CBP Hits JBS Trading With EAPA Interim Measures Over Xanthan Gum Imports

CBP has a "reasonable suspicion" that Fort Lauderdale-based JBS Trading is evading antidumping duties on xanthan gum from China ( A-570-985), it said as it annnounced that the company is under an Enforce and Protect Act investigation. The agency alleges that when JBS Trading imported China-origin xanthan gum into the U.S., it undervalued them at the time of entry, thereby failing to pay adequate cash deposits associated with the AD order, according to a Sept. 13 release.

As the investigation occurs, CBP will require “live” entry for imports of xanthan gum by JBS Trading, meaning the importer must submit proper import documentation and duties prior to release of the merchandise; suspend or extend JBS Trading’s entries without final computation or determination of duties (liquidation), as appropriate; and review JBS Trading’s continuous bonds and require single transaction bonds for its entries, as appropriate.

CBP could undertake additional enforcement measures as the investigation progresses.

According to CBP's notice last month about the investigation, Atlanta-based xanthan gum producer CP Kelco had filed an EAPA allegation saying that JBS Trading had imported xanthan gum produced in China and undervalued it, thus failing to pay adequate AD cash deposits.

"CP Kelco submitted commercial trade data reasonably available to it that indicates JBS Trading may have entered into the United States xanthan gum that originated from China, and that it was undervalued at the time of entry, which would result in much lower AD cash deposits than if it had been entered with proper valuation. This commercial trade data indicate multiple shipments of xanthan gum from Mexico to JBS Trading valued at $0.22 per kilogram," CBP said in the investigation notice. "The Initiation Memo also noted CP Kelco provided evidence of various other xanthan gum transactions involving other parties which were valued many times higher (at least 25 times greater in each instance) than the aforementioned $0.22 per kilogram valuation of the JBS Trading transactions. ... Even if the JBS trading shipments were of such low purity grades, their valuation at $0.22 per kg is considerably lower than the values of contemporaneous transactions for other similar xanthan gum grades."

In analyzing the situation, CBP determined that JBS Trading's shipments may have occurred with a unit value that was a small fraction of other xanthan gum transactions. The average customs unit value for xanthan gum was also higher than what JBS Trading quoted, according to CBP. The importer had also misdeclared the country of origin, which "calls into question the accuracy" of JBS Trading's characterizations of its transactions.

"Given those misdeclarations, and the evidence that the unit values for JBS Trading entries of xanthan gum were only a small fraction of those of virtually all other entries of xanthan gum into the United States, including some of the same grade family as the JBS Trading merchandise, there is reasonable suspicion that the xanthan gum entered into the United States by JBS Trading during the period of investigation was undervalued, thereby resulting in underpayment of AD cash deposits under the Order," CBP said.

JBS Trading was not immediately available for comment.