U.S. Customs and Border Protection (CBP) has determined that Sun Bright International Corp. and Fair Importing Corp. two Chinese companies have evaded antidumping (AD) and countervailing duties (CVD) by importing aluminum extrusions into the U.S. from China by transshipment through Malaysia and mis-stating the true country of origin which was China.
CBP says it has substantial evidence that the companies did not declare that the merchandise was subject to AD/CVD orders and made no tariff payments on the extrusions. Sun Bright produces aluminum profiles for curtainwalls, doors, windows and other uses.
Customs and Border Protection were provided an email exchange between a Chinese freight forwarder and a foreign investor as evidence. The email exchange between Qingdao ZHV International Logistics Co. Ltd., (ZHV) a Chinese freight forwarder and a foreign investigator. ZHV said that it ships products from Foshan China to Port Kelang , Malaysia where it changes the container and then re-exports the product to third counteiws. As part of the email exchange, ZHV responded to the investigator’s request for examples of successful transshipments by providing a Certificate of Origin indicating that Mailaysia was the country of origin Using this information, the extrusions were traced into the U.S. by Sunbright Industry New York.
According to the notice, AEFTC alleged that CK Aluminum’s facility in Malaysia does not produce aluminum extrusions. CBP officials in Malaysia visited the facility and came to the same conclusion, finding “reasonable suspicion” that the companies evaded AD/CVD orders.
“Substantial evidence on the record of this investigation supports a determination that the importers’ entries of aluminum extrusions from their supplier, CK Aluminium, were made by material false statements or acts, and material omissions, that resulted in the avoidance of applicable cash deposits required under AD order A-570-967 and CVD order C-570-968. Specifically, the aluminum extrusions imported by the Importers, and declared to be of Malaysian origin, were actually Chinese-origin aluminum extrusions that were transshipped through Malaysia. The Importers did not declare that the merchandise was subject to the AD and
CVD orders on aluminum extrusions from China upon entry and, as a result, no cash deposits were collected on the merchandise,” reads the notice’s final determination of evasion.
Going forward, CBP will require the companies to pay the applicable cash deposits prior to releasing the extrusions into the U.S. market.
THE FALSE CLAIMS ACT AND TARIFF EVASION
Evasion of U.S. tariffs through trans-shipping and falsify countries of origin is happening in various industries where products are imported into the US. such activities may be revealed through the False Claims Act (FCA) which allows private citizens to file actions on behalf of the federal and state governments where fraud has occurred. The FCA allows a whistleblower to recover up to 30% of what the government recovers in the case.
Jeffrey Newman handles tariff evasion cases under the False Claims act.
