CIT Denies Importer's Bid for Zero AD Rate, Says Should Have Requested Administrative Review
The Court of International Trade on Aug. 19 dismissed an importer’s bid to be eligible for the zero percent antidumping duty rate applicable to its purported parent company, rather than the 92.84% China-wide rate assigned to its entries of tapered roller bearings from China. Wanxiang America should have used the administrative review process to qualify its exporter for the parent company’s rate, CIT told the importer.
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Wanxiang America challenged a 2016 Commerce Department memo that told CBP that the exporter of the roller bearings, Wanxiang Qinchao, had never been found to be affiliated with Wanxiang Group Corporation. Partly as a result of the memo, Wanxiang Qinchao was found ineligible for Wanxiang Group’s zero rate, and CBP issued a pre-penalty notice to Wanxiang America for not paying the 92.84% China-wide duty rate that it found was applicable to its entries in 2011 and 2012.
The Commerce memo had followed a CBP audit report to the same effect. It had been prompted by a meeting between Wanxiang America and Commerce officials, including the Commerce secretary, where the importer had asked for Commerce to review the audit results. Nearly two years after Commerce sent the memo, CBP issued a pre-penalty notice to Wanxiang America for unpaid AD duties on the entries. The importer had filed the entries as type 01 rather than type 03.
Wanxiang America said Commerce’s memo was issued without giving the importer a chance to comment on or review the decision before it was made. The importer said that “Commerce has made a practice or policy of making ad hoc, undocumented, undisclosed, and individualized determinations,” according to CIT. It challenged the memo under 28 USC 1581(i), the trade court’s “residual” jurisdiction provision for agency actions not challengeable by other means (e.g., disputing denied protests or decisions made in antidumping duty investigations and reviews).
CIT found it had no jurisdiction over the case. First, the memo was not a final agency action ripe for review by the court. It simply relayed Commerce’s previous findings, including in an antidumping duty administrative review conducted in the late 1990s wherein two other companies were found to be Wanxiang Group affiliates, but not the exporter in question, Wanxiang Qinchao.
And Wanxiang America had another means of challenging the decision: it could have sought an administrative review to determine whether Wanxiang Qinchao was affiliated with Wanxiang Group and entitled to its zero percent AD rate. “Indeed, [Wanxiang America] seeks the very relief associated with administrative reviews -- determinations (1) that an exporter is not controlled by the Chinese government; and (2) to ‘collapse’ [Wanxiang Qinchao] with other [Wanxiang Group] companies without any analysis of [Wanxiang Qinchao’s] alleged exports of subject merchandise.”
“[Wanxiang America Corporation (WAC)] thus attempts to invoke the court’s residual jurisdiction to circumvent its failure to exhaust the administrative remedies provided to it through normal anti-dumping administrative review procedures,” CIT, said. “In sum, WAC could have challenged the results of such administrative reviews in a 28 U.S.C. 1581(c) action if it were dissatisfied with the results, and thus 28 U.S.C. 1581(i) jurisdiction is unavailable.”
(Wanxiang Am. Corp. v. U.S., Slip Op. 19-112, CIT # 18-00120, dated 08/19/19, Judge Katzmann)