CBP Finds Evidence of AD/CVD Evasion by Thermal Paper Importers

CBP found substantial evidence that Exquis, Lollicup USA and Sanster evaded antidumping and countervailing duty orders covering thermal paper, the agency said. It found that all three importers evaded the orders on thermal paper from China and found that Exquis also evaded the AD order on thermal paper from South Korea, CBP said.

The Enforce and Protect Act investigation was launched by CBP in January 2023, after the Paper Receipts Converting Association filed four EAPA allegations against the importers the previous November. The investigation covered imports beginning on Jan. 10, 2022. It started on Feb. 1, 2023, and the Notice of Investigation was sent out in May 2023.

The scope of the Chinese and South Korean orders covers "certain lightweight thermal paper" that weighs 70 grams per square meter or less, CBP said. Two Customs rulings have found that the country of origin of thermal paper is "where the thermal chemicals are applied" not where the thermal paper is converted into lightweight product, the agency said.

In its response to a CBP request for information response, Mega Thermal, the Taiwanese company that the thermal paper was sourced from, said that it converted jumbo rolls of thermal paper into smaller sizes and sold it to the importers. Because that didn't remove the thermal paper from the scope, that meant the thermal paper was transshipped, CBP said.

Mega Thermal provided a converting worksheet that CBP was able to use to find the country of origin of the paper, CBP said.

Lollicup USA argued that the thermal paper was substantially transformed in Taiwan and therefore Taiwan is the country of origin. But CBP said that the conversion of the thermal paper jumbo rolls to smaller sizes didn’t substantially transform it, so China and South Korea are the countries of origin. It said it “will assess duties based on the information found in the Converting Worksheet for these entries.”

CBP will suspend the liquidation of entries that are subject to both orders and continue suspension until instructed to liquidate the entries, it said. For entries that were previously extended when the interim measures were announced, it will "rate adjust" and change those entries to "type 03 and continue suspension until instructed to liquidate these entries," CBP said. The agency also will evaluate the importers and may require "single transaction bonds as appropriate.”

Exquis, Lollicup, Sanster and Mega Thermal didn't respond to our requests for comment.