No Commerce Authority to Ban It From Certification in Anti-Circ Proceeding, Exporter Argues
The Commerce Department "exceeded its legal authority" in an anti-circumvention case "by imposing a blanket origin finding" on aluminum wire and cable exporter Tanghenam Electric Wire & Cable when it barred the company from taking part in the agency's program for certifying that an exporter's inputs weren't of Chinese origin, Tanghenam argued in a Nov. 11 reply brief at the Court of International Trade (Tanghenam Electric Wire & Cable v. United States, CIT # 25-00049).
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Responding to a defense of Commerce's anti-circumvention finding on Tanghenam from the U.S. and petitioner Encore Wire (see 2510290048), the exporter also contested the evidentiary basis for the agency's final determination and Commerce's use of adverse facts available with respect to the origins of the company's inputs.
At issue is Commerce's finding that Tanghenam circumvented the antidumping and countervailing duty orders on aluminum wire and cable from China via Vietnam. In the proceeding, the agency precluded the exporter from its certification program on the basis that Tanghenam can't trace specific inputs to specific exports. The U.S. defended this finding at CIT.
However, Tanghenam said Commerce's decision "relies entirely on a single statement in the verification report," which says that once the exporter's products are in "finished goods inventory, there is no way to track which products go to sales."
The exporter contested both the factual and legal basis for this conclusion.
As a legal matter, Commerce can't shirk its responsibility for customs enforcement, "including origin verification for duty assessment," by barring Tanghenam entirely from the certification program, the exporter said. By banning the company from the program, Commerce forces the company to report that all of its exports from Vietnam are Chinese-origin, "even when Tanghenam can specifically and demonstrably prove the absence of Chinese-source inputs shipment-by-shipment," the brief said.
"In other words, Commerce requires Tanghenam to lie about the origin of its products," which exceeds the agency's legal authority, the brief said.
The certification program is meant as "additional assurance, not a substitute for origin determination," Tanghenam said. Commerce can't preempt its authority to "require supporting evidence, verify claims, and reject submissions as necessary" by declaring that every entry from a respondent must be declared Chinese-origin, "irrespective of actual content, documentation, or verification."
As a factual matter, Tanghenam proved that it can trace input origins to specific goods, the company added. The exporter said that the record "contains a comprehensive trail demonstrating the step-by-step process by which Tanghenam connects exported products to the origin of their underlying inputs." Through this process, Tanghenam identifies export shipments, maps exports to individual batches, traces batch numbers, links inventory movement to input purchases and, finally, identifies input origins.
"Tanghenam’s purchase ledger is exhaustive; it specifies both the address of the supplier and, crucially, the true country of origin of the input," the brief said, adding that the agency's verification team "confirmed that the ledger indicates both these data points." The record clearly proves the agency's stated basis for precluding the company from the certification program wasn't supported, the brief said.
Lastly, Tanghenam contested use of AFA for its input origins, arguing that no gap in the record existed that would justify the use of AFA. The government itself conceded that "Commerce collected information from Tanghenam during verification identifying the correct country of origin for all inputs used during the period of inquiry," the exporter said.
During the inquiry, Commerce initially accepted new factual information during verification, since Tanghenam "presented and corrected errors about supplier addresses and input origins." However, the agency, after later finding additional similar errors, "chose not merely to collect samples showing the discrepancies, but to collect Tanghenam’s entire purchase ledger reflecting the correct country of origin for all inputs used during the period of inquiry." In court, the government said Commerce "rejected" this information by using AFA.
Tanghenam said "the record in this case does not consist of separately 'accepted' and 'rejected' documents." Under Commerce's regulations, "the official record will include a copy of a rejected document only if the document was rejected for one of the enumerated reasons," and none "of those reasons apply here," the brief said. Thus, the agency has accepted the purchase ledger, foreclosing any claims that a gap existed on the record, the exporter argued.
While the U.S. said the acceptance of information at verification doesn't guarantee the information will be used, Tanghenam said this statement alone doesn't "confer complete authority for Commerce to disregard verified information on the record."