CBP Needs to Find Culpability in Sawblades EAPA Case, Importer Tells Trade Court

CBP ignored the Court of International Trade's ruling that it needs some finding of culpability before determining that importer Diamond Tools Technology evaded the antidumping and countervailing duty orders on diamond sawblades from China, DTT said in a Feb. 28 brief. Instead, CBP just ignored the court's definitions of the terms "false" and "omission" and illogically claimed that the customs penalty law's establishment of specific degrees of culpability negates the Enforce and Protect Act's culpability requirement, DTT argued (Diamond Tools Technology v. United States, CIT #20-00060).

The EAPA determination was based on allegations that DTT was transshipping diamond sawblades from China through Thailand. CIT remanded after ruling CBP did not show DTT had made a material and false statement, finding CBP's position unclear as to whether DTT's failure to distinguish the country of origin of the sawblades' cores and segments joined in Thailand qualified

CBP responded that it didn't need to establish intent to defraud the U.S. to find that an importer evaded AD/CVD (see 2201280037). In comments on CBP's remand, DTT argued that CBP violated the court's orders by still failing to find any level of culpability. In failing to do so, CBP ignored the court's definition for "false," saying instead that false simply means erroneous or wrong, and also the definition of "omission." CBP refused to recognize the court-ordered definitions of evasion, false and omission, the brief said.

In its remand results, CBP said that requiring CBP to find any levels of culpability in an EAPA case would be duplicative given the terms of the circumvention statute, which requires a finding of fraud, gross negligence or negligence. "Besides assuming, without basis, that a statute may require only the three levels of culpability that [the circumvention statute] sets forth, and no other, CBP’s argument ignores the plain meaning of the EAPA’s language ... as well as the EAPA’s purpose itself," DTT said.

In fact, it is EAPA's use of the terms evasion, false and omission that reveal that culpability is required, "but need not be defined or proven at a specific level," the plaintiff argued. "In contrast, § 1592(a) requires CBP to find a specific level of culpability because the amount of penalties CBP may impose depends on the level of culpability found (i.e., fraud, gross negligence, or negligence)," the brief said. "... By concocting a 'duplicative' overlap between two statutory provisions that are, in fact, complementary, CBP has further misread the plain language of the EAPA. Therefore, the Redetermination fails to comply with the Remand Order and is otherwise contrary to law."