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US Says CBP Legally Started EAPA Case Despite Later CIT Ruling Excluding Goods From AD/CVD

CBP legally initiated an Enforce and Protect Act case on Columbia Aluminum Products' door thresholds even though they had been ruled exempt from antidumping and countervailing duties on aluminum extrusions from China, in a Commerce Department scope ruling upheld by the Court of International Trade (see 2212190051), the government told the trade court in a March 7 brief. CBP said EAPA petitioner Endura Products' evasion allegations against the importer came before the CIT decision and were valid "at the time they were made," DOJ said (Columbia Aluminum Products v. United States, CIT Consol. # 19-00185).

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"Initiating a valid EAPA investigation is predicated on reasonable suggestion from the outset, not on the retroactive finality of administrative or court proceedings," the brief said. Commerce had issued the scope ruling while the EAPA investigation was ongoing. CBP eventually found Columbia's door thresholds evaded AD/CVD via a transshipping scheme through Vietnam.

Columbia claimed that CBP illegally started the investigation since "CBP did not -- and could not -- match the physical characteristics of the imported Columbia Aluminum merchandise with the language of the Orders." The importer said that its door thresholds have never been subject to the orders, which were imposed in 2011, since they are finished merchandise, and that, even if they were covered merchandise, CBP did not have the basis to launch an EAPA case until the date of the scope ruling.

The U.S. responded that Commerce explicitly found Columbia's goods to fall within the scope of the orders. The fact that CIT subsequently remanded the scope ruling and sustained Commerce's reversal on remand "does not then render Endura’s allegations of evasion unreasonable in hindsight," the brief said.

CBP's Regulations & Rulings (R&R) office originally agreed with Columbia that the thresholds could not be considered covered merchandise until the date of the scope ruling, relying on a 2019 U.S. Court of Appeals for the Federal Circuit decision, Sunpreme v. U.S., to claim that CBP cannot resolve a scope issue in the first instance, since only Commerce has that power. However, the appellate court vacated Sunpreme in 2020, ruling that CBP can find in the first instance whether goods are subject to AD/CVD orders.

CBP said that, while the ruling does not explicitly cover EAPA, it "gets to the heart of the first issue posed to this Court" -- whether CBP can start an EAPA case "in response to a reasonable allegation that imported goods have been entered in order to evade -- in the judgment of CBP in the first instance -- an existing AD or CVD order." Since Sunpreme was vacated, the government said "CBP is not obliged to defer to Commerce before it initiates an EAPA investigation," but is rather "obligated" to make a call as to whether the goods in question are subject to the orders. As a result, the government asked the court to "set aside" R&R's finding that the thresholds only became covered merchandise due to the scope ruling.