Adverse Inferences Under AD/CV Duty Evasion Investigations Unlikely to Apply to CF 28

CBP is unlikely to make new adverse inferences about companies that are unaware of antidumping or countervailing duty evasion allegations and don't respond to information requests, said Carrie Owens, acting CBP director of operations for Enforce and Protect Act and E-Allegations. Owens discussed the EAPA procedures and the use of adverse inference (see 1608190014) during a panel at the East Coast Trade Symposium on Dec. 2. "If a party is not aware it is being requested information pursuant to an EAPA investigation, my personal view is I'm unsure how we would then apply an adverse inference to that," she said. That includes responsiveness to Customs Form 28 that CBP may issue as part of the investigation, Owens said.

An importer that received a CF 28 would only assume the typical procedures apply and wouldn't necessarily know an evasion investigation was involved, Owens said. As a result, it would be tough to apply an adverse inference to that company, she said. CBP has been able to use CF 28 as part of an investigation since the interim EAPA rules became effective on Aug. 22. "Once you're aware that there's an EAPA investigation going on and we're sending you questionnaires and you fail to respond, there's clearly an adverse inference that's going to be made," she said. A company that's the subject of an EAPA investigation can also submit a prior disclosure before it's aware of the investigation, Owens said.

The only time an alleged evader would know of an investigation prior to a CBP decision about a reasonable suspicion of evasion, which is required within 90 days, would be if there was a referral to the Commerce Department about the scope involved, Owens said. "If that happens, then both parties would be informed of it and informed that there's an EAPA investigation ongoing," she said. CBP is somewhat limited in what it can do about allegations that name the wrong importer of record, Owens said. "We can tell you if your importer's wrong, but if we were then to tell you who the importer was, we would be telling you the importer of those entries and then that would be a breach of the Trade Secrets Act," she said.

Companies considering making an allegation should take a number of factors into consideration in deciding whether to proceed under the EAPA process or otherwise, Owens said. For allegations filed at the same time under EAPA and under CBP's legacy evasion investigation process, CBP will consider the EAPA allegation first as a result of the statutory deadlines, Owens said. "It's essentially the same parties that will be looking at the information initially," she said. Assuming there's "sufficient information" for an EAPA allegation," that's "probably your strongest bet," she said. Still, companies that want to avoid a public proceeding may prefer the legacy allegation process, Owens said.

CBP is still figuring out a lot of the new processes too, she said. "We are processing our first allegations and going through our initial investigation and we are seeing how our standard operating procedures work," Owens said. While the final decisions come from the Trade Remedy Law Enforcement Directorate, the investigation teams include officers from the Centers of Excellence and Expertise with consultation with the National Targeting Analysis Groups and Regulatory Audit, she said.

There's ongoing industry outreach to help importers and customs brokers gain a better understanding of AD/CV duty issues, said Lisa Gelsomino, CEO of Avalon Risk Management and co-chair of the Commercial Customs Operations Advisory Committee Trade Enforcement and Revenue Collection Subcommittee. For example, CBP and Commerce did some "training sessions" with brokers to understand some AD/CV challenges in ACE, she said. As a result, CBP and Commerce are creating some new definitions "to give better guidance in ACE [as] to how the cases are classified," she said.