CBP Finds Evasion of AD/CVD Orders on Glycine From China, Not From Thailand

CBP, in closely linked cases, determined that there is substantial evidence that importers Starille, Nutrawave and Newtrend USA evaded antidumping and countervailing duty orders on glycine from China (EAPA Consolidated Case No. 7647), while there was a lack of substantial evidence that the same importers evaded an AD order on glycine from Thailand (EAPA Consolidated Case No. 7663).

The cases followed two allegations by Geo Specialty Chemicals that the importers purchased glycine from PT Newtrend Nutrition Ingredient, an Indonesian affiliate of the Chinese Newtrend Group, before PTNNI’s Indonesian factory was able to produce glycine on its own. The allegation included a market research report, photos of PTNNI's factory and interviews with at least one PTNNI employee who allegedly told the investigator that the factory wasn't ready for production, although shipments were already in the U.S. Geo Specialty also alleged that PTNNI and the importers had "strong ties" to the Newtrend Group and its Thai affiliate, Newtrend Food Ingredient, including business registration records showing Nutrawave was first established at an address in Thailand and shared management personnel with the Newtrend Group. CBP found the allegations reasonably suggested that the importers entered covered merchandise through evasion, and opened a series of investigations into the importers between July and September 2021.

CBP issued requests for information to the importers and the manufacturer in October. PTNNI responded that it is owned by the Newtrend Group and that Newtrend Thailand produced glycine before the start of the period of investigation. PTNNI failed to provide information on the capacity of its factory equipment and sourcing data for its inputs.

Starille and Nutrawave said that they aren't affiliated with any other company but did purchase some glycine from PTNNI during the investigation period. Newtrend submitted a CBP verification report from a previous EAPA investigation, along with a Commerce Department second verification report from the Thailand antidumping duty investigation (A-549-837) and a decision memorandum in which CBP determined that Newtrend Thailand was not transshipping Chinese-origin merchandise. CBP found that there was reasonable suspicion that the importers entered covered merchandise into U.S. through evasion and introduced interim measures in both cases in October.

In May 2022 CBP officials visited PTNNI’s factory in Indonesia, where they interviewed PTNNI employees about company operations and organization, toured PTNNI’s facility to witness glycine production and reviewed accounting records of production and sales records associated with imports of glycine by the importers. CBP’s verification team observed deficiencies in the plant's ability to manufacture USP-grade glycine and calculated that PTNNI didn't purchase enough methanol to produce the volume of glycine it claimed to have produced.

On June 16, the importers submitted written arguments critiquing CBP's calculations and procedures. CBP responded that the manufacturers failed to provide information to accurately support many of the importers' claims, particularly the claim that methanol was recycled repeatedly at PTNNI's factory, resulting in low methanol usage rates. In response to complaints of due process violations, CBP responded that it extended the deadline for written submissions by 100 days in order to provide the importers time to respond adequately.

Ultimately, CBP found that there was substantial evidence that the three importers transshipped Chinese-origin glycine through Indonesia in order to evade AD and CVD orders. PTNNI could not have produced the volumes of intermediate glycine, and lacked an adequate workforce to produce the volumes of finished glycine sold even if the equipment in PTNNI's factory had been installed on the supposed production start date. Therefore, CBP determined that China was the country of origin. CBP also determined that the importers did not evade the AD on Thai glycine because the glycine PTNNI sold the importers was not Thai-origin and therefore not covered by the order.

CBP will require that for any imports of glycine from PTNNI, the importers will deposit estimated duties at the time of entry, and CBP will continue to evaluate the continuous bond. CBP said that these measures do not preclude it, or any other office, from taking additional actions as deemed necessary.

"The domestic glycine industry is thrilled that CBP thoroughly investigated the glycine transshipment issue at the PT Newtrend Nutrition Ingredient facility in Indonesia and determined that the U.S. importers Newtrend USA, Nutrawave and Starille purchased transshipped Chinese glycine from Indonesia that should be subject to the Chinese glycine antidumping and countervailing duty orders," said David Schwartz, counsel for Geo Specialty Chemicals.

A lawyer for the importers declined to comment.