CBP's Bar for 'Reasonable' Suggestion of AD/CV Duty Evasion Too High, Pipe Importers Say

CBP 's interim regulations set too high a standard for domestic producers to show evidence that "reasonably suggests" antidumping or countervailing duty evasion, the Committee on Pipe and Tube Imports said in comments to the agency (here). That's clear from CBP's decision not to act on the allegation submitted by Wheatland Tube (see 1610190029), the committee said. While Wheatland provided public import data, "CBP nevertheless required actual proof of evasion, which contradicts the minimal statutory evidentiary requirement for allegations," it said. That group and several others recently submitted comments (here) as part of CBP's request for comments on its interim regulations implementing the Enforce and Protect Act (EAPA) provisions (see 1608190014).

CBP mistakenly burdens domestic producers with having to prove evasion at the outset so as to trigger an allegation investigation, it said. "CBP should adhere to the modest standard for initiating EAPA allegations rather than imposing an evidentiary hurdle that was not contemplated by the statute," the pipe committee said. The agency should review its own entry data when deciding whether to pursue an EAPA investigation, as should have occurred in response to Wheatland's, it said. Much of the committee's comments was focused on the Wheatland case. CBP should also allow for administrative appeals of decisions to not initiate EAPA investigations, the group said.

The committee also submitted the Wheatland allegation filing and other related documents as part of its comments. Included were two November letters from members of Congress to CBP Commissioner Gil Kerlikowske expressing disappointment with the agency over its decision not to pursue Wheatland's case. CBP recently posted its notices in response to evasions allegations (see 1612190004). Comments to CBP were due Dec. 20, though several comments were filed early (see 1612200034, 1610170012, 1610240014, 1610260026 and 1611210009).

CBP should "adopt a practice of periodically publishing examples of what information was deemed 'reasonably available to the interested party,'" law firm Stewart and Stewart said (here). "As the CBP investigates allegations under the EAPA, it is likely to refine its approaches to initiation and investigation and so periodic updates based on CBP’s developed experience would be very helpful to interested parties and would likely reduce the agency’s workload as parties would have a better understanding of what kinds of information are required," it said. CBP should make a policy of publishing its decisions, the Cassidy Levy law firm said (here). "By declining to provide for the publication of agency actions, CBP is severely undermining the prevention goals of EAPA and, respectfully, we believe this must be changed in the final rule," it said.

Another group of trade associations said in comments (here) that CBP should do away with the specific importer identification requirements for allegations. Those associations -- the Coalition to Enforce AD/CV Duty Orders, the Aluminum Extruders Council, the American Wire Producers Association and the Diamond Sawblade Manufacturers Coalition -- said that despite CBP's Trade Secrets Act concerns for identifying importers (see 1612050018), there's an exemption "as provided by law," the groups said. "CBP’s regulations can provide the exception to allow CBP to identify the actual importer of record," which CBP does in other cases. Law firm Wiley Rein raised similar points in its comments (here).

The National Fisheries Institute objected to the possible release of proprietary information as part of status update requests for allegation investigations, it said in its comments (here). The regulations "allow the complaining party to request Federal documents, which will likely include confidential business information" and provide the alleger information that the importer is unaware of and can't review, it said. Also, the adverse inferences provisions authorize "CBP to cripple importers in any give[n] case, if and when CBP finds that the importer has failed to meet a vague standard of participation," it said.

CBP ought to clarify that EAPA determinations can't be protested, the King and Spalding law firm said (here). The law allows for a specific chronology for interested party administrative and judicial reviews, which should be solidified in the final EAPA regulations, it said. Those reviews shouldn't be available to other parties, the firm said. "Allowing for protests of EAPA determinations not only gives rights to non-interested parties, the rights provided would be far more expansive than those afforded to interested parties under the EAPA," it said. Among other issues, "CBP protests are significantly different from EAPA proceedings as contemplated by the statute -- they are off the record, the determination is not public, domestic interested parties cannot participate, and only the protestant may appeal a protest decision," it said.

Most of the comments submitted urged CBP to allow for an administrative protective order process. Although CBP contends that it lacks the authority to create an APO process (see 1611210053), that's also true of other agencies that use APOs, law firm Morris Manning said (here). Despite some transparency concerns raised by Sen. Rob Portman, R-Ohio, about the interim rules (see 1608230016), an APO "would actually further the interests of transparency by allowing all parties in an investigation, through their counsel, to view and address the information that CBP will be relying upon in making its determination of whether evasion is taking place," the firm said. Otherwise, "parties would have an incentive to engage in gamesmanship by marking substantial portions of their filings confidential so that the other side cannot respond in any meaningful way to these comments and filings," it said. Although the final law did remove a mention to APOs, Portman and other senators suggested that CBP establish a "process similar" to the APO "process used by Commerce and the [International Trade Commission]" in a letter to the agency (see 1608300039).

More information on verification procedures are also needed in the final rule, the Morris Manning firm said. "Besides stating that CBP may verify information submitted in these investigations" and add any pertinent information to the administrative record, the regulations are mostly silent on verification procedures. The agency should spell out the timelines for verifications and what it might consider to be relevant, it said. Also unclear is "exactly what will be verified, or how the party being investigated should prepare for verification," the firm said. "In order to bring some clarity to this process, we request that the regulations include a provision that provides for a verification agenda." Morris Manning also said it supports the requirement for specific importer information for allegations. "The statute is unambiguous, as the allegation must be filed against 'a person,'" it said. "It does not say multiple people or against all importers from an entire country" and "CBP has interpreted 'a person' to mean a singular importer." That's "a reasonable interpretation of the statute," it said.