Commerce Could Deny Section 232 Exclusion Requests for National Security Reasons, US Says
The U.S. responded July 25 to importer Prysmian Cables and Systems' remaining claims challenging the Commerce Department’s rejection of the importer’s Section 232 requests, saying a number of them had already been covered by the Court of International Trade's dismissal. It also defended Commerce's ability to deny exclusion requests for national security purposes (Prysmian Cables and Systems USA v. U.S., CIT # 24-00101).
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Prysmian’s motion for judgment came in June after Court of International Trade Judge Stephen Vaden ruled that Commerce doesn’t “unlawfully with[hold]” an action by denying an exclusion request (see 2501220064). In its June motion, Prysmian argued that Commerce's denials had cited authorities that were either wrongfully treated as retrospective or that Commerce didn’t actually have (see 2506110057).
The government argued first that the court’s dismissal had already fully responded to some of Prysmian’s claims and the importer was now illegally attempting to retry them.
One of the importer’s claims in its motion for judgment addresses Commerce’s refusal, after it did partially accept one exclusion request, to add an authorized importer of record to the exclusion because the exclusion window had closed. Two other claims involve two denied requests on which Prysmian again argued Commerce was unlawfully withholding decisions. As CIT explained, these claims should have been brought under 5 U.S.C. 706(2), not 706(1), and so they fail as a legal matter, the U.S. said.
It also said of Prysmian’s claim challenging the department’s refusal to add an authorized importer of record to an exclusion that, “although Prysmian contends that Commerce failed to ‘identify any legal authority justifying its refusal,’ Prysmian likewise fails to point to any provision of Section 232, any Presidential Proclamation, or Commerce’s regulations that mandate Commerce to add an authorized importer of record after the exclusion window has closed.”
Second, the government said that Commerce did have the authority to base exclusion request denials on considerations of national security.
Prysmian had argued that Section 232 only gave the department the ability to grant exclusion requests for national security purposes, not deny them -- but “[t]he operative version of the regulations provide that Commerce will evaluate ‘specific national security considerations’ when considering whether to grant an exclusion request,” it said.
“To be sure, national security considerations could be a basis to grant an exclusion request,” it said, citing 15 C.F.R. Pt. 705, Supp. 1, (c)(5)(i). “But the regulations also provided that national security considerations can be a basis to deny an exclusion request.”
It said that for example, Commerce can streamline exclusion requests that have not been objected to if the Bureau of Industry and Security “identifies no national security concerns.” Section 232 in general is intended to address national security, it also noted.
Further, it said, Commerce was correct to deny Prysmian’s exclusion requests for aluminum from Russia and Belarus, citing the Russian invasion of Ukraine.
Prysmian argued that the request, submitted pre-invasion, had been for aluminum it had already purchased and was attempting to bring into United States. It said that, because it had already bought the aluminum, refusing its exclusion request wouldn’t actually hurt Russia or Belarus economically.
The government acknowledged the importer submitted its requests prior to the invasion; but Commerce didn’t review the requests until after, it said, “and thus the most current national security considerations were at play.” And it said exclusion requests “were generally approved” for a year following the granting of the exclusion, so Prysmian’s exclusion would have applied post-invasion.
It said that an importer who makes purchases prior to seeking an exclusion request “accepts the risk” that its exclusion may be denied and it will have to pay tariffs.