Rulings, remedies and court proceedings for customs and trade professionals

CBP Finds Imported Evaded AD/CVD on Truck Chassis

Importer Pitts Enterprises evaded antidumping and countervailing duty orders on certain chassis and subassemblies from China, according to a May 23 Enforce and Protect Act (EAPA) notice. The agency said that Pitts knowingly imported finished chassis with numerous Chinese-origin subassemblies as products of Vietnam only, without disclosing the Chinese-origin components.

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The allegation submitted by CIMC Intermodal Equipment included company-specific shipment data, images of inspected chassis, business entity information, company profiles, media links, and sworn declarations from affiants with industry-specific knowledge. The allegation claimed that Pitts was importing certain chassis incorporating subassembly components manufactured in China and claiming that the imported chassis were of Vietnamese origin. CIMC claimed that, based on the manufacturing dates, the chassis were all made after the preliminary determinations and the suspension of liquidation. CIMC also cited a Vietnamese news article, which reported that Truong Hai Auto Corp. (THACO) planned to export between 12,000 and 15,000 semi-trailers to the U.S. market annually beginning in 2022, including to Dorsey Intermodal, a Pitts subsidiary.

CBP launched its investigation in July after finding that the allegation contained reasonable suspicion of evasion. In September, CBP conducted a cargo inspection and found that the chassis had subassemblies with “Assembled in CHINA” engravings. Pitts requested two time extensions in its questionnaire responses but eventually submitted "expansive" responses, which CBP said showed that THACO produced a significant portion of the chassis, including parts and subassemblies sourced from a variety of countries, including China.

In October, CBP announced the investigation and imposed interim measures (see 2210280052). CBP visited THACO’s manufacturing facilities and observed parts of each main production process and found no inconsistencies with the information provided in the questionnaire responses.

CBP concluded that Pitts should have segregated the chassis subassembly components on its entry summaries. The AD and CVD orders explicitly stated that imported chassis "having subassemblies of Chinese origin, such as axles and landing gear legs," are subject merchandise. These Chinese-origin subassemblies were observed by CBP during the cargo inspection, mentioned in both Pitts’ and THACO’s responses, and observed by the on-site verification team, CBP said. By falsely declaring the imported merchandise to be outside the scope of the orders, Pitts avoided paying applicable AD/CVD cash deposits and duties, which supported an affirmative determination that Pitts entered covered merchandise into the U.S. through evasion, the agency said.

CBP will suspend the entries covered by the investigation until instructed to liquidate. For entries previously extended in accordance with the interim measures, CBP will rate-adjust and change those entries to type 03 and continue suspension. CBP also will continue to evaluate Pitts' continuous bonds and may pursue additional enforcement actions or penalties, the agency said.