Exporter's 'Intimidation Tactics' Against Employees Don't Warrant AFA in Evasion Case, CIT Says

The Court of International Trade sustained CBP's finding that Dominican exporter Kingtom Aluminio didn't evade antidumping and countervailing duty orders on aluminum extrusions from China. In a June 13 decision made public July 8, Judge Richard Eaton said Kingtom responded to all U.S. requests for information during an Enforce and Protect Act investigation, precluding the use of adverse facts available. He also said the court can't ignore "the total lack of any record evidence of any imports by Kingtom into the Dominican Republic" of aluminum extrusions made in China.

The suit from petitioner Aluminum Extrusions Fair Trade Committee said Kingtom's campaign of "intimidation tactics," in which the company's officials allegedly threatened retribution against its employees if they spoke with U.S. government officials, warranted the use of adverse inferences against Kingtom (see 2309220032). The committee claimed that CBP's Trade Remedy Law Enforcement Directorate (TRLED) initially got it right in assessing AFA against Kingtom and that CBP's Office of Rulings and Regulations (R&R) erred in reversing this decision, leading to a negative evasion finding.

In rejecting the claim, Eaton invoked the statutory standard for using adverse inferences, which says they are to be used when a party has failed "to comply with a request for information." The petitioner failed to "identify any instance where Kingtom failed to comply with a request for information," the opinion said. In fact, Kingtom "timely responded to all Requests for Information and voluntarily supplied additional information" and made over 50 local employees available for questioning, the opinion said.

The judge said Kingtom's supposed "intimidation tactics" didn't warrant the use of adverse inferences because the petitioner failed to show that the tactics barred CBP from "receiving the information it asked for." Despite workers' claims they feared "retribution" if they spoke in front of Kingtom officials, none of the workers offered evidence that the company "could not or did not produce aluminum extrusions in sufficient quantities to equal imports into the United States," Eaton said.

The petitioner also cited as the basis for AFA Kingtom's deletion of all financial records from prior to the start of the investigation period. Eaton held that Kingtom's deletion of records didn't justify the use of AFA since there's no suggestion the exporter deleted records from the investigation period.

The committee claimed that R&R failed to acknowledge TRLED's findings regarding Kingtom's ties to China and the company's data discrepancies. Eaton found R&R to have sufficiently addressed both points, given that it addressed the discrepancies "that mattered most to its evasion determination, i.e., Kingtom's production data." Acknowledging the discrepancies, R&R found that Kingtom made extrusions in the quantities it sold to the U.S. when considered in the context of other evidence.

Eaton stressed there was no evidence of actual evasion, saying petitioner's counsel conceded at oral argument that "there was no affirmative evidence" showing Kingtom to have imported Chinese extrusions into the Dominican Republic. Evidence on the record shows that the exporter "could, and did, produce sufficient aluminum extrusions to meet the demands of its customers in the United States."

Jordan Fleischer, counsel for Kingtom, said in an email that the company is "pleased that the Court affirmed CBP's determination that Kingtom was not engaged in evasion of the AD and CVD Orders on aluminum extrusions from China."

(Aluminum Extrusions Fair Trade Committee v. U.S., Slip Op. 24-72, CIT # 22-00236, dated 06/13/24; Judge: Richard Eaton; Attorneys: Elizabeth Lee of Wiley for plaintiff Aluminum Extrusions Fair Trade Committee; Alexander Vanderweide for defendant U.S. government; Jordan Fleischer of Morris Manning for defendant-intervenor Kingtom Aluminio)