CBP Can Determine If Goods in EAPA Cases Are Covered by AD/CVD Orders, CIT Says
CBP wasn't required to make a scope referral to the Commerce Department in its antidumping duty evasion case against importer Vanguard Trading Co., since CBP properly exercised its authority in determining that Vanguard's products were under the scope of the relevant AD order, the Court of International Trade held in a decision made public May 27.
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Judge Timothy Reif similarly said CBP permissibly declined to stay the evasion investigation after Vanguard filed a scope ruling request with Commerce, since the agency found Vanguard's goods were within the scope of the order. Requiring a stay would let an importer "essentially unilaterally" achieve a pause in an evasion investigation by filing a separate scope inquiry request.
This outcome is "plainly contrary to" the Enforce and Protect Act's "legislative history to provide for 'the tools to identify proactively and thwart evasion at earlier stages to improve enforcement of U.S. trade laws,'" the court said. Reif also held that the evasion finding wasn't arbitrary and capricious.
Vanguard brought its case to challenge a host of elements of CBP's determination that the company evaded the AD order on Chinese quartz countertops (see 2505020053). One element was whether the EAPA statute permits an evasion finding where there's a legitimate dispute on how an import is classified. The importer argued that evasion can't be found in that circumstance, since the company didn't make a material and false statement in its entry paperwork.
Reif held that "false statements or omissions concerning the classification of merchandise may support a finding of evasion under" the EAPA statute. The definition of "evasion" is clear and includes "any document or electronically transmitted data or information, written or oral statement, or act that is material and false, or any omission that is material,” and that leads to any amount of AD or countervailing duties being reduced or not applied, the court said.
There's no limit in the definition of "evasion" that would exclude material and false statements made on entry paperwork from EAPA, the judge said, noting a nearly identical conclusion from the trade court in Ikadan Sys. USA v. U.S. Here, CBP said Vanguard made both statements and omissions that were false and material, as the importer incorrectly identified the products as "type '01' consumption entries" instead of "type '03' AD/CVD entries." The agency also said Vanguard failed to note AD and CVD case numbers on its entry documents.
Reif then said CBP didn't fail to make a covered merchandise referral, since the statute doesn't require it. While the statute says CBP "shall" make such a referral if the commissioner can't determine whether the merchandise is covered by an AD or CVD order, this requirement didn't kick in, since CBP said the goods are covered. "The statute does not place on Customs an obligation to refer the matter to Commerce wherever an interested party posits that merchandise subject to an EAPA investigation falls outside the scope of an existing AD or CVD order," Reif said.
Vanguard also said CBP improperly refused to stay the case after it filed a scope ruling request. On this point, Reif said the "statute is clear" in that it allows for a stay when CBP makes a covered merchandise referral. Since no referral was made, the statute doesn't require a stay, the judge said.
Reif lastly reviewed the evidence backing CBP's evasion finding. Vanguard argued that a lab report it conducted conclusively showed the "material of chief weight" wasn't silica, which would exclude its product from the AD order. The judge said he was satisfied CBP "articulated a 'rational connection between the facts found and the choice made' not to rely on plaintiff's lab report." For instance, the agency said the importer didn't provide responses to CBP's requests for information questionnaires, so it had "no way of corroborating that the tested merchandise included in the report is the same as the merchandise imported by the Importer."
The judge then rejected Vanguard's claim that its merchandise isn't covered by the order. The importer challenged CBP's reliance on two patents for the company's product, which indicate the product is covered by the order. While Vanguard said its goods "could have changed" from what is described in the patents, Reif found this claim to be "speculative and unsupported by the record." The judge added that CBP established the required "rational connection between the facts found and the choice made" to back its evasion finding.
(Vanguard Trading Co. v. United States, Slip Op. 25-61, CIT # 23-00253, dated 05/27/25; Judge: Timothy Reif; Attorneys: David Craven of Craven Trade Law for plaintiff Vanguard Trading Co.; Nico Gurian for defendant U.S. government)