Importer's Motion to Dismiss Should Be Denied in $100 Million Negligence Penalty Case, Government Argues
The Court of International Trade must not dismiss a case accusing importer Wanxiang America of gross negligence in its entries of wheel hub assemblies, radial ball and tapered roller bearings and universal joints from China, DOJ argued in a Dec. 21 opposition motion. The case addresses what DOJ calls "multiple grossly negligent and negligent violations" of Section 592 in connection with entries of wheel hub assemblies made between October 2007 and September 2012 that purportedly resulted in millions of dollars of lost duties for the government (United States v. Wanxiang America, CIT #22-00205).
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Wanxiang America imported the merchandise in question between 2007 and 2012. During this period, the importer brought in universal joints and parts, wheel hub assemblies, radial ball bearings, tapered roller bearings, and other automobile parts and accessories. The U.S. alleged these goods were subject to the antidumping duty order on tapered roller bearings from China and said Wanxiang America should have paid the cash deposit rate of 92.84% for the goods, since the relevant exporter, Wanxiang Qianchao, was subject to the all-others rate.
In its October motion to dismiss, Wanxiang America said that the U.S. cannot retroactively apply a scope ruling to argue that an importer negligently avoided antidumping duties on imports that were not subject to the AD order at the time of entry. Wanxiang America argued that it was entitled to its parent Wanxiang Group’s zero antidumping rate because it was a subsidiary and shared exporting personnel with its controlling company. Wanxiang America alternatively maintained, in its motion to dismiss, that it had no reason to believe that the newer generation wheel hub assembles were subject to the tapered roller bearings antidumping duty order (see 2210140075).
Wanxiang America’s arguments largely go to the merits of the government’s claims but "do not detract from the sufficiency and plausibility of those claims," DOJ said in opposition. The government's complaint alleged that Wanxiang America is a corporation and that it was the importer of the entries underlying the penalty. Negligence claims must allege that the importer “entered or introduced, or attempted to enter or introduce, merchandise into United States commerce by means of either (i) a material and false statement, document or act, or (ii) a material omission," DOJ said. "Nothing more is required.” The complaint further specifies the categories of goods that Wanxiang entered, alleges that they were entered by means of materially false statements or omissions, identifies each false statement "and its materiality in simple, concise, and direct allegations that together show" that the government is entitled to relief. Therefore, DOJ argued, the complaint is complete and ineligible for dismissal on the grounds that it fails to state a claim.