US Says Importer Waived Claim CBP Violating 15-Day EAPA Investigation Initiation Deadline

The U.S. argued Nov. 15 that an importer of Chinese-origin countertops had waived its challenge to CBP’s practice of initiating Enforce and Protect Act inquiries based on the agency’s “date of receipt” of a petition (Superior Commercial Solutions v. United States, CIT # 24-00052).

Even if the claim hasn’t been waived, however, it’s invalid because the rule that CBP must initiate EAPA investigations within 15 days of receiving a petition isn’t mandatory, the government added.

Importer Superior Commercial Solutions, in its August motion for judgment, opposed CBP’s policy of “acknowledging receipt” of an EAPA allegation days or weeks after the allegation was filed (see 2408080059). It’s challenging the adverse facts available determination reached in an EAPA investigation on its products, which domestic producer Cambria claimed were transshipped through Vietnam from China to dodge antidumping and countervailing duties on Chinese-origin countertops.

Superior said CBP “acknowledged receipt” of Cambria’s petition exactly 15 days before the investigation began, even though Cambria had filed its petition more than a month earlier. Relying on Loper Bright, Superior asked the court to find Congress had been “clear and unambiguous” in defining that 15-day deadline.

But Superior didn’t raise its claim against CBP’s “date of receipt” rule during administrative proceedings or in its complaint, the U.S. said; as a result, the importer waived it.

The government continued that even if Superior hadn’t waived it, administrative law precedents hold that when a law passed by Congress doesn’t contain a consequence for noncompliance, that law is “at best precatory, not mandatory.” So, it said, because the provision setting the 15-day deadline to initiate EAPA investigations carries no delineated consequences, it is optional, not mandatory.

Superior’s due process claim fails, meanwhile, because the importer lacks standing, it said. The importer argued that its due process right to fair notice was violated because CBP didn’t announce the EAPA investigation until after January 2023, even though it had initiated it in September 2022; as a result, it entered several shipments into the U.S. after September that it wouldn’t have otherwise.

But that isn’t a “protected interest,” the U.S. said.

“It is well-established that a company does not have a constitutionally protected property interest in any rate of duty, an importation, or even engaging in international trade,” it said.

The government also said evasion doesn’t have to be intentional, despite Superior’s claim otherwise. It said the courts have repeatedly held EAPA to be a strict liability statute -- as CBP and Commerce “do not possess the ability or resources to conduct a full-scale criminal-like investigation into ... what would be large volumes of information to identify evidence of scienter.”

Nor does the government have to avoid collateral damage when applying AFA, it said. Superior, hit with the adverse inference, after its exporters refused to participate in verification, argued it itself was shouldering the entire burden of AFA because its exporters had already sold it the subject merchandise.

But AFA does hurt those exporters because they’re unlikely to be sought out by U.S. customers in the future, the government said.