OR:RR:CTF:EPDR H309718 ND
Category: Entry
Center Director
Automotive and Aerospace
Center for Excellence and Expertise
1 World Trade Center Suite 741
Long Beach, CA 90831
Attn: Judy Staudt, Assistant Center Director and Lillian Imes, Supervisory Import Specialist
Re: Application for Further Review of Protest Number 5301-23-109115; New Pneumatic Off-the-Road Tires from the People’s Republic of China; Antidumping and Countervailing Duties
Dear Center Director,
The purpose of this decision is to address the application for further review (“AFR”) of Protest Number 5301-23-109115 filed by Leviathan Corp. d/b/a OTRUSA (“Leviathan”), regarding the assessment of antidumping duties (“ADD”) pursuant to case number A-570-912 and countervailing duties (“CVD”) pursuant to case number C-570-913.
FACTS:
On December 7, 2012, Leviathan entered a single entry, number XXX-XXXX575-7, of thirty-six pneumatic off-the road tires (“OTR tires”) from the People’s Republic of China (“China”). New pneumatic off-the-road tires (“OTR tires”) from China are subject to the ADD order in case number A-570-912 and the CVD order in case number C-570-913 (collectively “the Orders”). See Certain New Pneumatic Off-the-Road Tires from the People’s Republic of China: Notice of Amended Final Affirmative Determination of Sales at Less Than Fair Value and Antidumping Duty Order, 73 Fed. Reg. 51,624 (Sept. 4, 2008); Certain New Pneumatic Off-the-Road Tires from the People’s Republic of China: Countervailing Duty Order, 73 Fed. Reg. 51,626 (Sept. 4, 2008). Upon entry, Leviathan entered the OTR tires as a “type 01” entry and did not identify the merchandise as subject to the Orders. Upon review by U.S. Customs and Border Protection (“CBP”), Leviathan amended the entry to “type 03” and asserted the ADD rate and CVD rate were 12.83% and 5.65% respectively.
On November 27, 2013, with respect to case number C-570-913, the Department of Commerce (“Commerce”) directed CBP to assess CVD for entries of OTR tires from China entered for consumption between January 1, 2012, and December 31, 2012, at the cash deposit rate in effect on the date of entry, which was 5.65%. Message No. 3331317; see also Implementation of Determinations Under Section 129 of the Uruguay Round Agreements Act: Certain New Pneumatic Off-the-Road Tires; Circular Welded Carbon Quality Steel Pipe; Laminated Woven Sacks; and Light-Walled Rectangular Pipe and Tube From the People's Republic of China, 77 Fed. Reg. 52,683 (Aug. 30, 2012).
Also on November 27, 2013, with respect to case number A-570-912, Commerce directed CBP to assess ADD for entries of tires from China entered for consumption between September 1, 2012, and August 31, 2013, that were produced and exported by Triangle Tyre Co., LTC (“Triangle Tyre”) at the cash deposit rate in effect on the date of entry, which was 12.83%. Message No. 3331303; see also Implementation of Determinations Under Section 129 of the Uruguay Round Agreements Act: Certain New Pneumatic Off-the-Road Tires; Circular Welded Carbon Quality Steel Pipe; Laminated Woven Sacks; and Light-Walled Rectangular Pipe and Tube From the People's Republic of China, 77 Fed. Reg. 52,683 (Aug. 30, 2012).
On May 5, 2015, Commerce notified CBP of an injunction that enjoined all entries exported by the China-wide entity and were entered for consumption between September 1, 2012, and August 31, 2013. Message No. 5125301. On November 4, 2022, Commerce notified CBP that the injunction had been lifted and instructed CBP to assess ADD for shipments of OTR tires exported by the China-wide entity entered for consumption between September 1, 2012, and August 31, 2013, at 105.31%. Message No. 2308402. Because CBP initially determined that the exporter was Tianjin Leviathan International Trade Co., Ltd. (“Tianjin”), CBP did not assess the exporter and producer combination rate for ADD afforded to Triangle Tyre. Rather, on December 9, 2022, CBP liquidated the subject entry and assessed antidumping duties at the China-wide rate of 105.31% and countervailing duties at the rate of 5.65%.
On June 6, 2023, Leviathan protested the assessed ADD. Leviathan argues that CBP erroneously assessed ADD duties at the China-wide rate rather than the exporter and producer combination rate attributed to Triangle Tyre. Thus, Leviathan believes the entry should have liquidated with ADD equal to the cash deposit rate for merchandise exported and produced by Triangle Tyre as asserted on the date of entry. We note that in its protest Leviathan argues that cash deposit rate for ADD was 13.92% by referencing Commerce’s change to the cash deposit made effective March 23, 2015. See Certain New Pneumatic Off-the-Road Tires From the People's Republic of China: Notice of Amended Final Determination Pursuant to a Final Court Decision, 81 Fed. Reg. 47754 (July 22, 2016). The cash deposit effective at the entry date of December 7, 2012, however, was 12.83%. Implementation of Determinations Under Section 129 of the Uruguay Round Agreements Act: Certain New Pneumatic Off-the-Road Tires; Circular Welded Carbon Quality Steel Pipe; Laminated Woven Sacks; and Light-Walled Rectangular Pipe and Tube From the People's Republic of China, 77 Fed. Reg. 52,683 (Aug. 30, 2012). We also note that there is no dispute as to the CVD rate applicable to Leviathan’s entry and, accordingly, we only address the matter of the applicable ADD rate.
In support of its argument, Leviathan has provided several transactional documents, including two sales contracts, two commercial invoices, two packing lists, a bill of lading, and a bank statement demonstrating a payment from Leviathan to Triangle Tyre. The sales contracts, commercial invoices, and packing list concern the sale and transportation of thirty-six OTR tires. The first sales contract, dated November 1, 2012, covers the purchase of thirty-six Triangle Tyre OTR tires and lists Leviathan as the buyer, Tianjin as the payer, and Triangle Tyre as the seller and beneficiary. The second sales contract, dated November 12, 2012, is on Tianjin letterhead and lists Leviathan as the buyer and Tianjin as the seller and beneficiary.
The first commercial invoice, dated November 1, 2012, is on Triangle Tyre letterhead and lists Leviathan as the buyer, Tianjin as the payer. The second commercial invoice, dated November 14, 2012, is on Tianjin letterhead and lists Leviathan as the buyer and Tianjin as the seller. The first packing list, dated November 10, 2012, is on Triangle Tyre letterhead and lists Leviathan as the buyer, Tianjin as the payer, and Triangle Tyre as the producer and exporter. The second packing list, dated November 14, 2012, is between Tianjin and Leviathan. The first sales contract, first commercial invoice, and first packing list all note the destination from Qingdao, China, to Houston, United States, and all reference the same invoice number. The bill of lading identifies Tianjin as the shipper and Leviathan as the consignee. Although the bill of lading does not reference Triangle Tyre, the container number and seal number matches those on Triangle Tyre’s packing list. Furthermore, all documents are consistent in that the merchandise was exported from the Port of Qingdao, China rather than the Port of Tianjin, China where Tianjin is located.
Leviathan has further provided an agency contract between Leviathan and Tianjin that identifies Tianjin as a bona fide buying agent acting on behalf of Leviathan. Lastly, Leviathan provided a bank statement showing a $40,000 deposit sent to Triangle Tyre a couple months prior to the subject shipment along with contemporaneous emails between Leviathan and Triangle Tyre memorializing the negotiation for the deposit amount.
ISSUES:
Whether CBP properly assessed ADD at the correct rate on entry number XXX-XXXX575-7.
Whether entry number XXX-XXXX575-7 deemed liquidated by operation of law.
LAW AND ANALYSIS:
As an initial matter, we note that this protest meets the criteria for further review. Specifically, it raises questions of fact concerning the proper designation of transactional parties with respect to entry number XXX-XXXX575-7, which has not been ruled upon by the Commissioner of CBP or his designee or by the Customs courts. See 19 C.F.R. § 174.24(b). Additionally, we note that Protest Number 5301-23-109115 was timely filed. Pursuant to 19 U.S.C. § 1514(c)(3)(A), a party must file a protest within 180 days after the date of liquidation. Leviathan filed this protest on June 6, 2023, within 180 days of the December 9, 2022, liquidation date of entry number XXX-XXXX575-7.
Whether CBP properly assessed ADD at the correct rate on entry number XXX-XXXX575-7.
Once Commerce instructs CBP to liquidate entries, “[CBP] merely follows Commerce’s instructions in assessing and collecting duties.” Mitsubishi Elecs. Am. Inc. v. United States, 44 F.3d 973, 977 (Fed. Cir. 1994). Further, CBP cannot “‘modify’ . . . [Commerce’s] determinations, their underlying facts, or their enforcement.’” Id. (quoting Royal Bus. Machs. Inc. v. United States, 507 F. Supp. 1007, 1014 n. 18 (Ct. Int’l Trade 1980)). Customs plays a “merely ministerial role in liquidating [ADD].” Id. “Customs should do no more than enact the intentions of Commerce.” See e.g., Shinyei Corp. of. Am. v. United States, 35 C.I.T. 666, 669 (2011) (requiring Customs to consider documentation submitted at protest evidencing a sale, which occurred after entry, to an ultimate “sold to” customer listed in Commerce instruction).
To determine the parties to a transaction, CBP has traditionally looked to the documentation filed along with the entry, such as a commercial invoice. For example, in Headquarters Ruling Letter (“HQ”) H300287, dated February 25, 2019, CBP relied on multiple commercial invoices that corresponded to the entry data on the CBP Form 7501 to establish the “customer” in a transaction for purposes of determining whether a specific entity could benefit from a “customer” specific liquidation rate as determined by Commerce. Similarly, in HQ H308175, dated July 3, 2023, CBP relied on the sales contract, multiple commercial invoices, and packing list to determine the “customer” in the transaction for purposes of establishing the correct liquidation rate pursuant to Commerce’s instructions. In both instances, the documents expressly and consistently identified the buyers, manufacturers or producers, and exporters to determine eligibility for specific rates established by Commerce in the applicable liquidation instructions.
Here, Commerce directed CBP to liquidate entries of tires from China exported and produced by Triangle Tyre entered for consumption between September 1, 2012, and August 31, 2013, at the ADD cash deposit rate in effect on the date of entry. See Message No. 3331303. Commerce also directed CBP to assess ADD for shipments of OTR tires exported by the China-wide entity entered for consumption between September 1, 2012, and August 31, 2013, at 105.31%. See Message No. 2308402. The dispute therefore arises from the different ADD cash deposit rates assigned by Commerce to specific exporters and requires establishing the roles of the transactional parties for purposes of determining the correct ADD rate attributable to entry number XXX-XXXX575-7. If the exporter of the subject tires is Tianjin, then the applicable cash deposit rate is 105.31%, because they were a part of the China-wide rate during the relevant period. See Message 2308402. If, however, the exporter, as well as the producer, of the subject tires is Triangle Tyre, then the applicable cash deposit rate is 12.83%. CBP will look to any relevant evidence, including entry documentation, to determine the parties to a transaction. See HQ H300287; HQ H308175.
Of relevance in this protest are the sales contracts, purchase orders, commercial invoices, packing lists, and bank statement. The sales contracts, commercial invoices, and packing list concern the sale and transportation of thirty-six OTR tires. As discussed above, the first sales contract, dated November 1, 2012, covers the purchase of thirty-six Triangle Tyre OTR tires and lists Leviathan as the buyer, Tianjin as the payer, and Triangle Tyre as the seller and beneficiary. The second sales contract, dated November 12, 2012, is on Tianjin letterhead and lists Leviathan as the buyer and Tianjin as the seller and beneficiary. The first commercial invoice, dated November 1, 2012, is on Triangle Tyre letterhead and lists Leviathan as the buyer, and Tianjin as the payer. The second commercial invoice, dated November 14, 2012, is on Tianjin letterhead and lists Leviathan as the buyer and Tianjin as the seller. The first packing list, dated November 10, 2012, is on Triangle Tyre letterhead and lists Leviathan as the buyer, Tianjin as the payer, and Triangle Tyre as the producer and exporter. The second packing list, dated November 14, 2012, is between Tianjin and Leviathan. The first sales contract, first commercial invoice, and first packing list all note the destination from Qingdao, China, to Houston, United States, and all reference the same invoice number. The bill of lading identifies Tianjin as the shipper and Leviathan as the consignee. Although the bill of lading does not reference Triangle Tyre, the container number and seal number matches those on Triangle Tyre’s packing list. Furthermore, all documents are consistent in that the merchandise was exported from the Port of Qingdao, China rather than the Port of Tianjin, China where Tianjin is located. Leviathan has further provided an agency contract between Leviathan and Tianjin that identifies Tianjin as a bona fide buying agent acting on behalf of Leviathan. Lastly, Leviathan provided a bank statement showing a $40,000 deposit sent to Triangle Tyre a couple months prior to the shipment at issue along with contemporaneous emails between Leviathan and Triangle Tyre memorializing the negotiation for the deposit amount.
Based on the entry documentation, Triangle Tyre is the producer of the imported OTR tires. The first sales contract covers the purchase of Triangle Tyre’s OTR tires, and the first packing list states the producer is Triangle Tyre. There is no evidence to the contrary in the second sales contract, purchase orders, commercial invoices, and second packing list.
Having determined that Triangle Tyre is the producer of the subject OTR tires, we must next determine which entity is the exporter. The role of the parties is most clearly demonstrated with the first sales contract, first commercial invoice, and first packing list. These documents show that Leviathan contracted with Triangle Tyre for the sale and shipment of the OTR tires from Qingdao, China, to Houston, United States. This documented intent between Leviathan and Triangle Tyre—to move the OTR tires to the United States—lends support for the fact Triangle Tyre was the exporter. The subsequent sales contract, commercial invoice, and packing list between Tianjin and Leviathan does not nullify Triangle Tyre as the exporter, but rather demonstrates Tianjin’s role as a facilitator for the transaction between Triangle and Leviathan. Further, the first packing list explicitly refers to Triangle Tyre as the exporter. While the bill of lading refers to Tianjin as the shipper, the container and seal numbers on the bill of lading can be cross referenced to the first packing list, which lists Triangle Tyre as the exporter. Moreover, the merchandise was exported from the Port of Qingdao, China, where Triangle Tyre is located, rather than the Port of Tianjin, China where Tianjin is located.
Accordingly, after review of the totality of the documentation submitted by Leviathan, Triangle Tyre was the exporter of the subject OTR tires and line one of entry number XXX-XXXX575-7 should have been liquidated pursuant to Commerce’s Message No. 3331303 and the instructions for shipments of subject merchandise exported and produced by Triangle Tyre and entered for consumption between September 1, 2012, and August 31, 2013.
Whether entry number XXX-XXXX575-7 deemed liquidated by operation of law.
Pursuant to 19 U.S.C. § 1504, entries not liquidated within one year of the date of entry will be deemed liquidated at the rate of duty, value, quantity, and amount of duties asserted by the importer of record “unless suspended as required by statute or court order.” Once suspension of an entry is removed, either by court order or instructions from Commerce, the entry is deemed liquidated if CBP fails to liquidate “within 6 months after receiving notice of the removal.” 19 U.S.C. § 1504.
Here, CBP received the relevant notice of the removal of the suspensions when Commerce published the Initiation of Antidumping and Countervailing Duty Administrative Reviews and Request for Revocation in Part on November 8, 2013. 78 Fed. Reg. 67,104. See also Message No. 3331303. Therefore, the entry at issue deemed liquidated six months after receiving notice on November 8, 2013, namely on May 8, 2014. Accordingly, Leviathan’s entry deemed liquidated pursuant to 19 U.S.C. § 1504(d) at the 12.83% ADD rate asserted upon entry.
HOLDING:
Based on the foregoing, Triangle Tyre is the producer and exporter based on the documentation provided by Leviathan. Accordingly, Leviathan’s entry deemed liquidated at the 12.83% ADD rate asserted upon entry. The protest should be GRANTED.
You are instructed to notify the Protestant of this decision no later than 60 days from the date of this decision. Any reliquidation of the entry or entries in accordance with the decision must be accomplished prior to this notification. Sixty days from the date of the decision, the Office of Trade, Regulations and Rulings will make the decision available to CBP personnel and the public on the Customs Rulings Online Search System (“CROSS”) at https://rulings.cbp.gov/, or other methods of public distribution.
Sincerely,
Yuliya A. Gulis, Director
Commercial and Trade Facilitation Division