Steel Importer Files EAPA Challenge, Claims Due Process Violations
Steel importer Norca Industrial Company filed a challenge to an affirmative Enforce and Protect Act determination, claiming that CBP did not have a legal basis to initiate the investigation and violated its due process rights. In an April 27 complaint in the Court of International Trade, Norca made six claims against its EAPA investigation, including on the constitutionality of the process and whether CBP unfairly made adverse inferences against the company to determine that evasion took place (Norca Industrial Company LLC v. U.S., CIT # 21-00192).
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In November 2019, CBP initiated the EAPA investigation against Norca based on allegations made by steel company Allied Group. The EAPA investigation found that Norca's imports of carbon steel butt weld (CSBW) pipe fittings from Vietnam were evading an antidumping duty order on imports of the pipe fittings from China.
Norca, which maintains its CSBW pipe fittings were made in Vietnam by its Vietnamese supplier, says CBP did not have a legal basis to initiate the investigation since Allied did not provide the agency with a reasonable suspicion that evasion was occurring. Allied did say it attempted to visit the Vietnamese production facility in April 2018, but was refused because BW Fittings said that no production equipment was installed at the facility. But this is not evidence, Norca says, because this was before production began at the facility.
Norca originally imported CSBW pipe fittings from Malaysia before the Commerce Department determined that certain exports from Malaysia circumvented the AD order on the same fittings from China. Subsequently shifting its production to Vietnam, Norca says this is just good business. “An importer shifting purchases away from producers in a country subject to an anti-circumvention proceeding is hardly 'reasonable suspicion' of evasion,” the company said. “To the contrary, it reflects a reasonable response by an importer to ensure compliance with United States trade laws.”
Once the investigation got under way, Norca, like other companies challenging the EAPA process in CIT, said its due process rights were violated. Through CBP's failure to provide the importer with Allied's business confidential allegation, notice of proposed official action and notice that the agency received third-party information, due process was infringed. Norca also said CBP's application of adverse inferences against BW Fittings' answers in the investigation was illegal since the producer complied with the agency throughout the EAPA process. Norca also said in its complaint that the CSBW pipe fittings are not covered in the AD order since they were made in Vietnam, and because CBP's determination that “rough, unfinished CSBW fittings from China that undergo finishing processes ... in a third country would remain under country of origin China upon importation” is an “expansive reading of the Order,” it was made in error.