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 BMF Imports evaded the antidumping and countervailing duty orders on xanthan gum from China, and has enacted interim measures against the importer.
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The initiation notice, dated April 2, followed an August allegation from CP Kelco, saying the imports were evading the AD/CVD orders. The product in question appeared to be made by a Chinese manufacturer and was transshipped through India, the alleger said.
BMF Imports evaded the AD/CVD orders on xanthan gum by falsifying the country of origin, using two Indian manufacturers 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 between BMF Imports and the Indian manufacturer. One of the Indian manufacturers' website had xanthan gum bearing the name of a prominent Chinese manufacturer of xanthan gum, CP Kelco said.
The alleger provided shipping data showing a large import of xanthan gum from India to the U.S. in September that, based on the ship manifest data, was likely reported as originating from India. CP Kelco also alleged that xanthan gum isn't produced in India. An affidavit from CP Kelco's senior director and a 2018 report issued by the International Trade Commission said xanthan gum is produced only in Austria, France, China and the U.S., and couldn't have been produced in India.
CBP issued a Form 28 request to BMF lmports for three of its entries requesting photographs of the equipment used to produce the xanthan gum, production capacity of the equipment used, complete factory production records, factory-specific histories and the names of the factory owners and corporate officers, purchase orders, commercial invoices, transportation documents, entry transaction information, and the names of all intermediaries involved.
BMF Imports didn't submit any of the requested production records. This information could help CBP verify factory capabilities and production processes, and confirm the manufacturer's identity, the agency said. Without it, there is no record evidence to determine if either of the manufacturers produced the xanthan gum for the entries, the agency said. BMF Imports also conceded in one of its entries that the manufacturer of the xanthan gum was a Chinese producer. This led the agency to conclude there is reasonable suspicion of evasion.
The agency said it will suspend liquidation for each unliquidated entry on or after Dec. 27, 2023, the date of the investigation's 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.
BMF Imports didn't respond to our request for comment.