CBP Finds AD Evasion by Xanthan Gum Importer
CBP issued an Enforce and Protect Act determination, finding xanthan gum importer ADI ChemTech evaded antidumping duties by transshipping xanthan gum from China through India, according to a recent agency release.
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According to a July 9 filing from CBP, U.S. xanthan gum producer CP Kelco filed an EAPA allegation in July 2023, claiming that ADI ChemTech evaded AD order A-570-985 by importing Chinese-origin xanthan gum by transshipping the product through India using the supplier Prachin Chemical. An official with CP Kelco said the xanthan gum is manufactured in four countries: Austria, France, China and the U.S. If the xanthan gum imported by ADI ChemTech wasn't produced in India, it likely was produced in China, CP Kelco reasoned, according to the CBP filing.
In response to the filing, CBP examined entries from ADI ChemTech. The submissions ADI ChemTech gave in October 2023 and January 2024 included a production flow chart, CBP entry summary form 7501, an invoice/packing list, bill of lading, insurance information, country of origin certification and fumigation certification for each entry. However, ADI ChemTech did not submit any of the payment information that CBP requested, according to CBP.
The agency also noted that ADI ChemTech had put India as the country of origin for the xanthan gum. ADI ChemTech later supplied documentation indicating it used a “blended screening” machine,” but CBP said it also needs a list of raw materials used to produce xanthan gum as well as documentation that traces raw materials through the production process.
As a result of these findings, CBP initiated an EAPA investigation in December 2023 on ADI ChemTech (see 2312210047).
Since then, CBP asked Prachin in January and March 2024 to provide documentation on its finances and its sourcing procedures and production process for xanthan gum. While Prachin provided some materials in January 2024, it didn't sufficiently provide the sourcing documentation that CBP was seeking, according to CBP.
“Given Prachin’s continuous failure to provide responses to questions raised by CBP in its RFIs and there is no information on the administrative record regarding Prachin’s production capacity and sourcing of xanthan gum or raw materials, which are critical pieces of this investigation,” CBP said. “As a result, CBP is applying inferences adverse to the interests of Prachin. In relying on an adverse inference for failure to respond to the RFIs, or failure to cooperate and comply to the best of one’s ability with a request for information, CBP will look at the facts otherwise available.”
CBP said it would suspend or continue to suspend the entries covered by this investigation, until instructed to liquidate. Also, for those entries previously extended in accordance with interim measures, CBP said it would rate adjust and change those entries to type 03 and continue suspension until instructed to liquidate the entries.
CBP also said it would continue to evaluate ADI ChemTech’s continuous bonds in accordance with agency policies.