On February 27, 2025, the United States Court of Appeals for the Federal Circuit issued a significant opinion in All One God Faith, Inc. v. United States, affirming the U.S. Court of International Trade’s decision that upheld Customs and Border Protection’s (CBP) enforcement actions under the Enforce and Protect Act (EAPA). The case revolved around allegations that several companies, including GLōB Energy Corp. and Ascension Chemicals LLC, engaged in transshipment to evade antidumping (AD) duties on xanthan gum originating from China.

This case highlights two critical areas of law—international trade enforcement and intellectual property protection—as it relates to regulatory compliance, customs evasion, and the implications of foreign manufacturing claims.

Key Legal Issues in the Case

1. Transshipment and Antidumping Evasion

The central issue before the Federal Circuit was whether the appellants had engaged in transshipment, a practice in which goods subject to antidumping or countervailing duties are routed through a third country to obscure their true origin. The U.S. Department of Commerce had previously imposed antidumping duties on xanthan gum from China under AD Order No. A-570-985, requiring importers to pay tariffs to offset unfair pricing advantages.

Customs determined that the appellants imported xanthan gum produced in China but falsely declared India as the country of origin. This resulted in an unlawful avoidance of duties, which Customs deemed an act of evasion under 19 U.S.C. § 1517. The court upheld this determination, emphasizing that companies cannot circumvent trade laws by misrepresenting the origins of their goods.

2. Customs’ Use of Adverse Inferences

A pivotal issue in the case was CBP’s use of adverse inferences against the appellants and their foreign suppliers for failing to provide requested manufacturing documentation. The EAPA allows Customs to apply adverse inferences under 19 U.S.C. § 1517(c)(3)(A) when parties do not cooperate fully with investigations.

The court upheld CBP’s approach, noting that the appellants’ suppliers did not adequately respond to inquiries, and therefore, Customs was justified in inferring that the xanthan gum was manufactured in China, not India. This ruling reinforces the importance of compliance with regulatory investigations, as failure to provide supporting documentation can lead to negative legal presumptions.

3. Jurisdiction Over Finally Liquidated Entries

A notable procedural question was whether the trial court had jurisdiction to review CBP’s evasion determinations regarding entries that had already been finally liquidated. Initially, the U.S. Court of International Trade ruled that it lacked jurisdiction over these entries, but the Federal Circuit clarified that judicial review remains available under 28 U.S.C. § 1581(c), which allows challenges to evasion determinations irrespective of liquidation status.

While the appellate court found that the lower court erred in dismissing these claims on jurisdictional grounds, it nonetheless affirmed the trial court’s decision because CBP’s evasion determinations were supported by substantial evidence.

4. Intersection with Intellectual Property and Trade Laws

Beyond trade enforcement, this case underscores broader implications for intellectual property (IP) protection. Many antidumping and countervailing duty cases involve industries where intellectual property plays a key role in market competitiveness. The production of xanthan gum, a specialty polysaccharide used in food and industrial applications, involves proprietary manufacturing processes that companies seek to protect through patent and trade regulations.

When companies engage in transshipment to evade duties, it can undermine domestic producers who invest in IP and R&D. The enforcement of antidumping duties thus serves a dual purpose—preventing unfair trade practices and ensuring that companies adhering to U.S. intellectual property and trade laws are not undercut by competitors evading tariffs.

Implications of the Ruling

The Federal Circuit’s decision reinforces the U.S. government’s commitment to strict enforcement of antidumping and countervailing duty laws. Key takeaways from the ruling include:

• Companies must accurately report the origin of their imports or face significant penalties, including back duties and additional enforcement actions.
• Failure to cooperate with trade investigations can lead to adverse inferences, increasing financial and legal risks for importers.
• Judicial review of trade enforcement actions remains available even for liquidated entries, providing clarity on the scope of federal court oversight in trade disputes.
• This case highlights the ongoing tension between international trade laws and intellectual property protections, particularly where proprietary manufacturing processes and trade secrets are implicated.

As global supply chains grow more complex, businesses engaged in international trade must remain vigilant in compliance efforts, particularly when sourcing materials from countries subject to trade restrictions. The ruling in All One God Faith, Inc. v. United States serves as a cautionary tale for importers seeking to circumvent trade laws and a reminder of the legal tools available to combat customs evasion.

By Charles Gideon Korrell