CBP Declines to Investigate AD/CV Duty Evasion Allegation from Steel Tube Company

CBP declined to investigate further an allegation of antidumping or countervailing duty evasion on steel pipe from China, the agency told Wheatland Tube, the Pennsylvania steel tube company that filed the allegation last month (see 1609150028). While Wheatland’s allegation reasonably suggested that an undisclosed company "imported merchandise from China that may be subject to AD/CVD order," the allegation didn't "reasonably suggest that merchandise was entered through evasion," the agency told the company, according to a Wheatland news release. "Evidence of importation, without more, is not sufficient to raise a reasonable suspicion of evasion," CBP said to Wheatland.

Wheatland was highly critical of CBP's decision on what was said to be one of the first such allegations under AD/CV duty evasion language from the customs reauthorization law's Enforce and Protect Act (EAPA) (see 1608190014). "CBP appears to have set an impossible standard for initiating EAPA investigations by requiring that domestic producers prove, not just allege, duty evasion," it said. The decision "casts doubt on the agency’s willingness to utilize this new law to maximize AD/CVD collection," it said. CBP didn't immediately comment.

Wheatland will continue to engage on the issue on several levels, said a spokeswoman for Wheatland's parent company, Zekelman Industries. The company plans to follow up with Sens. Ron Wyden, D-Ore., and Rob Portman, R-Ohio, "and others on Customs’ lack of proper implementation of the Act," she said. Those lawmakers were heavily involved in seeing EAPA become law. Portman also recently visited a Wheatland factory in Warren, Ohio, and mentioned the filing, according to a report in the Tribune Chronicle (here). "We will vigorously pursue this evasion through the enforcement group at Customs’ headquarters in D.C., the Base Metals [Center for Excellence and Expertise] in Chicago, and import specialists at the ports," the spokeswoman said.

CBP informed Wheatland it wouldn't go forward with an investigation on Oct. 17, the company said. Barry Zekelman, CEO of Zekelman Industries, was "disheartened by the news," he said in the news release (here). "This is a legitimate allegation by a respected U.S. manufacturer, and they have chosen to not investigate to determine if there is any foul play. This law was enacted for this type of situation. If Customs won’t even investigate the claim, which they have the data and the ability to do so, what protections are there for legitimate U.S. manufacturers who pay U.S. taxes and create jobs for Americans?”

Wheatland also offered more information about its allegation, which said the undisclosed company "was evading AD/CVD orders on circular welded carbon-quality steel pipe from China." The allegation included public import data showing the amount of such pipe that was imported from China by the company since 2015. Wheatland also "acknowledged that it did not have access to the confidential CBP import data that would be necessary to prove duty evasion, and urged CBP to review such data." CBP didn't tell Wheatland whether it reviewed the internal data. Recent comments to CBP on the EAPA regulations mentioned Wheatland's filing as evidence of potential problems with the process (see 1610170012).