Document ID: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-ca13-17-02168/USCOURTS-ca13-17-02168-0/pdf.json

Parties Involved:
Shakeproof Assembly Components Division of Illinois Tool Works, Inc.
Not party
United States
Appellant
United Steel and Fasteners, Inc.
Cross-Appellant

Document Text:

United States Court of Appeals 

for the Federal Circuit ______________________

UNITED STEEL AND FASTENERS, INC.,

Plaintiff-Cross-Appellant

v.

UNITED STATES,

Defendant-Appellant

SHAKEPROOF ASSEMBLY COMPONENTS 

DIVISION OF ILLINOIS TOOL WORKS, INC.,

Defendant

______________________

2017-2168, 2017-2188

______________________

Appeals from the United States Court of International 

Trade in No. 1:13-cv-00270-JCG, Judge Jennifer ChoeGroves.

______________________

Decided: January 13, 2020

______________________

NED H. MARSHAK, Grunfeld, Desiderio, Lebowitz, Silverman & Klestadt LLP, New York, NY, argued for plaintiff-cross-appellant. Also represented by EDWARD B.

ACKERMAN; KAVITA MOHAN, ANDREW THOMAS SCHUTZ, 

Washington, DC. 

 MICHAEL D. SNYDER, Commercial Litigation Branch, 

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2 UNITED STEEL AND FASTENERS v. UNITED STATES

Civil Division, United States Department of Justice, Washington, DC, argued for defendant-appellant. Also represented by ROBERT EDWARD KIRSCHMAN, JR., PATRICIA M.

MCCARTHY, JOSEPH H. HUNT; JESSICA DIPIETRO, NANDA 

SRIKANTAIAH, Office of Chief Counsel for Trade Enforcement and Compliance, United States Department of Commerce, Washington, DC. 

 ______________________

Before MOORE, REYNA, and STOLL, Circuit Judges.

REYNA, Circuit Judge.

The United States Department of Commerce appeals 

the United States Court of International Trade’s determination that Commerce lacks authority to retroactively suspend liquidation of helical spring lock washers entered on 

or after the issuance date of an antidumping duty order. 

United Steel and Fasteners, Inc., an importer of the helical 

spring lock washers under investigation, cross-appeals the

Court of International Trade’s affirmance of Commerce’s

determination that its washers are within the scope of the 

antidumping duty order. Because we conclude that Commerce’s retroactivity determination was improper and substantial evidence supports Commerce’s scope ruling, we 

affirm.

BACKGROUND

I. The ADD Order

Shakeproof Assembly Components Division of Illinois 

Tool Works Inc. (“Shakeproof”) is a U.S. domestic producer 

of lock washers. In 1992, Shakeproof filed a petition (the 

“Petition”) for the imposition of antidumping duties on imports of certain helical spring lock washers from China. After examining the Petition, Commerce initiated an 

antidumping investigation. Commerce determined that 

imports of certain helical spring lock washers from China 

were being sold at less than fair value, and on October 19, 

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1993, it issued the antidumping duty order at issue in this 

appeal. See Certain Helical Spring Lock Washers From the 

People’s Republic of China, 58 Fed. Reg. 53,914 (Dep’t of 

Commerce Oct. 19, 1993), as amended, 58 Fed. Reg. 61,859

(Dep’t of Commerce Nov. 23, 1993) (“ADD Order”). Commerce’s ADD Order describes the subject merchandise as 

follows:

[C]ertain helical spring lock washers (HSLWs) are 

circular washers of carbon steel, of carbon alloy 

steel, or of stainless steel, heat-treated or non heattreated, plated or non-plated, with ends that are 

off-line. HSLWs are designed to: (1) Function as a 

spring to compensate for developed looseness between the component parts of a fastened assembly; 

(2) distribute the load over a larger area for screws 

or bolts; and (3) provide a hardened bearing surface. The scope does not include internal or external tooth washers, nor does it include spring lock 

washers made of other metals, such as copper. The 

lock washers subject to this investigation are currently classifiable under subheading 7318.21.0000 

of the Harmonized Tariff Schedule of the United 

States (HTSUS).

ADD Order, 58 Fed. Reg. at 53,914–15. 

II. Scope Ruling

United Steel and Fasteners, Inc., (“US&F”) is a U.S. 

importer of lock washers that meet the specifications of the 

American Railway Engineering and Maintenance-of-Way 

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4 UNITED STEEL AND FASTENERS v. UNITED STATES

Association (“AREMA”).1 US&F imports the washers under HTSUS subheading 7318.21.0090, without declaring 

them subject to the ADD Order. 

On April 9, 2013, US&F requested an official scope ruling from the United States Department of Commerce

(“Commerce”) pursuant to 19 C.F.R. § 351.225(c). In its request, US&F alleged that its washers were not covered by 

the ADD Order. US&F explained that United States Customs and Border Protection (“CBP”) was “aware of the 

HTSUS clarification being utilized by US&F,” and that

“[a]fter reviewing US&F’s response to a CBP Notice of Proposed Action, CBP is allowing USF to continue making entry under heading 7318.21.0090[] with the understanding 

that this scope determination was being readied and 

shortly filed.”2 J.A. 70. 

On July 8, 2013, without initiating a scope inquiry, 

Commerce issued a final scope ruling that US&F’s washers

are within the scope of the ADD Order based on the factors 

listed in 19 C.F.R. § 351.225(k)(1). Commerce also instructed CBP to suspend liquidation of “all unliquidated 

entries of merchandise made on or after the first day merchandise subject to the [ADD] Order was suspended for antidumping purposes and collect cash deposits on all such 

entries.” J.A. 396. Liquidation was suspended to October 

19, 1993, the date the ADD Order was issued and the first 

day CBP originally suspended liquidation of merchandise 

subject to this order. US&F appealed Commerce’s scope 

 

1 AREMA is a professional engineering association 

responsible for setting engineering standards for certain 

railway washers.

2 Neither US&F’s scope request, nor the record on 

appeal, provide any more information about CBP’s Notice 

of Proposed Action and its decision to allow US&F’s importation of washers under heading 7318.21.0090 and without 

deposit of estimated antidumping duties. 

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ruling and its instructions to retroactively suspend liquidation to the United States Court of International Trade 

(“CIT”). United Steel & Fasteners, Inc. v. United States, 

203 F. Supp. 3d 1235, 1241 (Ct. Int’l Trade 2017). 

The CIT affirmed Commerce’s scope ruling and reversed and remanded Commerce’s retroactivity determination. Id. at 1247–48. The CIT determined that Commerce 

exceeded its regulatory authority by ordering retroactive 

suspension of liquidation back to 1993 and ordered that

Commerce draft new suspension of liquidation instructions. Id. at 1248, 1255. On remand, Commerce issued 

new instructions to suspend liquidation on or after July 8, 

2013, the date when Commerce issued the final scope ruling regarding US&F’s washers. The CIT determined that 

Commerce’s new suspension instructions complied with its 

remand order and entered judgment. 

Commerce now appeals the CIT’s judgment on retroactivity and US&F cross-appeals the CIT’s affirmance of 

Commerce’s scope ruling. We have jurisdiction under 28 

U.S.C. § 1295(a)(5). 

DISCUSSION

We review decisions of the CIT de novo, applying the 

same substantial evidence standard the CIT uses in reviewing Commerce’s antidumping duty determinations. 

AMS Assocs., Inc. v. United States, 737 F.3d 1338, 1342 

(2013). We have consistently emphasized that Commerce 

is entitled to substantial deference when interpreting its 

own antidumping duty orders because the meaning and 

scope of such orders is within Commerce’s particular expertise and special competence. King Supply Co., LLC v. 

United States, 674 F.3d 1343, 1348 (Fed. Cir. 2012) (citing 

Tak Fat Trading Co. v. United States, 396 F.3d 1378, 1382 

(Fed. Cir. 2005); and Sandvik Steel Co. v. United 

States, 164 F.3d 596, 600 (Fed. Cir. 1998)). As a result, 

parties challenging Commerce’s scope determinations under substantial evidence review confront a high barrier to 

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reversal. Id. (quoting Nippon Steel Corp. v. United 

States, 458 F.3d 1345, 1352 (Fed. Cir. 2006)). That the evidence in the record could result in two inconsistent conclusions does not, alone, prevent Commerce’s conclusion from 

being supported by substantial evidence. Id. (quoting Am. 

Silicon Techs. v. United States, 261 F.3d 1371, 1376 (Fed. 

Cir. 2001)). Because the retroactivity issue depends upon 

whether US&F’s washers are covered by the ADD Order, 

we address the scope ruling issue first. 

I. Scope Ruling

When issues arise as to whether a product is within the 

scope of an antidumping duty order, Commerce “issues 

‘scope rulings’ that clarify the scope of an order . . . with 

respect to particular products.” 19 C.F.R. § 351.225(a). An 

interested party may submit an application with Commerce for a scope ruling. Id. at § 351.225(c)(1). Relevant 

to this case, Commerce may render a scope ruling with or 

without a “scope inquiry,” a broader inquiry as to whether 

a product is included within the scope of an antidumping 

duty order. Commerce’s decision to initiate a scope inquiry 

turns on whether it can render a scope ruling based solely 

upon a party’s application for a scope ruling and the descriptions of the subject merchandise referred to in 

§ 351.225(k)(1). Id. at § 351.225(e). Paragraph (k)(1) provides that Commerce will consider the “descriptions of the 

merchandise contained in the petition [for imposition of an 

antidumping duty order], the initial investigation, and the 

determinations of the Secretary (including prior scope determinations) and the [International Trade] Commission.” 

Id. at § 351.225(k)(1). If Commerce can render a ruling on 

that basis, it will issue a scope ruling. If not, it will initiate 

a scope inquiry and will further consider: 

(i) The physical characteristics of the product;

(ii) The expectations of the ultimate purchasers;

(iii) The ultimate use of the product;

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(iv) The channels of trade in which the product is sold; and

(v) The manner in which the product is advertised and displayed.

Id. at § 351.225(k)(2). Commerce’s analysis of the (k)(1) 

sources against the product in question produces “factual 

findings reviewed for substantial evidence.” Meridian 

Prods., LLC v. United States, 851 F.3d 1375, 1382 (Fed. 

Cir. 2017) (citing Fedmet Res. Corp. v. United States, 755 

F.3d 912, 919–22 (Fed. Cir. 2014) (reviewing Commerce’s 

analysis under § 351.225(k)(1) for substantial evidence)). 

Here, Commerce determined that US&F’s washers were 

within the scope of the ADD Order based solely on the (k)(1) 

sources and, thus, did not initiate a scope inquiry. J.A. 393. 

US&F argues that its washers have a distinct design 

and function from helical spring lock washers subject to the 

scope of the ADD Order. Commerce responds that US&F’s 

washers are “spring” washers, “helical” in nature, and 

function as lock washers, and, thus, within the scope of the 

ADD Order. As previously noted, the ADD Order covers 

“certain helical spring lock washers (HSLWs).” ADD Order

at 58 Fed. 53,914 (emphasis added). The parties do not 

dispute that US&F’s washers are spring lock washers. Instead, they dispute whether US&F’s AREMA washers are 

“helical,” and, if so, whether they are the helical type covered by the ADD Order.

In determining that US&F’s washers are “helical,” 

Commerce looked to the Petition, a (k)(1) source, and concluded that “helical” means “both a description of appearance, i.e., in the form of a helix, and a spring-like attribute 

or locking function to prevent loosening which is present 

when the helix is compressed.” J.A. 391 (citing Petition at 

5–6). Commerce then noted that the “pictures provided by 

US&F clearly show the helical aspect of AREMA washers.” 

J.A. 392 (citing US&F’s Scope Request). Commerce also 

noted that “[a] significant portion” of helical spring lock 

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washers of “larger sizes are used for installation of railroad 

tracks.” J.A. 392 (quoting Petition at 3). Commerce noted 

that this is precisely the type of application for which the

US&F’s washers are designed. Taken together, this is substantial evidence that supports Commerce’s conclusion 

that US&F’s washers are “helical” spring lock washers that 

fall within the scope of the ADD Order.

US&F argues that Commerce failed to consider that 

US&F’s washers are used only in the rail industry, unlike 

the helical spring lock washers subject to the ADD Order, 

which are used for mechanical applications, such as in machinery and vehicles. We reject this argument. Commerce

acknowledged that US&F’s washers are used for railways

but that this trade usage did not exclude them from the 

scope of the ADD Order. Commerce explained that, given 

the language of the ADD Order and the Petition, the subject helical spring lock washer is not defined by a specific 

trade or industry but by its physical and functional “helical” characteristic. Moreover, as noted above, the Petition 

even mentions that a “significant” portion of larger sized 

helical spring lock washers are used for railway purposes,

evincing that subject helical spring lock washers are used 

in the railway industry in addition to mechanical applications.

US&F next argues that Commerce improperly disregarded a “critical” physical difference between the crosssections of the subject helical spring lock washers and 

US&F’s washers, with the former being trapezoidal and 

the latter, rectangular. We disagree. Commerce explicitly 

acknowledged that “helical spring lock washers are generally designed with a trapezoidal cross section,” but that 

“this attribute does not change the basic function of the 

washer; it simply adds to the spring or locking function the 

helix provides.” J.A. 392. Commerce also noted that there 

was no evidence that helical spring lock washers were always trapezoidal.

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US&F finally argues that Commerce failed to properly 

consider that its washers, certified pursuant to AREMA 

standards, were neither described in the Petition nor subject to the initial antidumping duty investigation in 1992. 

In particular, US&F argues that because the Petition and

the investigation record reference the American Society of 

Mechanical Engineers (“ASME”) certification standards instead of the AREMA certification standards, this is evidence that its washers do not fall within the scope of the 

ADD Order. This argument is not persuasive. As Commerce explained, the language of the ADD Order, the Petition, and the record of the initial investigation did not 

specify that subject helical spring lock washers must be designed to meet ASME or any other specific industry specification or that lock washers designed to meet AREMA 

standards were excluded. Thus, the fact that AREMA certification standards were not described in the Petition or in 

the investigation record does not mean that US&F’s 

AREMA washers are excluded from the scope of the ADD 

Order. 

In sum, because we find that Commerce’s scope determination is supported by substantial evidence, we affirm. 

II. Retroactivity

The second issue on appeal concerns whether Commerce’s retroactive suspension of liquidation was lawful. 

The parties do not dispute that, after Commerce issues a

final affirmative scope ruling, Commerce may retroactively 

suspend liquidation for all unliquidated entries entered on 

or after the initiation date of the scope inquiry. 19 C.F.R. 

§ 351.225(l)(3). Section 351.225(l)(3), however, is silent as 

to how far back suspension of liquidation can go when there 

has been no scope inquiry. 

An agency’s interpretation of its own ambiguous regulation is controlling unless it is “plainly erroneous or inconsistent with the regulation.” Auer v. Robbins, 519 U.S. 452, 

461 (1997). The Supreme Court recently clarified in Kisor 

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v. Wilkie that a court should not afford Auer deference unless “the regulation is genuinely ambiguous.” 139 S. Ct. 

2400, 2415 (2019). “[I]f there is only one reasonable construction of a regulation . . . then a court has no business 

to deferring to any other reading.” Id. If a genuine ambiguity remains, then the agency’s reading must still be reasonable in order to receive Auer deference. Id. 

Commerce’s regulatory authority concerning suspension of liquidation following a final affirmative scope ruling

is contained at 19 C.F.R. § 351.225(l)(3). Section 

351.225(l)(3) provides:

(3) If the Secretary issues a final scope ruling, under either paragraph (d) or (f)(4) of this section, to 

the effect that the product in question is included 

within the scope of the order, any suspension of liquidation under paragraph (l)(1) or (l)(2) of this section will continue. Where there has been no 

suspension of liquidation, the Secretary will 

instruct the Customs Service to suspend liquidation and to require a cash deposit of estimated 

duties, at the applicable rate, for each unliquidated 

entry of the product entered, or withdrawn from 

warehouse, for consumption on or after the date 

of initiation of the scope inquiry. If the Secretary’s final scope ruling is to the effect that the 

product in question is not included within the scope 

of the order, the Secretary will order any suspension of liquidation on the subject product ended and 

will instruct the Customs Service to refund any 

cash deposits or release any bonds relating to this 

product.

19 C.F.R. § 351.225(l)(3) (emphases added). This regulation 

is clear. When Commerce issues a final scope ruling, and 

liquidation has not previously been suspended, Commerce 

may suspend liquidation beginning “on or after the date of 

initiation of the scope inquiry.” Id. The regulation does not 

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allow suspension of liquidation before a scope inquiry. Affording Commerce deference here would permit Commerce 

“under the guise of interpreting a regulation, to create de 

facto a new regulation.” Kisor, 139 S. Ct. at 2415 (internal 

quotations omitted). 

Supporting our interpretation is AMS, in which we determined that identical language in another subsection of 

§ 351.225 was unambiguous. AMS, 737 F.3d at 1343. In 

AMS, Commerce did not conduct a scope inquiry yet retroactively suspended liquidation to January 31, 2008, the beginning of the relevant administrative review period with 

respect to an antidumping duty order. Id. At issue was 

whether Commerce could do so pursuant to § 351.225(l)(2). 

Id. The only relevant difference between that subsection 

and 351.225(l)(3) at issue here is that the former applies to 

preliminary scope rulings while the latter applies to formal 

scope rulings. Notably, both sections provide that if liquidation has not yet been suspended, then suspension of liquidation occurs “on or after the date of initiation of the 

scope inquiry.” 19 C.F.R. § 351.225(l)(2), (3). Focusing on 

this language, the court noted that “the suspension of liquidation and imposition of antidumping cash deposits may 

not be retroactive but can only take effect ‘on or after the 

date of the initiation of the scope inquiry.’” AMS, 737 F.3d 

at 1344. The court explained that “[t]he unambiguous language of the regulation only authorizes Commerce to act on 

a prospective basis, and such express prospective authorization reasonably is interpreted to preclude retroactive authorization.” Id. (first emphasis added). The court 

concluded that Commerce’s suspension instructions to CBP 

were “clearly inconsistent with the limited prospective authority provided by § 351.225(l)(2)” and, thus, Commerce 

exceeded its regulatory authority. Id. 

Here, like in AMS, Commerce did not initiate a scope 

inquiry and yet issued instructions to CBP to retroactively 

suspend liquidation to October 19, 1993, the issuance date 

of the ADD Order. Thus, Commerce’s instructions are 

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12 UNITED STEEL AND FASTENERS v. UNITED STATES

“clearly inconsistent with the limited prospective authority 

provided” by § 351.225(l)(3) and must be vacated. 

Even if § 351.225(l)(3) could arguably be viewed as ambiguous, Commerce’s interpretation is not “within the 

bounds of reasonable interpretation.” Kisor, 139 S. Ct. at 

2416 (internal quotations omitted). This court will not defer to an agency’s interpretation of a regulation when the 

evidence shows that “the proffered interpretation runs contrary to the intent of the agency at the time of enactment 

of the regulation.” Gose v. U.S. Postal Serv., 451 F.3d 831, 

837 (Fed. Cir. 2006) (citing Gardebring v. Jenkins, 485 U.S. 

415, 430 (1988)). 

Here, the regulatory history of § 351.225(l)(3) indicates 

that Commerce intended to limit the reach of retroactive 

suspension of liquidation. Prior to promulgating this regulation, Commerce received comments from the public

that, after an affirmative scope ruling, Commerce should

suspend liquidation for all unliquidated entries, even those 

that were entered prior to the initiation of a scope inquiry. 

Antidumping Duties; Countervailing Duties, 62 Fed. Reg. 

27,296, 27,327–28 (Dep’t Commerce May 19, 1997). The 

public argued that “the Department must view any merchandise that it determines to be within the scope of an order as always having been within the scope” since “scope 

rulings only clarify, and do not expand, the scope of an order.” Id. Commerce, however, did not do this. Instead, 

Commerce tailored § 351.225(l)(3), noting that if liquidation has not yet been suspended, then suspension of liquidation would occur on entries “made on or after the date of 

initiation of the scope inquiry and that remain unliquidated 

as of the date of publication of the affirmative ruling.” Id.

at 27,328 (emphasis added). In so doing, Commerce explained that “[s]uspension of liquidation is an action with 

a potentially significant impact on the business of U.S. importers and foreign exporters and producers.” Id. Commerce also explained that “when liquidation has not been 

suspended, Customs, at least, and perhaps the Department 

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as well, have viewed the merchandise as not being within 

the scope of an order, importers are justified in relying 

upon that view, at least until the Department rules otherwise.” Id. (emphasis added). Thus, Commerce’s current 

position, that suspension of liquidation can extend back to 

the issuance date of the ADD Order, after US&F relied on 

the government’s liquidation of its product for almost 

twenty years, runs counter to Commerce’s prior position 

evidenced in the regulatory history. Commerce cannot now 

change course and broadly apply § 351.225(l)(3). 

Commerce argues that its interpretation of 

§ 351.225(l)(3) was reasonable and should be afforded deference. Commerce notes that it did not conduct a scope inquiry and instead entered a scope ruling based on the (k)(1) 

factors. Thus, Commerce argues, US&F’s washers were 

“clearly” subject to the ADD Order and it was “reasonable 

for Commerce to conclude that liquidation should have 

been suspended from the date of the initial suspension for 

merchandise subject to the order.” We disagree.

As the CIT noted, there was a genuine issue as to 

whether US&F’s washers were in scope. J.A. 29. Before 

US&F requested a scope ruling at the behest of CBP, CBP

had not been collecting deposits of antidumping duties on 

US&F entries for almost twenty years, suggesting that 

CBP initially did not view US&F entries as within the 

scope of the ADD Order. Id. In light of this uncertainty, 

Commerce granted US&F’s request for a scope ruling. Id. 

Although Commerce characterizes its scope ruling as not 

materially clarifying the scope of the ADD Order but

merely confirming that US&F’s washers were in scope, 

Commerce misapprehends the nature of a scope ruling. As 

the CIT noted, “[a] scope ruling by definition is a determination by Commerce that clarifies the scope of a standing 

antidumping or countervailing duty order.” Id. (citing 19 

C.F.R. § 351.225(a) (noting that when “issues arise as to 

whether a particular product is included within the scope 

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14 UNITED STEEL AND FASTENERS v. UNITED STATES

of an antidumping or countervailing duty order,” Commerce issues scope rulings that “clarify the scope of an order” with respect to particular products)). Thus, a scope 

ruling does not merely “confirm” the scope of an antidumping duty order but instead clarifies the unclear scope of the 

order and whether the particular product at issue falls 

within that scope. As this court has long noted, only Commerce can interpret and clarify the scope of an antidumping duty order. See, e.g., Mid Continent Nail Corp. v. 

United States, 725 F.3d 1295, 1300 (Fed. Cir. 2013) (“In issuing scope rulings, Commerce . . . enjoys substantial freedom to interpret and clarify its antidumping orders.” 

(internal quotations omitted)). 

Commerce also argues that its interpretation of 

§ 351.225(l)(3) is appropriate because it prevents gamesmanship and delay. According to Commerce, importers 

could be encouraged “to delay their request for a scope ruling from Commerce, because if entries are only suspended 

prospectively, importers could import potentially in-scope 

product without paying duties.” Appellant’s Br. at 22. 

While we do not disagree with Commerce’s argument, to be 

clear, we do not find that such gamesmanship occurred in 

this case. First, we note that Commerce always retains 

the authority to self-initiate a scope inquiry and, thus, is 

not bound by the timing of the importer’s scope ruling request to determine whether a product is in scope. 19 C.F.R. 

§ 351.225(b) (“If the Secretary determines from available 

information that an inquiry is warranted to determine 

whether a product is included within the scope of an antidumping or countervailing duty order . . . the Secretary will 

initiate an inquiry . . . .”). Second, in this case, there was 

no undue delay in requesting a scope ruling. Once US&F 

received CBP’s Notice of Proposed Action and became 

aware that its products were potentially in scope, US&F

timely filed its scope ruling with Commerce. 

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CONCLUSION

We hold that Commerce exceeded its regulatory authority under 19 C.F.R. § 351.225(l)(3) by retroactively suspending liquidation to the issuance date of the ADD Order.

We also find that substantial evidence supports Commerce’s final scope ruling that US&F’s washers are within 

the scope of the ADD Order. For these reasons, we affirm. 

AFFIRMED

COSTS

No costs.

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