CBP Got Aluminum Extrusion EAPA Case Right, but Botched Review, Domestic Group Says

CBP's Office of Regulations and Rulings abused its discretion when it overturned a determination of evasion in an administrative review, the Aluminum Extrusions Fair Trade Committee (AEFTC) said in an April 26 motion for judgment at the Court of International Trade. The original determination found that Kingtom Aluminio SRL had evaded antidumping and countervailing duty orders on aluminum extrusions from China by transshipment through the Dominican Republic. The AEFTC asked the court to remand the case to CBP (Aluminum Extrusions Fair Trade Committee v. U.S., CIT # 22-00236).

On review, CBP's Office of Regulations and Rulings failed to adequately address the decision to apply adverse inferences, the AEFTC said. "The record shows that Kingtom failed to cooperate to the best of its ability" in its submissions and during verification, it said.

Kingtom failed to cooperate with CBP's information requests and "engaged in a campaign of intimidation to prevent the factory employees from speaking with CBP officials," according to the original evasion determination. CBP concluded the verification in part due to safety concerns and growing tensions, the agency said. Because Kingtom prevented its employees from speaking with CBP officials, the company "clearly failed verification" and that required the application of adverse inferences, the AEFTC said.

Even if its employees had cooperated, Kingtom's deletion of records would also warrant the application of adverse inferences, the AEFTC said. The lack of records meant that CBP was unable to verify Kingtom's submission. While overhauling its accounting system, Kingtom deleted data that, as the importer of record, it was required to keep, the AEFTC said. In its initial report, CBP noted that one of the reasons for overhauling Kingtom's system in 2020 was allegedly because the old system was not "keeping up with" the EAPA investigation. The AEFTC argued that the timing showed that Kingtom "knowingly destroyed these records being aware that its exports were subject to an investigation."

The most "critical issue," according to the AEFTC, was that CBP found "widespread discrepancies" that showed Kingtom could not have made all the volume it claimed in the Dominican Republic. Those discrepancies involved production, sales, employee attendance and payroll data, as well as raw material purchases and suppliers, and financial records that were relevant to evaluating Kingtom's production capability and actual production, the AEFTC said. CBP couldn't verify purchase information because Kingtom did not have the necessary records. This failure to produce data meant that there were "critical gaps" in the record, which prevented Kingtom from demonstrating that it did not use Chinese production to supplement its Dominican production, the AEFTC said.

Given the widespread nature of the discrepancies, CBP properly concluded in the initial investigation that there was substantial evidence that Kingtom did not produce all the aluminum extrusions imported. CBP's review conclusion that the discrepancies did not have "sufficient bearing" on Kingtom's production capability and actual production to overcome the substantial evidence demonstrating actual and significant production in the Dominican Republic is contradicted by record evidence, the AEFTC said.