Retroactive Antidumping Tax on Wax Candles from China

Issue 522, July 27, 2006

The United States Department of Commerce has retroactively imposed antidumping (AD) duties of 108.30% on wax candles from The People's Republic of China (China) that contain over 50% and less than 87.8% palm oil or other vegetable oils. Previously, the Department of Commerce had held that candles with less that 50% petroleum wax were not subject to the AD duty order. This decision takes effect retroactively from February 25, 2005.

The original antidumping order included petroleum wax candles, having fiber or paper cored wicks, sold in the following shapes: tapers, spirals, straight-sided dinner candles, rounds, columns, pillars, votives, and wax-filled containers. Now, beginning with February 25, 2005, candles from China in the shapes described in the original order, and with fiber or paper cored wicks, that do not contain at least 87.8% palm or other vegetable oil-based waxes mixed with the petroleum wax, are subject to the AD order (A-570-504) on petroleum wax candles from the China. Because of this change, candles with between 51% and 87.7% palm oil, or other vegetable oil, are now subject to the antidumping case. Previously, all candles with over 50% palm or other vegetable oils were excluded from the case.

U.S. Customs and Border Protection will now impose 108.3% antidumping duties on all new entries of the subject candles, and will suspend liquidation on all unliquidated entries of candles from China. These entries will become antidumping duty entries and will liquidate with additional duty bills in the amount of 108.3%, perhaps two years from now.

For entries made within the past 60 days, Customs will reject the entries back to the brokers and will demand cash deposits of estimated antidumping duties at the 108.3% rate. This could be expanded to 90 days with headquarters approval.

Because of the large increase in duty liability, Customs may determine that an importer's continuous bond is not sufficient for the new expected duty payments, requiring importers to file a new continuous bond in a higher amount.

Candle importers, who have not been making paying antidumping should examine their past entries since February 5, 2005 for shipments that now fall under the antidumping case. Any such entries must be identified, and a new entry must be prepared and filed. A non-reimbursement certificate will now be required for these shipments. Failure to provide Customs with a non-reimbursement certificate will result in the antidumping duties being doubled at final liquidation.

Customs has put the burden on the importer to correct any entries of vegetable oil candles that are now considered to fall under the antidumping case. Failure to do so will result in penalties being issued by Customs. Please contact your customs broker to make the necessary corrections.

For more information, please check the Customs Border and Protection website at http://www.cbp.gov