US Files Nearly $3.4M Penalty Suit Against Mattress Innerspring Importer at Trade Court
The U.S. filed a customs penalty lawsuit on Sept. 22 at the Court of International Trade against importer Rayson Global and its owner Doris Cheng, seeking a nearly $3.4 million penalty related to evaded antidumping and Section 301 duties on uncovered mattress innersprings from China. The complaint says the imports were transshipped from China through Thailand to avoid the duties (United States v. Rayson Global, CIT # 23-00201).
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The U.S. said that a company called Tower Grow, co-owned by Cheng, began importing the innersprings from China in 2004. Tower Grow and Rayson Global "at one time shared a business address" at Cheng's house in California. Four years later, CBP seized two of Tower Grow's shipments for evading textile quotas and smuggling finished mattresses, mattress foundation covers, quilted zipper mattress covers, socks and woven fabrics.
At that time, Cheng admitted to double invoicing, undervaluing merchandise and providing fake documents to CBP. Later that year, in 2008, the Commerce Department announced its preliminary findings in an AD investigation on uncovered innerspring units from China. CBP received an allegation that Tower Grow was evading the duties by "claiming Hong Kong as a false country of origin," the U.S. said. The AD order was issued in 2009.
The government argued that from May 2018 to November 2019, Rayson Global entered innersprings by way of "material false statements, acts, or omissions that resulted in the evasion of ADD on innersprings imported from [China], ad valorem duties, and Section 301 duties." Rayson Global and Cheng allegedly falsely declared the origin of the goods to be Thailand for duty-free treatment under the Generalized System of Preferences benefits program.
The complaint adds that Rayson Global and Cheng "failed to exercise reasonable care because they did not seek clarification or guidance from CBP, their customs broker, or another customs professional, when causing these entries to be imported." In all, the U.S. said there was a $2,431,225.93 total revenue loss, leading to the present claim for $3,381,607.03 penalty.