CBP Lacked Evidence to Begin EAPA Investigation and Conclude Transshipment, Importer Says

CBP lacked sufficient evidence to begin an Enforce and Protect Act investigation on Phoenix Metal and then fabricated a conclusion that the company transshipped Chinese soil pipe through Cambodia, Phoenix said in a March 2 complaint at the Court of International Trade (Phoenix Metal v. U.S., CIT # 23-00048).

The agency relied only on a singular piece of information, a third party shipping document translated from Khmer, in making its transshipment determination, Phoenix said. Meanwhile, CBP discounted evidence that the shipment concerned raw materials and not finished pipe, the company said.

CBP based its evasion determination on supposed evidence that no steel pipes were produced in Phoenix's Cambodian factory, a conclusion which itself is based on Phoenix's purported refusal to produce production records, Phoenix said. But by "the time verification had been scheduled, all records and equipment were in the process of being moved to the new factory," Phoenix said. CBP ignored evidence that the Cambodian government had visited the factory in question and provided certificates of origin for the products at issue, it said.

In making its decision to investigate, CBP also "relied heavily on the ownership structure of Phoenix," but failed to provide "any evidence relating to the ownership structure of Phoenix to transshipment," the company said. CBP "specifically ignored a significant amount of information on the record to fabricate a conclusion that the soil pipes were transshipped," Phoenix said.

The facts in dispute were insufficient to overcome "the production that was documented and witnessed by CBP" in leading the agency to a conclusion that production did not take place" based on adverse inferences, Phoenix said.

CBP first investigated two other companies, Little Fireflies and Granite Plumbing Products. After the agency published its notice of investigation in 2021, the Cast Iron Soil Pipe Institute submitted a second allegation against Phoenix. The cases were consolidated in March 2022 (see 2203310044) before CBP ultimately concluded in September that all three importers had engaged in evasion (see 2209130059). "The Alleger’s Allegation consisted only of general trade data and discussion of a prior case, which is not sufficient to reasonably suggest that Phoenix evaded the Orders," the company said.