8 Oct 2019
Import Restrictions on Mainland Chinese Sawblades and Xanthan Gum for AD Duty Evasion
In a final determination under the Enforce and Protect Act, U.S. Customs and Border Protection has found substantial evidence that a U.S. company evaded the antidumping duty order on diamond sawblades from mainland China by transhipping such goods through Thailand. CBP has also determined that there is a reasonable suspicion that 11 importers are evading the AD duty order on xanthan gum from mainland China by transhipping it through India or Malaysia.
Diamond Sawblades. As a result of its final transhipment determination on diamond sawblades, CBP will continue to (i) suspend liquidation for any entry of subject goods entered on or after 25 July 2018; (ii) extend the liquidation period for all unliquidated entries of subject goods entered before that date; (iii) require live entry, which requires the importer to post the applicable cash deposit rate prior to the release of goods into U.S. commerce, for future entries of diamond sawblades from Thailand involving this company; 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.
Xanthan Gum. In making a preliminary transhipment determination on xanthan gum, CBP cites the large and rising volumes of imports into India and Malaysia from mainland China of the category of goods including xanthan gum, the very low volumes of such goods imported into India and Malaysia from other known xanthan gum producing countries, and the history of attempted circumvention of the xanthan gum AD duty order by various mainland Chinese companies. As a result, CBP is imposing the following interim measures:
- rate adjusting all unliquidated entries of xanthan gum and requiring AD cash deposits;
- 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;
- suspending liquidation of any entry entered on or after 7 May 2019 and extending the liquidation period for all unliquidated entries entered before that date; and
- evaluating the importers’ continuous bonds to determine their sufficiency.
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.