CBP Affirms Evasion Determination on Glycine From China
CBP affirmed its July determination that importers Starille, Ltd., Nutrawave Co., Ltd., and Newtrend USA evaded antidumping and countervailing duty orders on glycine from China, according to a notice dated Nov. 30 and released Dec. 16.
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The case was based on an allegation by Geo Specialty Chemicals that the importers purchased glycine from PT Newtrend Nutrition Ingredient, an Indonesian affiliate of the Chinese Newtrend Group, before PT Newtrend's Indonesian factory was actually able to produce glycine on its own. CBP found the allegations reasonably suggested that the importers entered covered merchandise through evasion, and opened a series of investigations into the importers between July and September 2021, finding evidence of evasion in July 2022 (see 2207290022).
Geo also alleged evasion by the three importers of AD/CVD orders on glycine from Thailand, but CBP in July found a lack of substantial evidence in support of an evasion finding.
The three importers filed two separate review requests Sept. 1, the first filed by Starille and Nutrawave and the second by Newtrend USA. Starille and Nutrawave argued that CBP's evasion determination relied on the idea that Nutrawave was affiliated with the Newtrend Group and that the finding of affiliation based on a common former officer and common business relationships failed to meet the statutory standard. In addition, the two companies argued that CBP failed to give them sufficient time to respond to CBP's "many factual and analytical errors,” including CBP's usage of a "flawed understanding of the glycine production process" when analyzing PT Newtrend's ability to produce glycine.
Newtrend USA argued in its own request that CBP "intentionally misconstrued" the record in its conclusion that PT Newtrend's facility was not operational and that CBP incorrectly calculated PT Newtrend's methanol consumption rate when analyzing the company's ability to produce glycine.
In its Sept. 16 response, Geo argued that PT Newtrend was incapable of production at its supposed start date, citing discrepancies in employment records, lack of raw materials, and comparisons to established glycine producers elsewhere. Geo also pointed to the financial and personnel linkages between the three companies as evidence that Newtrend Group’s factories in China were the actual producers of glycine, when combined with other evidence. CBP agreed, ruling that the review hinged on PT Newtrend's production capabilities and ultimately finding that "[PT Newtrend] was incapable of producing glycine at the times during which the Importers claim[ed] such capacity."
"Evasion of the Chinese glycine trade remedy orders has been and continues to be a persistent and troubling problem," David Schwartz, lawyer for Geo, said in response for comment. “The domestic glycine industry is pleased that CBP affirmed the duty evasion decision in a detailed and thoughtful de novo review." The importers did not respond to requests for comment.