CBP EAPA Decisions Need Only Be Backed by Substantial Evidence, Not Beyond Doubt, DOJ Says

CBP can reasonably interpret facts to establish that an importer is evading antidumping and countervailing duties in an Enforce and Protect Act investigation, and doesn't need to establish that no other conclusion could possibly be drawn from the record in an EAPA case, DOJ told the Court of International Trade in a brief filed May 20 (Leco Supply v. United States, CIT #21-00136).

Responding to a motion for judgment filed in January (see 2201260037), DOJ said CBP’s evasion determination against Leco Supply needed only be backed by “substantial evidence,” and that Leco’s “assertions to the contrary amount to nothing more than disagreement with how CBP weighed and considered record evidence.” And the evidence in the case was enough to come to the conclusion that Leco falsely said its wire hangers were made in Laos when they were actually made in Vietnam.

Leco’s arguments to the contrary ignore CBP’s application of adverse facts available against Truong Hong, the purported Laotian producer of the hangers, and the resulting finding that the Laotian company did not have enough capacity to produce the hangers, DOJ said. The use of AFA also meant that CBP found all documents purported to be from Truong Hong to be unreliable, it said.

Leco’s insistence that CBP take documents provided by Truong Hong and submitted by Leco at face value would result in “a legal framework under which a foreign producer like Truong Hong can fail entirely to response to CBP’s requests for information, and CBP must nevertheless give importers like Leco the benefit of the doubt as long as there is some evidence that some amount of product was produced where it is claimed to have been produced,” DOJ said.

“Such a reading of the law is contrary to the EAPA statute, not to mention the entire legal framework concerning foreign imports entering the United States,” the brief said. “Both this Court and the United States Court of Appeals for the Federal Circuit have repeatedly held that the foreign producer or importer bears the burden to provide sufficient evidence to establish the origin of the product it seeks to enter.”

Leco also had challenged CBP’s decision to allow information related to the allegations of evasion to remain confidential, but DOJ said Leco had enough detail to submit any rebuttal of the allegations. “Leco fails to establish that any of the documents it would have allegedly provided to rebut the confidential information was outside the scope of CBP’s requests for information,” DOJ said. “… Importantly, while [the alleger] M&B requested business confidential treatment over the entire report, the substance of it was discussed in detail in the public allegation document,” DOJ said.

And the brief said Leco’s challenge of the initiation of the EAPA investigation was invalid. While the law underlying the EAPA allows for challenges to EAPA determinations, it does not provide for challenges to the decision to initiate an investigation, DOJ said.

“Leco essentially argues that CBP cannot accept an allegation as true for the purposes of deciding whether to open an investigation, but instead must somehow verify the information in the allegation before investigating it,” the brief said. “The circular nature of Leco’s argument exposes its absurdity: how could CBP determine that an allegation is factually accurate without opening an investigation? Even if CBP’s decision to open an investigation were subject to judicial review -- which it is not -- the information submitted by M&B ‘reasonably suggests’ the evasion may have occurred, and CBP’s determination to open an investigation was reasonable.”