Pirelli Tyre Co. v. United States, 638 F.Supp.3d 1361

Background

Commerce conducted an administrative antidumping review of passenger vehicle and light truck tires from China for Aug. 1, 2017–July 31, 2018; Pirelli China sought separate-rate treatment but Commerce denied it and assigned a China-wide rate.
The sole mandatory respondent, Shandong New Continent Tire Co., Ltd. (New Continent), received a zero percent margin; U.S. Customs later flagged discrepancies between invoices New Continent submitted to Commerce and import records, prompting a court-ordered remand.
On remand Commerce issued supplemental questionnaires, reviewed over 20,000 pages of record material, and concluded New Continent’s export-price/constructed-export-price reporting in the administrative review was accurate and that New Continent was not affiliated with entities that furnished the discrepant invoices to Customs.
Commerce nonetheless sustained its denial of Pirelli’s separate-rate application, finding Pirelli failed the de facto test (lack of autonomy in management selection) due to indirect government influence via Chem China and related entities.
Pirelli argued Commerce applied an improper standard for minority government ownership, failed to tie alleged control to export activities, and should have given weight to Italian law provisions; the Court rejected those arguments and sustained Commerce’s Final and Remand Results.

Issues

Issue	Plaintiff's Argument	Defendant's Argument	Held
Accuracy of New Continent's sales reporting	New Continent's reported prices were unreliable given Customs' referral and invoice discrepancies	Commerce's remand review showed payment and invoice data tie to the reported U.S. sales values	Court: Commerce's remand finding that New Continent's administrative-review reporting was accurate is supported by substantial evidence
Authority to impose China-wide rate	(Challenge in complaint) Commerce lacks statutory authority to apply a China-wide entity rate	Commerce has authority; CAFC precedent supports Commerce	Court: Pirelli waived this claim by failing to raise it in its merits brief; in any event CAFC held Commerce has the authority
Pirelli's rebuttal of de facto government control	Pirelli asserted minority government ownership requires a lower burden; changes to ownership/board and Italian-law protections rebut control	Commerce and intervenor argued Commerce applied correct rebuttable-presumption framework and considered indicia of control	Court: Commerce lawfully applied the standard, considered indicia of control, and substantial evidence supports denial of separate-rate status
Relevance of Italian law to board independence	Italian statutes and CONSOB rules require independent directors and disclosure, which (Pirelli says) insulate management from shareholder/government control	Commerce reasonably declined to interpret foreign law that was not on the administrative record and record facts still show indirect government control	Court: USCIT Rule 44.1 does not permit supplementing the agency record; even if considered, Italian law would not rebut the presumption of de facto government control

Key Cases Cited

China Mfrs. All., 1 F.4th 1028 (Fed. Cir. 2021) (upheld Commerce's authority to apply a China‑wide rate)
Sigma Corp. v. United States, 117 F.3d 1401 (Fed. Cir. 1997) (establishes rebuttable presumption of government control in nonmarket-economy proceedings)
Diamond Sawblades Mfrs. Coal. v. United States, 866 F.3d 1304 (Fed. Cir. 2017) (sustains Commerce's application of the rebuttable presumption)
Transcom, Inc. v. United States, 294 F.3d 1371 (Fed. Cir. 2002) (exporter must demonstrate absence of de jure and de facto control)
Zhejiang Quzhou Lianzhou Refrigerants Co. v. United States, 350 F. Supp. 3d 1308 (CIT 2018) (majority government ownership strongly supports presumption of control)
Shandong Yongtai Grp. Co. v. United States, 415 F. Supp. 3d 1303 (CIT 2019) (examines board/ownership indicia in separate-rate analysis)
Yantai CMC Bearing Co. v. United States, 203 F. Supp. 3d 1317 (CIT 2017) (all four de facto factors must be satisfied to rebut presumption)