American HFC Coalition Applauds the U.S. Department of Commerce for Issuing Affirmative Findings of Circumvention of U.S. Law by Imports of Various HFC Refrigerants

WASHINGTON, July 11, 2024 /PRNewswire/ -- The American HFC Coalition commends the U.S. Department of Commerce for its recent anti-circumvention determinations in four separate inquiries involving imports of Chinese hydrofluorocarbons (HFCs). Since 2016, Chinese exporters and importers have continuously attempted to evade antidumping duties and import unfairly traded HFCs into the U.S. market. Chinese producers have shipped Chinese HFC components to India, Turkey, Malaysia, and Mexico in an effort to circumvent antidumping duties. Chinese exporters have also shipped blends of HFC components into the United States for re-blending after importation. Commerce's recent decisions confirm that these strategies will not escape the imposition of antidumping duties.

On July 5, Commerce issued affirmative findings of circumvention with respect to imports of R-410A and R-410B from Turkey and imports of R-410B, R-407G, and a custom blend from China. In June of this year, Commerce also issued a final affirmative finding with respect to imports of R-410A and R-407C from Malaysia. The decisions regarding R-410A and R-407C from Turkey and Malaysia, taken together with earlier decisions regarding Chinese HFC components blended in India, establish that merely blending Chinese-origin HFC components in a third country will not escape the antidumping duty order when the finished HFC blends are imported into the United States.

Importantly, in both the Turkey R-410A inquiry and the Malaysia inquiry, Commerce ordered that antidumping duties should be applied retroactively to all imports since November 2021. This action sends a strong message to exporters and importers tempted to blend Chinese components in any other third country in an effort to evade the antidumping duty order that such actions will not escape duty liability.

Likewise, the findings with respect to R-410B, R-407G, and custom blends establish that imports of HFC blends that are technically outside the scope of the antidumping duty order will not escape liability if those products are simply re-blended in the U.S. into R-404A, R-410A, or another product covered by the HFC blends order. The recent finding regarding blends from China, similar to a 2019 circumvention finding with respect to yet another "unfinished" blend from China, makes clear that importing a Chinese HFC blend that is outside the scope of the order will not escape the antidumping duty order if those imports are re-blended after importation.

Finally, the decision regarding R-410B imports from Turkey establishes that even a two-stage blending process, first in Turkey then in the United States, does not result in a product outside the scope of the antidumping order. In the Turkey R-410B case, Chinese origin HFC components were first shipped to Turkey and blended into R-410B – a product that is not explicitly identified in the antidumping duty order. Next, the R-410B was imported into the United States to be re-blended into a product that is covered by the antidumping duty order. Because blending or re-blending HFCs involves only "minor or insignificant" processing, even re-blending Chinese components multiple times in multiple countries will not insulate the imports from liability.

These important findings teach that imports of Chinese HFC blends, regardless where the blending takes place, cannot escape the discipline of the antidumping duty order. Moreover, the imposition of retroactive duties on importers that ignore Commerce's earlier decisions sends a strong message that circumvention will have serious consequences for importers that persist in their strategies to evade the law.

SOURCE The American HFC Coalition