Southern Shrimp Alliance Paper for U.S. Customs and Border Protection Details Widespread Fraud in Evasion of Antidumping Duties

In comments filed today with U.S. Customs and Border Protection (CBP), the Southern Shrimp Alliance detailed the extensive fraud uncovered by CBP in enforcement operations relating to evasion of antidumping duties on shrimp and other imports.  The comments, submitted for the record in advance of a meeting of the Advisory Committee on Commercial Operations of Customs and Border Protection (COAC), summarized public record materials drawn from federal court cases, internal agency ruling letters, published agency determinations, and annual reports from CBP to Congress regarding the agency’s AD/CVD enforcement efforts.

These public records demonstrate that CBP has carefully investigated allegations of circumvention of antidumping duties and confirmed the concerns of a wide-array of trade-affected domestic industries.  Specifically, the records confirm that CBP implemented an extensive operation cracking down on the false designation of shrimp imports as “dusted” shrimp, resulting in the discovery – through laboratory analysis – of large amounts of imported shrimp that unlawfully evaded the payment of antidumping duties.  The public records also confirm, through CBP investigations, that shrimp has been transshipped through countries not subject to antidumping duties to circumvent the antidumping duty order.

In addition to the evasion of duties on shrimp imports, the public records detail operations by CBP that have uncovered unlawful circumvention of trade remedies on other products, including:

• An importer fraudulently declaring the species of fish fillets on numerous shipments of pangasius;

• An exporter establishing a company in Thailand through which to transship crawfish tail meat from China in order to evade antidumping duties;

• An importer falsely declaring that 362 entries of brake rotors originated in Canada rather than their true country of origin, China;

• Illegal transshipment of Chinese steel wire garment hangers through Vietnam that resulted in the assessment of $7.6 million in antidumping duties;

• Illegal transshipment of Chinese steel wire garment hangers through Korea that resulted in the assessment of another $4.2 million in antidumping duties;

• Illegal transshipment of Chinese steel wire garment hangers through Mexico that resulted in the assessment of another $1.3 million in antidumping duties and the arrest of two Mexican citizens;

• Illegal transshipment of Chinese citric acid that resulted in the identification of at least $17 million in unpaid antidumping duties;

• Illegal transshipment of Chinese honey through Russia;

• Misclassification of crawfish tail meat as whole crawfish to evade antidumping duties resulting in the identification of $17.3 million in unpaid antidumping duty deposits;

• Misclassification of petroleum wax candle imports that resulted in the recovery of $5 million in antidumping duties from 57 violators;

• Misclassification of porcelain on steel imports that resulted in the recovery of $450,000 in antidumping duties;

• The undervaluation and misdescription of Dynamic Random Access Memory Semiconductors from Korea; and

• The smuggling of large volumes of Polyethylene Retail Carrier Bags made in China to evade payment of antidumping duties.

These enforcement efforts testify to CBP’s commitment to enforcing trade laws but, at the same time, demonstrate the prevalence of fraud in the importation of products subject to trade relief.

With respect to shrimp imports, the Southern Shrimp Alliance believes that CBP’s discoveries through its enforcement efforts to date represent only the tip of the iceberg.