The article analyzes illegal evasion of trade remedies on four different groups of imported products: fresh garlic, honey, glycine, and canned mushrooms. Overall, U.S. Customs and Border Protection (CBP) has reported to Congress that there has been a total of $1.79 billion in unpaid antidumping and countervailing duties. Using specific examples, the article describes how manipulating the new shipper and administrative review process to obtain low cash deposit rates, as well as outright fraudulent misidentification of goods at entry, results in the illegal evasion of hundreds of millions of dollars in antidumping duties each year.
On the U.S. side of the import transactions, “shell” companies act as the U.S. importers of record, but then disappear once bills come due. Shipments from one Chinese exporter of canned mushrooms are likely to result in antidumping duty bills of “at least $100 million,” according to the article. “But collecting will be difficult if not impossible” as at least five of the companies that purportedly acted as the importers of record have dissolved or cannot be located.
The fraud confronting federal agencies is sometimes committed by the same actors engaged in multiple transactions over time. One CBP investigation found that a garlic exporter had misidentified the producer of the merchandise, as the packing codes used in the commercial sale documentation identified the source of the garlic as another producer “a company responsible for 255 unpaid duty bills amounting to $12 million,” according to the article.
Commenting on the schemes documented by the Hearst Newspapers investigation, Picard Kentz & Rowe LLP partner Adam Gordon called the fraud “typical of the kinds of schemes that we have seen” which left trade law practitioners “wondering how many haven’t been found yet.”
The article, along with the vast majority of independent investigations of trade fraud, underscores the severity of evasion and circumvention of trade remedies. These schemes do not only violate the law; they cost the U.S. Treasury billions of dollars and do substantial damage to U.S. industries that have demonstrated material injury by reason of unfairly traded goods.
The full article is available here: http://www.sfgate.com/nation/article/Illegal-Chinese-garlic-imports-pounding-U-S-5396865.php
