Legislation & Legal

Chinese and Domestic Curtainwall Companies Continue in Legal Battles

Several Chinese companies are tangled up in litigation with domestic curtainwall companies concerning aluminum extrusions.

The CIT’s Decision

In December 2017, the U.S. Court of International Trade (CIT) upheld a decision that Chinese curtainwall is subject to U.S. tariffs on aluminum extrusions imported from China. The decision marked the potential end of years-long litigation between American and Chinese curtainwall companies.

In the latest case, Shenyang Yuanda Aluminum Industry Engineering Co., Yuanda USA Corp., Jangho Curtain Wall Americas Co., Permasteelisa North America Corp., Permasteelisa South China Factory and Permasteelisa Hong Kong Ltd., challenged the U.S. Department of Commerce’s scope de-termination for the antidumping (AD) and countervailing duty (CVD) orders on aluminum extrusions from China. The scope ruling determined that Yuanda’s unitized curtainwall was within the scope of the AD/CVD orders.

The CIT upheld the department’s determination. The ruling reads that “the orders cover, in pertinent part, ‘aluminum extrusions’ such as ‘parts’ for ‘curtainwalls’ to be ‘assembled after importation.’”

In previous litigation, the U.S. Court of Appeals for the Federal Circuit sustained a separate commerce scope de-termination that curtainwall units are parts of curtainwalls.

In recent litigation, the Chinese companies argued that curtainwall units imported under a supply contract or a complete curtainwall were partially assembled “subassemblies” of a complete curtainwall, and therefore excluded from the orders as a finished goods kit. The orders define a finished goods kit as a packaged combination of parts that contains, at the time of importation, all the necessary parts to fully assemble a final finished good and requires no further finishing or fabrication. The order excludes subassemblies provided that they are a finished good or “finished goods kit” requiring no further fabrication.

“If they appealed again we’d argue again. We’re confident of success, of course, because we’ve won every step of the way so far,” says David Spooner, partner at law firm Barnes & Thornburg.

Spooner represented American curtainwall companies Architectural Glass & Aluminum Co., Walters & Wolf and Bagatelos Architectural Glass Systems Inc.“Folks should get the message now that Chinese curtainwall is subject to the tariff,” he says. “My clients worked very hard to protect not only themselves, but curtainwall companies across the U.S. from unfair practices. They deserve credit for shouldering the burden.”

John D’Amario, Northwest USA sales manager of the America division of Yuanda USA Corp. told USGlass magazine that the Chinese companies could file an appeal.

“This ruling merely impacts a few of our completed projects from several years ago and has no impact on our current or future U.S. business,” he says. “Nonetheless, we will likely file an appeal for no other reason than to humorously watch the Curtain Wall Coalition post propaganda on their website and plead for donations to continually cover their attorney fees. There are many curtainwall contractors, general contractors, and developers that are strongly against this sort of protection-ism on the part of the CWC. I can’t re-ally blame them for trying to hang on, but in today’s global progressive world, it’s like Custer’s Last Stand.”

AEC Files a New Petition

The Aluminum Extruders Council (AEC), through its Aluminum Extrusions Fair Trade Committee (AEFTC), has filed a new circumvention petition against China Zhongwang Holdings Limited and its network of affiliates. AEC alleges that Chinese aluminum extrusions produced by Zhongwang are converted in Vietnam before being exported to the U.S., and that the extrusions are circumventing the antidumping (AD) and countervailing (CVD) duty orders on aluminum extrusions from China.

According to AEC, following the department’s determinations in December 2016 and June 2017 that Zhongwang’s pallets, which had initially been exported to the U.S. to evade AD/CVD duties were subject to the orders, Zhongwang shipped substantial quantities of these pallets to its affiliate in Vietnam, Global Vietnam Aluminum Co. (GVA) to continue to circumvent and evade the orders.

In September 2017, the U.S. Department of Justice filed a complaint against Perfectus Aluminum, an affiliate of Zhongwang, claiming that the company imported more than 2 million bogus aluminum pallets between 2011 and 2014 and stored them at separate warehouses with the intent to melt the pallets into aluminum billet for sale in the U.S.

The AEFTC’s petition provides the organization’s evidence that it says shows GVA in Vietnam is changing the shape and form of these Chinese extrusions and exporting them back to the U.S., claiming their origin is Vietnamese, to circumvent the orders.

According to the petition, 1.7 million tons of aluminum extrusions, worth $5 billion, were amassed by GVA.

“The petition lays out an extensive amount of research, much of which is confidential, of the circumvention scheme,” says Nancy Molenda, director of communications at AEC. “[It’s] a country-wide allegation that would apply to other Vietnamese producers that also convert the circumvented Chinese aluminum extrusions before exporting to the U.S. The evidence indicates that substantial quantities of Chinese aluminum extrusions are being shipped to Vietnam directly from China as well as from various trans-shipment points across the globe for conversion.”

AEC president Jeff Henderson calls the petition an important step for the industry to fight to close transshipment and circumvention points and to have the orders enforced fully.

“These blatant attempts to evade duties and flood the market with unfairly traded Chinese aluminum extrusions must be halted,” he says.

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