Electric Wire Exporter Says No Gap in Circumvention Proceeding Record to Warrant AFA
Challenging the result of a circumvention inquiry, Vietnamese exporter Tanghenam Electric Wire & Cable Co. said July 21 that its decision to track its inputs’ country of origin “manually,” based on “transaction documents which recorded the supplier’s address,” didn’t warrant application of adverse facts available (Tanghenam Electric Wire & Cable Co. v. United States, CIT # 25-00049).
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Tanghenam explained that during verification, it submitted several “minor” corrections identifying China, not Vietnam, as the country of origin of several of its factors of production (FOP). It said it accidentally misreported those countries of origin initially where its supplier had a Vietnamese address.
Though the inquiry’s petitioner pushed for AFA on the basis of those corrections, the Commerce Department ultimately chose to apply it instead for Tanghenam’s methodology, saying the exporter should have provided “a revised database with revised consumption figures based on country of origin” after verification. The department also forbade Tanghenam to participate in a certification process that would let it enter specific entries without paying duties after proving they weren’t made of Chinese-origin inputs, the exporter said.
But Tanghenam provided Commerce “detailed explanations” of how it determined its inputs’ countries of origin, it said. It also corrected the minor errors it did make during verification. As a result, it said, there wasn’t any gap on the record the department needed to resort to facts otherwise available to fill.
The corrections during verification demonstrated that its methodology was reliable, Tanghenam said. During verification, Tanghenam provided Commerce’s officials with purchase ledgers that “included the correct country of origin for all input purchases, including the additional instances of the supplier’s address not lining up with the country of origin which Commerce identified in the Verification Report,” the exporter said.
But, in its final determination, Commerce said that Tanghenam hadn’t provided accurate countries of origin for all its inputs and failed to “substantively address” the information it was given at verification, Tanghenam said. That the department did acknowledge that Tanghenam actually did provide information about country of origin at verification was “[t]ucked away in a somewhat grudging footnote,” it said. But that footnote also revealed that provision of information was not so much the issue for Commerce as it was that “certain of this data were not incorporated into the” factors of production database.
Tanghenam also called that footnote “particularly puzzling” considering Commerce had chosen not to apply AFA on the basis of the errors themselves. “To the extent Commerce itself determined that the wire origin issues were not sufficiently impactful to impact its determination on that score, then it is somewhat mystifying why the lack of an updated FOP database (which Commerce could of course have requested and did not) was in any way relevant,” it said.
Tanghenam also challenged Commerce’s refusal to let the exporter participate in its certification program. The department regularly prohibits those who receive AFA in circumvention inquiries from being allowed to certify their goods aren’t of third-country origin, but this “exceeds the Department’s authority,” it claimed.
In essence, it said, the policy requires Tanghenam to report that its products originate from China even when the exporter has enough evidence to “definitively” show they originated from Vietnam. It also requires CBP “to be complicit in the fiction,” it said. It explained the policy “runs afoul” of CBP’s own procedures for marking country of origin.