Subjects of CBP AD/CV Duty Evasion Allegations Deserve Earlier Chance to Rebut, Steel Group Says

The subject of an antidumping or countervailing duty evasion investigation under CBP's new regulations deserves notification before the agency takes "interim measures," the American Institute for International Steel said in comments to CBP (here). CBP requested comments on its procedures when it issued an interim final rule implementing AD/CV duty evasion language from the customs reauthorization law's Enforce and Protect Act (EAPA) (see 1608190014). The lack of early transparency in the process also threatens supply chains and broad categories of importers, the AIIS said.

The interim final rule allows for CBP to institute interim measures, which includes suspension or extension of liquidation, before the agency is required to notify the subject of an investigation. "Transparency of investigations should, at a minimum, allow an alleged evading interested party the opportunity to respond to the allegations before potentially devastating interim measures may be taken against it," the trade group said. While an investigation only requires a "reasonable suspicion" for CBP to initiate, the alleged evader may be able to provide information to demonstrate no such reasonable suspicion exists, the AIIS said. "The economic consequences for an alleged evading party subjected to interim measures, including retroactive duty deposits and the potential disruption of its supply chain with possible loss of customers, can be enormous, even if the final determination finds no evasion occurred. Interested parties should be assured of at least some opportunity to make arguments demonstrating the lack of reasonable suspicion at a time before such measures may be applied."

Also troubling is the ability of alleging companies to create widespread uncertainty among whole importing industries, AIIS said. For example, after Wheatland Tube filed an EAPA allegation involving circular pipe from China (see 1609150028), the company issued a press release prior to any CBP determination and without any identifying details, the AIIS said. Because such public announcements may be the only source of information, it's important for "parties to any investigation to receive notice as soon as possible after initiation in order to have a reasonable opportunity to respond," the group said. Actions like Wheatland's also potentially disrupts whole supply chains as "a broad product description and the lack of any named importers creates concerns for all importers of an extensive range of merchandise that may well not be covered by any allegation."

Considering the possibility that domestic interests or competitors might intentionally misuse EAPA allegations to disrupt others' supply chains, "it may also be reasonable for CBP to consider giving public notice of non-initiation in instances where the party filing an allegation has publicized it," AIIS said. That may be necessary in addition to CBP's plans to "monitor allegations to identify situations where allegations are routinely made with insufficient support or appear intended solely to create disruption," the trade association said.