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United States Court of International Trade Approves Determination That Chinese Diamond Sawblade Producer Is Government-Controlled

October 15, 2013

The United States Court of International Trade (CIT) handed a victory to U.S. diamond sawblades producers seeking to maintain and increase antidumping duties on diamond sawblades exported by Beijing Gang Yan Diamond Products Company (Gang Yan) and certain of its affiliates.  These exports were previously subject to lower duties, due to the United States Department of Commerce’s initial determination that Gang Yan was not affiliated with the Chinese government.  The agency reversed that determination earlier this year, and the court has now affirmed, clearing the way for additional duty collection.

Diamond sawblades from China have been subject to antidumping duties since November 2009.  Gang Yan and its affiliates are producers and exporters of diamond sawblades and sawblade parts.  In its original investigation into Chinese dumping, the Commerce Department found that Gang Yan and its affiliates were free from government control.  On appeal, the Diamond Sawblades Manufacturers’ Coalition (DSMC), a group of U.S. producers of sawblades, pointed out significant connections and ties between Gang Yan and the Chinese government, as well as recent Chinese laws that appear to strengthen the government’s control over entities such as Gang Yan.  The CIT subsequently issued two opinions questioning the evidence underlying the Commerce Department’s determination, and the agency reconsidered its findings, determining that Gang Yan is in fact subject to government control. The CIT has now affirmed the agency’s reversal.

Daniel B. Pickard, a partner in Wiley Rein’s International Trade Practice and counsel to the domestic industry, stated that “we are very pleased by the court’s decision.  The DSMC has worked very hard over these past four years to point out the extent to which Gang Yan is controlled by the Chinese government.  This is an important win for establishing a level playing field in the U.S. market.”

Under the U.S. antidumping laws, the duties applicable to companies controlled by the governments of non-market economy countries, such as China, are generally significantly higher than the duties applied to companies that are not government-controlled.  The recent decision could have substantial consequences for any individual that imported Chinese diamond sawblades from 2009 to the present.

“U.S. manufacturers can compete with any other company in the world, but they should not have to compete with the government of China,” Mr. Pickard said. “My clients are hopeful that the Commerce Department will recognize the significant issues arising from Gang Yan’s government ties and make a determination that provides U.S. manufacturers of diamond sawblades with the full relief from dumped imports that they deserve.”