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U.S. Department of Commerce Self-Initiates Inquiries into Possible Circumvention Involving Exports of Corrosion-Resistant Steel Products Completed in Costa Rica, Guatemala, Malaysia, South Africa, and the United Arab Emirates

Wednesday, August 14, 2019 

WASHINGTON – Today, the U.S. Department of Commerce announced the self-initiation of new inquiries into possible circumvention involving exports of certain corrosion-resistant steel products (CORE) made with substrate from China or Taiwan, completed in Costa Rica, Guatemala, Malaysia, South Africa, and the United Arab Emirates (UAE), and then exported to the United States. These actions demonstrate Commerce’s vigilance to stop circumvention of U.S. trade laws, wherever it occurs.

In these inquiries, Commerce will determine whether imports of CORE completed in Costa Rica, Guatemala, Malaysia, South Africa, and the UAE using Chinese-origin substrate, or imports of CORE completed in Malaysia using Taiwanese-origin substrate, are circumventing the antidumping duty (AD) and countervailing duty (CVD) orders on CORE from China or the AD order on CORE from Taiwan.

Under U.S. law, Commerce may conduct a circumvention inquiry when evidence suggests that merchandise subject to an AD or CVD order undergoes a minor alteration that brings the product outside the scope of the order. Commerce may also conduct circumvention inquiries when evidence suggests that merchandise subject to an order is completed or assembled in the United States or third countries from parts and components imported from the country subject to the order. Additionally, Commerce can find that later-developed merchandise may also be covered by an existing order.

Typically, circumvention inquiries are initiated in response to allegations filed by the domestic industry. However, Commerce’s regulations provide that a circumvention inquiry may be self-initiated when the Department determines from available information that an inquiry is warranted. This is the first time that Commerce has self-initiated circumvention inquiries based on its own monitoring of trade patterns, and the first self-initiation of multi-country circumvention inquiries.

If Commerce preliminarily determines that circumvention is occurring, Commerce will instruct Customs and Border Protection to begin collecting cash deposits on imports of CORE completed in Costa Rica, Guatemala, Malaysia, South Africa, and the UAE using Chinese-origin substrate, and CORE completed in Malaysia using Taiwanese-origin substrate. These duties will be imposed on future imports, and on any unliquidated entries since the date Commerce initiated these circumvention inquiries.

Shipments of CORE from Costa Rica, Guatemala, Malaysia, South Africa, and the UAE to the United States increased in value by 29,210 percent, 35,944 percent, 151,216 percent, 629 percent, and 5,571 percent, respectively, comparing import data from the 45-month period before and after the initiations of the original AD/CVD investigations on Chinese and Taiwanese CORE.

The strict enforcement of U.S. trade law is a primary focus of the Trump Administration. Since the beginning of the current administration, Commerce has initiated 21 new circumvention inquiries – this is an 133 percent increase from the number of circumvention initiations made during the comparable period in the previous administration.

The U.S. Department of Commerce’s Enforcement and Compliance unit within the International Trade Administration is responsible for vigorously enforcing U.S. trade law and does so through an impartial, transparent process that abides by international law and is based on factual evidence provided on the record.

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