CBP Finds AD Evasion by Chemicals Company on Xanthan Gum Shipments
CBP issued an Enforce and Protect Act determination, finding Mak Chemicals evaded antidumping duties by transshipping xanthan gum from China through Indonesia, according to a recent agency notice.
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Mak Chemicals said that it relied on a buying agent in India to verify the manufacturer's profile and production capabilities and their customs broker for guidance on classification and AD/CVD matters. Additionally, Mak Chemicals took at face value the supplier-issued certificate of origin, despite the certificate being undated, which CBP noted is an "uncommon business practice." The supposed Indonesian manufacturer did not respond to CBP's requests for information during the investigation.
Food products company CP Kelco initially filed the EAPA allegation against Mak Chemicals in October 2023, claiming that the company evaded the antidumping duty order on xanthan gum from China (A-570-985) by importing Chinese-origin xanthan gum via transshipment through Indonesia. An official with CP Kelco said xanthan gum is manufactured in four countries: Austria, France, China and the U.S.; CP Kelco has used this line of reasoning in several recent evasion allegations (see 2410250027).
CP Kelco provided trade data showing that the average unit value of xanthan gum from Indonesia is significantly lower when compared with countries such as Austria and France, supporting the conclusion that the origin of the imported Indonesian shipments is more than likely China. Additionally, the Indonesian supplier listed in the shipping documents occupies a 15th-floor office, making manufacturing extremely unlikely, according to CBP. Upon receipt of the allegation, CBP initiated an EAPA investigation in December 2023 and enacted interim measures against Mak Chemicals.
Mak Chemicals has ceased purchasing and selling xanthan gum since the onset of the investigation, CBP said.
CBP said it would suspend or continue to suspend the entries covered by this investigation, until instructed to liquidate. Also, for those entries previously extended in accordance with interim measures, CBP said it would rate adjust and change those entries to type 03 and continue suspension until instructed to liquidate the entries.
CBP also said it would continue to evaluate Mak Chemicals' continuous bonds in accordance with agency policies. Mak Chemicals did not immediately comment on the ruling.