Commerce Unreasonably Used AFA in Anti-Circ Case, Wire Cable Exporter Argues
The Commerce Department "unreasonably" used adverse facts available against exporter Tanghenam Electric Wire & Cable Co. in the anticircumvention inquiry on aluminum wire cable from China, barring the company from taking part in the certification process, Tanghenam argued in a March 28 complaint at the Court of International Trade (Tanghenam Electric Wire & Cable Co. v. United States, CIT # 25-00049).
Sign up for a free preview to unlock the rest of this article
Timely, relevant coverage of court proceedings and agency rulings involving tariffs, classification, valuation, origin and antidumping and countervailing duties. Each day, Trade Law Daily subscribers receive a daily headline email, in-depth PDF edition and access to all relevant documents via our trade law source document library and website.
During the proceeding, Tanghenam told Commerce that it makes its aluminum wire cable in Vietnam from inputs made by Chinese suppliers. During verification, the respondent made "minor corrections" to the country of origin determinations it stated at the beginning of verification for its inputs.
Tanghenam said it reported its factors of production based on its inventory movement report. The company "manually" traced the country of origin from transaction documents that record the supplier's address in Vietnam. Thus, a few inputs were reported as being of Vietnamese origin "according to the supplier’s Vietnam address," but the country of origin for these items should have been listed as China, since they were made in China, the brief said.
The respondent said it corrected the errors during verification, which Commerce accepted. The petitioner urged Commerce to use AFA on the grounds that the minor corrections warranted the use of total AFA, also arguing that Tanghenam should be excluded from Commerce's certification regime, since the company "was unable to track and identify the country of origin" of its inputs.
Commerce ultimately used AFA, excluding Tanghenam from the certification regime, though not because of the minor corrections. The agency based its conclusion on the "significant value of Chinese inputs" in the respondent's products and the value of the processing conducted in Vietnam.
The agency said that Tanghenam's factors of production data was "inaccurate with respect to the country of origin because Tanghenam used the transaction receipt to determine the country of origin, not the 'automated system' to trace and report the country of origin of Chinese inputs," the brief said. Commerce also noted that Tanghenam doesn't have a system in place to "tie specific inputs to specific exports" and thus "cannot accurately certify that inputs from China" aren't used in aluminum wire cable exported to the U.S.
At the trade court, Tanghenam argued that Commerce unreasonably used AFA, since the "statutory requirements of the application of AFA are not met." The respondent used a different methodology from its records to trace the country of origin, disclosing and correcting any inaccurate country of origin statements derived from its system. Tanghenam argued that it cooperated to the best of its ability and showed the ability to "track both the country of its suppliers as well as the country of origin for all inputs used" in making aluminum wire cable.
The respondent also argued that "Commerce’s determination that Tanghenam cannot participate in the certification process is arbitrary and capricious, an abuse of discretion, unsupported by substantial evidence, and otherwise contrary to law." The agency requires Tanghenam to report that the country of origin for all imports is China, even in instances where the respondent has enough documentation to "definitively show that the country of origin of certain entries is Vietnam."
The complaint said this finding is an "abuse of discretion and is outside the bounds of the Department’s authority, because it necessitates Tanghenam to improperly declare entries regardless of the underlying sourcing and actual origin of the components."