Executive's Foreign Conviction for Transshipment is Basis Enough for AD Duties Assessment, CBP Rules

CBP shot down an importer's effort to stop an antidumping duty assessment in a recent agency ruling related to imported steel nails said to be illegally transshipped. The Nov. 18 ruling (here) was in response to a protest from Continental Materials that said CBP was mistaken in assessing antidumping duties based on the foreign conviction of one of the seller's executives for illegal transshipment. The agency said in the ruling, HQ H200755, the evidence provided by Continental was not enough to prove the antidumping duties were incorrectly applied.

Continental imported some 1,614 containers in a 2008 shipment that came from a Han Ya Nail, a Korean manufacturer. The owner of Han Ya Nail was later arrested and convicted in Korea for falsifying the country of origin for Chinese nails to say they were from Korea, said CBP. Based on that conviction, the Port of Minneapolis liquidated the entry in 2011 at the China-wide entity antidumping duty margin of 118.04 percent, the agency said. Continental then protested and provided a number of documents to back up its case.

Continental argued that the Korean conviction is not enough for CBP to conclude that the nails come from China and subject to the duties. As U.S. courts have previously said was allowable, CBP reviewed and found that "the Korean criminal conviction of Han Ya Nail’s owner should be given weight as prima facie evidence of the facts underlying it," said CBP. Based on the facts provided from the Korean conviction and U.S. import documents, "we conclude that there is a reasonable basis for CBP" to conclude that the nails were "illegally transshipped," the agency said..

The importer also argued that it believed in good faith that the nails were from Korea. "Good faith, however, is not a determinative factor in whether antidumping duties are assessed," said CBP. The agency is also inconsistent on such assessments, the company said. Continental submitted a "signed declaration from the company's president" that said CBP previously acted differently when it did not assess the duties on a different importer for an entry of steel nails made by Han Ya Nail. Continental did not, though, provide specific information on that entry, so CBP declined to consider that allegation, it said.

While the company also provided some Han Ya Nail production records and a business license, CBP doesn't question that Han Ya Nail is a nail manufacturer. The issue is whether "the company, while capable of manufacturing nails, also imported and exported nails," the agency said. Continental "purchased and imported these illegally marked Chinese steel nails into the United States and circumvented the antidumping duty order in place for certain steel nails from the PRC" and "none of the evidence provided" calls into question those facts, said CBP. Therefore, the importer was unable to prove the CBP was in error and the protest is denied, the agency said.