Preventing Mislabeling and Transshipment

Exporters and importers of Chinese shrimp, in particular, have employed a variety of schemes to avoid antidumping duties and the FDA control. Substantial transshipment of Chinese shrimp through Indonesian exporters was uncovered several years ago by the investigatory work of Immigration and Customs Enforcement (ICE).
Since that time other transshipment schemes have been uncovered. CBP and ICE, at the request of the SSA, prevented Chinese shrimp falsely labeled as “dusted” from entering the United States duty-free. CBP and ICE, also at the request of the SSA, also determined that shipments of purportedly “Malaysian” shrimp were, in fact, Chinese in origin. CBP also developed laboratory analysis that determined that substantial shipments of purportedly “Indonesian” shrimp were, in fact, Chinese in origin.
CBP’s actions resulting from the SSA’s allegations and demonstration of circumvention of the antidumping duty order for Chinese shrimp resulted in the assessment of millions of dollars in antidumping duties that would have otherwise gone undetected.
One serious complication in CBP’s enforcement efforts is the nature of many of the U.S. importers involved in circumvention schemes. Each month, new importers are established in the United States that exclusively import shrimp and other products that are subject to antidumping orders. These importers claim to import shrimp (and other products) that are not subject to antidumping duties. Closer inspection indicates that these products are sourced from questionable or suspicious exporters that appear to be engaged in the transshipment and false labeling of product. When and if these importers are found to be circumventing the law and duties are assessed, the fly-by-night importers declare bankruptcy and millions of dollars in antidumping duties go uncollected.
Such circumvention schemes pose serious and systematic threats to the viability of the trade relief obtained by the domestic industry. The SSA is pursuing all legislative and regulatory options to address the problem and to prevent any further subversion of the trade relief.

CBP Recognizes SSA’s Help in Preventing Mislabeling
The CBP’s FY2008 Report to Congress on Plans to Increase AD/CVD Collections and AD/CVD Enforcement Actions and Compliance Initiatives states:
Based on an allegation from the domestic shrimp industry, CBP conducted a special operation centered on cargo examination and lab analysis to determine whether imports from China were being misdescribed as “dusted” shrimp so that the shipments would fall outside of the scope of the AD order.  CBP’s operation confirmed the allegation.  CBP determined that fourteen importers evaded the AD order, resulting in $5 million in lost revenue.  CBP recently completed this operation and has initiated procedures to collect the lost revenue and issue penalties.  Further investigations with ICE and penalty processing are underway.


http://shrimpalliance.com/Press%20Releases/5-20-10%20Customs%20Trade%20Facilitation%20and%20Enforcement%20in%20a%20Secure%20Environment%20Statement.pdf
http://shrimpalliance.com/Press%20Releases/USCBP-2007-0100%20Comments%20of%20SSA.pdf

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