Importers Claim CBP Misinterpreted Evidence, Shifted Burden of Proof in EAPA Investigation

Three importers said in combined remand comments that CBP was attempting to illegally shift the burden of proof onto them to prove they weren't guilty of evasion under the Enforce and Protect Act (Newtrend USA Co. v. U.S., CIT # 22-00347).

The three importers, Newtrend USA, Starille and Nutrawave, brought their Court of International Trade case in 2022 to contest CBP's EAPA evasion ruling that found they, through their exporter, had transshipped Chinese glycine through Indonesia to avoid AD/CVD orders.

After a voluntary remand to consider the U.S. Court of Appeals for the Federal Circuit's ruling in Royal Brush v. U.S. (see 2310230022), CBP reached the same conclusion as it had before, saying the importers’ new evidence -- shipment data from the Indonesian government showing that their exporter didn't import glycine to Indonesia -- still wasn't enough to dodge the evasion charge because the exporter likely used Indonesian intermediaries (see 2401190046).

In comments on the remand, the three importers opposed CBP’s unchanged ruling, saying CBP had the “ultimate” burden of proof to show they evaded AD/CVD.

“Forcing Importers to change CBP’s mind is inconsistent with the statutory allocation of the burden of proof to CBP,” they said.

They took issue with CBP’s evidence, saying the agency unfairly weighed petitioners’ evidence over theirs and that some of its other sources were not credible or had been misinterpreted.

When the agency investigated the importers’ records, it did so only to find evasion and otherwise called it “not enough to convince CBP to change its mind,” the importers said. This contrasted with CBP’s treatment of the petitioner’s evidence, including a newspaper article, which the agency only ever cited in support of its decisions, they said. They said this meant CBP wasn’t considering the whole record in reaching its conclusion.

CBP continually relied on import statistics based on a “basket” tariff schedule subheading for “amino acids” to make its evasion claim, even though glycine is only one of the products that fall within that basket, the importers said. The department pointed to increasing sale of amino acids from China to Indonesia in its ruling, but that data makes “no such representation regarding glycine” and has no link to their exporter, PTNNI, they said.

Other evidence CBP used was also not credible, they said, including bill of lading data that was also too broad and a GEO investigative report that was just “hearsay.” They likewise called CBP’s ruling that PTNNI couldn’t have produced enough glycine “arbitrary and capricious,” again because they said CBP had ignored substantial evidence to the contrary.

The importers also argued that under the Supreme Court decision in DHS v. Regents of the Univ. of California, CBP had two options in releasing its determination: it could explain in greater detail its original decision or it could take new agency action.

CBP did neither, they said. They said CBP “appears to imply” in the redetermination that it's chosen to explain its original finding in more detail. But CBP seemed to have not considered the Indonesian government’s shipment data at all in its initial investigation, according to a statement it made calling that data “unpersuasive,” they said.

“CBP footnotes its statement with the following: ‘See Confidential Document No. 104. See also Determination, at 3, 12; Admin. Review, at 14,’” the importers said. “This assertion can most charitably be described as misleading because there in fact is no evidence at all that CBP even looked at the statement from the Indonesian government that it received in the original investigation.”

Because that evidence had not previously been considered, CBP couldn’t claim it was attempting to “explain” that initial decision now while examining that evidence in more depth, the importers said. This, they said, was a post hoc rationalization.