CBP's Stay Motion Shows That Evasion Finding Was Unsupported, Plaintiffs Tell CIT in EAPA Case

The U.S.'s rationale for its motion to stay in an Enforce and Protect Act case at the Court of International Trade is "remarkable," and essentially concedes that CBP cannot back its evasion finding, plaintiffs Norca Industrial Co. and International Piping & Procurement Group (IPPG) said in a July 6 brief opposing the stay. The stay motion wants to halt proceedings at CIT so a covered merchandise referral can be issued to the Commerce Department, but the plaintiffs said that such a referral is not possible, the case has been narrowed to record issues and the move signals a concession on the facts (Norca Industrial Company v. United States, CIT Consol. #21-00192).

In the EAPA investigation, CBP found that Norca evaded antidumping duties on carbon steel butt-weld pipe fittings from China by transshipping them through Vietnam. Norca filed suit at CIT, alleging that its due process rights were violated, among other things. In the investigation, a third party submitted various photographs and videos from a site visit to manufacturer BW Fittings' Vietnam facility. This documentation was not shared with Norca either through access to the documents themselves or through CBP-made public summaries. CBP also failed to disclose its communications with the third party.

CBP then requested a voluntary remand to allow the third party to bracket this information and supplant the record with a public summary of the information (see 2109290061). Judge Jennifer Choe-Groves granted the remand motion so that the record may be complete in consideration of the evasion matter (see 2203110074).

Then CBP asked for a stay of proceedings to issue a covered merchandise referral -- a motion met with an emphatic response from Norca and IPPG. The plaintiffs said that after almost three years, CBP "now concedes that its determination was baseless." As a result, the trade court should deny the stay motion and simply enter judgment in the plaintiffs' favor. Norca and IPPG said that the "11th hour" stay motion is "extraordinary" and should be denied.

The first reason the plaintiffs say the motion should be denied is that the government failed to identiy what happened during remand that led CBP to find that it cannot say whether the imported merchandise is within the scope of the order. "Nor could it make such a showing," the brief said. "... CBP limited the remand proceedings to narrow record issues -- all of which went to the factual question of whether BW Fittings purchased seamless pipe to produce CSBW fittings. As to the legal issue -- i.e., the scope of the Order -- there is nothing that arose in the remand that is different from what Norca and its supplier, BW Fittings, raised since the inception of the investigation."

Further, Norca and IPPG said that a covered merchandise referral is "not permissible at this stage" of the proceeding. "If CBP believed that resolution required a determination from Commerce, it had the obligation to make such a referral during the investigation," the brief said. "CBP chose not to do so, and it must live with the consequences of its decision" through that resolution. "In short, CBP effectively concedes that the evasion determination challenged by Norca and IPPG is -- and was, when rendered -- contrary to law. CBP’s evasion determination must be vacated."