CBP Unlawfully Based Evasion Finding on Producer's 'Ties to China,' Importers and Manufacturer Say

Both CBP's Trade Remedy Law Enforcement Directorate and its Office of Regulation and Rulings failed to make a factual finding when it said that importers Global Aluminum Distributor and Hialeah Aluminum Supply evaded the antidumping duty and countervailing duty orders on aluminum extrusions from China, the importers and Dominican producer Kingtom Aluminio said. In two motions for judgment at the Court of International Trade, the plaintiffs and Kingtom both argued that CBP skirted the evidentiary standard, instead basing its conclusion on a vague reference to Kingtom's ties to China and discrepancies between the importers' and Kingtom's records (Global Aluminum Distributor v. United States, CIT Consol. #21-00198).

In CBP's Enforce and Protect Act investigation, CBP's TRLED initially said that "discrepancies" between Kingtom and the importers' submissions plus Kingtom's "ties to China" greenlighted the use of adverse inferences against the importers and an evasion finding. Both the importers and Kingtom argued in their motions for judgment that this was an improper use of adverse inferences as the importers and Kingtom were cooperating parties to the investigation. "Nonetheless, TRLED misunderstood or mischaracterized submitted materials as an excuse to disregard them, while simultaneously claiming that the information within those submitted materials was not provided," Kingtom said.

TRLED had said Kingtom's ties to China allowed the agency to find that the importers evaded the orders. Kingtom is owned and operated by Chinese nationals. CBP's ORR concurred with TRLED's assessment, relying on the discrepancies between the importers' and Kingtom's submissions and Kingtom's ties to China to support the evasion finding. ORR also said that since Kingtom did not operate at 100% capacity, it could rely on the nationality of Kingtom's owners as evidence. "This is incorrect and a misapplication of the substantial evidence standard, which requires some evidence of evasion, not vague and unsupported assertions," Kingtom said.

Added Global Aluminum and Hialeah: "Like TRLED, OR&R’s determination was not supported by substantial evidence on the record and instead relied on vague assertions about Kingtom’s production, its capacity, and its 'close ties' to China. CBP has misapplied the substantial evidence standard, which requires some evidence of evasion and not mere supposition."

Common to many EAPA challenges at CIT, the importers and Kingtom also challenged CBP's alleged due process violations in the investigation. The plaintiffs said that CBP violated their constitutional right to due process by imposing interim measures without proper notice of the existence of the investigation and a chance to be heard.

"CBP deprived the Plaintiffs of their due process right to be heard and to be defend themselves by : (1) failing to provide the Plaintiffs with an adequate public summary of the Attache Report, thus depriving Plaintiffs of any cogent understanding of what occurred and foreclosing a meaningful response; (2) denying the Plaintiffs the opportunity to review, evaluate or comment on proprietary evidence underlying CBP’s determination, and thus defend themselves; and (3) imposing highly punitive interim measures without providing the Plaintiffs the opportunity to comment beforehand," the importers said.