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Import Restrictions Imposed on Hangers, Pipe Fittings Alleged to Evade AD Duties

Friday, March 13, 2020
Sandler, Travis & Rosenberg Trade Report

U.S. Customs and Border Protection has issued separate determinations that there is a reasonable suspicion that specific importers are evading the antidumping duty orders on steel wire garment hangers from China and carbon steel butt-weld pipe fittings from China.

Hangers – Two importers are allegedly claiming hangers actually made in China are produced in India. CBP states that reports, photographs, and financial reports submitted by the complainant reasonably suggest that the facility of the purported Indian producer is incapable of manufacturing hangers. In addition, during a site visit by U.S. government officials, officials of that Indian company said they had procured hangers from China for export to the U.S.

Pipe fittings – Two importers are allegedly transshipping Chinese-origin butt-weld pipe fittings through Vietnam. CBP said an on-site visit concluded that the purported Vietnamese producer currently has the capacity to manufacture these fittings but found a significant stock of semi-finished and finished pipe fittings compared to the raw materials on-site. CBP also found data consistent with the allegation that the importers shifted imports from Malaysia to Vietnam around the time that the Department of Commerce found they were circumventing the AD duty order on China by transshipping through Malaysia.

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

- rate adjusting all unliquidated entries of subject goods and requiring AD cash deposits

- suspending liquidation for any entry of subject hangers entered on or after (a) Nov. 21, 2019 for hangers and (b) Nov. 5, 2019, for pipe fittings and extending the liquidation period for all unliquidated entries entered before those dates

- requiring live entry for all future imports for the importers at issue

- rejecting any entry summaries that do not comply with live entry and requiring a refile for those within the entry summary reject period

- evaluating the importers’ continuous bonds to determine their 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., by misrepresenting the goods’ true country of origin, submitting false or incorrect shipping and entry documentation, or misreporting 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.

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

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