Chinese fraud

Senate Finance trade subcommittee chairman Ron Wyden (D-Ore) revealed yesterday that his staff has uncovered evidence that Chinese companies are committing customs fraud in order to avoid paying antidumping and countervailing duties (WTD, 10/26/10).

“Chinese companies are not only committing customs fraud and costing the US Treasury in revenue, they aren’t afraid of getting caught,” the senator said.  He has introduced legislation (S 3725) requiring US Customs and Border Protection to establish consistent procedures to fast-track and prioritize allegations of evasion of US import orders.

Subcommittee staff conducted an experiment to find out how easy it would be to find a Chinese supplier willing to engage in customs fraud to avoid paying antidumping and countervailing duties.  His office staff used a Gmail account to pose as a fictitious American company interested in importing Chinese products without paying US duties.

After two weeks, staff had e-mails from 10 different Chinese companies interested in committing fraud.  Those companies manufactured products currently subject to antidumping and countervailing orders – ranging from steel nails to diamond saw blades.  Some manufacturers volunteered methods for evading US duties including changing the country-of-origin documents associated with the merchandise, re-routing goods through third countries or – in at least one case – undervaluing their product to lower the cost of the duties owed.

Staff also found dozens of other Chinese firms advertising – in English – services they provide to evade antidumping and countervailing duty orders.

Washington Trade Daily