Sawblade Importer Says CBP EAPA Initiation Can't Be Basis for AFA in Scope Ruling
The Commerce Department improperly treated CBP’s initial findings in an Enforce and Protect Act Investigation as fact when it relied on them to find a sawblade importer’s submissions unreliable and used adverse facts available (AFA) in a scope proceeding, the importer, Lyke Industrial, said in comments to the agency on a preliminary scope ruling.
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In a preliminary scope ruling issued March 25, Commerce relied AFA to find sawblades assembled from Thai and Chinese parts in Thailand prior to importation by Lyke are subject to antidumping duties on diamond sawblades from China. Lyke says Commerce disregarded its submissions during the scope inquiry because they conflicted with CBP’s notice of initiation and interim measures in an EAPA investigation, issued prior to the EAPA scope referral that led to the scope inquiry.
“Commerce appears to misunderstand the record and posture of the EAPA investigation in its finding that information submitted by Lyke Industrial and Like Tools cannot be relied upon in the scope inquiry,” Lyke said. The initiation notice was issued “prior to CBP conducting its full investigation of Lyke Industrial and Like Tools,” and was based on domestic industry allegations and limited information submitted by Lyke. “The limited information available to CBP at this initiation stage of the case is therefore insufficient for Commerce to use as a basis to contradict statements made by Lyke Industrial in its scope referral, which were presented after CBP conducted its full investigation,” Lyke said.
The evidentiary standard used by CBP at the initial stage is also less stringent than that used for CBP’s final determination: “reasonable suspicion” rather than “substantial evidence,” respectively. “Consequently, CBP’s Notice of Initiation is simply not a reliable basis upon which to compare Lyke Industrial’s statements. Commerce must acknowledge that the Notice of Initiation was only the beginning of the EAPA investigation, not the end,” Lyke said.
For example, Commerce found Lyke’s statement that CBP verified its Thai production was contradicted by a statement in the CBP initiation notice that said “there were alleged differences between the claimed capacity of operations presented by Like Tools and the insufficiency of production records do not corroborate Like Tools’ claimed capacity,” Lyke said. “It is critical that Commerce understand at the stage this document was issued, CBP had not fully conducted an investigation of Lyke Industrial and Like Tools,” Lyke said.
“Like Tools submitted virtually all of its production records in response to CBP’s requests for information issued after the notice of initiation,” Lyke said. “Given that CBP has not yet issued its final determination in the EAPA investigation following the extensive investigation and the initiation notice was based on limited information before the investigation was fully conducted, it is simply improper for Commerce to rely on CBP’s notice of initiation to substantiate its findings that any information submitted by Lyke Industrial and Like Tools are not reliable.”