CBP Affirms Decision on Duty Evasion by Trailer Wheel Imports
CBP recently affirmed an Enforce and Protect Act determination that found Lionshead Specialty Tire & Wheel, TexTrail and Trailstar evaded antidumping and countervailing duties on trailer wheels from China by transshipping Chinese-origin subject merchandise through Thailand, CBP said in a de novo administrative review of an EAPA investigation.
Sign up for a free preview to unlock the rest of this article
Export Compliance Daily combines U.S. export control news, foreign border import regulation and policy developments into a single daily information service that reliably informs its trade professional readers about important current issues affecting their operations.
The Dec. 15 decision was a review of a decision made in August. The initial EAPA investigation began in March 2020 when Dexstar Wheel Division of Americana Development Inc. filed three EAPA allegations alleging evasion by those three companies. CBP found substantial evidence that all three companies had imported steel wheels from Asia Wheel that were covered by the orders (see 2308290030). In September, the companies filed a review request.
CBP affirmed that there was substantial evidence that the products were covered by the order and that they were entered into the U.S. by "means of evasion," the agency said. The scope of the orders states that the "wheel diameter of 12 inches to 16.5 inches, regardless of width" are covered by the orders. Initially, CBP was unable to determine whether steel trailer wheels were considered covered merchandise.
In April 2023, Commerce issued a scope ruling -- based on a request by Asia Wheel and a CBP covered merchandise referral -- that considered three different production methods to be covered by the AD/CVD orders. The first was trailer wheels manufactured using discs from China and rims produced in Thailand from "rectangular steel plates from China" or a third country. The second method was trailer wheels manufactured using discs produced in Thailand from circular steel plates from China or a third country and rims produced in Thailand from rectangular steel plates from China or a third country. The third production method was dual wheels manufactured using discs produced in Thailand from disc blanks from China and rims from China.
Commerce determined that Asia Wheel's steel trailer wheels under consideration in the EAPA case used the first and third methods for production, and they were in scope. The production methods described didn't substantially transform the material, so the items made with materials from China were still considered of Chinese origin.
CBP also found that the covered merchandise was entered by evasion. The importers "entered covered merchandise by means of material and false documents or electronically transmitted data or information, written statements, or material omissions that resulted in AD/CVD cash deposits not being applied with respect to the merchandise," CBP said. The importers omitted case Nos. A-570-090 and C-570-091 from the entry summary documentation to interfere with the "government’s ability to accurately track imports of steel trailer wheels, to collect the applicable AD/CVD deposits due, and to determine and assess future AD/CVD payments," the agency said.
CBP said all three importers "erroneously" argued that the EAPA statute requires intent or culpability, the agency said. "The EAPA statute requires only that there be a material false statement, document or omission, which led to the non-payment or underpayment of antidumping and/or countervailing duties," CBP said. The words culpability or intent do not appear, the agency said.
TexTrail and Trailstar also argued that they didn't have "adequate notice" that their imports were in-scope, CBP said. The agency disagreed, noting that Commerce said in the original AD/CVD investigations that wheels similar to those in the EAPA case could be covered by the scope and that Commerce would consider the issue in future scope rulings.
Lionshead, TexTrail, Trailstar and Asia Wheel didn't respond to our requests for comment.