Industry News

US bans import and sale of Viraj tainless steel products 09 August 2016

The United States International Trade Commission (USITC) has banned the import of certain stainless steel products from Mumbai-based Viraj Profiles Limited following an investigation into allegations of the theft of trade secrets. The USITC has also prohibited Viraj activities in the United States, including the sale, marketing and advertising of its products.

The USITC instituted an investigation on 10th October 2014 based on a complaint by Valbruna Stainless Steel Inc, Fort Wayne, USA, alleging Viraj had misappropriated its trade secrets. Valbruna claimed Viraj had persuaded one of its employees to steal the trade secrets, subsequently transferring them to Viraj while employed by Flanschenwerk Bebitz GmbH – a Viraj affiliate company in Germany. Viraj denied possession or use of the information. However, a forensic investigation of Viraj computer systems, ordered by Judge Theodore Essex, unearthed evidence that the Indian company did have and had used the secrets.

Valbruna alleged the stolen trade secrets included proprietary knowledge regarding its processes for melting, refining, and casting or pouring stainless steel, as well as customer lists. Italian courts previously convicted Viraj India, its general manager, and the former Valbruna employee of crimes in connection with the theft.

On 25th May 2016 the USITC issued a final determination that Viraj had violated Section 337 of the United States Tariff Act. The Commission applied a limited exclusion order prohibiting importation of certain stainless steel products manufactured by or on behalf of Viraj Profiles Limited for a period of 16.7 years. It also issued a cease and desist order prohibiting all of the company’s activities related to the sale of its stainless steel products in the United States, including marketing, advertising and soliciting distributors for its products.
“We are gratified that the commission has recognised the harm Viraj inflicted on our business and workers in the United States,” said Massimo Amenduni Gresele, managing director of Valbruna. “Trade secret theft is a serious problem. Bad actors like Viraj cannot be allowed to profit from this kind of behaviour. Valbruna is proud of its investment in the Fort Wayne, Indiana, community and its workers, and they deserve to be protected when their competitors violate the law.” 
The USITC’s order and opinion were delivered to the United States President on the date they were issued. According to the USITC’s FAQs on Section 337 investigations. President Obama has sixty days from that date to disapprove them for policy reasons, something that rarely happens. Imports and sales activities may continue during this period subject to bonds being posted with the US Customs and Border Protection and the USITC respectively but these bonds are forfeited if the President does not disapprove the orders.  

 

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