In recent days, the US Customs and Border Protection (CBP) has issued a final “Positive ruling”under the enforcement and Protect Act against the BGI Group, also known as the US Cabinet Warehouse Company. The US Customs and Border Protection (CBP) ruled that wooden cabinets and dressers imported from Vietnam by a US Cabinet Warehouse Company had “Fraudulently”evaded anti-dumping (AD) and countervailing duty (CVD) laws. Because only some parts of the company’s products are processed in Vietnam, most of the components are made in China. If 40% or more of the value of the product is manufactured abroad, it can not meet the requirements for products originating in Vietnam and should not be labelled “Made in Vietnam”. 2021, the American Kitchen Cabinet Alliance, or AKCA, has filed formal charges with customs under the enforcement and Protection Act. The allegation contains substantial evidence that United States cabinet warehouse companies failed to declare that imports from Vietnam contained Chinese components without proper payment of the anti-dumping duty (AD/CVD) . According to US import data in recent years, the number of cabinets imported from Vietnam has soared after the AD/CVD decree was issued. The data also shows that American cabinet warehouse companies have a long history of importing cabinets from China, but importing cabinets from Vietnam only started in 2019. In the course of the proceedings, ambry warehouse argued that Chinese components should not be included in the AD/CVD order because they had been further processed in Vietnam. The customs rejected this argument, arguing that even if Chinese parts were further processed in Viet Nam before being combined with other parts, they would still be properly considered as coming from China and thus subject to the AD/CVD act.

A recent surge in Chinese investment in Vietnamese timber manufacturers has complicated supply chains and made fraudulent trans-shipments more complicated. China is investing in Vietnam to take advantage of its lower labor and raw material costs. So far, the strategy of importing parts from China into transit countries to assemble cabinets (or other products) and/or mixing them with parts from transit countries has been legal for companies such as U. S. cabinet warehouses, and helped them avoid huge tariffs. But it now appears that the companies that first tried it were at great risk. As part of the enforcement action, the Customs and Excise Department will suspend imports of products from United States cabinet warehouse companies. The United States Department of Commerce will also issue instructions on the applicable anti-dumping duties/anti-dumping duties to be paid on imports. The applicable tariffs may range from 58.89 per cent to 83.89 per cent. In addition, the rates will apply to one million cabinet products imported from Vietnam since March 2020. The American Cabinet Warehouse Company alone imported more than $40 million worth of cabinets from Vietnam in 2020, potentially incurring one million in unpaid tariffs. As Betsy Natz, chief executive of the Kitchen Cabinet Manufacturers Association, put it: “This decision will serve as a powerful deterrent to other companies that are or are considering evading the orders of AD/CVD. “These orders are important for reviving US industry, so it is vital that they are strictly enforced.”