Sawblade Importer Files First Court Challenge of CBP EAPA Evasion Investigation
An importer of diamond sawblades has filed the first legal challenge of a CBP Enforce and Protect Act evasion investigation. In a complaint filed March 10, Lyke Industrial Tool challenges CBP’s finding of antidumping duty evasion because it did not know any of its statements to CBP were false. Lyke also said the diamond sawblades it imported from China were exempt from AD duties, and even if they weren’t, Commerce should not have applied the high China-wide AD rate to the entries.
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CBP issued the final determination in July 2018 (see 1807240015), having launched the investigation in November of the previous year (see 1709250035). Lyke now faces a second EAPA investigation based on transshipment allegations submitted by the Diamond Sawblades Manufacturers Council (see 1709250035), which also requested the first investigation at issue in Lyke’s complaint.
In the complaint, Lyke said it had been classifying its sawblades, per a lawyer’s advice, in heading 6804, and was not paying AD duties because, before the sawblade cores were incorporated, they had a Rockwell C hardness of less than 25. Though Commerce had issued a scope ruling that the sawblades were subject to duties as part of the EAPA investigation, Lyke maintains that the sawblades are not covered by the AD duty order.
And even if they were, Lyke thought they were exempt, so it did not knowingly submit false statements to CBP on entry documentation when it entered them as type 01, the complaint said. In the administrative review that followed the EAPA determination, CBP rejected Lyke’s argument that knowledge of falsity is required for EAPA regulations -- a finding Lyke now challenges in its court complaint.
And even if the sawblades should be subject to AD duties, CBP should not have found the high China-wide rate applicable to the merchandise, Lyke said. Invoices and payment records show that NYCL was the exporter, so AD duties should be due at NYCL’s rate. Though Lyke’s owner, the China-based Danyang Like Tools, is part of the China-wide entity for the purposes of the AD duty order, Like only acted as the selling agent, not the actual exporter, Lyke said.
(Lyke Industrial Tool v. U.S., CIT # 19-00028)
Email ITTNews@warren-news.com for a copy of the complaint.