CBP Finds Evasion by Superior Commercial Solutions on Imported Quartz Surface Products
A CBP Enforce and Protect Act (EAPA) investigation found that Superior Commercial Solutions engaged in evasion by undervaluation and/or transshipment through Vietnam when it imported quartz surface products covered by antidumping and countervailing duty orders.
CBP said it based its ultimate evasion finding on adverse inferences due to the murky affiliations of the Vietnamese suppliers. The agency said two suppliers, Kales and Engga, operated as one company and attempted to hide their affiliations from CBP. The two companies, along with their affiliate Strry, had different Vietnamese shareholders but shared the same Chinese management team and attempted to conceal their relationship from CBP. Evidence showed that the management team used nominee shareholder agreements to exercise control over the Vietnamese companies, CBP said.
Kales and Engga claimed that Kales’ function was to produce countertops from quartz slabs it received from Strry. That claim incorrectly implied that quartz surface slabs are not covered merchandise until after additional finishing steps are performed, said CBP. The plain language of the orders indicated that slabs are covered merchandise regardless of additional production operations. Kales and Engga imported "a substantial quantity" of the quartz slabs from China that were eventually sent to the U.S., the agency said.
CBP ultimately applied adverse inferences in its finding of evasion. SCS protested that it had cooperated fully and said the use of adverse inferences was unjustified. CBP responded by saying the EAPA statute and regulations contain no prohibition on the use of adverse inference that may affect a cooperating importer.
The investigation and finding stemmed from a September 2022 allegation by Cambria Company. The allegation said that Chinese companies Xiamen Lexiang and Xiamen Stone Display exported the products to Kales Quartz in Vietnam, and Kales then exported the items to SCS in the U.S. CBP found that the allegation reasonably suggested that SCS entered covered merchandise through evasion and initiated the investigation in October 2022.
After the initiation of this investigation, CBP issued questionnaires to SCS concerning four entries and production documentation. SCS responded but did not provide various requested information. CBP attempted to fill the record with its own research, finding another affiliated Vietnamese exporter, Engga Company Limited and other companies, which appeared to share connections including Strry, New Quartz and Fonka.
CBP determined that reasonable suspicion existed based on SCS' entries from Kales and Engga that indicated a connection to the Chinese company Xiamen Gofor Stone. SCS imported a specific item, which had been listed on Xiamen Gofor Stone’s website and had directly imported from Xiamen Gofor Stone before the AD/CVD orders. CBP also found that Chinese-origin quartz slabs were sent to Kales during the period of investigation while Kales was exporting finished quartz products to SCS.
Further suspicion was aroused by Engga's attempt to conceal its relationship with Kales and that both companies, along with Strry, were established by a Chinese parent company with ties to Chinese quartz slab producers, CBP said.
CBP then issued a notice of investigation and interim measures in February and began issuing information requests to SCS, Kales, Engga, Strry and Xiamen Stone Display. Initially, Kales, Engga and Strry all agreed to allow CBP to conduct a verification at their facilities in Vietnam but then rescinded their offers.
CBP said it will suspend entries subject to this investigation until instructed to liquidate. For entries previously extended in accordance with interim measures, CBP will rate-adjust and continue suspension. The agency will also correct the valuation of any subject entry. CBP will also continue to evaluate SCS’ continuous bonds and will require single transaction bonds as appropriate.
Neither SCS, nor Cambria Company responded to requests for comment.