Plywood Importer Challenges Imposition of AD/CV Duties on Products From Cambodia
CBP violated the law when it imposed antidumping and countervailing duties, Section 301 China tariffs, merchandise processing fees and harbor maintenance fees on importer Richmond International Forest Products' (RIFP's) hardwood plywood imports since the entries were made in Cambodia and not China, the importer said. In three separate but very similar complaints filed at the Court of International Trade, RIFP argued that CBP ignored evidence revealing that the hardwood plywood was made in Cambodia, thereby abusing its discretion when it imposed a host of duties on the products (Richmond International Forest Products v. United States, CIT #21-00063, #21-00318, #21-00319).
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RIFP said it imported hardwood plywood from Cambodian manufacturer LB Wood (Cambodia) Co. However, CBP said that after conducting a site visit to LB Wood's manufacturing facilities, it found that the origin of the plywood was actually China. RIFP said in its CIT complaints that the only legal or factual basis CBP established for this claim was its conclusion that LB Wood did not have the capacity to make plywood, meaning that the entries were really from China.
While not subject to an AD/CVD evasion investigation, CBP eventually liquidated RIFP's entries as subject to the orders on hardwood plywood from China, also imposing Section 301 tariffs, merchandise processing fees and harbor maintenance fees on the products. RIFP said in its protest of CBP's decisions that although LB Wood imported individual veneer sheets from China, those sheets were outside the scope of the orders. CBP typically considers the country of origin of a plywood panel to be dictated by the country of origin of the plywood core or substrate and not the veneer sheets, making its decision here illegal, the complaints said.
"CBP’s application of AD/CVD, Section 301 duties and MPF to the protested entries was arbitrary, capricious and an abuse of discretion in that CBP entirely failed to consider the abundant evidence submitted by RIFP demonstrating that the country of origin of the imported plywood was considered Cambodia, not China, contrary to the facts presented," the importer said. "The abuse of discretion and arbitrary and capricious nature of CBP’s actions were further compounded by CBP’s failure to provide any explanation for its decision to apply AD/CVD, Section 301 duties and MPF to the protested entries and its decision rested on erroneous factual findings that were not supported by substantial evidence and represented an unreasonable judgment weighing relevant factors."
The complaints, all of which carried eight counts against CBP, further argued that the customs agency violated RIFP's due process rights since it never gave the importer the chance to respond to CBP's allegation over the true country of origin of the plywood. Citing a key CIT ruling addressing due process deficiencies in the Enforce and Protect Act process, RIFP said that CBP is required to give adequate notice and chances to respond in evasion cases.
"CBP failed to provide RIFP with any factual basis for its conclusion that the manufacturer did not have the capacity to [produce] plywood in Cambodia and the plywood is sourced from China or any opportunity for RIFP to review whatever evidence CBP had in its possession that supposedly showed the manufacturer did not have the capacity to produced plywood in Cambodia," one of the complaints said. "In this manner, CBP’s action violated RIFP’s constitutional rights and the liquidation/reliquidation of the [importer's] entries ... with AD/CVD, Section 301 duties, MPF and additional HMF was contrary to law."