KCMA “Extremely Disappointed” in Overturned Ruling

KCMA “Extremely Disappointed” in Overturned Ruling

The U.S. Customs and Border Protection recently reversed its January 27, 2022, decision that found U.S. importer BGI Group (doing business as U.S. Cabinet Depot) had evaded antidumping and countervailing duty orders on wooden cabinets and vanities and components thereof from China.

In January, the U.S. Customs and Border Protection issued an “affirmative determination” that the U.S. importer BGI Group, which is doing business as U.S. Cabinet Depot, had evaded the antidumping and countervailing duty orders on wooden cabinets and vanities and components thereof from China.

The initial ruling found that after the AD/CVD orders were imposed on cabinets and vanities from China in April 2020, BGI began importing ready-to-assemble cabinets from a Vietnamese company called HOCA Kitchen and Bath Products International Co. (“HOCA Vietnam”) and had a previous history of importing these items direct from China. U.S. import data also revealed a surge in cabinet imports from Vietnam from April 2020. It was found that HOCA Vietnam, established by Hangzhou HOCA Kitchen & Bath Products, China, lacked the capacity to produce the volume of cabinets being exported to the U.S., and was importing cabinet doors and frames from its Chinese parent company.

The agency found that the American Kitchen Cabinet Alliance, the group that filed the grievances, failed to support its arguments.

Betsy M. Natz, CEO, Kitchen Cabinet Manufacturers Association, responded to this decision:

“Customs got it right the first time in its January 2022 determination when the agency found that the U.S. importer BGI and the Vietnamese exporter HOCA Vietnam were together evading the antidumping and countervailing duty orders on Wooden Cabinets and Vanities and Components Thereof from China. The KCMA is extremely disappointed that Customs has now reversed this determination of evasion.

“We know for a fact that HOCA Vietnam was importing Chinese cabinet components and combining them with Vietnamese cabinet components in Vietnam before shipping complete ready-to-assemble cabinets to BGI in the United States.

“The KCMA invested many years of effort in gathering evidence of this evasion activity and prosecuting the EAPA investigation at Customs. The decision to reverse its final determination of evasion is a grave error that reflects numerous misunderstandings of the facts and the scope of the orders.

“Nevertheless, HOCA Vietnam is only one exporter in Vietnam. We have asked the U.S. Department of Commerce to conduct a countrywide inquiry into whether exporters in Vietnam are evading or circumventing the orders on Chinese cabinets and parts. If we are successful in this proceeding, it will address not only HOCA Vietnam, as a single exporter, but all the exporters in Vietnam that are evading and circumventing the orders.”

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