Trade Court Sends Back Evasion Finding on Door Thresholds Made in Vietnam

The Court of International Trade on Jan. 16 sent back CBP's finding that importer Columbia Aluminum Products' door thresholds evaded the antidumping and countervailing duty orders on aluminum extrusions from China. Judge Timothy Stanceu said CBP, in both the final evasion decision and an administrative review of the decision, committed "multiple errors, both of fact and of law." The judge said CBP didn't have evidence on its side in making the evasion finding, nor did it properly initiate the investigation.

Stanceu told CBP to issue its remand results on an "expedited basis" that addresses "the actions Customs will take with respect to the Interim Measures it previously imposed."

Jeremy Dutra, counsel for Columbia, said the company is "pleased with the result. The Court agreed with Columbia Aluminum that Customs made numerous factual and legal errors. In what may be a first under the [Enforce and Protect Act] statute, the Court agreed with us that Customs did not even have a basis to institute the investigation. We are optimistic that this matter will come to an expeditious close given the Court ordered Customs to issue a remand redetermination within 30 days."

CBP arbitrarily and capriciously said the door thresholds were evading the orders even though there was no evidence that Columbia received the thresholds from China, transshipped the thresholds from China through Vietnam or falsely declared the country of origin to be Vietnam and not China, the judge said. Columbia pointed out that there was no dispute that its thresholds are "multi-component products fully and permanently assembled before importation" and that the aluminum extrusions in the imported products are not the "principal contributor to the weight, value, or functionality of the finished threshold products."

Stanceu also ruled that the evasion decision "erroneously interpreted the orders to apply to merchandise produced in a third country." The orders' scope language covers aluminum extrusions from China made of certain aluminum alloys. It contains a "subassemblies" provision, which extends the scope to extrusion components that are attached to non-aluminum extrusion parts to form a subassembly at the time of import, though it notes that the scope doesn't include the non-extrusion parts of subassemblies. The scope also has a "finished merchandise exclusion," which excludes finished goods.

In the administrative review, CBP said that the orders didn't apply to thresholds assembled in Vietnam with a Chinese-origin extruded aluminum component, and the U.S. didn't contest that finding during litigation. As a result, the government waived any objection. But even if the objection weren't waived, "the court still would conclude that the Orders as issued in 2011 do not pertain to merchandise produced in, and exported from, countries other than China," the opinion said.

While the subassemblies provision extends the scope to partially assembled goods with an aluminum extrusion component, "nothing in the Orders provides that an assembled good produced in a third country and incorporating a Chinese-origin aluminum extrusion as a component part is within the scope that the Orders specify," Stanceu held.

Despite its correct finding that the orders don't apply to goods made in a third country, CBP erred in relying on a 2019 anti-circumvention proceeding in coming to its ultimate evasion conclusion, the court found. While the circumvention decision applies to goods made in Vietnam, it only applies to aluminum extrusions from Vietnam that are made from aluminum previously extruded in China. Per its express terms, the circumvention finding "does not apply to an assembled good exported from Vietnam in which an aluminum extrusion is only a component among non-aluminum-extrusion components within that assembled good," Stanceu said.

The circumvention case does apply to goods that remain aluminum extrusions after operations in the third country. However, the Commerce Department in the circumvention proceeding "made no such findings as to a good assembled in Vietnam using a Chinese-origin aluminum extrusion as a component part." Underlying documentation "further confirms that the circumvention inquiry was directed solely to aluminum extrusions, and not assemblies merely containing them, that are exported from Vietnam," the judge noted.

Stanceu additionally found that CBP opened the evasion investigation in the first place due to an interpretation error. The agency opened the investigation after receiving two allegations from domestic company Endura Products, alleging that Columbia was importing thresholds from China but misclassifying them as plastic wall plates and that Columbia was importing thresholds made in Vietnam using Chinese-origin extrusions. After CBP found the first allegation to be "uncorroborated," it based the decision to start the investigation solely on the second allegation.

This allegation, though, was "insufficient on its face," Stanceu said. Even if Columbia were importing thresholds made in Vietnam with Chinese-origin aluminum extrusions, it would not have made a "prima facie allegation of evasion" since the orders never applied to assembled door thresholds made in a third country using aluminum extrusions as parts.

The judge also denied the government's bid for a stay pending a separate scope case now at the U.S. Court of Appeals for the Federal Circuit, since CBP committed "multiple errors of fact and law."

(Columbia Aluminum Products v. United States, Slip Op. 24-3, CIT # 19-00185, dated 01/16/24; Judge: Timothy Stanceu; Attorneys: Jeremy Dutra of Squire Patton for plaintiff Columbia Aluminum Product; Alexander Vanderweide for defendant U.S. government)