Italian Tire Company Can't Rebut Assumption of Chinese State Control, DOJ Says of Appeal

An Italian tire company had not adequately proven it wasn't controlled by the Chinese government, especially as substantial evidence existed to the contrary, the U.S. said Jan. 5 in response to the exporter’s appeal to the U.S. Court of Appeals for the Federal Circuit (Pirelli Tyre v. U.S., Fed. Cir. # 23-2266).

Pirelli Tyre first filed in the Court of International Trade in May 2020 contesting the final results of the Commerce Department’s third administrative review of the antidumping duty order covering certain passenger vehicles and light truck tires from China. CIT ruled in June that Pirelli hadn't adequately proven it was not under control of the Chinese government and so was still covered by an 87.99% AD rate on Chinese tire exports (see 2306120055).

Pirelli China, located in China but indirectly owned by Italy-based Pirelli & C. S.p.A., had applied to Commerce for a separate AD rate. It “included information allegedly demonstrating its freedom from de jure and de facto government control,” DOJ said, but Commerce deemed its evidence inadequate, saying its management selection was controlled by a state-owned Chinese entity.

CIT was correct to hold that Pirelli had not sufficiently rebutted the presumption of de facto Chinese government control, DOJ said in its argument against the appeal. Pirelli was wrong that, in Commerce’s analysis, the department had to specifically consider the company’s freedom to choose executives in the context of its export activities, DOJ said.

“The general consideration of whether the factors indicate that a respondent is subject to de facto control of its export functions does not require a specific finding that each factor be specifically discussed in the context of export activities or functions,” it said. “This is made abundantly clear by the language of the four factors, given the first and fourth factors explicitly address export activities that Commerce must address in its analysis.”

DOJ also said Pirellli “wrongly interprets Commerce’s ‘presumption’ of government control as a separate, distinct, and lower standard than the normal ‘substantial evidence’ standard,” saying the exporter believed that “any proffered evidence” would be enough to rebut Commerce’s assumption of government control.

On the other hand, substantial evidence showed that China did exert control over the company, DOJ said.