Importer Challenges CBP Practice of Initiating EAPA Inquiries Based on 'Date of Receipt'

Further, the importer alleged, CBP had illegally failed to tell it about the ongoing investigation for several months.

CBP began its EAPA investigation of importer Superior Commercial Solutions in September 2022 in response to a petition filed a month prior by domestic producer Cambria, Superior said -- the petitioner, it explained, submitted import data obtained from a data subscription service company. But this was after the statutory 15-business day response deadline had passed, it said.

It pointed out that CBP “acknowledged ‘receipt’” of the allegation Sept. 8, 2023, exactly 15 business days before launching the investigation, but argued that this wasn’t the same thing as CBP actually receiving it. EAPA allegations are actually “received by CBP instantly” through the agency’s online portal, it said.

CBP published a regulation in 2016 creating the concept of a “‘date of receipt,’ which it claims to trigger the 15-business-day deadline rather than the day that the allegation is filed,” Superior said. But it said that “Congress was clear and unambiguous” in defining CBP’s deadline. The legislature “did not afford CBP the discretion to create an extra step involving an undefined amount of time to consider whether the allegation is proper,” Superior said.

And the importer pointed out that, due to the recent overturning of Chevron, the court doesn’t have to show any deference to the agency’s interpretation of its own regulations on a purely legal basis.

It also contested that CBP had waited too long to tell it about the opening of the investigation into it -- until late January 2023, it said. In November and December 2022, CBP issued Superior several CF-28 document production forms, but, not realizing the documents were anything other than routine, Superior didn’t retain counsel, it said.

In early February 2023, Superior said, it received an Interim Measures Notice in which CBP refiled entry summaries for all of importer’s imported countertops, including those that Engga’s records showed were made from Vietnam-origin quartz, and assigned them a 371.47% AD rate. The agency claimed that it didn’t need to make entry-by-entry determinations regarding Superior’s countertops, even though this is an “implicit requirement” of the law, the importer claimed.

In August, CBP released an affirmative evasion determination for Superior based on adverse facts available.

The importer acknowledged that there was no regulation specifying when a party under an EAPA investigation needed to be notified. The lack of one, however, was a violation of due process, it claimed.

“CBP can only remedy the substantial prejudice SCS [Superior Commercial Solutions] suffered by lifting the enforcement action it imposed on the portion of SCS’ entries, which SCS would not have entered but for CBP’s violation of the law,” it said.

Superior also contested that the agency misunderstood the definition of evasion. "Evasion," it said, had to be intentional; Superior's wasn't.

The importer said it hadn’t realized until the EAPA investigation itself that some of the countertops it sourced from a Vietnamese supplier, Engga, were actually made from Chinese quartz slabs that were only processed in Vietnam.

“Prior to this proceeding, [Superior] always understood that the countertops from Engga/Kales were fully manufactured in Vietnam in accordance with SCS’s stated policy of not purchasing goods subject to AD [and] CVD Orders,” it said.

It said it learned of Engga after research online and traveled to Vietnam in 2019 to visit the company in person. While it was there, an Engga salesperson showed Superior its “purported-business license.” The importer began purchasing from Engga that year, it said -- and though it had intended to visit the exporter every six to eight months, it said that was rendered impossible by the start of the COVID-19 pandemic.

Superior said it had never intentionally misfiled its entry summaries. This, it said, was indicated by the fact it had “done its due diligence” vetting the exporter, traveling to Vietnam to visit Engga’s production facilities and intending to continue making such trips until the pandemic.

Finally, the importer pushed back against CBP's final determination itself.

The agency initially based its determination on findings reached using confidential business information that was never provided to Superior, the importer said. But “to avoid a remand” based on Royal Brush, it didn’t mention either the findings or the confidential information in its final determination. Instead, the only evidence CBP relied on was Superior’s own acknowledgments during the administrative proceeding that some of its countertops were made of Chinese-origin quartz, the importer said.

But this meant that CBP had no reason not to make entry-by-entry determinations for all of the imports for which it refiled entry summaries, Superior said.

Further, adverse inferences also shouldn't have been applied retroactively to those imports, it said; according to statute, adverse inferences may only affect future action, it said.

And the agency also applied adverse inferences solely based on Engga’s refusal to cooperate with verification, saying it “did not need to avoid the ‘collateral consequences’ to a fully cooperating party -- [Superior],” Superior said. This, it argued, was "harsh and unreasonable."