The U.S. Court of Appeals for the Federal Circuit ruled July 27 that U.S. Customs and Border Protection violated a pencil importer’s right to due process by refusing to share the statistical and photographic evidence the agency used to determine that the importer’s pencils were evading duties on Chinese products.

The dispute started in 2018 when a competitor alleged that the importer was evading duties by importing Chinese pencils as products of the Philippines. In keeping with CBP’s procedures in evasion probes, the importer received only redacted summaries of the claims and CBP’s verification visit to the Philippines, with photos and numerical data erased. Multiple importers have criticized CBP’s redactions, arguing that the policy has left them unable to defend themselves in such investigations. CBP has argued that it cannot issue protective orders and share confidential information without an explicit legislative mandate under the Trade Secrets Act, but the CAFC said that “a release of information is “authorized by law” within the meaning of the Trade Secrets Act if that release is required as a matter of constitutional due process”.

For more information on this case, check out ST&R’s Two Minutes in Trade Podcast, featuring Mark Segrist.

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