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Evasion of AD Duties on Glycine Under Investigation

Friday, December 08, 2017
Sandler, Travis & Rosenberg Trade Report

On Aug. 28 U.S. Customs and Border Protection initiated an investigation to examine an allegation by a domestic manufacturer of glycine that an importer was evading the AD duty order on glycine from China by transshipping glycine from China through Cambodia. Following a review of information provided by the importer and a site visit to Cambodia, CBP determined that there is a reasonable suspicion that a coordinated transshipment scheme exists. For example, CBP found that there is no known glycine production in Cambodia, one of the companies involved has a demonstrated history of shipping non-scope amino acid products to the importer directly from China, and the facility in Cambodia lacked the basic infrastructure to process and package significant volumes of glycine, much less produce it.

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

- rate adjusting 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 Aug. 28 and extending the liquidation period for all unliquidated entries entered before that date

- reliquidating any entries that have liquidated for which CBP’s reliquidation authority has not yet lapsed

- evaluating the importer’s continuous bond to determine its sufficiency

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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