Petitioners Argue CBP R&R Office Can’t Re-Weigh TRLED Evidence on Appeal

In a March 8 brief, antidumping and countervailing duty petitioners argued that their case raises an “important issue of first impression for this Court” because it asks whether CBP’s Office of Rulings and Regulations is allowed to reverse evidence-based evasion determinations made at the conclusion of CBP Trade Remedy Law Enforcement Directorate investigations (American Kitchen Cabinet Alliance v. U.S., CIT # 23-00140).

The petitioners, American Kitchen Cabinet Alliance, brought its case in 2023 contesting CBP’s finding that importer Scioto Valley Woodworking was not transshipping Chinese wooden cabinets through Malaysia.

CBP’s TRLED initially found evidence of evasion. However, CBP’s Office of Regulations and Rulings found otherwise after petition by Scioto on behalf of its supplier, the Malaysian exporter Alno. DOJ said in response to the petitioners’ initial motion for judgment that there was “extensive documentation” that Alno was capable of producing the cabinets (see 2401230073).

The answer to the question of whether OR&R can reanalyze evidence “must be no,” the petitioners said. Otherwise, TRLED wouldn't have the authority to “verify the accuracy and reliability of a party’s submissions in an EAPA investigation in a timely manner,” they said.

“The purpose of de novo review is for OR&R to evaluate TRLED’s legal conclusions and factual findings insofar as those factual findings are based on interpretations of the record evidence,” they said. “The purpose of the de novo review was not to second guess findings that TRLED made based on its own observations and interactions with company officials during its on-site verification.”

The petitioners also argued that, contrary to OR&R’s finding, there was evidence of Scioto’s evasion that warranted AFA because the production documents of its Malaysian supplier were “rife with discrepancies,” they said.

The agency applied the wrong legal standard to the exporter’s several disclosure errors that showed that it had not cooperated to the best of its ability, the petitioners said.

First, Alno didn't mention one warehouse, in which it kept Chinese-origin wooden cabinets for U.S. sale, until CBP agents asked it about certain payments in its documentation, the petitioners said.

The exporter also failed to timely provide CBP “certain packing checklists” that would show whether its merchandise destined for Scioto was produced in China or Malaysia, “despite multiple delays and receiving multiple chances from the verification team,” they said. Untimeliness also represents a failure to cooperate fully, they said.

Alno likewise deleted certain emails; and “when questioned about this failure, its provision of explanations … made no sense,” they said. And, finally, TRLED discovered that certain commercial invoices “were missing from a binder where they were supposed to be kept.”

In its response to American Kitchen Cabinet Alliance’s motion for judgment, the government argued that these hadn’t been “nefarious,” but were simple oversights. But the reason for the exporter’s mistake was not relevant, petitioners said. The EAPA requires that parties to an evasion investigation cooperate “to the best of their ability” and doesn't “require findings of motivation or intent,” they said.

The petitioners also said OR&R “never mentioned” the missing invoices, “though it did confoundingly state that there was no evidence that Alno altered any of its records in advance of verification.”

And they said that several of Alno’s finished product inbound delivery sheets “showed that Alno had transshipped goods to Scioto” because they “showed that Alno had purchased finished goods from China and then shipped these finished goods to Alno.” The government’s claim that sheets indicating transshipment are distinguishable from those that aren’t by production batch numbers was a post-facto argument made after TRLED’s finding, they said. “Alno never offered this explanation” when asked by TRLED officials how to make that distinction, the petitioners said.

They took issue with the U.S. claim that American Kitchen Cabinet Alliance’s case was a “disagreement with how CBP weighed and considered relevant evidence,” not a legal claim.

“Nothing could be further from the truth,” they said. “The team of seven CBP investigators that conducted the on-site verification specifically found that Alno’s responses could not be verified as accurate and reliable because Alno had failed to cooperate to the best of its ability during the verification process.”

They also contested the government’s claim that Alno’s previous admission of transshipping for another importer didn’t mean that they had been doing so for Scioto. That admission was “highly relevant evidence because it shows that even if Alno is capable of producing [wooden cabinets and vanities] in Malaysia, it also has the means, motive, and opportunity to use its facilities in Malaysia as a cover for transshipment,” they said.