AD/CV Duty Evasion Rules Need Work to Meet 'Legislative Requirements,' Manufacturers Say

While some administrative proceedings use APOs to keep proprietary information from being released outside of a proceeding, the customs reauthorization law's AD/CV duty evasion language in the Enforce and Protect Act (EAPA) didn't provide for APOs. Instead, "the interim rule provides that stakeholders are to submit information to CBP confidentially and provide their own public summaries of the information," NAM said. "That process, however, severely limits the ability of all stakeholders to review and comment meaningfully on the information provided, undermining the ability of CBP to perform full and fair investigations.”

Though EAPA didn't provide for APOs, the law doesn't prohibit them either, NAM said. Other agencies, such as the Federal Communications Commission, use protective orders without specific statutory authority and CBP should too, the group said. The interim rule also uses a too narrow definition of "interested parties" that only includes parties to the investigation and denies access to "appropriate stakeholders," NAM said. This "artificial limitation" will deprive CBP of important insights, it said. CBP should expand the definition and "establish a mechanism to disclose publicly key events (initiation, final determinations, etc.) so that interested parties and the wider trade community are aware of evasion proceedings." CBP should also allow for allegations against foreign producers and exporters, in addition to importers, as part of the petition process, NAM said.

The Emergency Committee for American Trade said in its comments (here) that the possibility that evasion allegations could become public could cause "undue harm to innocent importers." Allegations can involve "any material error in the entry process, including errors made by a diligent importer who acted on a good faith belief that the entry was correct (e.g., that the merchandise was in fact outside the scope of an AD/CVD order)," ECAT said. " And, of course, CBP may investigate and find that the importer did not evade the AD/CVD order. By that time, however, the named importer may already have suffered significant, undue financial and reputational harm." CBP should revise its rules to say it won't "publicize the filing of an allegation and shall not accept or respond to any unsolicited oral or written communication concerning the allegations or investigation from any person other than a party to the investigation before CBP makes a determination," the group said.

Also troubling are the rules for "adverse inferences," which allow CBP to make conclusions based on a lack of response from various parties, ECAT said. The interim rule also seems to give CBP the ability to make adverse inferences based on other EAPA proceedings, it said. "The fact that a cooperating party in a current proceeding may not have cooperated in a prior proceeding is irrelevant to whether an adverse inference is warranted in a current EAPA investigation, and ECAT strongly objects to any rule to the contrary," it said.

ECAT also complained of the absence of APOs and offered suggestions as to how the agency could allow for fuller disclosure to accused importers. CBP could add "a requirement that CBP notify the importer whenever CBP issues a questionnaire to a foreign supplier," it said. "This will give the importer the opportunity to leverage its relationship with the supplier to obtain the supplier’s full cooperation in the investigation and avoid adverse inferences, which are ultimately harmful to the importer." CBP could also work with the Commerce Department to extend Commerce's APOs in AD/CV proceedings to cover EAPA allegations, ECAT said. CBP recently extended the comment period to Dec. 20 (see 1610200012), though other trade groups already filed comments on the proceeding (see 1610170012 and 1610240014).