CBP Announces EAPA Investigation, Interim Measures on Xanthan Gum From China
CBP announced a new Enforce and Protect Act investigation, saying it has reasonable suspicion that Guy & O’Neill evaded the antidumping and countervailing duty orders on xanthan gum from China and has enacted interim measures against the importer.
Sign up for a free preview to unlock the rest of this article
Export Compliance Daily combines U.S. export control news, foreign border import regulation and policy developments into a single daily information service that reliably informs its trade professional readers about important current issues affecting their operations.
The initiation notice, dated March 28, followed an August 2023 allegation from CP Kelco, which said that the importers were evading the AD/CVD orders. The product in question appeared to be made by a Chinese manufacturer and transshipped through Israel, the alleger said.
Guy & O'Neill evaded the AD/CVD orders on xanthan gum by falsifying the country of origin, using an Israeli manufacturer to transship the goods and then importing xanthan gum into the U.S., CP Kelco said. CP Kelco supported this allegation with U.S. import data showing imports of xanthan gum from Israel to the U.S. The alleger also provided data that the Israeli supplier used a Chinese company as its xanthan gum supplier and CBP confirmed this in its own research, CBP said.
CP Kelco also provided an affidavit from its senior director and a 2018 report issued by the International Trade Commission saying xanthan gum is produced only in Austria, France, China and the U.S., and could not have been produced in Israel.
CBP issued a Form 28 request in January to Guy & O'Neill for a copy of the contract or purchase order and a second CF-28 request for a purchase order, a description of the merchandise, a breakdown of the ingredients used to produce the merchandise, photographs of the manufacturing process and facility, and the names and addresses of the manufacturers that produced the xanthan gum for certain entries.
In its response, Guy & O'Neill acknowledged that the xanthan gum purchased was manufactured in China, and then submitted corrected 7501s for certain entries, declaring them subject to AD/CVD, CBP said. All of this led CBP to say the information supports a "reasonable suspicion" that the importer entered the xanthan gum through evasion.
The agency said it will suspend liquidation for each unliquidated entry on or after Dec. 22, 2023, the date of the investigation initiation, and extend the period for liquidating each unliquidated entry of such covered merchandise that entered before that date. It also said it may take additional measures, including requiring a single transaction bond or additional security or the posting of a cash deposit with respect to such covered merchandise. CBP will require live entry and reject any entry summaries that don't comply with live entry procedures as well as evaluate the importer's continuous bonds to determine sufficiency.
Guy & O'Neill didn't respond to our request for comment.