According to the Commerce Department release, Commerce will determine whether imports of CORE completed in Costa Rica, Guatemala, Malaysia, South Africa, and the UAE using Chinese-origin substrate, or imports of CORE completed in Malaysia using Taiwanese-origin substrate, are circumventing the AD and CVD orders on CORE from China or the AD order on CORE from Taiwan.

If Commerce preliminarily determines that circumvention is occurring, Commerce will instruct U.S. Customs and Border Protection to begin collecting cash deposits on imports of CORE completed in Costa Rica, Guatemala, Malaysia, South Africa, and the UAE using Chinese-origin substrate, and CORE completed in Malaysia using Taiwanese-origin substrate. These duties will be imposed on future imports, and on any unliquidated entries since the date Commerce initiated these circumvention inquiries.

Commerce can conduct a circumvention inquiry when evidence suggests that merchandise subject to an AD or CVD order undergoes a minor alteration that brings the product outside the scope of the order. Commerce also can conduct circumvention inquiries when evidence suggests that merchandise subject to an order is completed or assembled in the United States or third countries from parts and components imported from the country subject to the order. Additionally, Commerce can find that later-developed merchandise may also be covered by an existing order.

Typically, circumvention inquiries are initiated in response to allegations filed by the domestic industry. However, Commerce’s regulations provide that a circumvention inquiry may be self-initiated when the Department determines from available information that an inquiry is warranted. This is the first time that Commerce has self-initiated circumvention inquiries based on its own monitoring of trade patterns, and the first self-initiation of multi-country circumvention inquiries.

For more information on this topic or to learn more about KPMG’s Trade & Customs Services, contact: