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Evasion of AD Duties Found on Garlic, Pipe Fittings

Tuesday, March 17, 2020
Sandler, Travis & Rosenberg Trade Report

In separate final determinations under the Enforce and Protect Act, U.S. Customs and Border Protection has found substantial evidence that U.S. companies evaded (a) the antidumping duty order on fresh garlic from China by claiming its garlic was produced and exported by Chinese companies with a significantly lower AD duty rate than the one to which the company was entitled and (b) the AD duty order on carbon steel butt-weld pipe fittings from China by transshipping them through Cambodia and/or misclassifying them as goods other than pipe fittings. CBP states that the result of these schemes was the loss of tens of millions of dollars in AD duties.

As a result, CBP will continue to (a) suspend liquidation for any entry of subject goods entered on or after April 8, 2019 (garlic) or March 21, 2019 (pipe fittings), (b) extend the period for liquidation of all unliquidated entries entered before those dates, (c) require live entry, which requires the importer to post the applicable cash deposit rate prior to entry release, and (d) 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 EAPA, part of the Trade Facilitation and Trade Enforcement Act, gives 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.

For more information on AD/CV duty evasion, please contact Kristen Smith at (202) 730-4965.

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