CBP Begins New EAPA Investigation Into Plywood Importers

CBP's Trade Remedy Law Enforcement Directorate is investigating several new cases of alleged plywood antidumping and countervailing duty evasion under the Enforce and Protect Act (EAPA) evasion enforcement process (see 1608190014), CBP said in a Nov. 20 notice that was released by law firm Wiley Rein. The investigation is focused on five companies that were alleged to be involved in transshipment and false declarations of Chinese hardwood plywood. "Because the evidence thus far establishes a reasonable suspicion that the Importers have entered merchandise into the United States through evasion, CBP has imposed interim measures," the agency said.

CBP's investigation comes in response to allegations filed by a plywood importer in California, Plywood Source LLC. The company named Far East American, Ciel Group, American Pacific Plywood, InterGlobal Forest and Liberty Wood International as participants in the evasion. Plywood Source alleged in July that a Vietnamese manufacturer called VN Finewood began operations in reaction to AD/CV orders A-570-051 and C-570-052. As part of the allegation, Plywood Source provided video showing VN Finewood employees offloading plywood from China and being instructed to remove a "Made in China" label from a crate.

Vietnamese customs data provided by Plywood Source showed that during VN Finewood's first month of operation, it exported more than 200 containers of hardwood plywood to each of the importers, CBP said. Plywood Source also supplied another video showing a worker reviewing shipping document and breaking the seal on a container, revealing pre-packaged crates with the name and logo for InterGlobal Forest. That full container originated in China, according to public import/export data provided in the allegation.

CBP subsequently visited VN Finewood in October, where it validated that the video evidence came from the VN Finewood facility, it said. The agency also found "several inconsistencies and discrepancies in the actual quantity and description of merchandise shipped from VN Finewood." Based on the site visit and Plywood Source's videos, "there exists a reasonable suspicion that VN Finewood does not possess the infrastructure, equipment or personnel necessary to produce the volume and type of hardwood plywood it shipped to the Importers," CBP said. CBP also "determined that the individual investigations against the five importers meet the criteria to consolidate," the agency said. As a result, CBP said it will impose interim measures, including rate adjustments and suspended liquidations for unliquidated entries under investigation.

The Coalition for Fair Trade of Hardwood Plywood offered support to CBP's action. “We commend Customs and Border Protection for initiating this important investigation,” said Timothy Brightbill, a lawyer with Wiley Rein and trade counsel to the coalition. “With 200% duties on hardwood plywood imports from China, evasion and circumvention of these duties has been rampant. We welcome this strong enforcement step and hope this is the first of several such actions that CBP takes publicly to address this cheating and duty evasion.”