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Evasion of AD Duties on Furniture, Sawblades Under Investigation by CBP

Wednesday, August 23, 2017
Sandler, Travis & Rosenberg Trade Report

U.S. Customs and Border Protection has taken interim measures to prevent evasion of the antidumping duty orders on bedroom furniture and diamond sawblades from China.

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., through misrepresentation of the goods’ true country of origin, false or incorrect shipping and entry documentation, or misreporting of 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.

Bedroom Furniture. On May 9, 2017, CBP initiated an investigation to determine whether an importer is evading the AD duty order on wooden bedroom furniture from China by knowingly misreporting the identities of the producers of its imports as companies with zero or low AD duty rates. Following a site visit and a review of available data, CBP has determined that there is a reasonable suspicion that evasion is taking place.

As a result, CBP is imposing the following interim measures against the importer: rate adjusting subject goods that had been entered as not subject to this order and requiring AD cash deposits, requiring live entry (i.e., all entry documents and duties must be provided before cargo is released into U.S. commerce) for all future imports, suspending liquidation of subject goods entered on or after May 9, and extending the period for liquidation for all unliquidated entries that entered before that date. CBP will also be evaluating the importer’s continuous bond to determine its sufficiency and may take other measures as needed.

Diamond Sawblades. On March 22, 2017, CBP initiated an investigation to determine whether the AD duty order on diamond sawblades from China is being evaded via transshipment through Thailand. After a site visit, CBP determined that there is a reasonable suspicion of evasion based on the supplier’s refusal to permit inspection of certain areas of its facility, discrepant information on the supplier’s actual production capacity, and other factors.

As a result, CBP is imposing the following interim measures against the importer: rate adjusting subject goods that had been entered as not subject to this order and requiring AD cash deposits, requiring live entry for all future imports, rejecting any entry summaries and requiring a refile for those within the entry summary reject period, suspending liquidation of subject goods entered on or after March 22, 2017, and extending the period for liquidation for all unliquidated entries that entered before that date. CBP will also be evaluating the importer’s continuous bond to determine its sufficiency and may take other measures as needed.

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