Chinese Exporter Files Suit to Contest Rejection of WRO Removal Bid
Exporter Hoshine Silicon (Jia Xing) Industry Co. filed a lawsuit at the Court of International Trade to contest a withhold release order on the company and CBP's rejection of the exporter's petition to be removed from the WRO. The company, which goes by Jiaxing Hoshine, said the WRO has done "significant and irreparable damage" to its business and reputation and that CBP has skirted the law by failing to disclose the evidence it used in issuing the WRO (Hoshine Silicon (Jia Xing) Industry Co. v. U.S., CIT # 24-00048).
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Jiaxing Hoshine also sued on the grounds that CBP used an improper legal standard in reviewing the exporter's petition to be removed from the WRO.
CBP issued the WRO in 2021 on silica-based products made by Hoshine Silicon Industry -- the parent company of Jiaxing Hoshine -- and all of its subsidiaries, under the belief that the company uses forced labor in making its products (see 2106240014). The WRO covered all materials and final goods derived from Hoshine's silica-based products, regardless of where the final goods are made. CBP said in its announcement that Hoshine Silicon Industry Co. is based in Xinjiang -- something Jiaxing Hoshine contests as being "factually incorrect," since both the subsidiary and parent are based in the Zhejiang province.
Jiaxing Hoshine said it met with CBP in September 2021 to discuss the listing and receive clarification on the procedural steps needed to request a removal from the WRO and the evidence CBP used in making its listing decision. The exporter said CBP officers laid out a WRO removal procedure and said that third-party audits of labor practices would be seen as "compelling evidence supporting an entity's removal from a WRO."
Based on that guidance, Jiaxing Hoshine said, it hired third-party auditors to inspect its facilities. After these investigations wrapped, the company held another meeting with CBP in October 2022, in which the exporter gave CBP its evidence supporting a WRO removal application. The final petition, which only pertained to Jiaxing Hoshine and not Hoshine Silicon Industry or any other subsidiary, was submitted in September 2023. It was rejected by CBP.
The agency said a party must show to CBP that it has rectified all 11 International Labour Organization indicia of forced labor and that an entity must "remediate 'all of company locations subject to the WRO'" to be dropped from the WRO. In its complaint, Jiaxing Hoshine said there is "no legal basis to deny the Modification Petition on such ground."
The exporter argued that CBP failed to hand over any evidence for its decision to include Jiaxing Hoshine within the WRO's scope and that the agency "has no legal basis for its decision to reject the Modification Petition and, at minimum, its refusal to exclude Jiaxing Hoshine from the WRO." Both of these failures violate the Administrative Procedure Act's requirements that final agency action be supported by ample evidence and not be arbitrary and capricious, the complaint said.