US, Car Parts Importer Agree to Settle Nearly $100M Penalty Suit
The U.S. and importer Wanxiang America agreed to settle a customs penalty case against the importer in which the U.S. was seeking $97 million for unpaid antidumping duties on the company's car part entries. Counsel for Wanxiang America didn't immediately respond to a request for comment.
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At issue in the case were various entries of car parts, including universal joints, wheel hub assemblies, radial ball bearings, tapered roller bearings and other parts and accessories, which were made between 2007 and 2012. The U.S. alleged that the goods were subject to the AD order on tapered roller bearings from China and subject to a 92.84% cash deposit rate, since the exporter, Xanxiang Qianchao, was subject to the all-others rate (see 2207140032).
The importer initially filed a motion to dismiss the case, claiming the imports were clearly not subject to the AD order at the time of import (see 2210140075). A separate case on the scope of the AD order wasn't fully resolved until a U.S. Court of Appeals for the Federal Circuit decision in 2014 found that certain wheel hub assemblies are within the scope of the order.
The Court of International Trade denied Wanxiang America's motion to dismiss, finding that the importer's failure to change its classification of subsequent entries after receiving a CBP notice of action could be considered negligence or gross negligence, even if the notice wasn't binding on the later entries (see 2308160017). The court also found that misclassifications could be considered false statements despite concerns that good faith disputes on the scope of an order shouldn't automatically rise to the level of a penalty.
The court said Wanxiang had a number of options when "confronted with regulatory uncertainty" regarding the order's scope, yet failed to take any of those options (U.S. v. Wanxiang America Corp., CIT # 22-00205).