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Steel Nail Duties Ensnare Non-Nails

“The pin component of OMG’s zinc anchors is not intended for separate use as a nail, and it is not commercially viable for a customer to buy OMG’s zinc anchors, separate the steel pin from the zinc body, and then use the pin separately from the body,” OMG said.

That didn't stop the 
U.S. Department of Commerce agency, OMG said, from finding against the company's scope ruling request submitted in August, after the duties were first imposed, asking that the zinc anchors be excluded from the duties orders. According to the complaint, the ITA issued its final scope ruling Feb. 6 with a finding that the zinc anchors fall within the nails orders' scope.

The agency's finding, OMG said, is supported neither by the record nor by the law because the anchors aren't nails and shouldn't fall within the nails orders' scope. They also weren't intended by the petitioner seeking the original duties or the government itself to be included, the company said.

“The department’s decision to include OMG’s zinc anchors in the scope of the nails orders is unsupported by substantial evidence of record and is otherwise not in accordance with law, insofar as OMG’s zinc anchors have differing physical characteristics, expectations of ultimate purchasers, ultimate use, channels of trade and manner of advertising from steel nails, subject to the nails orders,” the company said.

OMG is also challenging the ITA's decision to not launch a formal scope probe, which the agency had found to be unnecessary but which the company contends was an arbitrary and capricious conclusion.

The last challenge is to the government's decision to continue with a suspension on processing importer duty calculations and collect cash for those entries, even shipments that came in before OMG asked for the scope ruling. Judicial precedent, Commerce regulations and more recognize that it's unfair, OMG said, to impose processing, or liquidation, suspension without prior notice.

OMG wants the final scope ruling tossed and the zinc anchors ruled exempt from the duties, or at the very least it wants Commerce forced to conduct a formal inquiry to see if they should be included, as well as a ruling directing 
U.S. Customs and Border Protection to process all entries made before the scope request.

The ITA referred a press inquiry to the 
U.S. Department of Justice, which declined comment.

OMG is represented by David M. Murphy, Ned H. Marshak and Andrew T. Schutz of
Grunfeld Desiderio Lebowitz Silverman & Klestadt LLP.

Counsel information for the ITA was not available Thursday.

The case is OMG Inc. v. United States, case number 1:17-cv-00036, before the U.S. Court of International Trade.

--Additional reporting by Alex Lawson. Editing by Aaron Pelc.