A U.S. Customs and Border Protection(CBP) investigation found evasion of its antidumping rules related to the shipping of wire hangers from China to the U.S, resulting in a loss of millions in antidumping duties.
Specifically, the hangers were transshipped from China through Thailand to evade the antidumping duties, the CBP found as part of its Enforce and Protect Act (EAPA) investigations. This was a complex and coordinated scheme, attempting to evade the antidumping duty order by transshipping wire hangers through Malaysia to the United States, said the CBP.
An antidumping duty is when the Department of Commerce finds that imported merchandise was sold in the United States at an unfairly low or subsidized price. To level the playing field for U.S. companies injured by these unfair trade practices, CBP collects Antidumping and Countervailing Duties. When the antidumping duties are evaded, the United States does not collect those tariffs.
“Combined, these EAPA investigations on wire hangers have resulted in CBP preventing evasion of over $33 million dollars in unpaid antidumping duties annually,” Acting CBP Commissioner Kevin McAleenan said. “CBP continues to make trade enforcement one of our top priorities, fully utilizing all tools that Congress has provided us, such as EAPA investigative authorities provided for in the Trade Facilitation and Trade Enforcement Act. This is a tremendous example of how a strong allegation from the trade enabled CBP to stop evasion and protect American jobs.”
The investigation under EAPA began last August 2016. After conducting an on-site visit of the manufacturer in Thailand, and reviewing trade data gathered during the investigation, CBP determined that the importer, Eastern Trading, had imported wire hangers that had been transshipped from China through Thailand.
CBP also conducted eight on-site visits in Malaysia to investigate the subsequent allegations on transshipment of wire hangers through that route. CBP found no production of wire hangers at any of those locations in Malaysia and therefore, concluded that there was a reasonable suspicion that these wire hangers had been imported through evasion as they were not produced in Malaysia as claimed upon entry.
M&B Metal Products Company, the sole remaining U.S. producer of wire hangers, filed an additional eight allegations of evasion concerning this case.
The notice of the final determination for these investigations is due March 15, 2018, if the investigations are not extended.
CBP also discovered a similar evasion of antidumping duties by an importer of wooden bedroom furniture. CBP determined that there was a reasonable suspicion that a wooden bedroom furniture importer had failed to report imported furniture as subject to the antidumping order and had therefore, entered wooden bedroom furniture through evasion. The notice of the final determination for this investigation is due March 12, 2018, if the investigation is not extended.
Since EAPA started last August, CBP has initiated 14 investigations and begun collaboration with other government agencies and foreign governments to strengthen enforcement through the course of these investigations.
Sen. Ron Wyden (D-OR) applauded the CBP for moving quickly against illegally laundered imports from China.
“We are seeing concrete results of the new trade enforcement tools I created to prevent bad actors from undermining our workers and manufacturers,” Wyden said. “These tools let CBP act quickly to stop merchandise laundering and other illegal trade activity in its tracks. Even before an investigation is complete, once it finds that there is a likely violation, CBP has the authority to put in place interim measures to protect U.S. businesses. I encourage CBP to continue its aggressive pursuit of these cases.”