CBP Announces EAPA Investigation on Imported Quartz Surface Products From China
CBP has opened an Enforce and Protect Act investigation on whether Superior Commercial Services (SCS) evaded antidumping and countervailing duty orders on quartz surface products from China and has imposed interim measures, according to Feb. 2 notice. The agency said there is a reasonable suspicion that SCS transshipped quartz surface products from China through Vietnam to evade AD/CVD of up to 526.14%.
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The investigation followed an Oct. 6 allegation by Cambria Company, which claimed that SCS acted as importer of record on shipments of quartz surface products covered by the AD/CVD orders. Cambria provided evidence showing SCS as the consignee on multiple imports of artificial quartz stone countertops classified under Harmonized Tariff Schedule of the U.S. heading 6810.99.00. The classification and product description corresponded to the scope of the AD/CVD orders for quartz surface products from China. Quartz surface product imports covered by the scope of the AD/CVD orders are subject to AD ranging from 255.27% to 326.15% and CVD ranging from 45.32% to 190.99%, which, Cambra said, meant "an incentive existed to falsify the country of origin ... ."
SCS’s quartz surface products imports were shipped by Vietnamese company Cong Ty Tnhh Kales Quartz (Kales) and likely claimed as being of Vietnamese origin. Kales imported multiple shipments of quartz surface products into Vietnam from a Chinese company called Xiamen Lexiang during the period of investigation, Cambria said. The shipped merchandise was described as, “Artificial quartz stone slabs,” which, Cambria said, is another name for quartz surface products.
Cambria pointed to five shipment lines of Chinese-origin quartz surface products that Xiamen Lexiang exported to Kales in Vietnam in November 2021 and claimed that those lines corresponded to five shipment lines of quartz surface products that Kales exported to SCS just eight days later. Cambria also alleged that a Vietnamese company named Vietnam Engga Quartz exported multiple shipments to SCS between November 2020 and June 2021 and that those shipments contained very similar product numbers and descriptions that Kales listed for its shipments to SCS.
CBP found that the allegation reasonably suggested that SCS had evaded AD/CVD on Chinese-origin quartz surface products and initiated an investigation on Oct. 28. SCS's questionnaire responses to CBP provided most of the requested information but did not provide customs clearance records, certificates of origin for imported raw materials, stamped timecards from the factory, or descriptions and photos of equipment and production processes.
SCS provided purchase orders issued by Engga for each of the four entries, although two of the entries were supposedly from Kales. Several business information websites show that Engga and Kales share personnel. CBP concluded that "the close relationship, and possible affiliation, between Engga and Kales, along with their participation in each other’s shipments, indicate Engga’s participation in the same pattern of evasion as Kales." The five shipment lines of quartz surface products that Cambria traced from Xiamen Lexiang to Kales to SCS were ultimately declared to CBP as being from Engga. The entry’s packing list denotes the same product number as the five shipment lines and the entry’s commercial invoice lists quartz surface products with the same dimensions as the five shipment lines as described by Cambria, CBP said.
CBP concluded that the evidence was consistent with a Chinese parent company or companies setting up Kales and Engga, as well as another company, Strry, in response to the July 2019 AD/CVD orders. The connection indicated a possible source of Chinese merchandise, and the timing indicated a motive for transshipment, CBP said. CBP determined that reasonable suspicion existed that SCS entered Chinese-origin quartz surface products subject to AD/CVD orders into the U.S. that was transshipped through Vietnam, and imposed interim measures.
The agency will suspend the liquidation of each unliquidated entry of covered merchandise that entered on or after the date of the initiation of the investigation (i.e., Oct. 28, 2022), extend the period for liquidating each unliquidated entry that entered before Oct. 28, and may take such additional measures as determined to be necessary, including requiring a single transaction bond or additional security or the posting of a cash deposit with respect to such covered merchandise. In addition, CBP will require live entry, requiring cash deposits to be posted prior to release of merchandise from CBP custody and will reject any entry summaries that do not comply with live entry procedure.
SCS did not respond to a request for comment. Cambria responded that it had no comment on the investigation.