CBP Finds Evidence of Duty Evasion in Wooden Cabinets From China Case
CBP has found substantial evidence that CNC Associates N.Y., Inc., (dba CNC Cabinetry) entered wooden cabinets and vanities (WCV) from China into the U.S. in violation of antidumping and countervailing duty orders by transshipping through Indonesia and claiming PT Aiwood Smart Home (Aiwood) and PT Sunwell Manufacturing Indonesia (Sunwell) as local manufacturers, according to a June 7 notice.
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The case began with an allegation by the American Kitchen Cabinets Alliance in March 2021, which claimed CNC evaded AD/CVD orders on WCV from China. The allegation noted that the two alleged Indonesian manufacturers were located at the same complex and have financial ties, including to Chinese nationals, and that local Indonesian newspapers reported illegal transshipment activities occurring at the facilities of the supposed manufacturers.
CBP found the allegation reasonably suggested CNC entered covered merchandise through evasion and initiated an Enforce and Protect Act (EAPA) investigation of CNC in June 2021. Over the course of the investigation, CBP found that the supposed manufacturers were linked entities and did not have the manufacturing capacity to provide for CNC's import volumes. CBP also found that trade data showed that alleged raw material purchases by the supposed manufacturers came from Chinese companies known for manufacturing finished cabinets rather than raw materials. In responding to information requests, CNC said that the manufacturers have real production but provided documents that do not account for all the raw materials required to manufacture the supposed volume.
CBP concluded that the suppliers manufacture some WCV from raw materials but did not present evidence that they were capable of providing all products sold to CNC. Since information on the record is insufficient to determine which of the commingled entries contain merchandise in violation of the AD/CVD orders, CBP says it is reasonable to conclude that the majority of imports contained Chinese-origin WCV and that imported WCV from the two suppliers is transshipped merchandise entered through evasion.
CBP will suspend the liquidation of entries of imported CNC subject to EAPA Case 7618. For entries previously extended and for all future entries subject to EAPA Case 7618, CBP will rate-adjust and change those entries to type 03, using the “all others” AD/CVD rates for China. CBP will also evaluate CNC’s continuous bonds and may require single transaction bonds, as appropriate. CBP or other agencies may pursue additional enforcement or penalties as appropriate.