US Seeks Nearly $1 Million in Evaded AD Duties on Steel Wire Hangers

Zhe "John" Liu and GL Paper Distribution owe the U.S. nearly $1 million for evading antidumping duties on steel wire hangers from China by transshipping the wire hangers through Malaysia, the U.S. argued in a July 21 complaint at the Court of International Trade. Alleging that Liu and GL Paper negligently avoided paying the duties, the U.S. took to the trade court to seek payment of the penalties, which equals the domestic value of the steel wire hanger entries made by GL Paper in 2017 (The United States v. Zhe "John" Liu, CIT #22-00215).

Liu is a Florida resident who operated or was an agent of multiple Florida-based companies, including co-defendant GL Paper Distribution and NC Supply, NC Supply Group, CEK Group, Garment Cover Supply (GCS) and AB MA Distribution Corp. (ABMA). Liu began creating companies to import steel wire hangers from China in 2004. In 2008, though, an antidumping duty order was placed on the hangers, placing an 186.98% China-wide rate on the imports.

Liu created CEK in 2012, then participated in a new shipper review of two Chinese steel wire hanger manufacturers in 2013 as president of the new company. The U.S. said the defendant showed his "thorough knowledge of antidumping duties" during the review. Liu then formed GCS in 2013, allegedly using the company to import hangers he claimed were from Malaysia but were in fact made in China. Liu then formed GL Paper in 2016, also using the company to import steel wire hangers claimed to be made in Malaysia.

In 2017, an Alabama-based wire hanger maker filed an Enforce and Protect Act allegation against GL Paper, alleging that evasion of the antidumping duties was occurring via a Malaysia transshipment scheme. The EAPA case prompted a site visit from the U.S. where it was purportedly discovered that GL Paper was not making wire hangers. GL Paper dissolved as a corporation in 2017. Liu then formed ABMA, using this company to allegedly import wire hangers claimed to be from India and Thailand but that were made in China. Liu then caused CEK to import wire hangers he claimed were made in Thailand just a week after ABMA's last importation of steel wire hangers in 2019, the U.S. said.

The U.S.'s complaint, however, while detailing the workings of many of Liu's businesses, only seeks to collect penalties on GL Paper's imports, which the U.S. claims skirted antidumping duties. "The acts ... were committed as the result of negligence by Liu and GL Paper, by failing to exercise the degree of reasonable care and competence expected from a person in the same circumstances," the complaint said. "... By reason of these negligent violations ... Liu and GL Paper are jointly and severally liable to the United States for penalties in the amount of $977,569.10."