On December 29, 2014, U.S. importers of Chinese drill pipe and drill collars (collectively, “drill pipe”) all breathed a sigh of relief when the Department of Commerce published its decision to revoke antidumping and countervailing duty orders against Chinese drill pipe. This publication would seem like a great victory for importers in the oil and gas industry, as the PRC-wide antidumping rate was a whopping 429.95%, along with an 18.18% countervailing duty rate.
What some drill pipe importers still may not realize, however, is that Commerce’s revocation was the result of a long-fought battle in the Court of International Trade (CIT), in which the court ruled on the side of the importers over the domestic industry. Because of the high stakes involved, the domestic industry quickly filed an appeal to the Court of Appeals for the Federal Circuit (CAFC) challenging the CIT’s decision.
Today, if one wanted to import Chinese drill pipe, Customs would allow this merchandise to enter free of any antidumping duty or countervailing duty cash deposits in accordance with the CIT decision. That’s great right now, but liquidation of entries of drill pipe have been indefinitely suspended pending the conclusive decision of the appeal in the CAFC. These appeals to the CAFC can take many months or even years to litigate.
So what happens if the CAFC reverses the CIT decision years from now? Any drill pipe imported during the CAFC litigation would be liquidated by Customs subject to the high antidumping and countervailing duties.
For the complete background, the updated status, and a review of what this means to individual drill pipe importers, please call or email us.