CBP Launches 2 EAPA Investigation Into Pipe Fittings, Touts Evidence of Continued Evasion Scheme

CBP initiated two antidumping and countervailing duty evasion investigations on cast iron soil pipe fittings (CISPF) from China under suspicion that imports from certain companies were evading the orders by way of transshipment through Cambodia. The Cambodian-registered company Little Fireflies International was implicated in both of the investigations as the importer of record in each case but also as the source of the covered merchandise for another importer named in one of the investigations, Granite Plumbing. CBP imposed interim measures in both investigations after finding a reasonable suspicion that Little Fireflies and Granite Plumbing entered merchandise covered by the ADD/CVD orders through evasion.

The cases were initiated after it was alleged that Little Fireflies was registered as a Cambodian company to continue a scheme that had already been previously determined to be evasion of the same goods by CBP. CBP in a separate Enforce and Protect Act investigation found that U.S. importer Lino International evaded the same ADD/CVD orders through transshipment via Cambodia. CBP found that Lino acted as the trade arm for Dalian Metal and that Dalian Metal and Dalian Lino FTZ Co. are affiliates in China. The result of this investigation was a 58.90% dumping rate for Dalian Metal and its affiliates.

The exporter in Lino's investigation was HiCreek Plumbing Co. The EAPA allegation said that HiCreek was registered in Cambodia to an individual named "Qian Zhang," a Chinese national who also was the manager of Qingdao H.R. International Trading Co. -- an exporter of CISPF. The allegation said that HiCreek was likely established to skirt the AD/CV duties on Chinese CISPF. The EAPA initiation notices in Little Fireflies' cases say that Dalian Metal and Lino "copied the previous HiCreek evasion scheme and had a sales representative register the Little Fireflies company in Cambodia to continue to transship covered merchandise to the United States." Little Fireflies was registered in Cambodia in 2020.

In September, CBP issued requests for information to Little Fireflies for two entries of CISPF, to which the importer failed to respond. The customs agency was able to elicit a response only after threatening to assess AD/CV duties on the entries. Little Fireflies then submitted one document for each entry, still failing to provided nine other requested documents to CBP.

"The reasonably available evidence the Alleger presented -- including [Source] data showing shipments of CISP [fittings] from Little Fireflies in Cambodia to the United States by the importers, indications of a connection between Little Fireflies’ director and chairman of its board to Dalian Metal, and evidence from past EAPA investigations of attempts by Dalian Metal to avoid payment of AD/CVD duties in a similar way to what is alleged here -- reasonably suggests that the Chinese CISP producer Dalian Metal may be using the Cambodian exporter Little Fireflies to facilitate the transshipment of covered merchandise through Cambodia," one of the notices said.

The second notice, which just looked only into Little Fireflies' alleged evasion, found that: "Because Little Fireflies provided no information to contradict record evidence, as detailed in the Allegation, CBP finds that there is reasonable suspicion that Little Fireflies is transshipping CISPF through Cambodia to the United States."