This announcement by U.S. Customs is evidence of a sophisticated and coordinated effort on behalf of China to circumvent tariffs and violate existing U.S. trade law.  

“Importers of illegal quartz surface products are on notice. U.S. Customs, Cambria, and other domestic quartz producers will not allow transshipping and illicit schemes that violate existing U.S. trade laws and tariffs imposed by the Commerce and Trade Departments,” said Marty Davis, President and CEO of Cambria. “Cambria will continue its work to ensure free and fair trade on a level playing field for American businesses, and in doing so protecting U.S. manufacturers and their employees from illegal foreign trade. We applaud the diligence of U.S. Customs and Border Protection and appreciate their continued work to ensure that U.S. manufacturers are able to compete fairly. You cannot have free trade without fair trade.” 

As part of its recent determination regarding evasion, Customs found that fifteen importers evaded the AD/CVD duties on Chinese imports by importing quartz surface products that were made in China and then transshipped through Malaysia before entering the United States without payment of the duties.

Additional research by Cambria shows that a significant portion of the quartz surface products that are shipped from Malaysia to the United States are actually made in China and thus subject to the AD/CVD duties. Cambria continues to work with Customs to identify and hold responsible any foreign exporters and U.S. importers that are evading the AD/CVD duties through transshipment or any other evasion scheme.  

Customs is conducting its investigation pursuant to the Enforce and Protect Act (“EAPA”).  Many U.S. importers know when they are purchasing transshipped Chinese merchandise and, as a result, that they are engaging in illegal evasion. However, EAPA does not have a knowledge requirement for Customs to find that evasion is taking place. In fact, one of the importers identified as participating in the evasion scheme has claimed to Customs that it never had any contact with the Malaysian transshipment company and purchased the quartz surface products through a U.S. company that claimed to be a partner in the Malaysian company. To avoid getting caught up in evasion schemes, U.S. companies need to be aware that any low-priced quartz surface products imported from Malaysia or other third countries may be Chinese merchandise. The purchase of this low-priced merchandise may ultimately subject U.S. companies to liability for payment of the AD/CVD duties.  

Customs will issue a more detailed memorandum explaining its initial determination of evasion. Following this initial determination, Customs has seven months to continue its investigation and determine appropriate penalties.