C.I.S. Investments Evaded AD/CVD Orders on Imported Forged Steel Fittings, CBP Rules

CBP has determined that C.I.S. Investments, doing business as Triangle Metals, evaded antidumping and countervailing duty orders on forged steel fittings from China, according to a Dec. 20 notice. The determination comes at the end of an Enforce and Protect Act investigation, which found that C.I.S. transshipped fittings through Indonesia, Sri Lanka and Thailand, did not declare that the merchandise was subject to AD/CVD orders upon entry, and made no cash deposits. CBP will require that for any imports of forged steel fittings from Sri Lanka, Thailand or Indonesia, C.I.S. deposit estimated duties at the time of entry, and CBP will evaluate the continuous bond and will require single transaction bonds as appropriate.

The investigation followed a January 2021 allegation by Flatlands Holdings, doing business as RK Supply, that C.I.S. imported forged steel fittings from four foreign suppliers in Indonesia, Sri Lanka and Thailand as part of a transshipment scheme involving Chinese logistics company Kingtrans Container Line. RK Supply also alleged that Kingtrans openly advertised sending Chinese-made products to third countries in South and Southeast Asia to change the country-of-origin markings without any further processing.

RK Supply provided trade data showing that C.I.S. imported Chinese-origin forged steel fittings from the Indonesian supplier Satria Tunas Persada; a Thai suppler, Siam Innovation Goods; and two Sri Lankan manufacturers, Eastborn and EFL Global. RK Supply produced a material test report for fittings it allegedly purchased from C.I.S., which was issued by Eastborn and signed by an employee of Jiangsu Forged Steel Fittings, a Chinese producer subject to the AD/CVD orders. Finally, RK Supply provided information on the four supposed manufacturers suggesting that none of them actually produced forged steel fittings. CBP found that the allegation was sufficient to launch a formal EAPA investigation and initiated one in February 2021.

CBP issued questionnaires to the four foreign suppliers and C.I.S. Several pieces of information on the responses provided by C.I.S. indicated that the documents were improperly created and possibly forged or fraudulent, CBP noted. EFL Global responded that it was not a manufacturer of any covered merchandise and instead acted as a freight forwarder to import Chinese forged steel fittings into Sri Lanka for re-export to the U.S. C.I.S. provided a factory profile and a general production process flow chart for its Indonesian supplier, Satria, but CBP noted that "no documents C.I.S. provided ... demonstrate that Satria even exists as a legally registered company in Indonesia." When CBP officials attempted to visit the factory it could not be located in its area of supposed operation.

The C.I.S. response said that Siam Innovation Goods was not the manufacturer for any of the entries covered by the questionnaire. Siam Innovation purchased pipe fittings from a Thai manufacturer and resold them to C.I.S. When CBP officials visited Siam Innovation's address in Thailand, they discovered an unoccupied residential building. In an investigation of Eastborn’s factory building, CBP noted that none of the provided photos showed equipment in use, except for one image of a pipe fitting being welded, which was not listed as a step in Eastborn’s production process. C.I.S. also provided inadequate information in its responses regarding transfers of product from Eastborn to C.I.S.

Given the evidence, CBP issued a notice of investigation and interim measures in May 2022. Many of the records C.I.S. produced documenting the production capabilities of its suppliers have been shown to be fraudulent. Specifically, a photo showing Eastborn's manufacturing facility, which C.I.S. later admitted was an altered image of another company’s factory. The deception undermined the credibility of other documents provided by C.I.S., CBP said.

C.I.S. contends that it has fully cooperated with this EAPA investigation, and CBP has no basis for applying adverse inferences in this case. However, "no foreign manufacturer has responded to a single request for information from CBP, even though CBP received acknowledgement from all the foreign manufacturers that they received the requests for information," the agency said. Information from the manufacturers validating their production capacity is central to the question of evasion and with no information from those manufacturers, CBP was forced to use adverse inferences the agency said. The totality of the evidence and the adverse inferences added up to "substantial evidence" that the forged steel fittings imported by C.I.S. were in fact Chinese-origin and subject to AD and CVD orders.

Brian Murphy, a lawyer representing C.I.S., said that the company "takes its customs compliance efforts seriously and it cooperated fully and to the best of its ability with the investigation." RK Supply did not respond to a request for comment by press time.