CBP Drops Evasion Finding for 2 Pipe Fitting Importers on Remand at Trade Court

CBP, on remand at the Court of International Trade, reversed its finding that importers Norca Industries Co. and International Piping & Procurment Group's imported carbon steel butt-weld pipe fittings evaded the antidumping duty order on the pipe fittings from China (Norca Industrial v. United States, CIT # 21-00192).

Submitting its remand results on Jan. 22, CBP said that after receiving the results of a covered merchandise referral and assessing submissions from the importers, the companies didn't enter covered merchandise during the investigation period. In addition, the agency gave the respondents access to the confidential information in the case, in light of the U.S. Court of Appeals for the Federal Circuit's ruling in Royal Brush Manufacturing v. U.S., and added information from a site visit to the Vietnamese manufacturer to the record.

CBP originally found that Norca and International Piping evaded the AD order by transshipping subject goods through Vietnam. Norca took to the trade court to contest the result, after which the agency became aware that information from a site visit to Vietnamese manufacturer BW Fittings was not added to the record. The court granted CBP's voluntary remand request to add this information to the record (see 2203110074).

During the remand proceeding, CBP said it was unable to determine if the respondents' goods were covered merchandise, and so asked Commerce to answer the question. Commerce looked at the three stages of the pipe fittings' manufacturing process and said that goods that undergo only the third stage -- finishing processes -- in a third country are covered goods, but that products which undergo the second and third stages -- reforming or sizing the rough fitting so that the fitting will match the pipe to which it is meant to be welded, and finishing processes -- are outside the order's scope.

Commerce noted that the terms "rough fitting" and "unfinished fitting" are "separate and distinct terms" and that rough fittings are not a form of unfinished butt-weld pipe fittings such that they are not automatically covered by the scope's plain language. As a result, CBP said it now finds the carbon steel butt-weld pipe fittings imported by IPPG and Norca "that were made from Chinese-origin rough fittings where steps two and three of the production process took place in Vietnam are not covered by the scope of the AD Order."

The remaining question was how much of the respondents' imports underwent both the second and third stages of production in Vietnam. BW Fittings said that from September 2018 through June 2019, it only performed the third step of the production process and didn't take up the second step in its facility until June 2019, indicating there were parts of the investigation period where the company only carried out the third phase. The companies submitted evidence showing that their goods underwent both phases in Vietnam. CBP found the companies' pipe fittings were not subject to the AD order.

CBP also addressed the respondents' pipe fittings made with Chinese steel tubes and pipes or steel plates, which became an issue after BW Fittings added the first stage of the production process -- cutting and forming -- in September 2019. Originally, CBP said there was no evidence BW Fittings bought long seamless pipe or steel plate, though it changed its tune on remand.

The agency found that "while the record does not appear to contain any evidence that BW Fittings imported long-length seamless pipe for the production" of the carbon steel butt-weld pipe fittings exported to Norca and IPPG during the period of investigation, "the record does contain evidence that BW Fittings imported and used shorter length, cut pieces of seamless pipe to manufacture" the carbon steel butt-weld pipe fittings. As a result, the pipe fittings made by BW Fittings in Vietnam from Chinese-origin seamless carbon steel pipe or steel plate are from Vietnam and not subject to the order, CBP said.