SAN JUAN, Puerto Rico — Four individuals and one corporation pleaded guilty Aug. 18 to charges of conspiracy to smuggle aluminum extrusions into the United States with the intent to avoid paying antidumping and countervailing duties. U.S. Immigration and Customs Enforcement's (ICE) Homeland Security Investigations (HSI), working jointly with U.S. Customs and Border Protection (CBP), conducted the investigation leading to the guilty plea.
Samuel Garcia-Adarme, Edrick Garcia-Vazquez, Armando Garcia-Vazquez, Carlos Minguela and PRP Trading Corp., pleaded guilty before U.S. District Court Judge Francisco Besosa after reaching a plea agreement. A sentencing hearing is scheduled for Dec. 17.
According to the indictment, the defendants conspired to smuggle and clandestinely introduce aluminum imported from China by passing false and fraudulent invoices and documents through the San Juan CBP customhouse with the intent to defraud the United States in lawful anti-dumping and countervailing (ADD/CVD) duties.
Anti-dumping and countervailing duties are additional duties imposed on goods entering into U.S. commerce for consumption. The U.S. Department of Commerce can impose these duties to avoid imported merchandise being sold below fair market value. Since November 2010, the U.S. Department of Commerce imposed anti-dumping and countervailing duties on Chinese-origin aluminum, which ranged from 30 to 33 percent of the declared value of the imported aluminum, and 374.15 percent of the declared value of the imported aluminum, respectively.
The object of the conspiracy was that defendants Samuel Garcia-Adarme, Edrick Garcia-Vazquez, Armando Garcia-Vazquez and Carlos Minguela-Ortiz, owners and/or principals of Sultana Screens & Aluminum Sales, PRP Trading, and Aluwest Industries, with the assistance of William Tang Piu Wong, would purchase aluminum from China, transship the aluminum to Malaysia, repackage the aluminum and create false invoices to make it appear as though the aluminum originated in Malaysia, and then import the aluminum into Puerto Rico in order to avoid payment of the ADD/CVD duties.
"HSI will continue investigating importers who evade the payment of ADD/CVD on imported merchandise," said Angel M. Melendez, special agent in charge of HSI San Juan. "ADD/CVD cases are long-term, transnational investigations that require significant coordination between domestic and international offices and with our foreign law enforcement counterparts."
"CBP is responsible for enforcing the anti-dumping and countervailing law and collecting the duties assessed against applicable imports," said Marcelino Borges, director of field operations for Puerto Rico and the U.S. Virgin Islands. "Importers who willfully circumvent the provisions of the ADD/CVD law through illegal transshipment, undervaluation or misclassification of merchandise in order to avoid paying these duties will be identified and investigated. Our officers and trade experts remain vigilant to detect these violators and enforce all trade laws."
The HSI anti-dumping and countervailing duties program is one way that HSI protects U.S. businesses from fraudulent trade practices. ADD/CVD orders are issued by the Department of Commerce (DOC) and collected and distributed by CBP. Antidumping duties are assessed when importers sell merchandise at less than fair market value, which causes material injury to a domestic industry producing a comparable product. The United States can also impose countervailing duties to offset foreign government subsidy payments on exports of foreign businesses. Duties are imposed to offset the dumping or subsidies provided by the foreign country in order to maintain the competitiveness of United States industry and to foster a level business playing field.