CBP Sticks With Evasion Determination on Remand in Magnesia Carbon Bricks Case

On remand, CBP reaffirmed its determination that Fedmet Resources Corporation evaded the antidumping and countervailing duty orders on certain magnesia carbon bricks (MCBs) from China, it said in its Sept. 1 remand redetermination to the Court of International Trade. The agency had sought and was granted a voluntary remand to consider several issues raised in Fedmet’s motion for judgment (see 2306290022) (Fedmet Resources v. U.S., CIT # 21-00248).

CBP said that it reevaluated elements of its investigation to address Fedmet’s scope-related and due process arguments "to the extent [they] could be addressed by the remand." Fedmet had argued that CBP’s investigation deprived it of its due process rights because the agency did not provide the evidence upon which CBP based its determination of evasion. The importer also argued that CBP exceeded its authority by redefining the scope of the orders and that the evasion finding was arbitrary and capricious and unsupported by record evidence.

On remand, CBP said that it addressed the due process issue and that it "reconsidered and supplemented the administrative record." The agency also placed public versions of business confidential documents on the administrative record. After requiring the interested parties to do the same, CBP said it then provided the parties an opportunity to submit rebuttal information and written arguments.

However, CBP said that "the single most important factor in determining whether Fedmet’s refractory bricks constitute covered merchandise is the chemical composition of the product." CBP said that it relied on prior rulings which "established a five percent alumina content threshold" for magnesia-alumina carbon (MAC) bricks if the testing used a methodology that did not distort the alumina content.

During the remand, CBP retested bricks and found that all but two of Fedmet’s brick samples were subject to the orders based on the 5% alumina threshold. "Fedmet did not declare the covered merchandise as subject to the Orders ... which constitutes a false statement that resulted in nonpayment of AD/CVD," CBP said.

Fedmet took issue with CBP’s sampling and testing methodology and argued that the results were inconsistent with the Commerce's covered merchandise decision. Fedmet argued that the testing methodology was inappropriate for inhomogeneous refractory bricks. In response, CBP said that "an importer cannot dictate CBP’s sampling protocol" and Fedmet offered no evidence to support that the sampling protocols were flawed.

CBP concluded that the imported bricks lacked a consistent chemical composition and found that it would be "extremely burdensome" to conduct in-depth laboratory for every imported MCB. The burden, CBP said, was therefore on Fedmet to demonstrate that its entries contained MAC bricks with over 5% alumina, which it did not do.

Fedmet is currently suing the government in a separate lawsuit challenging the Commerce Department's covered merchandise inquiry, arguing that Commerce illegally expanded the scope of the orders of MAC bricks (see 2306120054).