Importer Loses CVD Challenge at CIT
Apr. 27, 2021
By: Meaghan E. Vander Schaaf
On April 21 the Court of International Trade issued a decision in Acquisition 362 LLC v. United States. The case arose because Acquisition had imported tires from China, and it believed the tires were assessed an incorrect countervailing duty (CVD) rate. The case is an important reminder that importers generally cannot challenge antidumping or countervailing duty findings through protests.
On August 10, 2015, the U.S. Department of Commerce (Commerce) issued a countervailing duty order for certain passenger vehicle and light truck tires from China. Commerce’s order included tire imports from Zhongyi Rubber Company Ltd. (Zhongyi). Acquisition imported tires from Zhongyi on several occasions in 2016 and deposited CVD at the rate of 30.61%. Zhongyi and other interested parties requested that Commerce initiate an administrative review of the 2015 order and Commerce agreed. However, Zhongyi withdrew its individual request for administrative review. As a result, Commerce rescinded the administrative review as to Zhongyi and Customs liquidated Acquisitions’ entries at the entered 30.61% CVD rate.
On June 17, 2019, Commerce issued its Amended Final Results finding that the applicable countervailing duty amount should be 15.56% instead of 30.61%. Acquisition filed protests on December 12 and December 13, 2019, claiming that Customs should liquidate at the 15.56% rate, rather than the 30.61% rate.
Customs denied these protests as untimely since they were filed more than 180 days after liquidation. Acquisition argued that the protests were timely because they were filed within 180 days of Customs’ decision not to apply an amended countervailing duty rate. Acquisition did not challenge the CVD calculation by Commerce in the protest or before the court.
The Government moved to dismiss because the court lacked jurisdiction to hear the case. Specifically, the Government argued that the protest statute lists “protestable” events and that Customs’ decision to liquidate the entries using Commerce’s rate at the time of liquidation was not such a protestable event. Therefore, a court challenge based on a protest was improper. The Government also noted, as Customs had, that the protest was filed more than 180 days after liquidation, which also made the protest invalid.
Ultimately the court agreed with the Government as to both the protestability of the CVD decision and the timeliness of protest. In fact, either reason would have been sufficient to resolve the matter. Nevertheless, the court followed well-established precedent from the Federal Circuit that to affirm that countervailing and antidumping duty rate determinations are Commerce decisions and Customs’ role is merely implementation (and therefore not protestable) while also finding that the protest was filed too late. In effect finding that the food was terrible and the portions too small.
Although this case did not break new ground in the interaction of AD/CVD with importation and liquidation, it is a timely reminder that companies wishing to have an opportunity to challenge an AD or CVD finding must participate at the Department of Commerce, rather than awaiting the outcome at Commerce and challenging any aspect of the case with Customs. In AD/CVD scenarios protests are largely confined to the proper application by Customs of instructions from Commerce, not the underlying decision by Commerce.
If you have any questions about this case or would like more information about challenging Commerce countervailing and antidumping duty determinations do not hesitate to contact an attorney at Barnes, Richardson & Colburn LLP.