Trade Court OKs AD/CVD Evasion Finding on Glycine From Indonesian Manufacturer

Vaden also rejected the claim that CBP laid out new reasons for its original evasion determination when it considered the case on remand. CBP asked for a voluntary remand to consider the U.S. Court of Appeals for the Federal Circuit's decision in Royal Brush Manufacturing v. U.S., in which the court said parties to evasion cases should be given access to the business proprietary information in the proceeding.

The court rejected the importers' claim that CBP attempted to give a "fuller" explanation of its decisions it never explained in the first place, finding that CBP properly took new agency action on remand, reopened the record and appropriately considered all information on the administrative record. Supreme Court jurisprudence on the taking of new agency actions doesn't require the agency to "pretend the original determination never happened," and the fact that CBP said it continues to find evasion doesn't mean it "failed to take new action," Vaden said.

The judge then turned to the evidence underlying the evasion finding, first reviewing whether PT Newtrend's factory in Indonesia can make all the glycine it exports. The court opened this discussion by detailing the multistep production process for glycine. First, an input chemical is mixed with other chemicals to produce a "liquid slurry," which must then be transferred and mixed with methanol to separate the "intermediate glycine into crystals," which are removed. Then, activated carbon filters the crystals so the final product can meet relevant product standards.

Noting that the standard is whether CBP's decision is "arbitrary and capricious," Vaden held that the agency's finding "easily surmounts this bar." Accounting for the written evidence as well as CBP's findings during a three-day in-person verification, the judge said that the "factory lacked key inputs such as methanol, had no support staff, and could not perform crucial phases of production."

While the importers argued that CBP failed to consider photographs showing the factory was completed by fall 2020 and documents showing the factory conducted production runs and bought raw materials, CBP went to the factory to see if this evidence matched reality and found that it "did not," the judge held. "Employees mishandled chemicals; important measurement tools were missing; and workers could not demonstrate or explain entire stages of the glycine production process," the court said.

"Plaintiffs ask Customs agents to believe paperwork over their lying eyes," Vaden said. "The law does not require such a result." Such a result is especially true, since verification took place nearly 18 months after the factory would have needed to be operational to make the glycine the importers purchased, and, presumably, factories become "better equipped and more efficient as time" passes, not less, the judge said.

The importers said PT Newtrend submitted "payment records, sign-in sheets, and production records that demonstrate an adequate labor force." Vaden said the companies would have the court believe CBP ignored that evidence, but this isn't the case, since CBP "used much of its time during verification to investigate the company’s workforce," the judge said. The importers' documentary evidence, "when compared to this on-site evidence, was little more than wastepaper," Vaden held.

The remaining arguments against CBP's findings are "red herrings," the judge said. The importers argued that CBP failed to consider PT Newtrend's "efficient methanol recycling system" when it found the manufacturer "lacked an adequate methanol supply," and the agency "miscalculated how much" activated carbon the factory needed to use when it said PT Newtrend didn't have enough activated carbon. When CBP repeatedly asked PT Newtrend to watch the factory use methanol to separate glycine crystals from the liquid slurry and to use activated carbon to filter the glycine, the exporter "refused each request," Vaden noted.

Next, the court turned to the evidence supporting the finding that PT Newtrend's glycine comes from China. At the outset, Vaden noted that Newtrend USA is a "wholly owned subsidiary" of the Chinese Newtrend Group, which is PT Newtrend's parent company. Nutrawave, another plaintiff, is "run by the son of Newtrend Group's president," and evidence shows that Newtrend Group loaned Nutrawave and Starille money "on non-commercial terms" to aid them in importing glycine into the U.S. Thus, the court said, "Newtrend Group’s fingerprints were on every part of the transactions at issue."

In addition, evidence shows Newtrend Group's "only active glycine factories were in China." While the company has factories in China, Thailand and Indonesia, the Thai facility halted production before the investigation period and data shows "Newtrend Thailand did not sell any glycine to Indonesia.” CBP also reasonably said "PT Newtrend’s Indonesian factory could not have produced glycine in the quantities necessary to fulfill Plaintiffs’ orders," thus adequately concluding that only Newtrend Group's Chinese facilities could make the disputed glycine, the court held.

None of the evidence or arguments offered by the importers sufficiently undermined CBP's conclusion, Vaden held. For instance, while the importers say CBP ignored evidence that PT Newtrend didn't import glycine from China "in favor of speculation and 'guilt by association,'" the evidence on the record "reasonably" suggests the glycine at issue comes from the Newtrend Group in China.

The importers' citation to "company-specific import data from" the Indonesian government showing PT Newtrend didn't import glycine into Indonesia, doesn't displace the "overwhelming" evidence of evasion, Vaden said. Such evidence included "(1) Newtrend Group’s only working glycine factories were in China; (2) PT Newtrend’s employees claimed they could sell customers Chinese-origin glycine, and (3) import data suggested PT Newtrend could access Chinese glycine through other trading companies," the court said.

(Newtrend USA Co. v. United States, Slip Op. 25-83, CIT # 22-00347, dated 07/03/25; Judge: Stephen Vaden; Attorneys: Carrie Connolly of Faegre Drinker for plaintiffs led by Newtrend USA Co.; Kara Westercamp for defendant U.S. government; David Schwartz of Thompson Hine for defendant-intervenor Deer Park Glycine)