CIT Says Commerce Can Only Rescind Exporter's AD/CVD Review If No Subject Entries Made

Remanding the 2020-21 countervailing duty review on wood moulding and millwork products from China and the 2020-22 antidumping duty review of the same goods, Restani also held that Commerce "ignored overwhelming record evidence showing entries of subject merchandise" from the reviewed companies. The judge also sent back the AD review due to Commerce's denial of distributor Chen Chui a separate AD rate.

In both reviews, the decision was premised on the respondents' supposed lack of suspended entries of subject merchandise. Commerce said China Cornici and RaoPing Hongrong Handicrafts lacked these entries, since they "mislabeled" their entries, causing CBP to "liquidate entries of subject merchandise without collecting cash deposits."

The court said the reason the liquidation of the companies' merchandise wasn't suspended was that the entries at issue weren't identified with the correct "Type 03" code for goods subject to AD/CVD orders. The importer tried to fix this by making a prior disclosure and tendering the duties that were required to be deposited upon entry. China Cornici and RaoPing then challenged at CIT Commerce's rescission of the administrative reviews for the companies.

Restani said that the respondents weren't required to exhaust their claims before the agency, since their arguments are "purely legal." The question of whether the agency "lacked authority to rescind China Cornici’s and RaoPing’s reviews is a pure question of law," and, in resolving the issue, "the court needs only to decide whether section 351.213(d)(3) granted Commerce the authority to rescind the administrative reviews at issue based on a lack of suspended entries of subject merchandise," the court noted. "No facts from this case will change the meaning of that provision."

Substantively, the judge held that Commerce improperly rescinded China Cornici's and RaoPing's administrative reviews.

First, Restani said the companies only needed entries of subject merchandise, not suspended entries, to qualify for an administrative review. Under Commerce's regulation, the agency can only rescind a review if it finds "no entries of subject merchandise whatsoever." The agency said China Cornici's and RaoPing's unsuspended entries of subject goods weren't enough to entitle the companies to an administrative review, "even though the parties had paid duties on those entries as part of their effort to fix their mislabeling of the entries," the court noted.

Commerce lacked the authority to rescind the reviews solely based on a lack of suspended entries under the "plain language" of Commerce's regulation, the court held. For the agency to rescind the reviews, "it would have had to find that there were no entries of subject merchandise at all," the judge said.

In so holding, Restani rejected Commerce's claim that the "broader statutory scheme" requires suspended entries for an AD/CVD review. CBP has the authority to collect duties on "wrongly liquidated entries" so that liquidation will not bar collection of AD/CVD. CBP would have "no legal basis to collect these duties unless wrongly liquidated entries remain entries of merchandise covered by antidumping and countervailing duty orders," the court said. The judge added that the statutory scheme actually suggests Commerce will conduct reviews for entities "in China Cornici and RaoPing's position," noting that CBP can collect duties on wrongly liquidated entries only to the extent the government has been "deprived of 'lawful' duties."

"The lawful level of duties, however, can only be determined after an administrative review," the court said.

Restani additionally held that Commerce ignored "overwhelming record evidence" showing the companies had entries of subject merchandise. While the U.S. said China Cornici's and RaoPing's mislabeling of its goods meant the customs records Commerce normally relies on only showed the parties had entries of non-subject goods, the judge said the government "conflates whether it will conduct a review and what rate it will assign." Restani said she "sees a distinction."

Commerce ignored evidence that the companies entered subject goods and "were in the process of asking Customs to recategorize the entries as suspended during the administrative review," the court noted. Instead of disputing this evidence, the U.S. merely says Commerce can solely rely on CBP entry forms when finding if an entry is subject merchandise, "even when the parties tell Commerce those forms were mislabeled." The court rejected this proposition, finding that "mislabeled paperwork is not enough to meet the substantial evidence standard."

On remand, the agency "shall consider under what circumstances and how to adjust its proceedings when prior disclosures and deposits of duties are made in an attempt to remedy mistakes on entry papers, addressing all the statutes at play, not just unfair trade statutes and preferred practices," the court said.

Lastly, China Cornici and RaoPing challenged Commerce's refusal to give Chen Chui, RaoPing's distributor, a separate AD rate on the basis that Chen Chui had to submit its own separate application "even though it is a Taiwanese-owned company located in Taiwan."

Restani said "Commerce departs, without explanation" from the language of the applicable statute, which said the agency "would normally apply RaoPing’s separate rate to a reseller like Chen Chui." None of the agency's regulations indicate that a "third-country reseller must show an absence of government control as to itself, unless it is owned by a nonmarket economy government," the court said.

(China Cornici v. United States, Slip Op. 25-118, CIT #s 23-00216, -00217, dated 09/05/25; Judge: Jane Restani; Attorneys: Robert Williams of Clark Hill for plaintiffs China Cornici and RaoPing Hongrong Handicrafts; Katy Bartelma for defendant U.S. government)