Last week, Hoshine Silicon Industry Co. (“Hoshine”) filed a complaint at the Court of International Trade contesting a withhold release order (“WRO”) issued against it by U.S. Customs and Border Protection (“CBP”).

The withhold release order prohibits Hoshine and its subsidiaries from importing silica-based products into the United States due to allegations of forced labor in Hoshine’s manufacturing process. The WRO applies to materials and final goods derived from or produced using those silica-based products, regardless of where the materials and final goods are produced. The WRO therefore effectively bans any solar panel product containing Hoshine silica materials from entering the United States. At the time of WRO issuance, it was estimated that around 80% of the world’s polysilicon supply originated in China, nearly half of which came from the Xinjiang region.

The complaint alleges that the WRO was issued without prior notice to Hoshine and that CBP’s press release announcing the WRO contains factual inaccuracies including the statement that Hoshine’s parent company is located in Xinjiang Uyghur Autonomous Region. The complaint further alleges that Hoshine attempted to meet with Customs, but the agency did not provide any additional reasons for the WRO.  Moreover, despite efforts to establish supply chain tracing and third-party audits in support of a petition to be removed from the WRO, Hoshine’s petition was summarily denied by CBP. This denial ultimately prompted Hoshine to file its CIT suit.

This lawsuit tees up several interesting issues before the Court of International Trade and could have a significant impact on forced labor prevention enforcement.  To date, while several other cases challenged forced labor-related determinations have been brought, neither the Court of International Trade nor any other Court has assessed CBP’s forced labor prevention enforcement on the merits.  Should this case proceed, it may be the first insight we get into how the courts will view CBP’s increasing enforcement efforts.

Additionally, the complaint’s focus on CBP’s alleged lack of prior notice or reasoning seems to take aim at the Court of Appeals for the Federal Circuit’s recent decision in Royal Brush Manufacturing, Inc. v. United States, in which the Court of Appeals found that CBP violated an importer’s due process because it did not share information used to make the underlying determination.  Though not a case in the forced labor context, the Royal Brush decision may impact the progression of this litigation.

Crowell & Moring, LLP continue to monitor this case and the potential impact any court decision will have moving forward.

Print:
Email this postTweet this postLike this postShare this post on LinkedIn
Photo of Pierfilippo M. Natta Pierfilippo M. Natta

Pierfilippo M. Natta (“Pier”), is an associate in Crowell’s International Trade Law practice. He focuses on assisting clients with complex international trade matters, ranging from implementing sanctions and export controls programs to forced labor investigations and general trade disputes. Pier works on developing…

Pierfilippo M. Natta (“Pier”), is an associate in Crowell’s International Trade Law practice. He focuses on assisting clients with complex international trade matters, ranging from implementing sanctions and export controls programs to forced labor investigations and general trade disputes. Pier works on developing Business and Human Rights legal guidance for clients and his practice covers a global reach including US, EU and Asia. His investigatory work has primarily focused on South-East Asia.

Pier applies his international trade knowledge to help clients identify manage and remediate risks. He has advised U.S. and global companies on developing programs specific to UN, US, and EU sanctions. More recently, Pier and the Crowell team are working to develop Crowell’s Business and Human Rights sub-practice which includes Crowell’s anti-forced labor investigatory work.

Andrew J. Schlegel

Andrew Schlegel is an international trade analyst III in Crowell & Moring’s Washington, D.C. office. He provides practice support to the International Trade Group on import regulatory matters pending before the Office of the U.S. Trade Representative (USTR) and U.S. Customs and Border

Andrew Schlegel is an international trade analyst III in Crowell & Moring’s Washington, D.C. office. He provides practice support to the International Trade Group on import regulatory matters pending before the Office of the U.S. Trade Representative (USTR) and U.S. Customs and Border Protection (CBP). He works closely with attorneys developing courses of action for clients impacted by investigations under Section 301 of the Trade Act of 1974 and Section 232 of the Trade Expansion Act of 1962. Andrew also supports unfair trade investigations, including antidumping (AD) and countervailing duty (CVD) investigations, sunset reviews, and changed circumstance reviews before the Department of Commerce and the International Trade Commission (ITC).

Prior to joining Crowell & Moring, Andrew worked as an intern at SAP’s Government Affairs Business Development Team in Berlin, Germany. There, he analyzed the effects of regulatory changes on SAP business operations and expansion opportunities. Before this, he completed an internship at the International Trade Administration’s Office of Energy and Environmental Industries. While there, he developed the U.S. Energy Trade Dashboard, an interactive data visualization tool for use by professionals and researchers to analyze how energy supply chains have developed.