CBP Announces EAPA Investigation, Interim Measures on Xanthan Gum From China

CBP announced an Enforce and Protect Act (EAPA) investigation on whether Texas United Chemical Company and TBC-Brinadd evaded an antidumping duty order on xanthan gum from China. The agency said it found reasonable suspicion existed that the importers had transshipped Chinese-origin xanthan gum through Turkey, necessitating the imposition of interim measures.

The Nov. 8 announcement followed a March allegation by CP Kelco U.S., which claimed that U.S. importer TBC-Brinadd was evading the AD order. Later in March, CP Kelco amended its allegation to clarify that Texas United was the parent company and TBC-Brinadd and Texas United were incorporated at the same address.

CP Kelco alleged that Turkish exporter Neu Kimya exported "significant volumes" of xanthan gum to the U.S. despite Turkey having no xhanthan gum producers, and provided evidence to support that claim, CBP said. CP Kelco also provided trade data that showed a single shipment of xanthan gum departing Aliaga, Turkey, and routed through Portugal before arriving in Houston. CP Kelco said the xanthan gum couldn't have been of Turkish-origin because xanthan gum is manufactured in only four countries worldwide: Austria, France, China and the U.S. CP Kelco provided International Trade Commission data to support that assertion.

In addition, CP Kelco said that China is the largest supplier of xanthan gum to Turkey, accounting for more than 80% of all Turkish imports. CP Kelco stated that any exports of xanthan gum from Turkey were likely of Chinese origin.

CBP found that the allegation reasonably suggested evasion by Texas United and initiated investigations in June and July, issuing questionnaires to both importers. CBP said the information could have enabled it to verify factory capabilities, production processes, country of origin, and confirm the identity of the manufacturers of the imported merchandise.

But the response to CBP's Form 28 from TBC-Brinadd and Texas United "corroborated CP Kelco’s allegations, as it admitted, and provided documentation supporting the fact, that xanthan gum imported by the Importer originated from, and was produced in, China," CBP said. "Through the date of this Notice, the Importer has yet to provide any information to CBP that would contradict CP Kelco’s allegations or provide explanations to alleviate reasonable suspicion of evasion as expounded upon throughout this Notice."

The agency said it will suspend the liquidation of each unliquidated entry that entered on or after Aug. 8, the date of the initiation of the investigation, extend the period for liquidating each unliquidated entry of such covered merchandise that entered before that date, and 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 procedure as well as evaluate TBC-Brinadd and Texas United's continuous bonds to determine sufficiency.

This case is similar to an EAPA case brought in September of this year (see 2309290006), in which CP Kelco brought a case against Ebuy Enterprises and Highland USA.