Customs has Authority to Suspend AD/CVD Entry Liquidation Even Where Scope is Unclear

Steven W. Baker

The government had moved for a rehearing and new arguments before the en banc panel. The panel, without argument, granted the rehearing and vacated and replaced the prior panel opinion. This decision allows CBP to make its own preliminary determination on the Scope of an Order, and initiate duty collection and withholding of liquidation. If a Scope request is filed claiming the goods are not covered and that position is upheld by Commerce, the suspension of liquidation will end and any duties paid be refunded. If the goods are found to be in Scope the suspension of liquidation will continue and normal AD and CVD review proceedings will apply, including for those entries suspended prior to any Scope request.
The en banc panel upheld the parts of both prior opinions that had found the products imported by Sunpreme – certain types of solar panels - to be covered by AD and CVD Orders. The panel noted that if Sunpreme prevailed on its claim that duties could only be applied to entries filed on and after the date of its Scope request, it would receive a windfall refund of duties on prior entries which had also been found to be within the Scope. CBP is not authorized to expand or alter the Scope of an Order as determined by Commerce, but does have the authority to ensure protection of the revenue by suspending liquidation pending a formal determination by Commerce.
This decision is expected to result in CBP asserting that more goods are within the Scope of AD and CVD Orders and collecting duties and suspending liquidation, leaving it up to importers to challenge such Scope assertions through formal Scope requests. There is some concern that not all such assertions by CBP may in fact be open to Scope challenges, potentially leading to court review without input by Commerce.
              The upcoming policy change by CBP regarding Single Transaction Bond (STB) requirements for AD and CVD entries filed by “new” importers – meaning new to AD/CVD investigation and liquidation procedures – will mean many importers with ambiguous Scope issues will likely not only have to make AD and CVD deposits but will also face much higher bond costs. https://www.cbp.gov/sites/default/files/assets/documents/2019-Nov/IE%20-%20Risk%20Based%20Bonding%20External.pdf