Customs and Border Protection (CBP) officials moved to collect millions of dollars in unpaid anti-dumping penalties earlier this month after they discovered that Chinese companies had fudged the source of exports to the United States by shipping them through other countries.
The agency issued 10 decisions under the Enforce and Protect Act (EAPA), a year-old law that gives the government additional tools to pursue anti-dumping cases. The agency found substantial evidence that wire hangers were shipped from China through Thailand to get out of paying taxes on the goods.
M&B Metal Products Co., the sole American producer of wire hangers, made additional allegations of tax evasion related to shipments through Malaysia. The agency described a “complex and coordinated scheme” through which wire hangers were being imported under evasive tactics.
Acting Customs and Border Protection Commissioner Kevin McAleenan praised the American hanger factory for its help in nabbing the criminals. “This is a tremendous example of how a strong allegation from the trade enabled CBP to stop evasion and protect American jobs,” he acknowledged.
Read the Border Patrol’s report below:
U.S. Customs and Border Protection Exercises EAPA Authority, Launches Multiple Investigations on Illegal Imports From China
August 17, 2017
WASHINGTON, DC – U.S. Customs and Border Protection (CBP) issued ten (10) decisions this week in Enforce and Protect Act (EAPA) investigations, concerning the evasion of the antidumping duty orders for wire hangers and wooden bedroom furniture. Of note is that CBP issued its first final determination in an EAPA investigation on Monday, August 14th, finding substantial evidence that wire hangers were imported through evasion. Specifically, the hangers were transshipped from China through Thailand to evade the antidumping duties.
As a result of the successful impact from the enforcement effort in this first investigation, M&B Metal Products Company, the sole remaining U.S. producer of wire hangers, filed an additional eight (8) allegations of evasion concerning the transshipment of wire hangers through Malaysia. Today, CBP issued a consolidated notice for the decision on interim measures in those investigations, finding a reasonable suspicion of the importation wire hangers through evasion. This was a complex and coordinated scheme, attempting to evade the antidumping duty order by transshipping wire hangers through Malaysia to the United States.
“Combined, these EAPA investigations on wire hangers have resulted in CBP preventing evasion of over $33 million dollars in unpaid anti-dumping duties annually,” said Acting CBP Commissioner Kevin McAleenan. “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 authority for investigating under EAPA began last August 2016, and the allegation on transshipment of hangers through Thailand was filed shortly thereafter, in September. After conducting an on-site visit of the manufacturer in Thailand, and reviewing trade data gathered during the course of this investigation, CBP determined that the importer, Eastern Trading, had imported wire hangers that had been transshipped from China through Thailand.
CBP also conducted eight (8) 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. The notice of the final determination for these investigations is due March 15, 2018, if the investigations are not extended.
On the same day as the final determination in the Thailand hangers investigation, CBP also issued a notice of interim measures on its investigation into evasion 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 has come into force last August, CBP has initiated 14 investigations and begun collaboration with other government agencies and foreign governments to strengthen our enforcement through the course of these investigations. EAPA investigations present CBP with new tools to investigate evasion and protect the revenue, while also providing an opportunity to partner with other governments and government agencies to expand CBP’s investigative capabilities. For additional information on CBP and the Enforce and Protect Act, please visit CBP.gov.