US Defends Evidentiary Standard in Making UFLPA Entity List Additions at Trade Court
A less stringent "reasonable cause" standard for adding companies to the Uyghur Forced Labor Prevention Act Entity List is justified on statutory and policy grounds, the U.S. told the Court of International Trade in a brief opposing Chinese exporter Ninestar Corp.'s motion for a preliminary injunction. Using a higher standard, such as a preponderance of the evidence standard, for making listing decisions, would undermine the UFLPA's goal of placing a burden on exporters to show that their goods are not made with forced labor (Ninestar Corp. v. U.S., CIT # 23-00182).
Sign up for a free preview to unlock the rest of this article
Export Compliance Daily combines U.S. export control news, foreign border import regulation and policy developments into a single daily information service that reliably informs its trade professional readers about important current issues affecting their operations.
Ninestar had recently challenged the Forced Labor Enforcement Task Force's evidentiary standard after it was allowed to see the administrative record in its case challenging its addition to the Entity List (see 2312180057). The exporter said without a statute to the contrary, the minimal burden that should be set on companies subject to administrative proceedings is a preponderance of the evidence.
In reply, the U.S. said this rule only applies to "formal agency adjudications," noting that FLETF listing decisions are considered "(at most) informal adjudications" under the Administrative Procedure Act. The distinction between formal and informal agency actions is "crucial," the brief noted.
"That the APA lacks a requirement that informal adjudications be resolved based on the preponderance of the evidence thus means that the FLETF is free to select a burden of proof appropriate under the circumstances," the government said. "The FLETF acted appropriately here given the UFLPA’s text and purpose and the similar standards applicable to analogous agency determinations."
The lower evidentiary standard was also justified on policy grounds, the U.S. said, telling the trade court that using a higher burden "would allow entities to have their goods enter the United States without a showing by clear and convincing evidence that their goods were not produced using forced labor, even where there is reasonable cause to believe such conduct is occurring." The government added that its standard is in line with the UFLPA statute; Section 307 of the Tariff Act of 1930, which bars the importation of goods made with forced labor; and with long-established practice in "closely analogous foreign-relations contexts."
In addition, it is "extremely difficult for the FLETF to obtain information from or about Chinese individuals or entities," the brief noted. For instance, the Chinese government must sign off on all information obtained from China, restricting the task force's ability to gather reliable information. Establishing a higher threshold would "undermine the effectiveness of the UFLPA given that significant information about a listed entity's actions often may be unavailable to the FLETF," requiring the task force to "rule out" a company's explanation for "suspicious facts," even though the FLETF "may often lack a realistic ability to do so."
According to Ninestar, the UFLPA allows the FLETF to list entities working with the Chinese government in the Xinjiang region to receive forced labor of the persecuted groups in the region. Ninestar noted that FLETF said there was "reasonable cause to believe" that the company did so. The printer cartridge exporter said the task force didn't require "proof beyond a reasonable doubt" nor a "preponderance of the evidence," nor even a "plurality of the evidence."
Following the government's motion, the trade court ordered that the hearing on the motion for a PI and the motion to unseal and redact the record will take place at 10 a.m. EST on Jan. 18.