Import Restrictions Imposed on Hangers, Pipe Fittings and Garlic Alleged to Evade AD Duties
17 March 2020
U.S. Customs and Border Protection has issued separate determinations that there is a reasonable suspicion that specific importers are evading the antidumping duty orders on steel wire garment hangers and carbon steel butt-weld pipe fittings from mainland China. Separately, CBP has issued final determinations in similar proceedings involving mainland Chinese garlic and pipe fittings.
Hangers. Two importers are allegedly claiming hangers actually made in mainland China are produced in India. CBP states that reports, photographs and financial reports submitted by the complainant reasonably suggest that the facility of the purported Indian producer is incapable of manufacturing hangers. In addition, during a site visit by U.S. government officials, officials of that Indian company said they had procured hangers from mainland China for export to the United States.
Pipe fittings. Two importers are allegedly transshipping mainland Chinese-origin butt-weld pipe fittings through Vietnam. CBP said an on-site visit concluded that the purported Vietnamese producer currently has the capacity to manufacture these fittings but found a significant stock of semi-finished and finished pipe fittings compared to the raw materials on-site. CBP also found data consistent with the allegation that the importers shifted imports from Malaysia to Vietnam around the time that the U.S. Department of Commerce found they were circumventing the AD duty order on mainland China by transshipping through Malaysia.
As a result, CBP is imposing the following interim measures:
- rate adjusting all unliquidated entries of subject goods and requiring AD cash deposits;
- suspending liquidation for any entry of subject merchandise entered on or after (i) 21 Nov 2019 for hangers and (ii) 5 November 2019 for pipe fittings and extending the liquidation period for all unliquidated entries entered before those dates;
- requiring live entry for all future imports for the importers at issue;
- rejecting any entry summaries that do not comply with live entry and requiring a refile for those within the entry summary reject period; and
- evaluating the importers’ continuous bonds to determine their sufficiency.
Garlic and Pipe Fittings. CBP has also determined in separate proceedings that U.S. companies evaded the AD duty orders on garlic and carbon steel butt-weld pipe fittings from mainland China by, respectively, (i) claiming the garlic was produced and exported by mainland Chinese companies with a significantly lower AD duty rate, and (ii) transshipping the pipe fittings through Cambodia and/or misclassifying them as goods other than pipe fittings.
As a result, CBP will continue to (i) suspend liquidation for any entry of subject goods entered on or after 8 April 2019 (garlic) or 21 March 2019 (pipe fittings); (ii) extend the period for liquidation of all unliquidated entries entered before those dates; (iii) require live entry, which requires the importer to post the applicable cash deposit rate prior to entry release; and (iv) evaluate the continuous bond of the importers and require single transaction bonds as appropriate. CBP could also pursue additional enforcement actions or penalties as appropriate.
The Enforce and Protect Act, part of the Trade Facilitation and Trade Enforcement Act, gave CBP a significantly expanded role in investigating AD/CV duty evasion and the authorities to match. Under CBP regulations implementing the EAPA any interested party, including competing importers and federal government agencies, may submit allegations that AD/CV duties are being evaded; e.g., by misrepresenting the goods’ true country of origin, submitting false or incorrect shipping and entry documentation, or misreporting the goods’ physical characteristics.
CBP has broad authority to conduct investigations of these claims and can impose initial remedial measures that could interrupt a supply chain in as little as 90 days. Any final determination of evasion may be met with not only AD/CV duties but also other enforcement measures such as civil or criminal investigations.
- Household Products
- Food & Beverages
- North America
- Mainland China