CBP Announces EAPA Investigation on Thermal Paper From China

CBP announced that it has opened a formal investigation into whether WHP Associates evaded antidumping and countervailing duty orders on thermal paper and has imposed interim measures, according to an Oct. 3 notice publicly released on Oct. 18. The investigation was formally launched on June 28 following an allegation by Paper Receipts Converting Association (PRCA) that WHP, an e-commerce company located in San Francisco, transshipped thermal paper through Malaysia to evade AD orders on thermal paper from China, Germany and South Korea, and a CVD order on thermal paper from China.

PRCA alleges that WHP imported thermal paper from a Malaysian company, Actan. PRCA said Actan improperly marked the paper as Malaysian, while in fact importing rolls to then convert into smaller thermal paper rolls. PRCA cited shipping data that showed imports to Malaysia of thermal paper from South Korea, Germany and China; industry reports citing zero thermal paper production in Malaysia; and Actan's own website, which did not mention paper manufacture. PRCA said that Actan's conversion of jumbo thermal paper rolls into smaller slit rolls was a "minor operation" that did not change the country of origin.

WHP itself confirmed that it imported thermal paper from Acton in its responses to a CBP questionnaire in September. WHP also provided information that Actan purchased jumbo thermal paper rolls from Hansol Paper Co., Ltd. in South Korea, and pictures of the production process provided by WHP show Actan unrolling jumbo rolls of thermal paper that are then slit and rerolled into smaller rolls.

CBP said that "rerolling does not result in a substantial transformation so as to change the [country of origin] of the merchandise." South Korean-origin thermal paper supports PRCA's allegation that WHP imported thermal paper transshipped through Malaysia and "Actan's own company information shows that its main business is converting [rather than manufacturing] paper products."

CBP announced that given the evidence, it will impose interim measures that suspend the liquidation of each unliquidated entry of covered merchandise that entered on or after June 28, extend the period for liquidating each entry that entered before the date of the initiation of the investigation, and take additional measures as the agency determines necessary, including requiring a single transaction bond, additional security, or the posting of cash deposits. CBP said that it will require live entry and reject any non-compliant entry summaries, and will require refiling of entries that are within the entry summary rejection period. CBP will continue to evaluate WHP Associates’ continuous bonds to determine sufficiency.