. Supp. 3d at 1395.
AEFTC appeals the Trade Court’s decision sustaining
Commerce’s reformulated liquidation instructions. Nei-
ther Commerce nor any other party to the Trade Court pro-
ceeding have appeared in this appeal. We have jurisdiction
under 28 U.S.C. § 1295(a)(5).
DISCUSSION
The sole issue on appeal is whether Commerce’s Initi-
ation Notice, published on March 21, 2016, provided ade-
quate notice to Tai-Ao and Regal that their products would
be subject to Commerce’s anti-circumvention inquiry and
therefore their unliquidated entries entered on or after
that date could be subject to duties. “We review the [Trade
Court’s] decision to sustain Commerce’s final results and
its remand redeterminations de novo.” SolarWorld Ams.,
Inc. v. United States,
962 F.3d 1351, 1356 (Fed. Cir. 2020).
We review whether Commerce’s initial decision, prior to re-
mand, was “unsupported by substantial evidence on the
record, or otherwise not in accordance with law.” 19 U.S.C.
§ 1516a(b)(1)(B)(i). “A party may challenge an
Case: 20-1501 Document: 23 Page: 11 Filed: 12/17/2020
TAI-AO ALUMINIUM (TAISHAN) CO. v. UNITED STATES 11
interlocutory decision of a trial court on appeal from the
final judgment.” Sears Roebuck & Co. v. United States,
22
F.3d 1082, 1084 (Fed. Cir. 1994), superseded by statute on
other grounds, 19 U.S.C. § 1202, as recognized in JVC Co.
of Am., Div. of US JVC Corp. v. United States,
234 F.3d
1348, 1354–55 (Fed. Cir. 2000).
Two subsections of Commerce’s anti-circumvention in-
quiry regulations are at issue. First, 19 C.F.R. § 351.225(l)
authorizes Commerce to order suspension of liquidation of
merchandise entered on or after the date of the initiation
of the scope inquiry. It provides:
If liquidation has not been suspended [at the time
of an affirmative preliminary determination of cir-
cumvention], the Secretary will instruct the Cus-
toms Service to suspend liquidation and to require
a cash deposit of estimated duties, at the applicable
rate, for each unliquidated entry of the product en-
tered, or withdrawn from warehouse, for consump-
tion on or after the date of initiation of the scope
inquiry.
19 C.F.R. § 351.225(l)(2). Thus, “[w]hen Commerce rules
that a product falls within the scope of an order, but ‘there
has been no [previous] suspension of liquidation,’ a new
suspension must be ordered beginning only [with entries]
‘on or after the date of initiation of the scope inquiry.’” Sun-
preme Inc. v. United States,
946 F.3d 1300, 1319 (Fed. Cir.
2020) (quoting 19 C.F.R. § 351.225(l)(3)) (second alteration
in original); see also 19 C.F.R. § 351.225(l)(2).
Second, 19 C.F.R. § 351.225(f)(1) requires Commerce to
provide notice of the initiation of the anti-circumvention in-
quiry. If Commerce decides to initiate a scope inquiry (such
as an anti-circumvention inquiry) on application from an
interested party, Commerce is required to provide notice
that includes “[a] description of the product that is the sub-
ject of the scope inquiry” and “[a]n explanation of the
Case: 20-1501 Document: 23 Page: 12 Filed: 12/17/2020
12 TAI-AO ALUMINIUM (TAISHAN) CO. v. UNITED STATES
reasons for [Commerce’s] decision to initiate a scope in-
quiry.” 19 C.F.R. § 351.225(f)(1)(i)–(ii). 3
This notice requirement is designed to avoid unfairness
to importers and foreign exporters. In explaining why the
regulations require Commerce to first make an affirmative
preliminary or final determination of circumvention before
suspending liquidation, Commerce noted it must provide
3 Commerce has proposed regulations that would al-
low Commerce, once it has reached an affirmative prelimi-
nary determination of circumvention, to instruct Customs
“[t]o suspend liquidation of all . . . unliquidated entries of
the product at issue [for which liquidation was not previ-
ously suspended], and apply the applicable cash deposit
rate under the order to those entries.” Regulations to Im-
prove Administration and Enforcement of Antidumping
and Countervailing Duty Laws (“Proposed Regulations”),
85 Fed. Reg. 49472, 49,501 (Dep’t. of Commerce Aug. 13,
2020) (proposed § 351.226(l)(2)(ii)). The proposed regula-
tions would permit Commerce to suspend liquidation of all
entries that are unliquidated dating “back to the earliest
suspension date” under the original duty orders, unlike the
current regulations, which only allow Commerce to sus-
pend liquidation of entries made on or after the date of the
initiation of the scope inquiry.
Id. at 49,483, 49,488.
Commerce has also proposed regulations that would re-
move the current notice requirements for initiation of cir-
cumvention inquiries. Compare 19 C.F.R.
§ 351.225(f)(1)(i)–(ii) with Proposed Regulations, 85 Fed.
Reg. at 49,496–97, 49,499–500. Commerce described the
proposed regulations as “remov[ing] unnecessary and bur-
densome notice and service requirements.” 85 Fed. Reg. at
49,472.
We express no opinion as to the validity of the proposed
regulations or their applicability to circumstances such as
those present here.
Case: 20-1501 Document: 23 Page: 13 Filed: 12/17/2020
TAI-AO ALUMINIUM (TAISHAN) CO. v. UNITED STATES 13
prior notice to foreign interested parties that provides “a
meaningful opportunity to present relevant information
and defend their interests”:
Suspension of liquidation is an action with a poten-
tially significant impact on the business of U.S. im-
porters and foreign exporters and producers. The
Department should not exercise this governmental
authority before it has first given all parties a
meaningful opportunity to present relevant infor-
mation and defend their interests, and before the
Department gives a reasoned explanation for its ac-
tion. Formal initiation of a scope inquiry by the
Department represents nothing more than a find-
ing by the Department that it cannot resolve the
issue on the basis of the plain language of the scope
description or the clear history of the original in-
vestigation. It would be extremely unfair to im-
porters and exporters to subject entries not already
suspended to suspension of liquidation and possi-
ble duty assessment with no prior notice and based
on nothing more than a domestic interested party's
allegation. Because, when liquidation has not been
suspended, Customs, at least, and perhaps the De-
partment as well, have viewed the merchandise as
not being within the scope of an order, importers
are justified in relying upon that view, at least un-
til the Department rules otherwise. Therefore, the
Department will not order the suspension of liqui-
dation until it makes either a preliminary or final
affirmative scope ruling, whichever occurs first.
Antidumping Duties; Countervailing Duties (“Preamble”),
62 Fed. Reg. 27,296, 27,328 (Dep’t of Commerce May 19,
1997) (Final Rule).
Thus, Commerce could only suspend liquidation of en-
tries made on or after March 21, 2016, that were unliqui-
dated as of November 14, 2016, if Commerce provided
Case: 20-1501 Document: 23 Page: 14 Filed: 12/17/2020
14 TAI-AO ALUMINIUM (TAISHAN) CO. v. UNITED STATES
adequate notice that the merchandise subject to the scope
inquiry included Tai-Ao and Regal’s products on March 21,
2016. The notice requirement reflects “the broader due-
process principle that before an agency may enforce an or-
der or regulation by means of a penalty or monetary sanc-
tion, it must ‘provide regulated parties fair warning of the
conduct [the order or regulation] prohibits or requires.’”
Mid Continent Nail Corp. v. United States,
725 F.3d 1295,
1300–01 (Fed. Cir. 2013) (quoting Christopher v.
SmithKline Beecham Corp.,
567 U.S. 142, 156 (2012)) (al-
teration in original).
Commerce’s statement in the Initiation Notice on
March 21, 2016, that the anti-circumvention inquiry
“cover[ed] extruded aluminum products that meet the
chemical specifications for 5050-grade aluminum alloy,
which are heat-treated, and exported by Zhongwang” did
not provide notice to Tai-Ao and Regal, and neither Com-
merce nor any other party contended that it did. Initiation
Notice, 81 Fed. Reg. at 15,042.
Commerce’s additional language in the March 21,
2016, Initiation Notice that it “intend[ed] to consider
whether the inquiry should apply to all imports . . . regard-
less of producer, exporter, or importer, from the PRC” also
did not provide sufficient notice that all imports other than
those of Zhongwang would be “cover[ed]” by the inquiry.
Id. 4 A statement of intention to “consider whether the
4 Commerce explained in its Final Determination
Memorandum that it included language of its “inten[t] to
consider” products from entities other than Zhongwang be-
cause, “[a]t the time of the initiation of this anti-circumven-
tion inquiry, the record contained evidence indicating that
Zhongwang and its numerous alleged affiliates were pro-
ducing, exporting, and/or importing inquiry merchandise.
Based on this evidence, [Commerce] indicated in the Initia-
tion Notice that it intended to consider applying the
Case: 20-1501 Document: 23 Page: 15 Filed: 12/17/2020
TAI-AO ALUMINIUM (TAISHAN) CO. v. UNITED STATES 15
inquiry should apply to all imports” is not the same as a
notice that such imports are within the scope of the inquiry.
Several other factors support this conclusion. First,
here, the initial anti-circumvention inquiry was not coun-
try-wide. Anti-circumvention determinations may be com-
pany-specific or country-wide. 5 The Initiation Notice here
was not country-wide since it named Zhongwang’s products
specifically as subject to the inquiry. Only on November
14, 2016, did the inquiry become country-wide when Com-
merce announced that “[t]he products covered by this
determination in this inquiry to all imports of extruded alu-
minum products that meet the chemical specifications for
5050-grade aluminum alloy and are heat-treated, regard-
less of producer, exporter, or importer, from the PRC.”
Anti-Circumvention Inquiry Regarding Aluminum Extru-
sions from the People’s Republic of China (Final Determi-
nation Memorandum) at 29 (Dep’t of Commerce Jul. 20,
2017) (emphasis added) (footnotes omitted).
5 As Commerce explained in proposing new regula-
tions for anti-circumvention inquiries,
In its experience, Commerce has witnessed scenar-
ios in which the circumvention determined to exist
was unique to the interested party under review.
In that situation, a company-specific circumven-
tion determination is warranted. However, Com-
merce has also found circumvention to exist in
other cases in which the circumvention warranted
a country-wide determination.
Proposed Regulations, 85 Fed. Reg. at 49,489.
Proposed § 351.226(m)(1) would allow Commerce to
“consider, based on the available record evidence, whether
the circumvention determination should be applied on a
country-wide basis.”
Id. at 49,501.
Case: 20-1501 Document: 23 Page: 16 Filed: 12/17/2020
16 TAI-AO ALUMINIUM (TAISHAN) CO. v. UNITED STATES
inquiry [were] heat-treated extruded aluminum products
that meet the chemical specifications for 5050-grade alu-
minum alloy . . . regardless of producer, exporter, or im-
porter, from the PRC.” Preliminary Determination, 81
Fed. Reg. at 79,445.
Second, the regulations require that Commerce’s Initi-
ation Notice include “[a]n explanation of the reasons for
[Commerce’s] decision to initiate a scope inquiry.” 19
C.F.R. § 351.225(f)(1)(ii). As explained in the Preamble, “a
reasoned explanation” as to why Commerce initiated an
anti-circumvention inquiry that could lead to the imposi-
tion of duties helps alleviate potential “unfair[ness]” by
providing “prior notice.” Preamble, 62 Fed. Reg. at 27,328.
Here, Commerce’s explanation for why it initiated the
inquiry focused primarily on Zhongwang. Commerce ex-
pressly cited AEFTC’s “Scope Clarification and Anti-Cir-
cumvention Inquiry Request for certain merchandise from
Zhongwang,” which Commerce described as “contend[ing]
that Zhongwang’s 5050-grade aluminum alloy extrusion
products are circumventing the scope of the Orders,” and
Commerce explained that, “in response” to that request by
AEFTC, it initiated an anti-circumvention inquiry as to
Zhongwang. Initiation Notice, 81 Fed. Reg. at 15039–40.
Third, our determination is further supported by Com-
merce’s conduct during its investigation, which would not
have put Tai-Ao and Regal on notice that they were subject
to the inquiry before the Preliminary Determination was
published. After the Initiation Notice was published, Com-
merce issued a questionnaire only to Zhongwang, suggest-
ing that Commerce intended its inquiry to pertain only to
Zhongwang. In the period between the Initiation Notice
and the Preliminary Determination, Commerce received
additional information from domestic interested parties,
AEFTC and Endura, that led Commerce to apply its in-
quiry to entities other than Zhongwang. This additional
Case: 20-1501 Document: 23 Page: 17 Filed: 12/17/2020
TAI-AO ALUMINIUM (TAISHAN) CO. v. UNITED STATES 17
information was significant because it led Commerce to ex-
pand the scope of its inquiry.
There are no other indicia that would support a differ-
ent result. AEFTC relies on Commerce’s statement in the
March 2016 notice that, “[i]n accordance with 19 C.F.R.
351.225(l)(2), if [Commerce] issues a preliminary affirma-
tive determination, [Commerce would] instruct U.S. Cus-
toms and Border Protection to suspend liquidation and
require a cash deposit of estimated duties, at the applicable
rate, for each unliquidated entry of the merchandise at is-
sue, entered or withdrawn from warehouse for consump-
tion on or after the date of initiation of the inquiry.”
Appellant’s Br. 18 (quoting Initiation Notice, 81 Fed. Reg.
at 15,044) (second alteration in original). But “the mer-
chandise at issue” at the time referred to “the merchandise
subject to the inquiry,” namely, products “exported by
Zhongwang.” Initiation Notice, 81 Fed. Reg. at 15,044,
15,042. It was not until November 14, 2016, that Com-
merce changed the description of the “Merchandise Subject
to the Anti-Circumvention Inquiry” and thus provided ad-
equate notice that Tai-Ao and Regal’s products would be
subject to the anti-circumvention inquiry, and liquidation
could only have been suspended for Tai-Ao and Regal as of
that date. Preliminary Determination, 81 Fed. Reg. at
79,445.
Because Commerce did not provide adequate notice to
Tai-Ao and Regal until November 14, 2016, Commerce’s in-
structions to suspend liquidation effective March 21, 2016,
were not in accordance with law. We affirm the Trade
Court’s decision sustaining Commerce’s reformulated liq-
uidation instructions as in accordance with law.
AFFIRMED
COSTS
No costs.
