AD/CVD Petitioner Rails Against Evasion Finding on Its Vietnamese Chassis Imports

CBP abused its discretion by ignoring explicit antidumping and countervailing duty scope language when it found that importer and AD/CVD petitioner Pitts Enterprises evaded the AD/CVD orders on chassis and subassemblies thereof from China, Pitts argued in a Nov. 6 complaint at the Court of International Trade. The importer admitted to integrating Chinese axle and landing gear leg components into finished chassis shipments, which were finished in Vietnam, but it said individual Chinese components were "explicitly removed from the scope" (Pitts Enterprises v. U.S., CIT # 23-00234).

CBP's Trade Remedy Law Enforcement Directorate (TRLED) "confirmed at the on-site verification that" Pitts' Vietnamese manufacturer, Truong Hai Auto Corp. Special Vehicle Manufacturing Limited Co., manufactures the Pitts chassis with non-scope raw materials, components and parts, instead of "covered subassemblies." CBP ignored this finding by declaring that Pitts evaded the AD/CVD orders, the complaint said.

The importer's complaint included eight counts in total, with the majority focusing on the evasion decision itself -- a decision based on a scope dispute. Pitts served as the AD/CVD petitioner for the relevant orders, noting Commerce cleared up a scope request during the AD/CVD investigations regarding individual Chinese components. The agency adhered to the petitioner's demand that these components explicitly be excluded from the orders, while four specific subassembles -- chassis frames, running gear/axle assemblies, landing gear assemblies and connection assemblies -- remain subject to the duties, the complaint said.

In addition, Commerce confirmed that finished and unfinished chassis that have been processed or assembled in a third country, but not Chinese parts alone, remain in scope, the brief said. After the orders went into effect, Pitts imported finished chassis from a Vietnamese producer. An evasion petition was filed and TRLED eventually found that Pitts evaded the orders because Chinese components on any chassis were covered by the orders.

In its complaint, Pitts said the evasion decision clearly "ignore[d] the AD/CVD country of origin requirement," adding "merchandise entering a non-subject, third country must be the covered product in the AD/CVD orders in the first instance. CBP ignored plain scope language distinguishing nonscope components from subassemblies and explicitly stating Chinese components alone are not covered, and failed to recognize proper third country scope language."

Pitts claimed CBP "specifically ignored a significant amount of information on the record to produce a conclusion that the Orders cover finished chassis manufactured in Vietnam integrating Chinese origin components." As a result, the agency didn't apply "an appropriate substantial evidence standard," the complaint said. The brief also challenged CBP's refusal to submit the case to Commerce for a scope inquiry.

The last count of the complaint laid out the importer's due process claims against CBP, citing the key Royal Brush Manufacturing v. U.S. decision. In that case, the U.S. Court of Appeals for the Federal Circuit said CBP violated an EAPA party's due process rights by not providing it access to the confidential business information in the proceeding. Similarly, Pitts claims here that CBP imposed interim measures without notifying it of the evasion allegation and the investigation, while withholding access to confidential business records.