Global Fastener News

March 23, 2009 FIN – The Fastener Industry Education Group warned distributors to immediately quarantine mismarked Grade 5 cap screw from Thailand as the U.S. Customs & Border Protection Agency continues its investigation (see FIN 3/2/09).

Field agents from Customs are probing allegations of imported Grade 5.2 cap screws incorrectly marked as Grade 5 cap screws.
“During 2008 Tycoons Worldwide Group, using the head mark TY, shipped into the USA numerous orders of bolts identified as SAE J429 Grade 5 that do not conform to Grade 5 chemical requirements,” the group explained.
In a bulletin entitled “Mismarked Grade 5 Bolts,” the FIEG — a joint effort by the Industrial Fasteners Institute and the National Fastener Distributors Association — advised distributors with the nonconforming fasteners to obtain legal counsel in order to determine “whether or not to sell any more of these bolts.” An attorney could also suggest a proper way to notify end-users of the product in question. In addition, the bulletin urged distributors to “contact the supplier from whom the bolts were purchased to determine disposition of the remaining inventory.”
The FIEG bulletin sought to ease industry concern over questions of performance related to the mismarked bolts. “There have been no reported performance issues with the subject parts,” the document stated. “Grade 5 and Grade 5.2 have the same performance requirements. All indications are that the subject parts meet all Grade 5.2 physical requirements.”
Customs is reportedly investigating the allegation that 10B21 steel was used and certified to. As stated in SAE J429, Grade 5 specifications require a medium carbon steel marked with a three-line “sunburst” 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.
The nonconforming Grade 5.2 fasteners could give suppliers an estimated 10% to 18% cost advantage over Grade 5 cap screws that fully comply with the proper specification.
While the Fastener Quality Act does not apply to fasteners from accredited manufacturers such as Tycoons, a government probe could lead to Customs violation charges. In the past Customs has prosecuted sellers of misrepresented products under the Lanham Act (15 U.S.C. 1125), which prohibits the sale of mismarked products in the U.S.
The FIEG bulletin listed other laws covering smuggling and making false statements that might be used to prosecute businesses that imported the product. “These statutes do not apply to users of the misrepresented products in question,” the group emphasized. “All fastener distributors who imported the subject bolts directly are considered the ‘importer and manufacturer of record’ by U.S. Customs.”
The FIEG advised all distributors to download a free copy of its white paper, “The Proper Designation and Use of Standards by End-Users and Suppliers Is Critical to Fastener Quality,” from indfast.org or nfdafastener.org. ©2009/2013 Fastener Industry News.
For information on permission to reuse or reprint this article please e-mail: FIN@GlobalFastenerNews.com

2009 FIN � U.S. Customs Probes Mismarked Grade 5 Cap Screws From Thailand

March 2, 2009 FIN – The U.S. Customs & Border Protection Agency reportedly is investigating claims of chemically nonconforming Grade 5 cap screws having been imported to the U.S. from Thailand, prompting painful memories of the Congressional process that led to the U.S. Fastener Quality Act during the 1990s.
The fastener industry is buzzing over news that Customs has reportedly assigned field agents to investigate allegations of fraudulently marked Grade 5 cap screws from Thailand.
“This is big,” one industry executive told FastenerNews.com, calling Grade 5 cap screws the “backbone of the OEM industry.”
The allegations reportedly center on Grade 5.2 cap screws incorrectly marked as Grade 5 cap screws. As stated in SAE J429, Grade 5 specifications require a medium carbon steel marked with a three-line “sunburst” 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 product in question appears to show a bolt head with a Grade 5 marking and a manufacturer’s mark of TY. TY is the symbol used by Tycoons Group Enterprise Co. Ltd. of Taiwan, which operates additional factories in Thailand and Vietnam.
Tycoons reportedly shipped numerous orders of the nonconforming bolts into the U.S. during 2008.
The nonconforming Grade 5.2 fasteners could give suppliers an estimated 10% to 18% cost advantage over Grade 5 cap screws that fully comply with SAE J429.
So far no importers have been named in the allegations.
While the FQA does not apply to fasteners from accredited manufacturers such as Tycoons, a government probe could lead to Customs violation charges.
In the past Customs has prosecuted sellers of misrepresented products under the Lanham Act (15 U.S.C. 1125), which prohibits the sale of mismarked products in the U.S.
Reached at his office in Washington DC, Kevin McCann of the commercial targeting division of the Office of International Trade at Customs declined to comment. McCann referred FastenerNews.com to Customs’ Office of Public Affairs, which has yet to comment on the matter.

Fastener Industry Upset By Infractions
“Buy and sell cheap is and has always been too much of a priority in the import game,” reflected one insider who has held key positions with two well-known fastener companies. “I am appalled that veterans in our industry who lived through the 1990s and the government intervention regarding counterfeit markings could allow this to happen so blatantly,” said an industry leader who was involved in the FQA amendment process, which lasted the entire decade.
Worried about undue panic, industry associations are fielding questions from fastener business owners concerned about the issue.
News of the Customs probe prompted a special meeting of the Fastener Industry Education Group, a joint effort by the Industrial Fasteners Institute and the National Fastener Distributors Association. FIEG was formed as a proactive approach to help maintain quality in the fastener industry following headlines about lead paint in imported toys, toxic toothpaste and tainted dog food.
Fastener experts agree that Grades 5 and 5.2 are completely interchangeable from an applications standpoint. “There is absolutely no reason to think that there are any dangerous situations out there just waiting to occur,” a fastener expert asserted in an email obtained by FastenerNews.com.
The same expert asserted that the practice of mismarking fasteners “cannot be condoned.”
In a letter obtained by FastenerNews.com, IBECA Technologies Corp. president Salim Brahimi reassured fastener executives that the issue appeared to be limited to the incorrect markings on the cap screws. “The problem in this case resulted from Tycoons having identified these parts as SAE J429 Grade 5,” Brahimi wrote. “It is important to emphasize that the parts are not defective or “bad.” Rather, they are incorrectly identified. The parts fully conform to SAE J429 Grade 5.2.”
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 into the U.S. from Thailand. However, Tycoons only manufactured a portion of those cap screws.
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 in attendance to witness the event.
Industry leaders are mulling suggestions for distributors who have these bolts in their inventory. Such steps could include immediately quarantining the products, obtaining legal counsel to determine the proper way to notify end users in possession of these parts, and contacting the supplier from which these bolts were purchased to determine further action on the remaining inventory.  ©2009/2013 Fastener Industry News.
For information on permission to reuse or reprint this article please e-mail: FIN@GlobalFastenerNews.com