CBP Not Required to Apply 'Knowledge Test' in AD Duty Assessments, CIT Says
An importer’s challenge of the antidumping duty rate assessed on its hand trucks from China is better directed to the Commerce Department than to CBP by way of protest, the Court of International Trade said in a Nov. 23 decision. Northern Tool argued that, under Commerce’s “knowledge test” the exporter for AD duty purposes should have been the manufacturer of the hand trucks, but the trade court found CBP was only bound to determine the exporter based on entry documentation.
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CBP had assessed duties at the high China-wide rate of 383.6% on Northern Tool’s entries. Northern Tool had identified Taifa, a company which Commerce had assigned a 26.49% rate, as the manufacturer and paid its cash deposit at the lower rate. But pro forma invoices related to the transactions identified ITI (Shanghai) as the seller. Taifa was not named on the pro forma invoices or the sea waybills, and was only identified as the manufacturer on the commercial invoices, again on the letterhead of ITI (Shanghai).
ITI (Shanghai) had never been assigned its own AD rate, and was part of the China-wide entity for AD duty purposes. But Northern Tool contended that, because Taifa knew the hand trucks were being sold to Northern Tool through ITI (Shanghai), and the goods were shipped directly from Taifa’s factory in China to Northern Tool in the U.S., the goods were entitled to enter at Taifa’s lower AD rate.
CIT found in favor of the government. Commerce has a “heavy hand” in “determining the entity that is the exporter for antidumping duty purposes,” the court said. Whether the entries had a different exporter under Commerce’s “knowledge test” could have been addressed in a Commerce administrative review by requesting review of ITI (Shanghai), CIT said. Here, CBP found ITI (Shanghai) to be the exporter for AD duty purposes based on a variety of factors, including that Taifa was not identified as the exporter on commercial documents and that Commerce did not direct CBP to apply the “knowledge test” in its liquidation instructions, and that determination was “rational” under the applicable legal standards, CIT said.
(Northern Tool & Equip. Co. v. U.S., Slip Op. 18-161, CIT # 14-00146, dated 11/23/18, Judge Musgrave)
(Attorneys: David Sanders for plaintiff Northern Tool & Equipment Company, Inc.; Hardeep Josan for defendant U.S. government)