New CBP Investigation Into Diamond Sawblades Antidumping Duty Evasion Underway

CBP is investigating two California companies over allegations of antidumping duty evasion for diamond sawblades from China, the agency said in a Sept. 22 notice. The investigation stems from allegations filed under the Enforce and Protect Act (EAPA) by the Diamond Sawblades Manufacturers Coalition (DSMC) regarding Power Tek Tool and Lyke Industrial Tool. "Because evidence establishes a reasonable suspicion that Power Tek and Lyke have entered merchandise into the United States through evasion, CBP has imposed interim measures against both importers," the agency said.

The companies were alleged to have evaded an antidumping duty order on diamond sawblades from China (A-570-900). CBP said the DSMC used an affidavit from an industry expert and market data to show that Power Tek and Lyke began classifying diamond sawblades by a Chinese manufacturer, Danyang NYCL Tools Manufacturing, as "millstone product or as segments" soon after "the AD cash deposit increased from 2.34% to 29.76%" for circular saw blades. Despite the change in classification, the imported products used the "the same weight per unit as the diamond sawblades," CBP said.

While the DSMC filed separate allegations, CBP is consolidating the investigations, it said. Both allegations were "virtually identical" because DSMC alleged that Power Tek is the successor to Lyke, CBP said. "Each imported covered diamond sawblades during the period of investigation, with one beginning to import as the other stopped importing," CBP said. "Both importers share the same physical address, indicating that they may be related companies, which we will further investigate." Both also "imported from the same manufacturer, NYCL, and the type of evasion for both concerns misclassification," CBP said.

After the DSMC filed the allegations in June, CBP examined an entry by Power Tek imported from NYCL "and found that it contained undeclared diamond sawblades from China that were subject to" the AD order, the agency said. "The entry was filed as type 01 instead of type 03 and falsely classified the diamond sawblades as 'millstone diamond cup wheel,' under HTSUS subheading 6804.21.0080. CBP determined that each type of sawblade in the shipment should have been classified under HTSUS subheading 8202.39.0010, and would fall within the scope of the AD order on Diamond Sawblades and Parts ther[e]of." That evidence combined with the DSMC allegations "establishes a reasonable suspicion that the importers entered merchandise into the United States through evasion," CBP said.

This case marks the second investigation initiated based on allegations from the DSMC (see 1706280035), said Daniel Pickard, a lawyer with Wiley Rein who represents the DSMC. "We're going to continue to monitor the situation and continue to file allegations when there's evidence of illegal circumvention of the antidumping order," he said in a Sept. 25 interview. The DSMC is working "zealously" on multiple fronts, including through a Commerce Department anti-circumvention inquiry that's expected to be ruled on in coming weeks, he said.

The DSMC is "especially thankful for the good work done" by CBP, he said. Pickard is "very pleased" with EAPA and "how CBP is administering it," he said. "We've found the process of filing allegations to be relatively straightforward" and have "already provided significant remedies to domestic industry," Pickard said. The group's first allegation that resulted in an investigation over transhipment through Thailand "already resulted in meaningful consequences," he said.