CBP Finds 8 Companies Evaded AD Duties on Steel Hangers

A CBP investigation into allegations of evading antidumping duties for steel garment hangers turned up "substantial evidence" of evasion, the agency said in a March 15 final determination. The allegations named Brooklyn Knights Trading of Philadelphia; GL Paper Distribution of Miami; Garment Cover Supply of Orlando; Newtown Supply NY of Woodside, New York; Casa USA of Carson, California; Subcos Percha De Metal Factory of Rosemead, California; Nice Guy Trading of New York; and Masterpiece Supply of San Francisco. Those allegations, which were filed by M&B Metals under the Enforce and Protect Act provisions, were consolidated into one case (see 1708170024).

Based on CBP's site visits to the supposed hanger manufacturers in Malaysia that found "no hanger production at any of the alleged supplier addresses," the agency "determined that Malaysia was not the country of origin of the hangers imported by the Companies under investigation," it said. CBP also noted that one company involved in the investigation, Newtown Supply, is owned in part by James Liang, who was the sole owner of another hanger importer, Eastern Trading, found to have evaded AD duties in the only other final determination under EAPA (see 1708170027). Newtown Supply "admitted that it was solicited by R&X Industries to import wire hangers from Malaysia and received a payment for each shipment it entered." R&X was similarly involved in the Eastern Trading case, CBP said.

Newton Supply also mentioned Brooklyn Knights as having an affiliation with R&X, CBP said. While Brooklyn Knights didn't respond to requests for information, that company "is similarly connected to Eastern Trading and R&X Industries by the phone number listed on its commercial documents," CBP said. With those connections to "R&X Industries’ transshipment scheme involving Chinese manufacturers, substantial evidence on the record exists that the hangers imported by Newtown Supply and Brooklyn Knights originated in China," CBP said.

Casa USA, Garment Cover, GL Paper and Nice Guy also claimed to have bought hangers from three fictitious Malaysian manufacturers. But, "those entries originated in China and were entered through evasion," CBP said. CBP is "applying an adverse inference" for the other entries under investigation that weren't imported from any of named fictitious manufacturers, it said. "In applying an adverse inference against an eligible party, CBP may select from the facts otherwise available to make a final determination as to evasion." Here, "CBP is applying an adverse inference against Garment Cover, GL Paper, Masterpiece Supply and Subcos Percha, and concludes that all of their remaining imports of wire hangers from Malaysia" came from "China and were transshipped through Malaysia," the agency said.

M&B Metals also asked CBP to take additional enforcement action through Section 1592 penalty proceedings against each importer and pass along the EAPA investigation records to ICE. "CBP will pursue any additional enforcement action, as appropriate," it said. As a result of its finding "CBP will continue to suspend the liquidation for any entry that has entered on or after May 12, 2017, the date of initiation of this investigation" and "extend the period for liquidation for all unliquidated entries that entered before that date," CBP said. "CBP will continue to require live entry, which requires that the importer post the applicable cash deposit prior to the entry's release. Finally, CBP will evaluate the continuous bonds of these companies in accordance with CBP's policies."