CBP Flips AD/CVD Evasion Finding at CIT Over Aluminum Extrusions From Dominican Republic

CBP no longer believes importers Global Aluminum Distributor and Hialeah Aluminum Supply evaded the antidumping and countervailing duty orders on aluminum extrusions from China by transshipping them through Dominican manufacturer Kingtom Aluminio. Filing its remand results at the Court of International Trade in a case related to the Enforce and Protect Act investigation, CBP said that after taking another look at the record, it cannot conclude that evasion took place (Global Aluminum Distributor v. United States, CIT #21-00198).

Paul Pizzeck, the chief of the Penalties Branch in the Office of Regulations and Rulings (ORR) of Trade at CBP, said on remand that the Trade Remedy Law Enforcement Directorate (TRLED) erroneously relied on one-day site visits from the EAPA alleger Ta Chen and CBP to find evasion. Further, many other supposed inconsistencies in Kingtom's records submitted during the investigation have "logical explanations," Pizzeck said.

The case at CIT was filed by Global Aluminum, Hialeah and Kingtom. The plaintiffs alleged that TRLED and ORR failed to make a factual finding when ruling that Global Aluminum and Hialeah committed evasion (see 2202160041). CBP based its conclusion on a vague reference to Kingtom's ties to China give that the company is owned and operated by Chinese nationals and discrepancies between the importers' and Kingtom's records rather than relying on an evidentiary standard, the plaintiffs argued. The case led CBP to file for a voluntary remand "in light of the arguments raised by the parties during judicial review" (see 2204150039), the results of which were filed June 15.

In the results, CBP completely changed its tune. Going through the record evidence, Pizzeck first said that TRLED, in its affirmative evasion finding, conflated monthly theoretical production volumes and monthly sales volume figures provided by Kingtom as evidence that Kingtom did not have the capacity to make the number of goods it sent to the U.S. CBP treated them as interchangeable when they are different figures, the remand results said.

The production numbers fluctuate between months since Kingtom makes custom extrusions to a customer's requested specifications on a per-order basis. The monthly production numbers would not mirror monthly sales since the production could sit over two different months or be finished in one month but not exported until the next. Even if it was a continuous process, the volume would still fluctuate based on the number of orders received and filled in each month, Pizzeck said.

Many of the other "inconsistencies" identified by TRLED have "logical explanations," the remand results said. For instance, differences in amounts paid by customers and the amount deposited in Kingtom's bank account can be attributed to bank transaction fees. Pizzek also found that TRLED's use of adverse facts available was unwarranted since "there is no indication within the record that Kingtom refused to provide requested information or otherwise did not fully cooperate to the best of its ability during the course of the EAPA investigation."

Looking at the full gammut of record evidence -- everything from purchase orders to bank records to photographs of Kingtom's facilities -- shows that Kingtom has the capacity to make all of the extrusions it sends to the U.S., the remand results said. Rather than looking at this evidence, TRLED "placed much significance and weight" on Ta Chen and CBP's site visits to find a lack of production capacity. Kingtom never had less than three aluminum extrusions presses, which is more than enough to fill all of its orders, Pizzeck said. However, during the site visit, Ta Chen and CBP saw that not all of them were operating at full capacity. Kingtom and Pizzeck, though, said that this was due to the manufacturer's business model of making the extrusions to order.

"TRLED relied on the extent of production observed during a single site visit to extrapolate Kingtom’s monthly production capacity, while not affording any weight to more complete production information submitted by Kingtom," the remand results said. "Such isolated observation cannot comprise the entirety of evidence used to find a lack of production that would signify evasion. The administrative record needs to contain greater evidence than an affidavit opining on overall production capacity after only one visit to the manufacturer."

In all, CBP has made three evasion findings against Kingtom. The present case marks the first time CBP has flipped its affirmative evasion decision against the exporter.