California-based Ceka Nutrition didn’t declare merchandise from China and circumvented antidumping fees.
Ceka Nutrition Inc. illegally evaded antidumping duties on glycine from China, according to a U.S. Customs and Border Protection anti-circumvention investigation that was initiated Aug. 28, 2017, and recently concluded.
Dated July 2, the results of the Enforce and Protect Act (EAPA) investigation indicate that Chino Hills, Calif.-based Ceka Nutrition entered merchandise covered by AD order A-570-836 into the customs territory of the U.S. through evasion, by trans-shipping glycine of Chinese origin through Cambodia to the United States to circumvent AD duties.
Ceka didn’t declare the merchandise was subject to an AD order upon entry, so CBP didn’t collect cash deposits on the goods, the agency said.
Section 421 of the Trade Facilitation and Trade Enforcement Act (TFTEA), enacted in 2016, established a formal procedure for the government to investigate alleged evasion of AD and countervailing duty orders.
Ambler, Pa.-based GEO Specialty Chemicals Inc. successfully alleged that Ceka imported into the United States glycine produced in China and trans-shipped through Cambodia via its supplier, JC Chemicals Ltd.
CBP on Sept. 18 issued a CBP Form 28 (CF 28) request for information to Ceka to learn the nature of any production processes by the supplier, JC Chemicals.
Ceka claimed its U.S. entries of glycine were being manufactured in Cambodia, but CBP site visits to the Cambodian exporter showed no evidence of glycine manufacturing, the CBP determination states.
CBP observed that the Cambodian exporter only further processes technical- grade glycine imported from China to remove impurities and processes no other products.
“As all grades of glycine are subject to the AD order, these results confirm that the glycine found onsite at the Cambodian facility is covered merchandise,” CBP said.
Refining operations wouldn’t remove the subject product from the scope of the AD order, as a 2002 Commerce Department scope ruling clarified all glycine further processed or refined from Chinese-origin technical grade, or crude, glycine in a third country and exported to the United States is subject to the above-mentioned AD order, CBP said.
CBP noted that U.S. law defines evasion as “the entry of covered merchandise into the customs territory of the United States for consumption by means of any document or electronically transmitted data or information, written or oral statement, or act that is material and false or any omission that is material and that results in any cash deposit or other security of any amount of applicable antidumping or countervailing duties being reduced or not being applied with respect to the merchandise.”
There is “extensive documentation” regarding the trans-shipment “scheme,” CBP said.
Despite the fact that the Cambodian exporter provided a Cambodian certificate of origin designating Ceka’s imports as a Cambodian product, Ceka’s arguments that processing in Cambodia confers the country of origin designation are totally irrelevant regarding whether or not it is subject to the AD order, CBP said.
Cambodian law doesn’t influence how Commerce applies the scope of the AD order, the EAPA determination states.
“The facts of the transshipment scheme, as set forth above, are uncontroverted and demonstrate that during the period of investigation Ceka imported glycine from Cambodia that was originally sourced from a Chinese manufacturer,” CBP said. “As such, it is covered by AD order A-570-836. Furthermore, as Ceka did not affirmatively substantiate that its imports of glycine are entitled to a rate other than the China-wide rate of 453.79 percent, this is the applicable rate to apply to Ceka’s glycine imports subject to this investigation.”
CBP will continue to suspend liquidation for any entry entered on or after Aug. 28, 2017, the date of the EAPA investigation’s initiation, the agency said.
The agency will continue to require live entry for future entries, a requirement that directs the importer to post applicable cash deposits prior to the entry’s release.
CBP will evaluate the continuous bond of the importer in accordance with agency policies and require single transaction bonds as appropriate, CBP said.
The agency will continue to extend the period for liquidation for all unliquidated entries that entered before Aug. 28, until instructed to liquidate these entries, the determination states.
Customs finds importer evaded glycine duties
