Law360, New York (August 2, 2017, 7:56 PM EDT) -- Malaysian exporter Inmax Industries lodged a complaint with the U.S. Court of International Trade on Tuesday accusing the U.S. government of imposing unfair and arbitrary anti-dumping duties on steel nails that cost it both sales and customers. 
Inmax Industries Sdn Bhd. was under construction when its sibling company Inmax Sdn. Bhd. was assigned an anti-dumping rate of 39 percent after being selected as a mandatory respondent by the U.S. Department of Commerce in an investigation of Malaysian steel nails exports in 2013, while Inmax Industries was assigned a preliminary anti-dumping duty rate of 2.14 percent. 

That tariff on Inmax Industries was eventually bumped up to 39 percent though, after Commerce conducted a “changed circumstances review” that resulted in a decision to collapse the two companies. But the final result of that CCR vastly overstated Inmax Industries’ anti-dumping duty margin, not to mention that the review itself was untimely conducted less than 24 months after a final determination was issued, the nail maker argued Tuesday.

“The department’s conclusion that ‘good cause’ existed to initiate a review normally precluded by law to be initiated within 24 months of the final determination was not supported by substantial evidence,” Inmax Industries wrote. “This case presents a particular lack of good cause because the congressionally prescribed remedy of the annual review would have been completed by now had [Commerce] not diverted resources to the specious changed circumstances review.”

Throughout the process of determining sibling company Inmax Sdn. Bhd’s 39 percent anti-dumping rate — which was based on adverse facts available — Commerce never addressed the collapsing issue, though it was “emphatically clear that Inmax Industries was making nails with the intent to export them to countries such as the U.S.,” the company said.

Commerce published its anti-dumping order on nails from Malaysia in July 2015. Parties were afforded, under law, the opportunity to request an annual review, which Inmax Sdn. and Inmax Industries both did. However, that annual review was unfairly put on hold while Commerce instead conducted the CCR review, Inmax Industries argued.

The department issued its final results of the CCR on July 25, which collapsed the two Inmax entities and assigned them both the 39 percent anti-dumping rate. The department also found that Inmax Industries was evading the anti-dumping duty laws by depositing only 2 percent — its original tariff — rather than the 39 percent rate assigned to its affiliate.

“In light of the severe harm and consequences of the department’s CCR final results, both in terms of lost sales and lost customers, the Inmax entities have commenced this action,” the company wrote on Tuesday.

Representatives for the Commerce Department late Wednesday couldn’t immediately be reached for a comment.

Inmax is represented by Gregory S. Menegaz, J. Keven Horgan and Alexandra H. Salzman of deKieffer & Horgan PLLC.

Counsel information for the U.S. wasn't immediately available.

The case is Inmax Sdn. Bhd. et al. v. United States, case number 1:17-cv-00205, in the U.S. Court of International Trade.