CBP Finds Evidence That Importer Evaded Order on Aluminum Extrusions From China
CBP found substantial evidence that Midwest Livestock Systems evaded antidumping and countervailing duty orders covering steel gratings from China. CBP, in an Enforce and Protect Act notice of determination dated April 9, said that Midwest Livestock imported the steel gratings in the form of “tri-bar flooring” from a Chinese supplier, failing to declare the items as subject to the AD/CVD orders.
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The allegation was filed by Hog Slat in May 2023, a U.S. hog production equipment manufacturer (see 2309150022). It said that Midwest Livestock had entered covered steel grating from China either as a stand-alone product or as part of a package of components used to construct farrowing crates and gestation pens. Hog Slat said that the tri-bar flooring met the plain language of the scope of the order. Hog Slat also provided an affidavit stating that Midwest’s current U.S. pricing for tri-bar flooring wiring was not feasible without AD/CVD evasion, as the combined AD/CVD rate is over 200%.
CBP issued its EAPA Initiation of Investigation in September 2023 after determining there was reasonable suspicion of evasion by the importer and sent out requests for information in September, November and December 2023.
In response, Midwest Livestock said that it purchases equipment from the Chinese company Bai Mu Da, but there is no further affiliation. However, the company provided several independent contractor agreements with the two companies dating back to a redacted year, CBP said. The agency found that a Midwest Livestock employee was also Bai Mu Da's manager and majority owner, meaning that they were affilaited.
There is also evidence that Bai Mu Da didn't manufacture the floors but purchased them from a Chinese factory, CBP said. The Chinese supplier then coordinated the shipping, export declaration and tariff classification of the tri-floors and other items not covered by the orders.
CBP said that before its August 2023 cargo exam, Midwest Livestock didn't declare tri-floors in any of its entries during the period of investigation. However, after the cargo exam, the company admitted that it had entered tri-floors along with "non-subject merchandise" for six entries during the period of investigation. Five of those entries contained tri-floors that Midwest Livestock initially concealed from CBP in entry summaries but "eventually admitted" to, the agency said.
The companies also withheld documents that CBP requested and made "material false statements" that concealed the evidence CBP needed to do its investigation, the agency said. These false statements also included lying about their affiliation, purchase orders, drawings, quotation documents, and correspondence, CBP said.
Although there were adverse interferences, they are not necessary as there is substantial evidence of evasion as both companies acknowledged that some of the entries contained tri-floors, the agency said.
CBP will suspend or "continue to suspend" the liquidation of all entries that are subject to this EAPA case from Midwest Livestock, CBP said. For the entries CBP extended for its interim measures, the agency will "rate adjust" and change those entries to type 03 and will continue suspension of liquidation until instructed otherwise, CBP said. The agency also will evaluate Midwest Livestock's continuous bond and may require single transaction bonds "as appropriate." This doesn't stop CBP or other agencies from taking "additional enforcement actions," CBP said.
Midwest Livestock Systems didn't respond to our request for comment.