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Evasion of AD Duties on Oil Country Tubular Goods Under Investigation by CBP

Thursday, October 26, 2017
Sandler, Travis & Rosenberg Trade Report

U.S. Customs and Border Protection has taken interim measures to prevent evasion of the antidumping duty order on oil country tubular goods from Vietnam.

On July 18, 2017, CBP initiated an investigation to examine an allegation by a domestic manufacturer of OCTG that a U.S. company imported steel pup joints produced in Vietnam and declared them as upper extension nipples not subject to the order, thus avoiding the applicable 111.47 percent AD duties. CBP states that several cargo exams established this pattern and thus provided a reasonable suspicion that goods covered by the AD duty order entered the U.S. through evasion.

As a result, CBP is imposing the following interim measures.

- rate adjusting unliquidated entries of subject goods entered as not subject to the AD duty order and requiring AD cash deposits

- requiring live entry for all future imports by the importer at issue

- rejecting any entry summaries and requiring a refile for those that are within the entry summary reject period

- suspending liquidation of any entry entered on or after July 18 and extending the liquidation period for all unliquidated entries entered before that date

- evaluating the importer’s continuous bond and requiring single transaction bonds as appropriate

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.

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