CBP Ruling Finds 'Extensive' Honey Traceability Records Not Enough to Reverse AD Duties Assessment

Despite a honey importer's "extensive and commendable" efforts to trace the origin of imported honey, it wasn't enough to reverse a CBP laboratory finding that led to an assessment of antidumping duties, CBP said in a Jan. 26 ruling (here). Lamex Foods, the importer, filed an application for further review of protest after CBP said lab testing of honey from one of the containers at issue showed the honey came from China. Lamex argued that the AD duties shouldn't apply because the honey is from Vietnam, not China.

CBP labs tested honey samples from three containers imported by the company in 2011. CBP issued a Form 28 in 2012 for one of the containers "stating that the honey was found to be of Chinese origin and subject to antidumping duties pursuant to Case A-570-863" and "requested that Lamex submit the appropriate antidumping duties at a deposit rate of $2.63 per kilogram." The company challenged the application of the AD duties after CBP liquidated the entry in 2013. Lamex provided several documents meant to show the honey came from Vietnam, including "County of Origin Affidavits that are signed by the honey supplier and provided with every shipment" and information from a program Lamex developed to "ensure the traceability of the country of origin of its honey." Lamex also used an independent auditor to test the honey.

While most AD duty issues aren't protestable with CBP, "because Lamex disputes CBP’s country of origin determination and application of Commerce’s liquidation instruction," this matter is protestable, CBP said. Still, CBP "enjoys a statutory presumption of correctness with regard to factual disputes" and "Lamex’s arguments individually and taken together do not successfully make a prima facie case to sufficiently overcome the presumption of correctness afforded CBP’s laboratory report," it said. For example, despite the traceability records provided "there are, however, breaks in the chain of custody that are outside of Lamex’s control and present reasonable opportunities for Chinese honey to be introduced or mixed with the honey," the agency said. Also, while the third-party auditor's test found the honey's "pollen spectrum" to be consistent with honey originating from Vietnam, it's unclear if the auditor tested the honey against the pollen spectrum in China.

The Vietnamese supplier also underwent a Food and Drug Administration audit in 2012 that didn't show evidence of trading in Chinese honey, Lamex argued. But that audit was more than a year after the honey at issue was processed, CBP said. Also, "the time frame captured by the audit is unclear, but Lamex does not represent that it covered the time period at issue." The company also said it takes AD duty laws very seriously and helped establish ethical honey dealing with the development" of the True Source Honey program (see 13101601). While CBP didn't disagree with that assertion, "such efforts, however, do not obviate the fact that there are months during which the ability to alter the honey was feasible," it said.

Considering the "nature of the antidumping order" on honey from China and the demand for honey in the U.S. "in the face of waning production capacities due to overall declining honeybee health, the moment for deceit was and continues to be ripe," the agency said. Lamex's evidence isn't "more convincing than CBP’s trace mineral testing analysis," and the company was unable to "prove by a preponderance of the evidence that CBP’s decision was incorrect," it said. As a result, the protest should be denied, it said.