Givens & Johnston Secures Favorable Scope Ruling Regarding Pipe Spools.

Pipe Spools

Givens & Johnston PLLC recently secured a scope ruling excluding certain pipe spools manufactured in the People’s Republic of China (PRC) from Chinese anti-dumping duties (ADD) and countervailing duties (CVD). The exclusion covers pipe spools fabricated from non-Chinese originating pipe and pipe fittings (e.g. Japanese, Korean, U.S., etc.). In 2016, the ITA and Customs determined that all pipe spools fabricated in PRC were within the scope of the ADD & CVD orders applicable to Chinese pipe and pipe fittings as part of the ITA’s Westlake scope ruling decision.

In the Westlake case, the ITA declined to apply a substantial transformation analysis to the fabrication of pipe spools. Instead, the ITA used a mixed media analysis that looked at the components individually rather than as part of a whole. In Westlake, the ITA held that the pipe and pipe fittings fabricated into a pipe spool continue to have the same characteristics of pipe, so the ITA continued to treat them as pipe for ADD & CVD purposes. More recently, the ITA used the same method of analysis, except determined that because the non-Chinese origin pipe spool components were not subject to Chinese ADD & CVD, the fabrication into pipe spools did not change this result.

The full text of the scope ruling can be found here.

This ruling is crucial to companies who fabricate goods in the PRC from non-Chinese originating components and to any importers interested in importing pipe spools that are not subject to Chinese ADD & CVD. If you have any questions regarding how this ruling may affect you or your business, please give Givens & Johnston a call:

950 Echo Lane, Suite 360
Houston, Texas 77024
Phone: (713) 932-1540
Fax: (713) 932-1542

Z Gallerie Settles False Claims Act Case.


Z Gallerie LLC Settles False Claims Act Case of Alleged Customs Duties Evasion for $15 Million

In April of 2016, the Department of Justice (DOJ) announced that Z Gallerie LLC agreed to pay $15 million to resolve allegations that Z Gallerie tried to evade customs duties on imports of wooden bedroom furniture from the People’s Republic of China (PRC).

The California based company is headquartered in Los Angeles and sells furniture and accessories in stores across the United States.

The allegations claim Z Gallerie evaded antidumping duties on wooden bedroom furniture imported from the PRC by misclassifying, or conspiring with others to misclassify, the imported furniture as pieces intended for non-bedroom use on documents filed with Customs and Border Protection (CBP). For example, furniture used in the bedroom were misclassified as “grand chests” and “hall chests” in order to avoid antidumping duties on wooden bedroom furniture.

The purpose of antidumping duties is to protect domestic manufacturers against overseas companies “dumping” goods in the U.S. market at prices below cost. Since 2004, imports of wooden bedroom furniture manufactured in China have been subject to antidumping duties.

Importers of wooden bedroom furniture should be aware that under the new Trade Facilitation and Trade Enforcement Act of 2015, CBP will be increasing their enforcement of antidumping evasion schemes.

It is important to note that the settlement by Z Gallerie LLC were for allegations only and there were no determinations of liability.

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