Evading Remedies: Why The Marked Increase In Fraud In China-Related AD/CVD Cases Should Concern You

The Metropolitan Corporate Counsel

Reducing the substantial foreign-party fraud that occurs in many of the federal government’s enforcement actions against Chinese imports under the antidumping (AD) and countervailing duty (CVD) laws will not be easy. For example, the two agencies principally charged with enforcing those laws -- U.S. Commerce Department (Commerce) and U.S. Customs and Border Protection (Customs) -- typically will not investigate possible fraud unless presented with material evidence by the competing domestic producers, which face great difficulty in obtaining such evidence in China, where collecting what is viewed as public information in other countries is still criminalized as industrial espionage.

After giving examples of the type of fraud schemes dishonest traders are using to evade AD/CVD measures on Chinese imports, this article observes that Commerce and Customs can best reduce these schemes by prosecuting the perpetrators to the fullest extent possible where the agencies have the evidence to do so. The article concludes that the agencies’ failure to do this will likely increase fraud in these proceedings because such inaction will reinforce the current view of dishonest traders that they face little risk of being caught or punished for their fraud.