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Letter to Richard Gil Kerlikowske, Commissioner of the US Customs and Border Protection - Ensuring Level Playing Field for Ohio Workers at Appvion, Inc.

Letter

By:
Date:
Location: Washington, DC

Mr. Richard Gil Kerlikowske
Commissioner
United States Customs and Border Protection
1300 Pennsylvania Avenue, N.W.
Washington, DC 20229

Dear Commissioner Kerlikowske:

We are writing to ask your assistance in ensuring that companies who are importing lightweight thermal paper (LWTP) from China and Germany are paying the requisite duties owed on these products. We understand that there are importers who refuse to play by the rules and blatantly evade the duties at the expense of U.S. LWTP producers and the U.S. Treasury. We would like to work with you to have a mechanism in place to catch evaders, and put a stop to duty evasion.

In November 2008, antidumping (AD) duties were imposed on imports of LWTP from Germany and China and countervailing duties (CVD) were imposed on imports of LWTP from China. LWTP is produced in the United States by Appvion Inc. and Kanzaki Specialty Papers, and is used primarily as point-of-sale receipt paper. The duties were effective for someyears after they were imposed in shielding the U.S. industry from unfair trade in the U.S. market for LWTP. However, we understand from U.S. producers that in the past several years, importers have started to bring LWTP from China and Germany into the U.S. market without paying the duties.

Our constituent, Appvion, a U.S. producer, and petitioner in the original investigation, has alerted Customs and Border Protection (CBP) about the evasion schemes and has been working closely with CBP officials at headquarters, the National Targeting and Analysis Group (NTAG), the Laboratories and Scientific Services (LSS) Directorate, and with Import Specialists at the ports to identify problem importers. These schemes take a number of forms. The two most prevalent are (1) transshipment through third countries and (2) minor processing (slitting) in third countries which does not change the country of origin or eliminate the applicability of the duties.

We understand from Appvion that CBP officials at all levels have been receptive and cooperative. The problem, however, is that there does not appear to be any abatement in evading imports. If anything, Appvion tells us, the situation is getting worse. Dishonest importers seem to be saying "we aren't worried, because no one seems to be getting caught." Thus, the perceived lack of action on the part of CBP, Homeland Security Investigations (HSI), or Immigration and Customs Enforcement (ICE), appears to have emboldened would be LWTP duty evaders.

In order to ensure that everything that can be done is being done to stop duty evasion, we would like a report from you on the scope and nature of the activities undertaken by CBP, HSI, and ICE, and what the outcome of those activities have been. We are specifically interested in whether you have issued any penalty notices, undertaken any focused assessments, or referred any cases to a U.S. Attorney, in conjunction with the LWTP duty orders. We would also like an update on CBP's efforts to develop the ability to test imported LWTP to determine whether it is subject to AD and/or CVD duties.

We look forward to hearing from you at your earliest convenience, and stand ready to help you in any way we can to make LWTP duty evasion a priority.


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