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Enforcement Resources
The effective enforcement of unfair trade orders depends on close collaboration between the Departments of Homeland Security and Commerce to identify and investigate patterns of noncompliance, to work cooperatively to advance enforcement cases, as well as on partnerships between the agencies and private sector stakeholders who are critical to identifying unfair trading practices and in helping to inform government officials of relevant information to support these enforcement efforts.
What Is Evasion?
Evasion is an illegal activity that refers to the importation of merchandise into the United States by an act or omission that is material and false, and which results in the correct duties being reduced or not applied to the merchandise. Examples of evasion include:
- Misrepresenting the true country of origin of the merchandise (e.g., through fraudulent country of origin markings on the product itself or false sales documentation),
- Undervaluing the merchandise, or misrepresenting the actual manufacturer or exporter using false or incorrect documentation so as to pay a lower amount of duty, or
- Misreporting the merchandise’s physical characteristics.
What Is Circumvention?
Circumvention involves an action by a foreign entity or U.S. importer to avoid the assessment of AD/CVD duties by modifying a product in order to claim that it does not fall within the scope of an existing AD/CVD order. Common circumvention schemes involve:
- Importing parts or components of a product and completing or assembling them in the United States;
- Completing or assembling a product in a third-country and claiming that the country of assembly is the product’s country of origin;
- Making minor alterations to a product; or
- Importing a later-developed product that includes physical characteristics or features that did not exist at the time of the original investigation that resulted in an unfair trade order.
Which U.S. Government Agencies Have Authority to Enforce AD/CVD Orders?
The Enforcement and Compliance business unit within the Commerce Department’s International Trade Administration (ITA) is responsible for enforcing the U.S. AD/CVD laws to protect U.S. businesses. Once an AD/CVD order is in place, the Commerce Department conducts retrospective annual reviews of merchandise imported into the United States to determine the specific margins by which the imports were sold at less than fair value (“dumped”) or benefitted from unfair subsidization. If Commerce finds that the imports are being dumped, or unfairly subsidized, it directs U.S. Customs and Border Protection (CBP) to assess AD/CVD (as appropriate) in the amount calculated by Commerce in the course of the review proceedings.
Within the Enforcement and Compliance business unit there are offices that are particularly engaged in relevant activities:
- Antidumping and Countervailing Duty Operations Unit: Conducts anti-circumvention inquiries when there is evidence that foreign producers/exporters are attempting to avoid the payment of AD/CVD duties. The anti-circumvention inquiries may be initiated in response to a petition from a domestic industry, or may be self-initiated by the Commerce Department. In addition, AD/CVD Operations conducts scope inquiries when a party is unsure whether a particular product should be subject to AD/CVDs. Scope inquiries are initiated in response to requests from U.S. importers, domestic industries, or CBP.
- Customs Liaison Unit (CLU): Serves as the liaison between Commerce and CBP on issues involving the suspension of entries and the collection and assessment of AD/CVDs. The CLU also maintains a call center where importers can seek clarification on cash deposit and assessment instructions to CBP. The CLU also serves as the bridge between Commerce, CBP, and other Department of Homeland Security agencies on matters related to fraud and evasion of AD/CVD orders and assists with the transfer of information between the two agencies.
CBP plays a front-line role in the enforcement of AD/CVD orders by collecting AD/CVD cash deposits, administering entries that are subject to AD/CVD duties, assessing and collecting final AD/CVD duties, and taking enforcement actions against U.S. importers that seek to evade AD/CVD orders. CBP also collaborates with U.S. Immigration and Customs Enforcement (ICE) to substantiate and act on allegations of duty evasion and to support enforcement actions. CBP is currently enforcing over 480 AD/CVD orders on imported goods.
One of the key statutes relied on by CBP in enforcing AD/CVD orders is The Enforce and Protect Act of 2015 (EAPA). This statute created a new framework for CBP to investigate allegations of evasion of AD/CVD orders and to take action to remediate the evasion. While CBP previously had tools to fight evasion of AD/CVD orders by unscrupulous foreign exporters and importers, EAPA required CBP to:
- Investigate alleged evasions of AD/CVD orders made by domestic parties and report publicly on their findings.
- Act on allegations within a set a timeline, with CBP required to initiate an investigation within 15 business days of receipt of a properly filed allegation from an interested party that reasonably suggests that merchandise covered by an existing AD/CVD order has entered into the United States through evasion.
- Establish a new Trade Remedy Law Enforcement Division, which CBP did within the Office of Trade (OT), that is charged with overseeing the EAPA investigations. CBP also established an Evasion National Targeting Analysis Group (NTAG) to prevent and counter evasion, as well as assist in the EAPA investigations.
- Allow domestic parties to appeal a negative finding of evasion.
An overview of EAPA’s investigation process is available here.
What Should I Do if I Suspect Evasion of AD/CVD Orders?
If you have evidence of evasion, you can alert officials with U.S. Customs and Border Protection (CBP), which is within the Department of Homeland Security, to the possibility of evasion by submitting an allegation through the e-Allegations online trade violations reporting system at https://apps.cbp.gov/eallegations. This checklist provides useful background in evaluating whether there is sufficient information for CBP officials to pursue the allegation.
- CBP corresponds with every party (so long as the party provides its contact information) to review the allegation with the alleger and obtain additional information about the allegation.
- CBP reviews and researches every e-Allegation submitted to determine the validity of the allegation. Some alleged violations are reviewed and resolved internally within CBP, and some are referred to U.S. Immigration and Customs Enforcement (ICE), which is also within the Department of Homeland Security, for further investigation.
- The party submitting the allegation may provide information to CBP during the proceeding and receive notification of interim measures and the final determination from CBP.
- Any information in your allegation that you wish to designate as business confidential information must be enclosed within single brackets, and the first page of your submission must be marked as “business confidential.” In addition, you must provide an explanation as to why the bracketed information is entitled to business confidential treatment. A public version of the business confidential allegation must also be filed with CBP.
Aluminum Association staff are available to consult with member companies on the preparation and submission of allegations. Please contact policy@aluminum.org for more information.
Aluminum Industry AD/CVD Orders
First Aluminum Foil Case
In March 2017, the Aluminum Association filed its first-ever unfair trade case against large rolls of aluminum foil (weighing more than 25 pounds) from China. Following extensive investigations, the Commerce Department published final AD/CVD orders (83 FR 17360, 17362) on certain aluminum foil imported into the United States from China on April 19, 2018. The effective combined AD/CVD duty deposit rates calculated by the Commerce Department range from 55 to 187 percent, reflecting the substantial magnitude of the unfair trade practices by Chinese producers and exporters of aluminum foil.
The orders apply to aluminum foil (classifiable under HTS 7607) having:
- A thickness/gauge of 0.2 mm (0.00787 inches) or less
- In reels exceeding 25 pounds
- Regardless of alloy
- Regardless of width
- Excluded from the scope of the investigation is aluminum foil that is backed with paper, paperboard, plastics, or similar backing materials on one side or both sides of the aluminum foil, as well as etched capacitor foil and aluminum foil that is cut to shape.
- Specific classifications involving in-scope merchandise include 7607.11.3000, 7607.11.6000, 7607.11.9030, 7607.11.9060, 7607.11.9090, and 7607.19.6000. Note, the written description of the scope of this proceeding is dispositive.
One year after the orders took effect, the Association released a white paper, Targeted Trade Enforcement in Action: Aluminum Foil AD/CVD One-Year Later, highlighting the positive impact of the AD/CVD orders on the domestic industry.
Second Aluminum Foil Case
In September 2020, the Aluminum Association’s Foil Trade Enforcement Working Group filed antidumping and countervailing duty petitions charging that unfairly traded imports of aluminum foil from five countries caused material injury to the domestic industry. Due to the success of the Association’s first unfair trade case involving imports of foil from China, Chinese producers shifted exports of aluminum foil to other foreign markets, which led producers in those countries to export their own product to the United States. The industry’s petitions allege that aluminum foil imports from Armenia, Brazil, Oman, Russia and Turkey are being dumped in the United States and that imports from Oman and Turkey benefit from actionable government subsidies. In initiating its investigations, the Commerce Department estimated that foil imports from the subject countries are being dumped at margins of up to 107.61 percent.
The aluminum foil subject to the unfair trade investigations includes all imports from Armenia, Brazil, Oman, Russia and Turkey of aluminum foil that is less than 0.2 mm in thickness (less than 0.0078 inches), in reels weighing more than 25 pounds, and that is not backed. In addition, the unfair trade petitions do not cover etched capacitor foil or aluminum foil that has been cut to shape. The petitions were filed concurrently with the U.S. Department of Commerce and the U.S. International Trade Commission (USITC).
On November 12, 2020, the USITC made a unanimous preliminary determination that unfairly-traded imports of certain aluminum foil from Armenia, Brazil, Oman, Russia and Turkey caused injury to U.S. producers. As a result of the USITC’s affirmative preliminary determination, the U.S. Department of Commerce will continue to conduct its antidumping and countervailing duty investigations on imports of certain aluminum foil from the five countries. The Department of Commerce’s preliminary determinations concerning countervailing duties on Oman and Turkey are due to be completed on February 26, 2021. The current deadline for Commerce to complete its preliminary antidumping determinations is March 8, 2021, although that deadline will likely be extended.
Common Alloy Aluminum Sheet
In March 2020, the Aluminum Association’s Common Alloy Aluminum Sheet Trade Enforcement Working Group filed antidumping and countervailing duty petitions charging that unfairly traded imports of common alloy aluminum sheet from 18 countries are causing material injury to the domestic industry.
Typical applications for common alloy aluminum sheet include: gutters and downspouts, building facades, street signs and license plates, electrical boxes, kitchen appliances and tractor-trailers for trucks.
Prior to the association’s action, the Commerce Department announced in November 2017 a historic self-initiation of AD/CVD investigations on imports of common alloy aluminum sheet from China – the first such action by the department in more than 25 years. The Aluminum Association was strongly supportive of the Department’s self-initiated investigations.
Following a unanimous determination in December 2018 from the U.S. International Trade Commission that U.S. producers had been materially injured by unfairly traded imports of common alloy aluminum sheet from China, the Commerce Department issued in February 2019 AD/CVD orders (84 FR 2813, 2157) on imports of common alloy aluminum sheet from China – with effective combined AD/CVD duty deposit rates ranging from 96 to 176 percent.
The duty orders enacted in February 2019 on imports from China into the U.S. prompted Chinese producers to shift exports of common alloy sheet to other foreign markets. That shift resulted in producers in those countries exporting their own production to the United States, the only market in the world where market conditions were not distorted by large volumes of unfairly low-priced imports from China.
The domestic industry’s 2020 antidumping petitions allege that common alloy aluminum sheet from Bahrain, Brazil, Croatia, Egypt, Germany, Greece, India, Indonesia, Italy, Oman, Romania, Serbia, Slovenia, South Africa, South Korea, Spain, Taiwan, and Turkey was dumped in the United States at margins ranging from 15.90 percent to 151.00 percent of the value of the imported common alloy aluminum sheet.
Domestic producers also filed countervailing duty petitions alleging that producers in Bahrain, Brazil, India, and Turkey benefit from numerous government subsidy programs. You can find all public petitions for the AD/CVDs here.
Both the industry’s 2020 petitions and the Commerce Department’s 2019 orders apply to aluminum sheet with the following physical characteristics:
- A thickness/gauge of 6.3 mm (0.248 inches) or less, but greater than 0.2 mm (0.00787 inches)
- In coils or cut-to-length
- Unclad sheet manufactured from a 1XXX-, 3XXX-, or 5XXX-series alloy
- Multi-alloy, clad aluminum sheet
- Clad sheet with a 3XXX-series alloy core (regardless of alloy of cladding layer(s)
- Regardless of width
Excluded from the scope of the petitions and orders is aluminum can stock that is suitable for use in the manufacture of aluminum beverage cans, lids, or tabs. While the scope of the separate cases is the same, some HTS codes have changed since the initiation of the first case in 2017.
In October 2020, the Department of Commerce announced its preliminary determinations that imports of common alloy aluminum sheet from 18 countries are being dumped in the United States. As a result of this determination, effective in mid-October 2020, U.S. importers of common alloy sheet from the 18 countries at issue in the case will be required to deposit estimated preliminary antidumping duties at the time of importation. There will be an opportunity for parties to submit case and rebuttal briefs to the Commerce Department and to participate in a hearing addressing the preliminary determinations before Commerce issues its final determinations for the on-going investigations. The deadline for the Commerce Department to complete its final determinations in the on-going investigations is March 1, 2021.
If the Commerce Department and U.S. International Trade Commission reach affirmative final determinations that are consistent with their preliminary determinations, imports covered by the investigation will be subject to AD/CVD orders. In the event such unfair trade orders are issued, imports that fall within the scope of the orders will be subject to retroactive annual administrative reviews that can result in revisions in the levels of duties applied for the respective year. In addition, these reviews can result in revisions to the duty deposit rates applicable to future imports – for at least the next five years.