CBP Finds Garlic, Pipe Fittings Importers Evaded Duties
CBP posted two new final determinations of duty evasion under the Enforce and Protect Act, finding that there was sufficient evidence that a garlic importer and a group of pipe fittings importers illegally avoided antidumping duties. The garlic importer, IPC International, was under investigation following an allegation filed by the Fresh Garlic Producers Association (see 1909120040). Multiple importers of carbon steel butt-weld (CSBW) pipe fittings were under investigation due to an allegation from Allied Group (see 1907190028). Both determinations were posted by CBP on March 9.
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IPC has claimed that its imported garlic is allowed a lower AD rate because the garlic is produced by Jinxiang Zhongtian Business Company and exported by Shijiazhuang Goodman Trading Co. (see 1707240001). CBP performed a site visit in order to verify the company's claims and found the information produced by Zhongtian to be lacking. “The factual record of this investigation provides substantial evidence that at least some of the merchandise entered by IPC was not produced by Zhongtian and therefore should have been entered at the duty rate of $4.71 per kilogram,” CBP said. “In the aggregate, this resulted in the loss of tens of millions of dollars in AD duties to the U.S. government.”
Following the site visit, IPC said that “Zhongtian’s inability to provide 'full exculpatory evidence' and production records does not rise to substantial evidence of evasion in this matter.” The company also said “that 'Zhongtian’s verification issues do not constitute substantial evidence of evasion,' because the evidentiary 'burden is on the alleger and on CBP,'” but the agency responded that it is tasked with conducting the investigation and may seek out information from foreign producers. As a result of the determination, “CBP will continue to require live entry, which requires that the importers post the applicable cash deposits prior to the release,” it said. The agency will also extend the liquidation period for unliquidated entries, it said.
The CSBW pipe fitting case involved six importers: Ductilic, Inc.; Iron Mule Products; Missouri Pipe Fittings; Norca Industrial Company, LLC; Trupply, LLC; and Service Metal Products. The importers were alleged to have “misclassified and/or transshipped through KKFF Bend (Cambodia) Co., Ltd. ('KKFF Bend'), an alleged producer of CSBW pipe fittings in Cambodia, and falsely declared as being of Cambodian origin.” Because KKFF didn't respond to a CBP request for information, “CBP may apply adverse inferences and infer that it is not a manufacturer and, instead, based on the information provided by the Alleger, KKFF Bend has been participating in the transshipment of Chinese-origin CSBW pipe fittings through Cambodia,” it said.
The “failure of the Importers to respond to the best of their abilities also supports the application of adverse inferences,” CBP said. When applying adverse inferences, the agency considers all other facts available, it said. Here, “CBP determines that substantial evidence exists demonstrating that the CSBW pipe fittings entered by the Importers during the period of investigation for which the claimed manufacturer was KKFF were Chinese and transshipped through Cambodia, and in some instances had been misclassified as product other than CSBW pipe fittings.” As a result, CBP will continue to require live entry and extend the liquidation periods of unliquidated entries, it said.