Jason Sandefur

The U.S. Customs & Border Protection Agency investigation of fraudulently marked Grade 5 cap screws could lead to importers and distributors having to scrap the “backbone of the OEM industry” fasteners with a U.S. Customs official present to witness.

The fastener industry is buzzing over news that the Customs agency has reportedly assigned field agents to investigate allegations of fraudulently marked Grade 5 cap screws being imported from Thailand.

“This is big,” one industry executive told FastenerNews.com, calling Grade 5 cap screws the “backbone of the OEM industry.”

Kevin McCann of the commercial targeting division of the Office of International Trade at Customs declined to confirm details of any allegation. McCann referred FIN to Customs’ Office of Public Affairs in Washington DC. Attempts to reach a representative from the public affairs office were unsuccessful.

According to the U.S International Trade Commission, in the first 11 months of 2008, over $11.5 million worth of product with a harmonized code of 7318.15.8065 (cap screws) were imported from Thailand into the U.S.

The allegations reportedly center on Grade 5.2 cap screws fraudulently marked as Grade 5 cap screws. As stated in SAE J429, Grade 5 specifications require a medium carbon steel marked with 3 lines evenly spaced on the bolt head. The Grade 5.2 is made of low carbon boron steel with a 3-line mark on one side of the bolt head.

SAE J429 requires a minimum of 28% carbon in Grade 5 product, while Grade 5.2 product under the spec calls for a minimum of 15% carbon and a maximum carbon content of 25%. Both Grade 5 and Grade 5.2 product have the same tensile strength requirements.

Customs is reportedly investigating the allegation that 10B21 steel was used and certified to, while a sample of the shipment in question appears to show a bolt head with a Grade 5 marking and a manufacturer’s mark of TY.

If confirmed, the fraudulent Grade 5.2 fasteners could give suppliers an estimated 10% to 18% cost advantage over authentic Grade 5 cap screws.
Thus far no importers or distributors have been named in the allegations.

As stipulated in the U.S. Fastener Quality Act, penalties for the sale or resale of fraudulent fasteners could include fines of up to $25,000 per violation, or imprisonment of up to 5 years.

While the FQA does not apply to fasteners from accredited manufacturers, a government probe could lead to Customs violation charges.

The investigation appears to have been prompted by a tip submitted through the agency’s new online trade violation reporting system, known as e-Allegations. The system was unveiled in 2008 as a new way to confidentially report suspected trade violations through an online form.

It’s unclear what the ultimate fate of the fasteners will be, though in similar cases the fasteners had to be scrapped with a Customs official present. Web: cbp.gov @2009 FastenerNews.com