CBP Initiates EAPA Investigation on AXN Heavy Duty

The agency’s Trade Remedy Law Enforcement Directorate with CBP’s Office of Trade initiated its investigation of AXN Heavy Duty under the Enforce and Protect Act on April 25 after it received an allegation from Saf-Holland, a Bessenbach, Germany-based chassis manufacturer that has an office outside of Detroit. Saf-Holland claimed that AXN was importing covered merchandise without declaring that the merchandise was subject to AD/CVD duties, said CBP in a recently released notice dated July 31.

The merchandise includes chassis and subassemblies that may be finished or unfinished and assembled or unassembled. Components include chassis frames, running gear assemblies, landing gear assemblies and assemblies that connect to the chassis frame or a section of the frame.

Saf-Holland told CBP that it has been supplying axles and slide box assemblies to U.S. trailer manufacturers. It learned from a customer that that customer had also been acquiring slide box subassemblies from AXN. Saf-Holland determined that AXN imports the parts from parent company Guangdong Fuwa Group Engineering, which produces them in its facility in Shenzhen, China.

CBP said it asked AXN to provide information on merchandise that was entered under Harmonized Tariff Schedule subheadings 8716.90.5060 and 8716.90.5010 during CBP’s period of investigation. That merchandise was listed under Type 01 entries that aren't subject to AD/CVD. The information that CBP sought included production documentation, production and labor records, and a description of the production process, purchase documentation and certificates of origin, among other items.

AXN was not immediately available for comment. But the company told CBP that it was not subject to the orders “because they are not dedicated to the production of container chassis or subassemblies thereof from China.” CBP also quoted AXN as saying that any final assembly in the United States did not apply because AXN “entered the goods as individual parts and sold the goods as individual parts.”

After conducting some additional research, CBP doubted AXN’s arguments, leading to the preliminary EAPA finding.

“Evidence on the record shows that AXN’s product offerings include chassis subassemblies and components such as trailer axles, suspensions, landing gear, and sliders for chassis trailers that are manufactured by Fuwa in China. Based on information in the Allegation, the record demonstrates that AXN is dedicating at least some portion of the merchandise it imports from Fuwa to container chassis. Nonetheless, CBP systems show that AXN declared as type 03 only [certain entries] of merchandise classified under the HTS numbers listed in the scope of the Orders. Accordingly, CBP finds there is reasonable suspicion that AXN evaded the AD/CVD orders on certain chassis and subassemblies thereof from China by failing to declare entries of covered merchandise as subject to the AD/CVD orders.”

CBP will suspend the liquidation of each unliquidated entry of such covered merchandise that entered on or after April 25, which is the date of the initiation of the investigation. It's also extending the period for liquidating each unliquidated entry of such covered merchandise that entered before April 25.

CBP also said it may take such additional measures “to protect the revenue of the United States, including requiring a single transaction bond or additional security or the posting of a cash deposit with respect to such covered merchandise,” and it will “require live entry and reject any entry summaries that do not comply with live entry and require refiling of entries that are within the entry summary rejection period. CBP may also evaluate AXN’s continuous bond to determine its sufficiency.” CBP could also pursue additional enforcement actions.