U.S. Customs and Border Protection :Notice of Initiation of Investigation and Interim Measures

My article  is cited by U.S. customers and border protection https://www.cbp.gov/sites/default/files/assets/documents/2018-Nov/Notice-of-Investigation_Interim%20Measures-Final_Signed-PV.pdf .

18See Plywood Source Factual Information submission, showing its machinery and production capacity at VN
Finewood’s Vietnam facility, Oct. 4, 2018. 19 See “Quality Control in China, UV Coating (Finishing) Line for Plywood and Engineered Wood Panels”
(available at http://www.plywoodinspection.com/2016/01/26/uv-coating%EF%BC%88finishing-line-for-plywoodand-engineered-wood-panels/)
(last visited Nov. 20, 2018)

Notice of Initiation of Investigation and Interim Measures
Notice of Initiation of Investigation and Interim Measures

November 20, 2018
PUBLIC VERSION
EAPA Cons. Case Number 7252
Mr. Oliver W.C. Wong
CEO, Far East American, Inc.
5410 McConnell Ave.
Los Angeles, CA 90066
David M. Stone / Matt McNichols
InterGlobal Forest
2190 W. 11th Ave., # 231
Eugene, OR 97402
Mr. Shuning Xu
CEO, Ciel Group, Inc.
1706 E. Francis Street
Ontario, CA 91761
J. Bradford Coors
CEO, Liberty Woods International, Inc.
1903 Wright Place, #360
Carlsbad, CA 92008
Mr. John Bennett
CEO, American Pacific Plywood, Inc.
414 1st Street
Solvang, CA 93463
Mr. Ofir Levy
Plywood Source LLC
2943 E. Las Hermanas St.
Compton, CA 90221
Re: Notice of Initiation of Investigation and Interim Measures
Messrs Wong, Xu, Bennett, Stone, McNichols, Coors and Levy:
This letter is to inform you that U.S. Customs and Border Protection (“CBP”) has commenced a
formal investigation under Title IV, Section 421 of the Trade Facilitation and Trade Enforcement
Act of 2015, commonly referred to as the Enforce and Protect Act (“EAPA”), into certain import
transactions of Far East American, Inc. (“Far East”), Ciel Group, Inc. (“Ciel”), American Pacific
Plywood, Inc. (“American Pacific”), InterGlobal Forest (“InterGlobal”), and Liberty Woods
International, Inc. (“Liberty Woods”), hereafter referred to as the “Importers.” Specifically, CBP
is investigating whether the Importers evaded the antidumping (“AD”) order, A-570-051,1
and
countervailing duty (“CVD”) order, C-570-052,2
on Certain Hardwood Plywood from the
1 Certain Hardwood Plywood from the People’s Republic of China: Antidumping Order, 83 Fed. Reg 504 (Dept.
Commerce, Jan. 4, 2018) (“Antidumping Order”). 2 Certain Hardwood Plywood from the People’s Republic of China: Countervailing Duty Order, 83 Fed. Reg. 513
(Dept. Commerce, Jan. 4, 2018).
1300 Pennsylvania Avenue NW
Washington, DC 20229
U.S. Customs and
Border Protection
People’s Republic of China (hereinafter the “Orders”). Because the evidence thus far establishes
a reasonable suspicion that the Importers have entered merchandise into the United States
through evasion, CBP has imposed interim measures pursuant to 19 C.F.R. § 165.24.
Period of Investigation
Pursuant to 19 C.F.R. § 165.2, an EAPA investigation covers “entries of alleged covered
merchandise made within one year before the receipt of an allegation….” Entry is defined as “an
entry for consumption, or withdrawal from warehouse for consumption, of merchandise in the
customs territory of the United States.” See 19 C.F.R. § 165.1. CBP may, at its discretion,
investigate other entries of covered merchandise and the period of investigation remains open
until CBP has issued a final determination. See 19 C.F.R. § 165.2.
Plywood Source, LLC (“Plywood Source” or “Alleger”) initially filed five allegations separately
identifying and alleging Far East, Ciel, American Pacific,
3
InterGlobal and Liberty Woods as
importers that have entered plywood through evasion of AD and CVD orders. At CBP’s
discretion, multiple allegations against one or more importers may be consolidated into a single
investigation. See 19 C.F.R. § 165.13(a). As explained below, CBP has determined that the
individual investigations against the five importers meet the criteria to consolidate under 19
C.F.R. § 165.13(b). In this case, Plywood Source filed its five allegations on July 9, 2018, and
CBP acknowledged receipt of the properly filed allegation on July 25, 2018. Therefore, the
Importers’ entries covered by this investigation are those entries of hardwood plywood from the
People’s Republic of China (“China”) that were entered for consumption, or withdrawn from
warehouse for consumption, from July 25, 2017 through the pendency of this investigation. See
19 C.F.R. § 165.2.
Initiation
On August 15, 2018, the Trade Remedy Law Enforcement Directorate (“TRLED”) within CBP’s
Office of Trade initiated an investigation under EAPA. TRLED determined that the allegations
submitted by Plywood Source, and consolidated by CBP, reasonably suggested evasion of
AD/CVD duties. Plywood Source alleged that the Importers entered Chinese origin hardwood
plywood into the United States that was transshipped through Vietnam and falsely declared as
being of Vietnamese origin. Plywood Source’s allegations provide evidence supporting the
existence of a transshipment scheme in which the Importers were engaged. Specifically, the
alleger contends that Vietnamese manufacturer/exporter Vietnam Finewood (“VN Finewood”)
was established and began operations in Vietnam subsequent to the Department of Commerce’s
(“The Department” or “Commerce”) AD/CVD orders on hardwood plywood from China for the
purpose of evading the orders. The alleger began compiling data and information on VN
Finewood shortly after the company began operations in April 2018. According the alleger, VN
Finewood does not possess the capacity to produce the volume of merchandise that it has
exported to the named U.S. importers, and is instead importing finished hardwood plywood from
China and shipping the merchandise to the United States falsely as a product of Vietnam.
3 In its initial allegation filing, Plywood Source identified Cosco International, the shipper of the merchandise, as the
importer of record. Prior to initiation of the investigation, Plywood Source amended its allegation filing to identify
American Pacific as the importer of record for the subject merchandise. See Allegation 7254 (July 9, 2018).
2
To support this claim, the alleger provides two videos taken within the VN Finewood facility in
Hanoi, Vietnam. In the first video, workers are shown offloading crates purported to be plywood
from China into VN Finewood’s facility. As the crates are stacked within VN Finewood’s
warehouse, a worker is instructed to remove a “Made in China” label from the crate.4
The video
footage of the interior of the warehouse depicts many similar crates, stacked floor to ceiling, and
little machinery and presses typically used in the production of plywood.
The alleger also provides Vietnamese customs data indicating that VN Finewood shipped an
aggregate of more than 200 containers of hardwood plywood to each of the Importers during VN
Finewood’s first month in operation.5
The Vietnamese export data is supplemented with
publicly available import data showing hardwood plywood shipped by VN Finewood and
entered into the United States by importers American Pacific, Ciel, and InterGlobal.6
The
Alleger therefore argues that VN Finewood is transshipping subject merchandise to the Importers
based on the visual depiction of the production capacity at VN Finewood and the offloading of
crates of plywood with labels indicating that the product was “Made in China.”
To further substantiate this claim, the second video shows workers inspecting shipping
documents and breaking the seal on container . As the container is opened,
crates visibly pre-packaged and marked with the name and logo for InterGlobal Forest can be
seen. The video reveals a worker inspecting a delivery notice of the container to “Vietnam
Finewood.” The container is then taken into the VN Finewood facility, ostensibly to be shipped
in the pre-packaged crate to InterGlobal.
7
The alleger provides public import/export data
indicating that the container originated as a full container in Jiangsu, China and was discharged
full in Haiphong, Vietnam on June 29, 2018.8
The Alleger supplements the contents of the video
with Vietnamese customs data showing shipments of hardwood plywood from VN Finewood to
InterGlobal. The data indicates that VN Finewood shipped cubic meters (“CBM”), or
approximately containers,9
of plywood to InterGlobal between April and July 2018.10

CBP will initiate an investigation if it determines that “he information provided in the
allegation … reasonably suggests that the covered merchandise has been entered for
consumption into the customs territory of the United States through evasion.” See 19 CFR
§165.15(b). Evasion is defined as “the entry of covered merchandise into the customs territory of
the United States for consumption by means of any document or electronically transmitted data
4 See Allegations 7252-7256, at 1 (July 9, 2018) (providing a link to Dropbox hosting video of VN Finwood
facility). 5 See id., at 1 (providing Vietnamese export data for each of the U.S. importers). 6 See Allegations 7253-55, at Exh. 1 (providing Shipments from VN Finewood to Ciel, American Pacific, and
InterGlobal). 7 See Allegation 7255 (providing a video taken inside VN Finewood facility). 8 See id., at 1 (providing data for PS Shipment Link, Cargo Tracking from China to Vietnam, ). 9 A 40’ General Purpose (40’GP) container has a volume of 67 cubic metres and will hold 55-60 cubic metres of
cargo. See “FAQ’s: How many cubic meters of cargo can I put in a 20’ container 40’ container and 40’ High Cube
container?” (available at www.worldcargonetwork.com.au/faq.html). 10See Allegation 7255, at 1 (providing Vietnamese export data for June 2018). The Vietnamese import/export data
submitted by the alleger is in a spreadsheet and does appear to be an original source document. The alleger has
attested to its validity and indicated that the information is official Vietnamese customs data, provided by
who wish to remain anonymous.
3
or information, written or oral statement, or act that is material and false, or any omission that is
material and that results in any cash deposit or other security or any amount of applicable
antidumping or countervailing duties being reduced or not being applied with respect to the
merchandise.” See 19 CFR §165.1. Thus, the allegation must reasonably suggest not only that
merchandise subject to an AD and/or CVD duty order was entered into the United States by the
importer alleged to be evading, but that such entry was made by a material false statement or act,
or material omission, that resulted in the reduction or avoidance of applicable AD and/or CVD
duty cash deposits or other security.
In its allegations, Plywood Source provided evidence to reasonably suggest that the Importers
entered merchandise into the United States through evasion by a material false statement or act,
or material omission that resulted in the reduction or avoidance of applicable AD and CVD cash
deposits or other security. Information submitted by Plywood Source reasonably suggested the
Importers entered Chinese origin hardwood plywood into the United States through evasion.
Video footage taken at VN Finewood’s facility depicts containers of finished hardwood plywood
arriving pre-packaged from China and subsequently shipped to InterGlobal in the United States,
and is corroborated by public source data indicating that the shipment originated in China.
Further video evidence indicates that VN Finewood does not have the production capacity to
produce the volume of merchandise it exports to the Importers, and instead is receiving and relabeling
Chinese shipments of subject merchandise for shipment to the Importers as a product of
Vietnam. For the foregoing reasons, TRLED determined on July 25, 2018, that the allegations
reasonably suggest that Importers entered covered merchandise into the customs territory of the
United States through evasion by a material false statement or act, or material omission, and
initiated an investigation pursuant to 19 U.S.C § 1517 (b)(1).
Interim Measures
Not later than 90 calendar days after initiating an investigation under EAPA, CBP will decide
based on the investigation whether there is reasonable suspicion that such covered merchandise
was entered into the customs territory of the United States through evasion. Therefore, CBP need
only have sufficient evidence to support a reasonable suspicion that merchandise subject to an
AD duty or CVD order was entered into the United States by the importer(s) by a material false
statement or act, or material omission, that resulted in the reduction or avoidance of applicable
AD/CVD cash deposits or other security. If reasonable suspicion exists, CBP will impose
interim measures pursuant to 19 U.S.C. §1517(e) and 19 CFR § 165.24. As explained below,
CBP is imposing interim measures because there is a reasonable suspicion that the Importers
named in the allegation entered covered merchandise into the customs territory of the United
States through evasion. See 19 CFR § 165.24(a).
Subsequent to the initiation of the investigation, the alleger provided additional factual
information to support its contention that VN Finewood supplements its limited production by
importing finished hardwood plywood from China for export to the Importers. Plywood Source
submitted factual information from public import/export sources identifying seven shipments of
hardwood plywood from in China to VN Finewood. The
4
shipments occurred between June and October, 2018 and totaled cubic meters, or
approximately containers of merchandise manifest as plywood.11
CBP conducted a site visit to VN Finewood to verify the information in the videos and
accompanying allegation that were submitted by the alleger. CBP visited VN Finewood’s
production facility on October 25, 2018, and issued a report of its findings (herein after referred
to as the “site visit report”).
12 The findings conveyed in the site visit report articulate several
inconsistencies and discrepancies in the actual quantity and description of merchandise shipped
from VN Finewood to the Importers. CBP also verified that the video was taken at the VN
Finewood facility, as CBP personnel were able to identify specific buildings and structures from
their October 25, 2018, site visit that are visible in the video footage.13
The U.S. delegation met with several VN Finewood officials, including , VF
General Manager; , Operations Manager; , Manager; and
, Purchasing Manager, to discuss and review VN Finewood’s production
operations. VN Finewood officials stated that the company produces various types, grades, sizes
and finishes of plywood, and specified that it used wood
in production. However, VN Finewood officials did not mention the use of birch in production
of plywood. This omission by VN Finewood officials is relevant, as only birch plywood was
visible and labelled in the processing station and packaging areas of the facility.14 Also,
according to public import data, consistent with CBP data, all but one entry into the United
States of hardwood plywood from VN Finewood was entered as plywood with face ply of
birch.15
The site visit report also details the quantity and type of equipment, as well as the number of
employees on site used in the production of plywood. VN Finewood officials indicated that
there are a total of presses, with workers, operates days per week, hours/day, with shifts per day. Occasionally, it
operates on , as needed.16 A VN Finewood official asserted that the available
equipment and personnel allow the company to produce containers, or approximately
cubic meters of plywood per month. The VN Finewood officials further stated that
approximately percent of its plywood production is exported to the United States, and
percent is sold domestically in Vietnam.17
In order to produce the purported quantity of plywood exported and sold domestically, VN
Finewood would require approximately 20 cold presses, 20 hot presses, and 1000 employees,
11 See Plywood Source Factual Information submission at 1 (providing Vietnamese Customs data for imports of
plywood to VN Finewood from China during the period of June – October 2018). 12 See CBP Vietnam Finewood Site Visit Report, Oct. 29, 2018. 13 See Memo to the File, Nov. 14, 2018. 14 Site Visit Report, at 2. 15 See CBP import data, showing imports of plywood from VN Finewood, June 26 – November 11, 2018, Nov. 11,
2018. 16 Site Visit Report, at 2. 17 Id. at 2, 3.
] 5
working 24 hours per day, 7 days per week.18 However, only a fraction of that equipment and
employees are at VN Finewood. Thus, evidence reasonably suggests that VN Finewood is not
manufacturing all of the plywood it is exporting and selling domestically and is procuring it from
another source. In addition, during the CBP site visit, VN Finewood indicated that machinery in
its facility included veneer laying stations, as well as finish station. CBP
research indicates that finish station is not sufficient for producing the quantity of
plywood sold domestically and exported by VN Finewood.19 Moreover, that finish station
was not operational at the time of the visit.
Given the foregoing observations and analysis by CBP of the VN Finewood facility, coupled
with video footage taken within VN Finewood’s facility showing merchandise with “Made in
China” labels, and merchandise that arrived to VN Finewood pre-packaged and ready to ship to
one of the named importers, corroborated by Vietnamese import data showing that VN Finewood
imports plywood from China, there exists a reasonable suspicion that VN Finewood does not
possess the infrastructure, equipment or personnel necessary to produce the volume and type of
hardwood plywood it shipped to the Importers. Therefore, CBP has determined that there is
reasonable suspicion that Importers entered merchandise through evasion based on the alleged
transshipment scheme described above.
As interim measures, CBP is directing that all unliquidated entries of imported merchandise
under this investigation that entered the United States as not subject to AD duties will be rateadjusted
to reflect that they are subject to the AD/CVD orders on hardwood plywood from China
and cash deposits are now required. Additionally, “live entry” is required for all future imports
from the Importers, meaning that all entry documents and duties must be provided before cargo
is released by CBP into the U.S. commerce. CBP will reject any entry summaries and require a
refile for those that are within the entry summary reject period; suspend the liquidation for any
entry that has entered on or after August15, 2018, the date of initiation of this investigation; as
well as extend the period for liquidation for all unliquidated entries that entered before that date.
See 19 CFR § 165.24(b)(1)(i) and (ii). Further, CBP will evaluate the Importers’ continuous
bonds and will require single transaction bonds as appropriate.
Consolidation of the Investigations
CBP is consolidating the five investigations on each importer into a single investigation covering
all of the importers named in the allegation. The new consolidated case number will be EAPA
Consol. Case No. 7252, and a single administrative record will be maintained.
At its discretion, CBP may consolidate multiple allegations against one or more importers into a
single investigation, pursuant to 19 C.F.R. §165.13(b), which stipulates that:
18See Plywood Source Factual Information submission, showing its machinery and production capacity at VN
Finewood’s Vietnam facility, Oct. 4, 2018. 19 See “Quality Control in China, UV Coating (Finishing) Line for Plywood and Engineered Wood Panels”
(available at http://www.plywoodinspection.com/2016/01/26/uv-coating%EF%BC%88finishing-line-for-plywoodand-engineered-wood-panels/)
(last visited Nov. 20, 2018).
6
The factors that CBP may consider {in consolidating multiple allegations}
include, but are not limited to, whether the multiple allegations involve: 1)
relationships between the importers; 2) similarity of covered merchandise; 3)
similarity of AD/CVD orders; and 4) overlap in time periods for entries of
covered merchandise.
In these investigations, the Importers entered hardwood plywood, covered by the same AD/CVD
orders. Moreover, each imported covered merchandise during the period of investigation.
Further, each imported goods subject to the same transshipment scheme from the same
Vietnamese manufacturer. Because factors warranting consolidation are present in these
investigations, CBP is consolidating them and providing this notice pursuant to 19 C.F.R.
§165.13(c). These facts support the consolidation of these investigations.
For any future submission or factual information that you submit to CBP pursuant to this EAPA
investigation, please provide a public version to CBP, as well as to all other parties to this
investigation, which would also include alleger, Mr. Ofir Levy, President, Plywood Source,
LLC, at ofir@plywoodsource.com. See 19 C.F.R. §§ 165.4, 165.23(c), and 165.26. Should you
have any questions regarding this investigation, please feel free to contact us at
eapaallegations@cbp.dhs.gov. Please include “EAPA Cons. Case Number 7252” in the subject
line of your email.
Sincerely,
Carrie L. Owens
Director
Enforcement Operations Division
Trade Remedy Law Enforcement Directorate
Office of Trade
7

 

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