On December 15, 2002, the U.S. Commerce Department issued a final scope ruling to Leader Light Ltd. that involved 76 various candles.  In issuing its ruling to Leader Light, U.S. Commerce indicated that candles made out of palm oil (palm wax), or primarily made of palm oil, were outside of the scope of the Antidumping Order On Petroleum Wax Candles From The People's Republic Of China.  In reaching its decision, Commerce reviewed the various comments that had been submitted by the National Candle Association ("NCA"), representing U.S. domestic candle makers, as well as comments submitted by U.S. importers. 

Commerce concluded that the evidence demonstrated that palm oil is not derived from petroleum, and is not similar to a petroleum wax.  Commerce also indicated that in light of this conclusion, there was no need to render a decision on whether palm oil was "later developed merchandise" within the purview of Section 351.225(k)(2) of the Commerce regulations.

The use of palm oil in candles has greatly increased over the last few years, with the result that candles made of palm oil or primarily made out of palm oil have been treated as being outside the scope of the antidumping order.  This treatment has now been confirmed by Commerce in its ruling to Leader Light.

Importers should be advised that the NCA is not precluded from filing a petition with Commerce and the U.S. International Trade Commission to initiate an investigation on candles made of palm oil.  Should this petition be accepted by Commerce and the ITC, both agencies would commence an investigation to determine whether candles of palm oil from China were being sold at less than fair value (dumping), and whether there is injury to the U.S. candle industry as a result of this dumping.  Should both agencies decide in the affirmative, a dumping order would be issued by Commerce and an antidumping rate established for palm oil candles.

Our law firm specializes in the practice of antidumping, Customs and international trade law.  If you have any questions on the issues raised in this newsletter, please contact Stephen Spraitzar at (415) 288-0427, or via email at sss@tuttlelaw.com.