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New Law Hits China Trade Fraud, Aids Alabama Fabricator

Illegal competition has left M&B as one of the last wire hanger manufacturers in the U.S.

U.S. government goes to bat for wire hanger maker M&B Metal Products in Leeds.

U.S. government goes to bat for wire hanger maker M&B Metal Products in Leeds.

Photo courtesy of M&B, by Cary Norton

In August, U.S. Customs and Border Protection issued an official ruling to declare what M&B Metal Products Co. of Leeds, Alabama has known for years: China dumps cheap metal products here through other countries to evade antidumping duties.

Illegal competition has left M&B as one of the last wire hanger manufacturers in the U.S. The CBP’s Aug. 14 ruling found “substantial evidence that wire hangers were imported through evasion.” The Trade Facilitation and Trade Enforcement Act of 2015, commonly referred to as the Enforce and Protect Act (EAPA), sought to address such problems.

M&B Metal has now filed an additional eight allegations of evasion concerning the transshipment of wire hangers through Malaysia. CBP issued a consolidated notice Aug. 17 for the decision on interim measures in those investigations, finding a reasonable suspicion of a complex and coordinated scheme to import wire hangers through Malaysia. “Combined, these EAPA investigations on wire hangers have resulted in CBP preventing evasion of over $33 million in unpaid antidumping duties annually,” said Acting CBP Commissioner Kevin McAleenan.

EAPA conducted an on-site visit of a hanger manufacturer in Thailand, and reviewing trade data gathered during the course of this investigation, CBP determined that the importer, Eastern Trading, had imported wire hangers that had been transshipped from China through Thailand. CBP found similar evidence in eight visits to Malaysia.

“Needless to say, we are very satisfied with the way CBP has investigated our EAPA allegations,” M&B President Milton Magnus says. “EAPA definitely works, as evidenced by these cases. We received preliminary results on Thailand in December, and since February, there are no hangers being imported from Thailand. We expect the same thing to happen in Malaysia.”

The Customs investigation has accomplished real-time results for M&B, Magnus says.

“Our business has increased since Thailand, and we feel it will be even stronger as the illegal imports from Malaysia dry up. Malaysia exported to the U.S. about 700 percent more illegal hangers per year than Thailand, so the bump in business should be significant.”

CBP has the authority to bring civil and criminal charges against the importers of illegal hangers, as they are committing fraud against the U.S. government. For shipments to the U.S. over the past nine months, Customs will require the importers to pay the China-wide dumping margin of 187 percent.

“Sadly, most of these importers know how to play the system,” Magnus says, and much of the illegal profit will likely already be moved out of the government’s reach. “Since they are ill-gotten profits, we hope CBP uses all of their resources to penetrate the corporate entity to seize their assets,” he says.

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