U.S. Immigration and Customs Enforcement (ICE) has filed criminal charges against the president and two employees of a Chinese honey company for fraudulently circumventing an antidumping order. The charges stem from a scheme to surreptitiously re-route Chinese honey through the Philippines and Thailand to avoid antidumping duties on Chinese honey. This case shows that ICE will respond to importer fraud with criminal charges.
The offending company, Changge Jixiang Bee Products Ltd., began its circumvention activities in 2005 in reaction to a Department of Commerce order placing a 137% tariff (later increased to 221%) on its goods. Under the circumvention scheme, the company shipped Chinese honey to the Philippines or Thailand, moved the honey into a warehouse, and attached “Product of the Philippines/Thailand” labels to the product. The company then shipped the honey to the United States pursuant to customs forms describing the honey as a Philippine/Thai product, thus circumventing the payment of dumping duties. From 2005 to 2009, the company transshipped $1.6 million worth of honey, avoiding $3.3 million in tariffs.
ICE learned of the scheme and initiated an international investigation that included agents in the United States, Bangkok, Hong Kong and Manila. In May 2009, ICE agents arrested two company employees in Los Angeles and also indicted the company president. One employee pled guilty on August 19, while the other is scheduled for trial in 2010. They face jail sentences of up to five year and fines of up to $250,000.
ICE's press release describing the case is available at http://www.ice.gov/pi/nr/0908/090819seattle.htm