OCTG Importers Say CBP Unlawfully Interpreted AD/CVD Orders' Scope in Evasion Determination
CBP improperly interpreted the scope of the antidumping and countervailing duty orders on oil country tubular goods (OCTG) from China when it found that 10 importers evaded the orders, importer LE Commodities argued in an Aug. 13 complaint at the Court of International Trade. During the evasion proceeding, CBP said that the China-origin hollow steel billets used by Thai manufacturer Petroleum Equipment (Thailand) Co. to make the subject OCTG were "unfinished OCTG" subject to the orders (LE Commodities v. United States, CIT # 25-00181).
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The Commerce Department never issued a scope ruling finding that OCTG made in a third country from Chinese hollow steel billets are within the scope of the orders, LE Commodities said. "CBP does not have statutory or regulatory authority to interpret the scope of the Orders," the complaint challenged.
CBP didn't cite any evidence for its conclusion that the hollow steel billets are within the scope of the orders other than the "one fact that hollow steel billets have a circular cross section," the importer said. The agency failed to account for the fact that the "hollow steel billets had irregular cross sections and that the wall thickness and outer diameter would not be fixed until after processing of the hollow steel billets at" Petroleum Equipment's facility.
LE Commodities argued that the OCTG made in Thailand aren't subject to the orders, since the hollow steel billets aren't subject to the orders.
Joining LE Commodities in challenging the evasion finding, importers Trek Metals and Centric Pipe argued in their own complaints that CBP erred in finding that the importers evaded the AD/CVD orders by entering covered merchandise (Centric Pipe v. United States, CIT # 25-00182) (Trek Metals v. United States, CIT # 25-00183).
The importers also argued that CBP's evasion finding lacked substantial evidence. During the evasion proceeding, LE Commodities submitted evidence including "email communications with its supplier, mill test certificates issued by" the manufacturer, quality certificates from accredited companies, certificates of origin and shipping documents. Petroleum Equipment also submitted evidence and cooperated in an on-site verification to show that it had the "necessary production capacity and produced the quantities of OCTG shipped to the" covered importers.
Record evidence, "including raw material acquisition records, production records, and sales records, clearly demonstrates" that the manufacturer "had the necessary production capacity to produce the quantities of OCTG shipped to the Importers," the complaint said.
LE Commodities also argued that it didn't enter covered merchandise through a "false statement" and that it "exercised reasonable care" in seeking not to evade the AD/CVD orders. The importer said that given the "due diligence and reasonable care" it showed, "no materially false statements or omissions were made when the goods entered the U.S. customs territory." The company "reasonably relied on certificates to ensure compliance with U.S. trade laws," and it didn't have "any knowledge of any transshipment or evasion at the time of entry," the complaint said.
Lastly, LE Commodities claimed that CBP erred in using adverse facts available in the evasion proceeding. CBP used AFA against Petroleum Equipment and various importers for allegedly failing to respond to the best of their ability in the proceeding. In its complaint, LE Commodities said the manufacturer's "transparency and cooperation throughout the investigation and verification demonstrates" the company's "good-faith efforts to comply with CBP’s inquiries," making the use of AFA unlawful.
Centric Pipe, meanwhile, argued that CBP was wrong to even open the investigation. The importer said the allegation of evasion didn't "reasonably support the finding of evasion by consisting of false or otherwise unsubstantiated statements." Centric Pipe took issue with the fact that CBP relied on "specious claims by the Alleger" that the manufacturer "lacked the production capacity to produce OCTG at the level that it exported to the United States." Instead of supplying actual production data, the alleger submitted a declaration stating that the "declarant observed 'no movement in or out of'" the manufacturer's facility and no employees.