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Court of International Trade Limits Retroactive Application of Scope Determination
January 19, 2017
By: Lawrence M. Friedman



Court of International Trade Limits Retroactive Application of Scope Determination


In United Steel and Fasteners, Inc. v. United States, the Court of International Trade held that the Commerce Department overstepped its authority when it instructed Customs and Border Protection to suspend the liquidation of certain helical spring lock washers used in the railroad industry retroactively to the date of the issuance of the antidumping duty order.

In a scope ruling, Commerce found that the petition in the case specifically referenced the application of large lock washers to railroads. In addition, the lock washers, although not built to typical industry specifications, were not functionally different from the description of lock washers applied in the investigation. Consequently, Commerce determined that the lock washers had always been within the scope of the order. Consequently, Commerce issued retroactive suspension instructions to Customs.

In cases where a formal scope inquiry is initiated, the date of suspension of liquidation is the date of initiation of the scope inquiry. Here, Commerce decided the scope question without a formal inquiry. Thus, Commerce argued, it was not bound by the limitation on the effective date of suspension.

The Court of International Trade overturned those instructions. According to the Court, suspension of liquidation is a serious step having important consequences for importers and foreign exporters. Commerce, therefore, must act within its authority. Whether these lock washers were in scope was not obvious to the importer nor to Customs, which liquidated many entries without the application of the antidumping duty. The Court held that the importer is entitled to rely on that treatment and not have liquidations suspended prior to the commencement of the informal scope inquiry. The Court remanded the case to Commerce to issue new instructions to Customs.

For more analysis of this case visit the Customs Law Blog.

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