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CBP Finds Xanthan Gum Importer to Have Evaded Antidumping Duty Order

A&A Pharmachem evaded the antidumping duty order on xanthan gum from China, CBP said in a determination on evasion under the Enforce and Protect Act. CBP said that A&A Pharmachem transshipped its Chinese-origin xanthan gum imports into the U.S. through India without declaring that the entries were subject to the order. CBP initiated the EAPA investigation following an allegation from domestic xanthan gum producer CP Kelco, through Greenberg Traurig lawyer Matthew Kanna (see 2106070057).

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CBP said it based its affirmative evasion finding on information from CP Kelco, its prior finding of evasion in another investigation into xanthan gum and the discrepancies found in A&A Pharmachem's production documents. In particular, CBP found "significant discrepancies" between A&A's and manufacturer Sarda Bio Polymers Private Ltd.'s responses to CBP's requests for information, which called into question Sarda Bio's ability to produce xanthan gum. CBP looked at email correspondence between A&A and Sarda Bio over an order of 2,000 kg of xanthan gum.

"Sarda Bio stated that it imports xanthan gum from China and stated that the Chinese xanthan gum undergoes further processing, i.e., sterilization, processing, and packaging, at Sarda Bio’s Indian facility to qualify as country of origin India," CBP said. Sarda Bio then said it would take 25 days from the date of the order for the product to be made and sent to India, then another 50-60 days to get to Los Angeles. A&A then submitted an order on Dec. 21, 2019, and it was ready just 10 days later, CBP said. Sarda Bio told the customs agency that the discrepancy between the 25-day estimate and the 10-day result was a result of them tapping existing stock instead of going through the manufacturing process.

CBP also said Sarda Bio never bought a key component of xanthan gum and that the manufacturer's production records are "out of order." CBP said it will suspend, or continue to suspend, the liquidation for all relevant entries and will "rate adjust and change those entries to type 03 and continue suspension until instructed to liquidate these entries."