Customs began its investigation after Cambria Company LLC, the leading U.S. producer of quartz surface products, submitted 15 EAPA allegations to the agency on October 16, 2020, that provided details of the evasion scheme by the 15 U.S. importers. After consolidating the allegations into a single case, Customs conducted a thorough and wide-ranging investigation that covered the illegal activities of multiple Chinese producers and exporters, several Malaysian companies involved in transshipping merchandise, and the 15 importers that were participating in this evasion scheme.

During the course of its investigation, Customs found that some of the parties had intentionally withheld information requested by the agency and submitted fraudulent documents as part of attempts to cover up their illegal evasion activities. Despite these attempts, Customs still found an overwhelming amount of incontrovertible evidence of illegal evasion. For example, Customs identified an email sent from a Chinese company to a U.S. importer that stated: “It estimates that cargoes will arrive in the USA after one month. We sailed them from Xiamen to Malaysia, then Malaysia sailed to the USA.”

In light of Custom’s determination, Customs will suspend or continue to suspend the entries of quartz surface products by the 15 importers that were subject to the agency’s investigation until it receives instructions from the U.S. Department of Commerce as to the correct AD/CVD rates that should be applied to the entries, and then duties will be imposed.

Where imports were misclassified as merchandise other than quartz surface products, such as wooden furniture, Customs will reclassify the merchandise as quartz surface products subject to the AD/CVD duties. In addition, because Customs found that the importers had understated the value of the merchandise for some entries, it will correct the valuation of those entries so that the full duties are paid. Customs will also continue to evaluate the importers’ continuous bonds to ensure that the agency will be able to collect the total AD/CVD duties owed by the importers. Finally, based on the fact that some parties submitted false and fabricated information to Customs during its investigation, Customs warned that it could potentially pursue additional enforcement actions or penalties against those parties. In prior cases, Customs and the U.S. Department of Justice have filed civil and criminal actions against individuals who have made false statements to the U.S. government to avoid paying the correct AD/CVD duties.

“Customs should be commended for its incredible and painstaking efforts in digging into the facts of this evasion scheme to ensure that the U.S. importers that were involved are held accountable for their illegal activity,” said Luke Meisner of the law firm of Schagrin Associates, Cambria’s legal counsel in this matter. “Customs's enforcement action in this investigation targets an unprecedented large number of U.S. importers and should send a clear signal to the industry that evaders can and will be caught.”

“This illegal evasion of the antidumping and countervailing duties on quartz surface products will not be tolerated,” said Arik Tendler, Chief Sales Officer of Cambria. “We appreciate Customs taking this enforcement action to ensure that Americans are able to compete on a fair and equal playing field.”

In April of 2018, Cambria initiated a case before the Department of Commerce and the United States International Trade Commission alleging unfair trading of quartz surface products from China. At that time, dumped and subsidized Chinese quartz imports harmed American industry and workers by displacing over $1 billion per year of domestic product. Cambria’s successful petition resulted in U.S. Customs levying duties of up to 500% to halt the import of unfairly traded Chinese quartz into the U.S. marketplace.

Customs’ announcement confirms that quartz surface products made in China remain subject to the payment of AD/CVD duties, even when they undergo further processing in a third country. If you suspect an importer of duty evasion, you can submit an allegation through Customs’ online portal.