CBP Withheld Key Information During EAPA Investigation, Importer Says

CBP imposed interim restrictions on an importer without informing it of an ongoing Enforce and Protect Act investigation, then put partly confidential information on the record without notice so that the importer couldn’t rebut it, that importer said in a Feb. 26 complaint at the Court of International Trade (Superior Commercial Solutions LLC v. U.S., CIT # 24-00052).

In January 2023, having not notified importer Superior Commercial Solutions of an EAPA evasion investigation into it launched in October 2022, CBP illegally imposed interim measures on Superior that included rejecting its entries, suspension of liquidation, “threatening liquidated damages and threatening liquidation of entries at high duty rates” and requiring cash deposits of about 370%, Superior alleged.

Then, in June 2023, Superior said CBP uploaded to the EAPA web portal a memo that included inaccessible confidential business information. CBP failed to serve that memo to Superior, the importer said, leaving Superior “completely unaware” of it until after the rebuttal deadline had passed.

The importer of quartz countertops from Vietnam said it turned to CIT to contest the affirmative evasion finding CBP reached. Superior said only a small, “not substantial” number of the Vietnamese quartz countertops it imported were made out of slabs from China; the rest used Vietnamese-origin inputs, it said.

Cambria Company, a domestic producer, petitioned CBP to launch the investigation in 2022. Cambria claimed Superior’s Vietnamese supplier Engga Company, as well as Engga’s producer Kales Quartz Company and its affiliated supplier Strry Manufacturing Company, were transshipping merchandise for Superior from Xiamen Lexiang Imp. & Exp. Co., a Chinese manufacturer. Quartz countertops from China are subject to AD/CVD. CBP began its inquiry in October 2022, Superior said.

The interim measures CBP took against Superior without warning were a violation of its due process rights, as well as against EAPA rules, the importer said.

Then, when CBP reached its affirmative evasion determination in August 2023, Superior said it did so on the basis of information contained in that memo. But preventing Superior from accessing that confidential information was illegal under the U.S. Court of Appeals for the Federal Circuit's decision in Royal Brush v. U.S., it said. It also said CBP’s failure to serve that memo directly to Superior or notify the importer of it in any way went against the agency’s common practice. CBP’s actions were arbitrary and capricious, Superior said.

Superior also said that CBP, in its determination, “misinterpreted a significant amount of information on the record” that actually showed a “substantial portion” of Superior’s imports were made with Vietnamese-origin, not Chinese-origin, slabs. This was arbitrary, capricious and an abuse of discretion, the importer said.

Superior said it is also contesting CBP’s application of adverse facts available to Superior in its determination.

CBP hit the importer with AFA in part because the Vietnamese exporter Engga and its affiliates had refused to cooperate with the agency, the importer said. In June 2023, CBP had scheduled verifications for Engga, Kales and Strry, but the three companies said they couldn't participate because their resources were “extremely” limited due to the interim restrictions CBP had imposed in January, Superior said. It said CBP had also determined there were “inconsistencies and irregularities” in those companies’ questionnaire responses.

Superior, however, had cooperated fully with CBP, it said. It said application of AFA to it was unjustified and against the law, especially as AFA “only has adverse impact on” Superior.

“CBP’s determination is also particularly unreasonable when it could have applied adverse inference to the Vietnamese entities without collateral consequence to SCS,” it said.

It also said CBP had been required to consult with the Commerce Department when it set a new rate for Superior, but that “the public administrative record contains no evidence that [CBP] ever informed Commerce of its affirmative evasion determination and requested Commerce to determine the applicable assessment rate applicable to SCS’s entries.”