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Transshipment Used to Evade AD Duties, CBP Finds

Tuesday, July 10, 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 a U.S. company evaded the antidumping duty order on glycine from China by transshipping glycine from China through Cambodia. CBP states that it found no evidence of glycine manufacturing at the Cambodian company where the importer claimed its entries were being produced and that the company conceded that it only processes technical grade glycine imported from China to remove impurities, which would not remove such goods from the scope of the AD duty order.

As a result of this final determination, CBP will continue to (a) suspend liquidation for any entry of subject goods entered on or after Aug. 28, 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 453.79 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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