CBP Announces Evasion Investigation on Cast Iron Soil Pipe Fittings
CBP announced it began a formal Enforce and Protect Act investigation on whether U.S. importer Besttn Industry evaded antidumping and countervailing duty orders on cast iron soil pipe and fittings from China and has imposed interim measures due to reasonable suspicion that Besttn entered covered merchandise.
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The investigation itself began in July, following an allegation by The Cast Iron Soil Pipe Institute in April, which said that Besttn had entered Chinese soil pipe and fitting as products of Malaysia to evade the orders and avoid paying the associated duties. The institute alleged Besttn is an “apparent affiliate” of Kingway China, which it called "a known exporter" of soil pipe fittings and subject to AD/CVD duties. The complaint alleged that Besttn executives were former employees of Kingway USA and that Besttn "appeared" to have been used as an importer of record for shipments from Kingway even after it was dissolved in February 2022.
Both Kingway and Besttn shared similar addresses as well as personnel. Based on the evidence, Kingway China’s former vice manager took over Kingway USA and then set up Besttn as a "corporate front for Kingway’s operations in the United States," the institute alleged.
The allegation cited shipment data to conclude that Besttn had imported over 350 tons of cast iron “hubless” and “no hub” pipe and fittings. The pipe and fittings were reported to be shipped by United Metal Industries in Malaysia, but the institute alleged that the provided address was a business office for a telecom provider rather than a foundry or other industrial site.
After it began its investigation, CBP issued questionnaires to Besttn concerning two entries. The company responded with a variety of documents, including bills of lading, certificates of origin, production process descriptions, and invoices. However, CBP found some documents were duplicates for both entries while others differed between entries. The same company profile and pictures of equipment and production processes were reported in both responses and the business registration was not translated from Malaysian as requested in the information request. CBP said the invoiced price and weights between the two entries were "remarkably similar, even though they are entered as distinct products falling under distinct HTS classifications," which suggested the prices may not have been reliably reported during the short window of imports, CBP said.
Besttn also failed to include dates of establishment or incorporation of United Metal Industries despite specific requests by CBP. The agency said it obtained United's business profile, business registration and business expiration certificate from the Malaysian Companies Commission and found that the business registration expired seven months before the September questionnaire responses.
CBP found that the combination of personnel overlap and neighboring address with Kingway USA, Besttn's imports from United, United's address not being a foundry, the "striking similarity" between the two examined entries, Besttn’s failure to provide all requested information, and United's expired registration all suggested that Besttn had evaded import duties on pipe and fittings from China.
CBP said it will suspend the liquidation of unliquidated entries that entered on or after July 26, the date the agency began the investigation, and will extend the period for liquidation for entries before that date. The agency may take additional measures including requiring a single transaction bond or additional security or the posting of a cash deposit. CBP also will require live entry and will reject any entry summaries that don't comply with live entry procedure. The agency said that it may also evaluate Besttn’s continuous bonds to determine their sufficiency.