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AD Duty Evasion a Growing Problem, U.S. Says in Request for Further Talks

Monday, March 23, 2015
Sandler, Travis & Rosenberg Trade Report

The United States has proposed that World Trade Organization members discuss in greater detail the growing problem of antidumping duty evasion.

According to a paper circulated to the Committee on AD Practices, the U.S. has witnessed over the years a dramatic increase in activities expressly designed to help importers and/or exporters evade AD duties. For example, affected goods may be shipped to a third country, where they are reloaded into new containers and provided with new documents showing that third country as the originating export country. Associated services include manipulating and creating new invoicing, packing lists and other related documentation to disguise the actual country of origin. While this problem has been going on for many years, the U.S. states, it has become more pervasive and those involved have become more brazen in their activities.

In addition, the paper states, companies seeking to evade AD duties no longer have to search to find such services, as providers are now making initial contacts with potential clients. For example, importing and exporting companies have received emails that state: “We have been exporting for many years… If you need this product, please tell me, so I can quote you. Please do not worry about the dumping duties. This order will be operated through the intermediary trade. We will send the goods to a third country; the forwarder will repack our goods for export with other company title from that third country. It is a legit business. Contact Us.”

While those participating in AD duty evasion activities can face substantial civil and criminal penalties from domestic customs authorities, the paper adds, the effectiveness of such penalties may be limited. The U.S. is thus proposing a discussion on this topic and a sharing of members’ experiences dealing with evasion and the actions they are taking to counter and eliminate it.

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