Chineese Exporters Willing to Commit Fraud

By Ted Sickinger The Oregonian March 22--Looking to crack down on illegal dumping by overseas manufacturers, staff members for Sen. Ron Wyden, D-Ore., conducted their own clandestine survey last fall and found a surprising number of Chinese exporters ready and willing to commit fraud to avoid U.S. customs duties on the goods they ship here. Wyden, who heads a Senate subcommittee on trade, says importers' willingness to flout the law is increasingly pervasive and brazen, and is costing the country valuable manufacturing jobs and revenues. In Oregon, for example, the steel and pipe industries are being undercut by imported product on which the Commerce Department has slapped countervailing duties because of unfair trade practices. Producers and importers, however, are avoiding those duties -- even advertising their willingness to do so on the Internet. Wyden is sponsoring legislation to force the U.S. Customs Service to step up what he says is lax enforcement of antidumping laws, after a similar attempt late in the last session got little traction. He held a press conference Monday morning at Evraz North America's steel mill in North Portland and says he will be holding hearings on the issue to educate Senate colleagues on how companies around the country are affected. Mike Rehwinkel, chief executive of Evraz North America, said Monday that the company had two mills in Western Canada that aren't operating, in part because the company has trouble competing against pipe imported from China -- pipe that often avoids the duties that have been imposed. "We can compete against anyone as long as the playing field is level," he said. Evraz, a Russian company, purchased Oregon Steel Mills in 2007. It employs about 500 in the city, and recently announced said it was moving its headquarters from Portland to Chicago. Manufacturing will remain in Portland, adding jobs if Evraz can boost sales of steel pipes and plate made here. To get a sense of the problem manufacturing companies face, Wyden's staff posed as a purchasing manager for a fictitious import company called AvisOne Traders Inc. Staff members contacted a variety of overseas companies manufacturing goods already subject to antidumping duties. Their emails inquired whether they could supply a particular product, and whether they knew of any way to evade the duties. In under two weeks, staff contacted roughly 120 companies and received 47 responses. Of those, 10 said they were willing to evade duties on five different products subject to U.S. antidumping duties, including mattress innersprings, paper, steel nails, paint brushes and steel pipe and tube. The most common method suggested was to ship the product to a third country and falsify the accompanying documentation so it would pass muster when it arrived in the U.S. But the emails also offered to falsify invoices to understate costs, or break up the products into component parts to avoid duty. "This is all taking place under the eyes of the very sleepy U.S. Customs Service," Wyden said on Monday. Wyden's staff claims there are $90 million in uncollected duties on four steel products that are shipped into the U.S. from countries that engage in unfair trade practices. They also believe there are 300 cases pending with Customs from U.S. companies that feel they've been wronged by not having countervailing duties collected on imported products. Wyden's legislation would put some teeth in the existing law, requiring customs to investigate allegations within 30 days and start collecting duties if there were violations discovered. "We've got trade laws on the books," he said. "But they're not very good if you're not going to enforce them." Jenny Burke, a spokeswoman for U.S. Customs and Border Protection, said the agency cannot comment on pending legislation. Read original article here