Importer Objects to EAPA Procedure in Motion for Judgment

CBP's failure to timely release documents in an Enforce and Protect Act investigation deprived importer Phoenix Metal of its right to defend against the agency's allegation that it transshipped in order to avoid paying antidumping and countervailing duties (see 2303030049), Phoenix said in an Aug. 9 motion for judgment at the Court of International Trade. The company said it had no chance to respond to allegations of evasion before "severe enforcement measures" were put in place, adding that CBP's "only purpose" in EAPA investigations "is to operate in the shadows and shun inconveniences like the [Administrative Procedure Act] and due process of law" (Phoenix Metal v. U.S., CIT # 23-00048).

Phoenix said it previously raised due process concerns during the administrative review, but CBP’s Office of Regulations and Rules "dealt only briefly" with arguments and said the agency acted in accordance with the EAPA statute. The company said the EAPA allegation and other documents filed by the petitioner and CBP before March 28, 2022, became part of the administrative record on Feb. 28, 2022, when CBP initiated the investigation. But the company said CBP did not make the public documents and public versions of confidential documents available to it until a month later and deprived Phoenix of its right to timely file rebuttal factual information.

The importer cited the U.S. Court of Appeals for the Federal Circuit's opinion in Royal Brush Manufacturing v. U.S. to make its case. In the ruling, the appellate court said CBP violated Royal Brush's due process rights by not providing the company with access to the confidential information in the EAPA proceeding (see 2307270038). Phoenix noted that the Federal Circuit "found not only that CBP has the authority to provide parties with confidential information that it used in its determinations, but has the obligation under the due process clause of the Fifth Amendment of the U.S. Constitution."

Phoenix pointed to 19 CFR § 165.15(e), which states, in part, that “[i]f an investigation is initiated ... then the information considered by CBP prior to initiation will be part of the administrative record pursuant to §165.21.” Phoenix said it was "significantly prejudiced" by not being able to reply while the investigation was taking place. Four of its alleged covered merchandise shipments were entered after the allegation but before it was aware of a potential investigation, the company said.

The purpose of the EAPA law is not to maximize government revenue but to prevent the evasion of AD and CVD Orders, Phoenix said. "Surely, the best way to prevent evasion is providing immediate notification to the targeted importer that it is under investigation," the brief said. "Whether or not the allegation ultimately proves to be true ... the U.S. industry likely receives immediate relief from the perceived threat of the foreign imports."

Phoenix asked the court to remand the case to CBP with instructions to lift the current enforcement measures and possibly restart the investigation with orders to CBP to provide timely notification before the imposition of interim measures and orders to provide unredacted record documents.

Phoenix also said the "record of this case does not support a rational connection between the facts found and CBP’s conclusions and determinations," making them "arbitrary and capricious."