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Practice Areas

Import Restrictions Imposed on Xanthan Gum Alleged to Evade AD Duties

Monday, October 07, 2019
Sandler, Travis & Rosenberg Trade Report

U.S. Customs and Border Protection has determined that there is a reasonable suspicion that 11 importers are evading the antidumping duty order on xanthan gum from China by transshipping it through India or Malaysia. CBP cites the large and rising volumes of imports into India and Malaysia from China of the category of goods including xanthan gum, the very low volumes of such goods imported into India and Malaysia from other known xanthan gum producing countries, and the history of attempted circumvention of the xanthan gum AD duty order by various Chinese companies.

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

- rate adjusting all unliquidated entries of xanthan gum and requiring AD cash deposits

- 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

- suspending liquidation of any entry entered on or after May 7, 2019, and extending the liquidation period for all unliquidated entries entered before that date

- 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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