How CBP Catches AD/CVD Transshipment

An antidumping order slaps a triple-digit duty on a category of Chinese goods. Within months, imports of that same product from China fall — and imports of a suspiciously similar product from Malaysia, Vietnam, or Thailand surge. To the importer buying the “Malaysian” version, it looks like a lucky sourcing shift. To CBP, it looks like exactly what it usually is: Chinese goods routed through a third country to dodge the duty. And CBP has a dedicated enforcement machine built to catch it.

This is antidumping and countervailing duty evasion, and the importer of record who gets caught in it faces retroactive duties, interim cash-deposit demands that bite before any final finding, and potential penalties — often for a scheme the importer did not know it was part of. Understanding how CBP finds transshipment, and how the investigation process works, is the difference between due diligence and a very expensive surprise.

Why the Incentive Is So Large

Ordinary tariffs are measured in single or low double digits. Antidumping and countervailing duties are a different order of magnitude — rates of 50%, 100%, or several hundred percent are common, because they are designed to offset unfair pricing or foreign subsidies, not to raise revenue. When the duty on a product can exceed its value, the incentive to make Chinese goods look like they came from somewhere else becomes enormous. That gap is what drives the entire transshipment economy. Our overview of AD/CVD duties and scope rulings covers how those duties are set.

What Evasion Actually Looks Like

Transshipment is the classic move: goods leave China, stop in a third country, and are re-exported to the United States with paperwork claiming that third country as the origin. But the family of evasion schemes is broader, and the sophistication varies.

Common AD/CVD evasion patterns

Scheme	How it works
Pure transshipment	Chinese goods pass through a third country and are relabeled as that country’s origin, with no real processing
Minor processing	Trivial finishing in a third country — repackaging, light assembly — dressed up as a “substantial transformation” that does not actually change origin
Misdescription	The product is described or classified to fall outside the literal scope of the order, even though it is covered
False origin documents	Certificates of origin, mill certificates, or invoices fabricated to support the third-country claim

The line that matters legally is substantial transformation. Origin follows real manufacturing, not the last place a box was opened. Repackaging Chinese goods in Vietnam does not make them Vietnamese; a genuine manufacturing process that transforms them into a new article with a new name, character, and use might. The distinction is factual and often close, which is why country of origin analysis sits at the heart of these cases.

Two Different Legal Tracks

Importers often conflate two distinct enforcement mechanisms. They are separate, run by different agencies, and answer different questions.

Anti-circumvention vs. EAPA evasion

	Commerce Anti-Circumvention / Scope	CBP EAPA Evasion
Agency	Department of Commerce	CBP (Trade Remedy Law Enforcement Directorate)
Question	Should the order be extended to reach these goods or this country?	Did this importer evade an existing order on specific entries?
Focus	The product and the order’s reach	The importer’s conduct and entries
Result	A ruling that goods are, or are not, within scope	A determination of evasion, with duties and interim measures against the importer

The Enforce and Protect Act — EAPA, enacted in 2015 and codified at 19 U.S.C. 1517 — is the one that puts the importer directly in the crosshairs, because it targets conduct rather than product scope. It is the mechanism most likely to turn a sourcing decision into a personal liability.

How CBP Finds It

CBP is not guessing. It brings a set of investigative tools specifically suited to detecting origin fraud, and the data patterns transshipment creates are exactly what those tools look for.

CBP’s evasion-detection toolkit

Tool	What it does
Trade-pattern analytics	Flags the tell-tale signature — imports from China fall as imports of the same product from a third country spike right after an order issues
EAPA allegations	Domestic competitors and other interested parties can file detailed evasion allegations that trigger an investigation
Requests for information (CF-28)	CBP asks the importer to document origin, production, and the supply chain — answers become evidence
Foreign site verification	CBP can visit the claimed third-country factory to see whether it can actually produce what it claims to
Supply-chain tracing	Following components, capacity, and shipping records back to their real source

The foreign verification tool is the one importers underestimate. A third-country “manufacturer” that is really a repackaging shed cannot survive an on-site visit — a facility with no meaningful production capacity, no raw-material inputs, and output that dwarfs its plausible capacity tells the whole story. When the factory cannot make what the paperwork says it made, the origin claim collapses.

The EAPA Investigation, Step by Step

1. AllegationAn interested party — typically a domestic producer — files an evasion allegation with supporting evidence. CBP decides whether to initiate.
2. Initiation and investigationCBP’s Trade Remedy Law Enforcement Directorate opens an investigation and gathers evidence from the importer, the foreign parties, and its own data.
3. Interim measuresIf CBP finds a reasonable suspicion of evasion, it can impose interim measures — suspending liquidation, requiring cash deposits, and demanding live entry — before any final determination. This is where the financial pain begins.
4. DeterminationCBP issues a determination as to evasion within the statutory timeline, based on the record.
5. Administrative review and appealAn adverse determination can be challenged through de novo administrative review and, ultimately, at the Court of International Trade.

The Importer’s Exposure

Here is the part that surprises honest importers: knowledge is not always required for the duties to attach. If your goods are in truth covered by an AD/CVD order — because the “third-country” origin does not hold up — the duties are owed regardless of whether you knew your supplier was transshipping. You are the importer of record, and the entries are yours.

On top of the retroactive duties and interim deposits, deliberate evasion can draw penalties, and where the conduct was knowing, the exposure escalates into the culpability tiers of the broader penalty regime — see customs violations and penalties. The uncomfortable reality is that a supplier’s fraud becomes your liability, which is why supplier due diligence is not optional in AD/CVD-sensitive categories.

How to Protect Yourself

The defense is built before there is ever an allegation. Verify that your third-country supplier can actually manufacture what it sells you — capacity, inputs, and process, not just a certificate. Understand the substantial-transformation analysis for your product rather than assuming the shipping country is the origin country. Keep the production records that would let you prove genuine origin if CBP asks. And treat a sudden, unusually good price on a product that carries a heavy AD/CVD duty elsewhere as the red flag it usually is.

If a CF-28 arrives asking pointed questions about origin, or an EAPA investigation has been initiated, the response is consequential and the timeline is unforgiving — a poorly handled early response can supply the evidence that sinks the case. A customs and international trade lawyer can assess the origin position, respond to CBP’s inquiries, and defend against interim measures and an evasion determination. Building the supplier due-diligence into a broader import compliance program is how honest importers stay out of these investigations in the first place.

Frequently Asked Questions

What is transshipment in customs terms?

Transshipment, in the AD/CVD evasion context, means routing goods through a third country to disguise their true origin — typically Chinese goods passed through a country like Malaysia, Vietnam, or Thailand and relabeled as that country’s origin to avoid antidumping or countervailing duties. Without genuine manufacturing that substantially transforms the goods, the origin does not actually change.

Am I liable if my supplier transshipped without telling me?

Potentially, yes. If the goods are in fact covered by an AD/CVD order, the duties are owed regardless of your knowledge, because you are the importer of record. Penalties generally turn on culpability, so a lack of knowledge can affect the penalty exposure — but it does not erase the underlying duties.

What is an EAPA investigation?

An investigation under the Enforce and Protect Act (19 U.S.C. 1517) in which CBP examines whether an importer evaded an AD/CVD order on specific entries. It can be triggered by an allegation from a domestic producer, and CBP can impose interim measures — suspended liquidation and cash deposits — on a reasonable suspicion of evasion, before any final determination.

How does CBP prove transshipment?

Through trade-pattern data, requests for information, supply-chain tracing, and, notably, on-site verification of the claimed foreign factory. A facility that lacks the capacity or inputs to produce what it claims to make cannot support the origin claim, and that mismatch is often the decisive evidence.