US Seeks More Than $66 Million in Penalty and Unpaid Duties From Importer for Gross Negligence

Importer and U.S. subsidiary of a Chinese manufacturing company, Wanxiang America Corp. is guilty of negligence by making false statements and omissions over its entries of wheel hub assemblies, radial ball and tapered roller bearings, and universal joints and their parts, the U.S. argued in a July 13 complaint at the Court of International Trade. Through its negligence, Wanxiang America avoided antidumping duties and customs duties on its entries, cheating the U.S. out of over $31 million in lost revenue, the U.S. said. DOJ filed its case to seek the lost duty payments along with a penalty (United States v. Wanxiang America Corporation, CIT #22-00205).

Wanxiang America imported the merchandise in question between 2007 and 2012. During this period, the importer brought in universal joints and parts thereof, wheel hub assemblies, radial ball bearings, tapered roller bearings and other automobile parts and accessories. These goods were subject to the antidumping duty order on tapered roller bearings from China. From 2007 to 2012, Wanxiang America should have paid the cash deposit rate of 92.84% for the goods, since the relevant exporter, Wanxiang Qianchao Co., was subject to the all-others rate.

When importing the wheel hub assemblies, the U.S. alleges, Wanxiang America failed to deposit antidumping duties, falsely identified the wheel hub assemblies as "01" consumption entries as opposed to "03" antidumping entries and misclassified the products under the wrong Harmonized Tariff Schedule subheadings. As a result, the U.S. lost out on nearly $27 million in revenue. In the complaint, DOJ is seeking more than $53.8 million for the importer's alleged negligence -- an amount that totals double the lost antidumping duties for the wheel hub assemblies.

The U.S. said that the importer's misclassification of these products led to the loss of millions of dollars in duties. In all, the complaint wants the importer to pay over $1.2 million on the tapered roller bearings, $10.9 million for the universal joints and parts of the joints, $83,020.60 for the agriculture machine parts and $97,085.88 for miscellaneous parts and accessories.

For the universal joints and parts of the joints and the agriculture machine parts, the U.S. is alleging gross negligence in the handling of these goods, but also alleging negligence in the alternative should the court find that the importer's conduct does not rise to the level of gross negligence. In all, the U.S. is seeking more than $31 million for unpaid duties, taxes and fees, and over $66 million for negligent and gross negligent violations of customs law.