On October 21, 2022, the Department of Commerce, International Trade Administration (The DOC) published its Final Scope Ruling on Malaysian Processed Quartz Slab.   The DOC determined that imports of quartz slab manufactured in the People’s Republic of China (China) and processed in Malaysia are covered by the scope of the antidumping duty (AD) and countervailing duty (CVD) orders on certain quartz surface products (QSP) from China.

This was no surprise as the language in the Scope of the Orders expressly provides: “Subject merchandise includes material . . . that has been finished, packaged, or otherwise fabricated in a third country”.  What was uncertain was whether the DOC was going to impose AD / CVD duties on some, or possibly all QSP products from Malaysia, or whether the DOC would impose a certification requirement. 

The DOC elected to impose a certification requirement which will be required for all unliquidated shipments of QSP from Malaysia going back to entries made on or after November 4, 2021.  For shipments made during the time period from November 4, 2021, through the October 21, 2022, the publication date of the Final Scope Ruling, importers will have 60 days to meet the certification requirements set forth in the Notice, which are described in more detail below.  Failure to timely submit the necessary certifications will result in the imposition of AD / CVD on the shipments.

This requirement, which has substantial retroactive effect, will certainly result in the “smoking out” of many Malaysian producers / exporters that are using Chinese made QSP slab rather than Malaysian produced QSP slab in the production of finished QSP shipped to the US.

Note: The DOC also determined that because certain interested parties (nine companies) did not cooperate to the best of their abilities in responding to Commerce’s requests for information in connection with the scope ruling investigation, these companies would not be eligible to participate in the certification process and unliquidated entries of exports of QSP from these companies would be assessed AD / CVD duties at the applicable rates under the QSP from China Order going back to the November 4, 2021 date and on a going forward basis.

The requirements related to the Certification requirements for both Exporter and Importer are found under Appendix II of the Final Scope Ruling on Malaysian Processed Quartz Slab and Recission of the Circumvention Inquiry. 87 Fed. Reg. 64011 (October 21, 2022) (the Final Ruling).  https://www.govinfo.gov/content/pkg/FR-2022-10-21/pdf/2022-22857.pdf

Appendix II of the Final Ruling provides the certification requirements – provided in part:

To import quartz surface products from Malaysia and declare them as exempt from the scope of the Orders and hence free of AD/CVD duties, the importer and the exporter must complete and maintain certifications, along with proof of where the quartz slab was manufactured.

The importer is required to complete and maintain the importer certification, and retain all supporting documentation (e.g., invoice, purchase order, production records, etc.).  Where the importer uses a broker to facilitate the entry process, it should obtain and retain the entry summary number from the broker.  

The exporter is required to complete and maintain the exporter certification, and is further required to provide the importer a copy of that certification and all supporting documentation (e.g., invoice, purchase order, production records, etc.).  The party that made the sale to the United States should fill out the exporter certification.

Note – when completing the certificate for previous entries (going back to November 4, 2021) Section “I” of the certificate should be edited to provide: “This certification was completed on mm/dd/yyyy, within 60 days of the date on which Commerce published its final scope finding in the Federal Register.”

Also, Appendix II provides that for such entries/shipments, importers and exporters each have the option to complete a blanket certification covering multiple entries/shipments, individual certifications for each entry/shipment, or a combination thereof.  As the certificates require identification of shipment specific information such as foreign seller’s invoice number, foreign seller’s Invoice Line item, in the Importers Certificate this is accomplished by providing the following block of information under Section “E” of the Importers Certificates repeated as many times as necessary to cover all the entries:

Entry Summary #:

Entry Summary Line Item #:

Foreign Seller:

Foreign Seller’s address:

Foreign Seller’s Invoice #:

Foreign Seller’s Invoice Line Item #:

Country of origin for QSP slab:

Name of slab producer:

Address of slab producer:

For future shipments, the importer and exporter are required to certify that the certification was completed “at or prior to the date of shipment” and once again as the certificates require identification of shipment specific information such as foreign seller invoice numbers and invoice line items, a blanket certificate for future shipments would not appear feasible and individual certifications would appear to be required.

Lastly, importers face serious consequences for failure to maintain the required certification and supporting documentation, failure to substantiate the claims made herein, and/or failure to allow CBP and/or Commerce to verify the claims including:

i.)   suspension of all unliquidated entries (and entries for which liquidation has not

become final) for which these requirements were not met; and

ii.)   the requirement that the importer post applicable AD and CVD cash deposits (as

appropriate) equal to the rates as determined by Commerce;

iii.)   the revocation of {NAME OF IMPORTING COMPANY}’s privilege to certify

future imports of quartz surface products from Malaysia as not manufactured using

quartz slab from China.

The above certification requirement will certainly result in substantial difficulty for past importers of Malaysian QSP that cannot obtain the required information to certify that the QSP slab used in the manufacture was not Chinese.  In a  ongoing basis importers of QSP from Malaysia should make sure their Malaysian supplier can certify that the QSP slab used to produce the QSP finished products well in advance of future orders.  Further, there has been substantial enforcement action related to QSP from other Asian countries, including Vietnam, and there is a pending AD / CVD Administrative Review related to QSP from India that could result in significant retroactive AD / CVD liability for many US importers.  Importers should be aware of these developments and understand the need to carry out extensive due diligence with regard to the origin of their QSP imports, and even then, there may be no way to achieve 100% certainty related to potential AD / CVD risks and retroactive liabilities when importing QSP from the Asian region.