EAPA Process 'Stacks the Deck' Against Importers, Lawyer Says

The lack of disclosure in Enforce and Protect Act evasion proceedings and the deferential standard of review "stack the deck" in favor of the alleger, giving importers "a lot to complain about in the EAPA process," customs lawyer Larry Friedman of Barnes/Richardson said in a July 6 blog post. Even importers who believe they have conducted reasonable due diligence may have serious unexpected liabilities that come out during the investigation, he said.

"It is a very hard time to be an importer," Friedman said.

Evasion is not a purposeful or negligent act according to the law as interpreted, he said. Because EAPA has so far been interpreted as a strict liability statute, even where the importer exercises reasonable care, the process can result in a significant and unexpected bill, Friedman said.

Importers have long understood their obligation to exercise reasonable care in reporting accurate and complete information to CBP, but that documentation relies on the trustworthiness of the suppliers, Friedman said. In many EAPA cases, it is the same supplier who is doing the actual evasion, rather than the importer targeted by the investigation.

"Supply chain visibility is the new currency of trade compliance. Importers need to know what goes into their products, where it comes from, and who processed it. That is true for forced labor compliance, the application of Section 301 duties, antidumping and countervailing duties, and other trade remedy measures," Friedman said.

"Not all importers are honest, but when conscientious importers are led astray by bad information or diligence that in hindsight was inadequate to identify deception, the risks are enormous. Nothing in the EAPA statute or enforcement process recognizes that," he said.

Another ongoing issue for importers is that the courts have so far held that as long as the public summaries are sufficiently detailed to permit the importer to understand the substance, its due process rights have not been violated.

So far, challenges to the public summary process have not been successful, to the frustration of many trade lawyers, Friedman said. "A visceral and negative reaction based on principle" is unfortunately not a legal basis on which to challenge a decision, he said.

The courts have found importing isn't a protected right, precluding substantive due process challenges. And they've also ruled CBP's public summaries can satisfy procedural due process requirements, as long as they "are sufficiently detailed to permit the importer to understand the substance of the information" so that "the importer has an adequate opportunity to respond and, therefore, to be heard."

"Thus, the issue turns on the risk that the undisclosed information would have changed the outcome of the investigation versus the government's interest in performing its function with reasonable burdens, Friedman said. "That is a fairly high bar for those challenging the public summary process. So far, that has not been successful."

CBP did not immediately comment.