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Misclassification Used to Evade AD Duties on Sawblades, CBP Finds

Thursday, July 26, 2018
Sandler, Travis & Rosenberg Trade Report

In a final determination under the Enforce and Protect Act, U.S. Customs and Border Protection has found substantial evidence that two U.S. companies evaded the antidumping duty order on diamond sawblades from China by misclassifying the goods as millstone products and segments. In addition, given contradictory information as to who served as the exporter and a failure to answer requests for information on this issue, CBP is applying an adverse inference and subjecting entries of affected goods during the period of investigation to the China-wide rate.

As a result of this final determination, CBP will continue to (a) suspend liquidation for any entry of subject goods entered on or after July 18, 2017, (b) extend the period for liquidation of all unliquidated entries entered before that date, (c) require live entry, which requires the importer to post the applicable cash deposit rate (currently 82.05 percent) prior to entry release, and (d) 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 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.

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