U.S. Customs and Border Protection (“CBP”) recently announced two new final determinations that importers of garlic and pipe fittings were evading antidumping and countervailing duties, under the Enforce and Protect Act (“EAPA”).

Title IV, Section 421 of the Trade Facilitation and Trade Enforcement Act of 2015 is commonly referred to as The Enforce and Protect Act of 2015 or EAPA. EAPA establishes formal procedures for submitting and investigating antidumping or countervailing allegations of evasion against U.S. importers. U.S. Customs and Border Protection has the responsibility for tracking and reporting allegations of evasion from initial receipt, vetting and enforcement actions, to final disposition of an investigation. In recent years, CBP has been ramping up use of these enforcement tools, as evidenced by these two recent decisions. Since the first case was filed in 2016 and to date, CBP has issued fourteen final EAPA determinations, all of which have been found to be affirmative.

In the investigation on IPC International Inc, CBP found that there was sufficient evidence that the garlic importer IPC, illegally avoided antidumping duties on the Antidumping Duty Order on Fresh Garlic from China. IPC has been under investigations since the allegation was filed by the Fresh Garlic Producers Association in December 2018. While IPC maintained and claimed that it was eligible for a lower rate based upon the fact that its garlic imports were produced by Jinxiang Zhongtian Business Company and exported by Shijiazhuang Goodman Trading Co., CBP’s site visit seemed to demonstrate otherwise. CBP stated in its final determination that “[t]he factual record of this investigation provides substantial evi­dence that at least some of the merchandise entered by IPC was not produced by Zhongtian and therefore should have been entered at the duty rate of $4.71 per kilogram,” CBP said. “In the aggregate, this resulted in the loss of tens of millions of dollars in AD duties to the U.S. government.” As a result of the final deter­mination of evasion, going forward, “CBP will continue to require live entry, which requires that the importers post the applicable cash deposits prior to the release,” of the merchandise.

In another EAPA investigation based upon an allegation by Allied Group that multiple pipe fittings importers illegally avoided and evaded antidumping duties on the Antidumping Duty Order on Certain Carbon Steel Butt-Weld Pipe Fittings from China, CBP once again found that these importers were in fact evading duties. The pipe fittings case involved six importers: Ductilic, Inc.; Iron Mule Products; Missouri Pipe Fittings; Norca Industrial Company, LLC; Trupply, LLC; and Service Metal Products. The importers were alleged to have “misclassified and/or transshipped through KKFF Bend (Cambodia) Co., Ltd. (‘KKFF Bend’), an alleged producer of butt-well pipe fittings in Cambodia, and falsely declared as being of Cambodi­an origin.” The case was based upon adverse inferences because the Cambodian entity KKFF Bend did not respond to CBP’s requests for information. CBP was forced, due to the lack of cooperation by KKFF Bend and importers to make an affirmative finding of evasion. CBP’s decision indicates that based upon the facts available to it that butt-weld pipe fittings that were imported into the United States were in fact of Chinese origin and transshipped through Cambodia as well as in certain instances misclassified as product other than butt-weld pipe fittings. As a result, CBP will continue to require live entry and extend the liquidation periods of unliquidated entries, it stated in the decision.