CBP Looking Into Possible Evasion of AD Duty Order on OCTG

CBP is reviewing entries of oil country tubular goods (OCTG) imported by American Pacific Rubber (APAC) as part of a formal Enforce and Protect Act investigation, the agency said in an Oct. 23 notice to the company. The investigation stems from allegations submitted by Aztec Manufacturing Partnership that APAC evaded antidumping duties on the goods. "Because evidence establishes reasonable suspicion that APAC has entered merchandise into the United States through evasion, CBP has taken" interim measures against APAC, it said.

Aztec, which is represented by Richard Mojica of Miller Chevalier, alleged in June that APAC evaded an antidumping order on OCTG from Vietnam (A-552-817), CBP said. Aztec is a “domestic manufacturer of OCTG, which is a family of iron and steel tubular products used in oil wells that includes casing, tubing, couplings, and plain-end drill pipe.” APAC allegedly declared steel "pup joints" as "upper extension nipples," which aren't covered by the AD order. Former Aztec customers reported the ability to buy cheap pup joints marked with Ultra Pipe Manufacturing Co., some of which were available on e-commerce site Alibaba.com. Aztec also found that 11 shipments in 2016 and 2017 from UPM were consigned to APAC with a cumulative weight of over 900 metric tons, none of which was classified as pup joints nor reported as subject to AD duties on pup joints.

Aztec also arranged for a third-party distributor in Texas, Dandy Specialties, to purchase the UPM-marked joints sourced through another distributor, Netco Energy Products. "It was during a site visit to Netco’s facility where Aztec employees first saw pup joints stenciled with the marking 'UPM' first-hand," CBP said. "Aztec noted that in searching the public import data it did not find any imports by Netco or Dandy Specialties for UPM’s pup joints, confirming they were not importers." Three mill inspection certificates that came with the purchased pup joints "specifically described the commodities they covered as pup joints." The "low price of the UPM pup joints, combined with their indistinguishable quality, led Aztec to conclude AD cash deposits were not posted at the time of importation," CBP said.

The allegation included enough "evidence to reasonably suggest that merchandise was entered through evasion by a material false statement or act, or material omission that resulted in the reduction or avoidance of applicable AD cash deposits or other security," the agency said. CBP subsequently performed three cargo exams and found "each of the three entries were filed as non-subject merchandise and APAC incorrectly classified the steel tubing." In response to a CBP request for more information, APAC argued that the goods were outside the AD order but didn't offer sufficient proof. "These entries establish the pattern of evasion alleged by Aztec in its allegation," CBP said. APAC also later provided samples to CBP, which are now being tested.

CBP's interim measures include "live entry" requirements for all imports from APAC, it said. The agency is also "directing that all unliquidated entries of subject merchandise" entered as "not subject to AD duties" be "rate-adjusted to reflect that they are subject to the AD order on OCTG from Vietnam and cash deposits are now owed." Aztec and APAC didn't comment.