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Import Measures Imposed on Pencils, Aluminium Extrusions and Glycine Alleged to be Evading AD Duties

CBP has determined that there is a reasonable suspicion that an importer is evading the antidumping duty order on mainland Chinese cased pencils by transshipping cased pencils manufactured in the mainland through the Philippines. In addition, CBP has determined that there is a reasonable suspicion that evasion of the AD duty order on aluminium extrusions from mainland China is taking place. The petitioner in this case alleges that an importer misclassified extruded aluminium door thresholds as plastic wall plates, transshipped such thresholds from mainland China through Vietnam, and has a history of attempting to avoid AD duties under this order.

As a result, CBP is imposing the following interim measures:

  • rate adjusting all unliquidated entries of subject goods entered as not subject to AD duties and requiring AD cash deposits;
  • requiring live entry for all future imports of identified products believed to be imported by the importers at issue;
  • rejecting any entry summaries and requiring a re-file for those that are within the entry summary reject period as type 03 with appropriate AD cash deposits (pencils);
  • rejecting unliquidated entry summaries submitted prior to 17 May (aluminium extrusions);
  • suspending liquidation of any entry entered on or after 27 March (pencils) or on or after 9 February (aluminium extrusions) and extending the liquidation period for all unliquidated entries entered before that date; and
  • evaluating the importers’ continuous bonds and requiring single transaction bonds as appropriate.

Separately, CBP has issued a final determination that a U.S. company evaded the AD duty order on glycine from mainland China by transshipping glycine from the mainland through Cambodia. CBP states that it found no evidence of glycine manufacturing at the Cambodian company where the importer claimed its entries were being produced and that the company conceded that it only processes technical grade glycine imported from mainland China to remove impurities, which would not remove such goods from the scope of the AD duty order.

As a result of this final determination, CBP will continue to (i) suspend liquidation for any entry of subject goods entered on or after 8 August 2017; (ii) extend the period for liquidation of all unliquidated entries entered before that date; (iii) require live entry, which requires the importer to post the applicable cash deposit rate (currently 453.79 percent) prior to entry release; and (iv) evaluate the continuous bond of the importer 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 as well as 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.

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