Cabinet Importer Tells CAFC CBP Illegally Took EAPA Petitioner's Claims at Face Value

A finding of evasion against Skyview Cabinet USA was arbitrary and capricious because CBP failed to establish that the subject wooden cabinets and vanities were covered merchandise at the time they were made and because CBP failed to follow Enforce and Protect Act procedures when it applied adverse inferences, Skyview said in its Oct. 23 opening brief at the U.S. Court of Appeals for the Federal Circuit (Skyview Cabinet USA v. U.S., Masterbrand Cabinets Inc., Fed. Cir. # 23-2318).

Skyview also alleged that CBP improperly shifted the burden of proof onto it, failed to notify the importer of detracting evidence and unlawfully relied on hearsay in the underlying investigation.

Skyview said CBP failed to meet its "substantial evidence" threshold because the agency never showed that Skyview had entered covered merchandise. Instead, CBP took Masterbrand's allegation at face value "without any apparent investigation," Skyview said. CBP concluded that Skyview produced its cabinets in China rather than in Malaysia, and noted "various discrepancies and omissions" in Skyview's questionnaire responses but didn't list them or address how they may have been relevant to a country of origin analysis, Skyview said. Skyview said that it "provided a volume of documentation" to be used in making substantial evidence determinations but that, even where it "connected the dots from purchase order information to the shipment ... CBP simply disregarded documentation."

Skyview also argued that CBP failed to follow EAPA requirements when it applied AFA against Skyview's Malaysian supplier, Rowenda.

Because the court has not "had the opportunity to provide further guidance on the adverse inference framework established by EAPA," Skyview pointed to the Commerce Department's AFA guidelines. CBP found that because Rowenda didn't cooperate to the best of its ability, it relied on "other record evidence," in this case information submitted in the allegation.

Skyview said that CBP didn't need to fall back on claims in the allegation because it had the full record through Skyview from Rowenda but failed to consider provided production records and therefore didn't comply with all procedures under the EAPA statute. When it ruled in June, the Court of International Trade found that CBP drew no adverse inferences against Skyview and instead drew an adverse inference in selecting from facts otherwise available to fill the gaps that Rowenda’s repeated refusal to cooperate created (see 2306200059). Even if CBP had the authority to apply an adverse inference against Rowenda, it failed to select from among the facts otherwise available, Skyview said. "Although Rowenda did not submit production data to CBP, Rowenda submitted production data to Skyview which in turn submitted the production data to CBP."

When CBP said that Rowenda didn't provide "actual" country of origin documentation but failed to explain further, it unlawfully shifted the burden of proof onto Skyview, the importer argued. The assertion by CBP that Skyview failed to establish the existence of wooden cabinet and vanity production in Malaysia "independent of any failure by Rowenda to cooperate" put the evidentiary burden onto Skyview. An importer doesn't have to disprove the allegation of evasion, it only has to provide evidence sufficient to detract from the "substantiality of the evidence," which Skyview argued that it did.