CAFC Says Importer Can't Challenge CBP's Decision on AD/CVD Suspension of Liquidation

An importer of solar cells can’t challenge CBP’s decision to require antidumping and countervailing duty cash deposits without a scope ruling in hand, the U.S. Court of Appeals for the Federal Circuit said June 14. Reversing an October 2016 decision from the Court of International Trade (see 1610200024), CAFC held the trade court did not have jurisdiction to hear a challenge of CBP’s allegedly illegitimate decision to require cash deposits because Commerce had not yet issued a scope ruling on whether Sunpreme’s hybrid solar cells were included under the scope of AD/CVD orders on solar cells from China.

In its decision, CIT had held Commerce can’t direct CBP to “continue” to suspend liquidation when that original suspension of liquidation exceeded CBP’s authority. CBP began requiring cash deposits on Sunpreme’s hybrid cells, which included both a thin-film layer of amorphous silicon and a substrate of crystalline silicon, in April 2015, despite some ambiguity because amorphous silicon is exempt from the AD/CVD order. CBP is allowed to suspend liquidation before a scope ruling, but can’t make factual determinations where the scope is ambiguous.

Commerce’s direction to continue to suspend came after it eventually resolved any ambiguity by issuing a scope ruling that the hybrid cells were indeed subject to duties (see 1608030041). Importantly, Sunpreme had filed its CIT challenge of CBP’s April 2015 decision to suspend liquidation shortly before it requested that scope ruling.

Sunpreme should have waited for that scope ruling before filing its complaint, CAFC said. CIT’s heard the case under a “residual” jurisdiction provision for trade issues not covered by other CIT jurisdiction provisions, such as for challenges of denied protests and AD/CVD determinations, including scope rulings. It’s only available when those other jurisdiction provisions aren’t. In this case, Sunpreme would have been able to resolve the issue by waiting for the scope ruling, because a negative scope ruling would have resulted in CBP ending its suspension of liquidation, and Sunpreme could have (and has) challenged a finding that its products are covered, CAFC said. The residual provision was not available, and CIT should not have allowed a legal challenge based upon it, the appeals court said.

In any case, CBP is allowed to suspend liquidation before the scope ruling, CAFC said. “The statute does not prohibit, and the pertinent regulations clearly contemplate, that Customs can suspend liquidation pre-scope inquiry. In this case, the suspension of liquidation mitigates the long-term effect of any alleged financial hardship to Sunpreme by ensuring the return of cash deposits pending the merits of its scope dispute,” CAFC said.

(Sunpreme Inc. v. U.S., CAFC # 17-1338, dated 06/14/18, Judges Newman, Lourie and Reyna)