MAC Brick Importer Blasts EAPA Process for Imposing 'Embargo' on Its Goods

The antidumping and countervailing duties that importer Fedmet Resources now has to pay as a result of a CBP duty evasion ruling amounts to an "embargo" and deprives Fedmet of market access, the importer argued in a Nov. 19 brief at the Court of International Trade. Further, CBP violated Fedmet's due process rights by not even notifying the importer of the existence of the investigation until the interim measures were put in place and not giving it an opportunity to respond to evidence against it, the brief said (Fedmet Resources Corporation v. United States, CIT #21-00248).

Fedmet is challenging CBP's determination from an Enforce and Protect Act investigation into whether its magnesia alumina carbon bricks (MACB) evaded antidumping and countervailing duties on magnesia carbon brick (MCB) from China. According to Fedmet, the allegations of evasion stem from a Commerce Department scope ruling requested in July 2009 wherein, despite evidence from the original petition that MACB were expressly meant to be excluded from the orders, Commerce still found MACB in scope. This ruling was reversed by the U.S. Court of Appeals for the Federal Circuit, which relied on the evidence from the petition. Fedmet then faced an evasion allegation from the Magnesia Carbon Brick Fair Trade Committee, which said that Fedmet evaded the AD/CVD orders on MCB by misclassifying its imports as MACB.

CBP took up the investigation after conducting lab tests of Fedmet's bricks from its Ohio warehouse. According to Fedmet's original complaint, the company "received no notice of either the EAPA allegation or the initiation of an investigation for another three months" (see 2105240042). Fedmet also took issue with how CBP came to the determination that its MACB were actually MCB.

Now further backing its case against the evasion finding in its judgment on the agency record, Fedmet continued its attack against CBP's evasion finding. "In its determinations, CBP exceeded its authority under the statute by unlawfully expanding the scope of the orders," the brief said. "The scope of the AD/CVD orders on MCBs from China has been well-litigated before Commerce, the Court, and the CAFC. In its evasion determination, [the Trade Law Enforcement Directorate (TRLED)] failed to adhere to those determinations and expanded the scope of the Orders to include Fedmet MAC bricks that are marketed under a different brand name. In so doing, TRLED ignored the fact that the CAFC has already held that Fedmet MAC bricks are excluded from the MCB orders because all MAC bricks are excluded from the orders and also failed to follow Commerce’s determinations that brand names are irrelevant to the scope of the Orders."

Fedmet based its argument on the legislative history of the EAPA statute, which instructs CBP's Office of Trade, Trade Law Enforcement Directorate to consult with Commerce, seeing as the agency should maintain its authority on AD/CVD scope rulings. "Rather than consulting with Commerce, TRLED appears to have based its determination, in part on its own independent analysis of factors that are set out in Commerce's regulations for evaluating scope issues ... . TRLED attempting to fill Commerce’s role rather than consulting with Commerce is unlawful," the brief said.