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U.S. Cabinet Depot Investigated for Evading Import Duties

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January 7, 2021 | Bill Esler

BGI Group (dba U.S. Cabinet Depot) operates from a 620,000 sq. ft. headquarters near Atlanta.

BGI Group (dba U.S. Cabinet Depot) operates from a 620,000 sq. ft. headquarters near Atlanta.

KENNESAW, GA – The U.S. Customs and Border Service has made a preliminary determination that U.S. importer BGI Group Inc. has evaded anti-dumping and countervailing duties (AD/CVD) on wooden cabinets, bathroom vanities and component parts from China, reports the Kitchen Cabinet Manufacturers Association. 

Based in Kennesaw, GA, BGI Group does business as U.S. Cabinet Depot, operating from a 620,000 sq. ft. headquarters assembly plant/warehouse there, as well as three  100,000+ sq. ft. warehouses in Norton, MA, Fontana, CA. and Houston. 

Drawer box assembly at U.S. Cabinet Depot.

Drawer box assembly at U.S. Cabinet Depot. 

In its 2015 Customs Bill, Congress provided for the enforcement of U.S. international trade laws, modernizing U.S. Customs and Border Protection, and establishing a Trade Remedy Law Enforcement Directorate to prevent the evasion of antidumping and countervailing duty orders. “Evasion” under the bill refers to entering covered merchandise “by means of any document or electronically submitted data or information, written or oral statement, or act that is material and false” and that reduces applicable antidumping or countervailing duties. 

Since April 21, 2020, imports of Chinese wooden cabinets and vanities have been covered by anti-dumping and countervailing duties orders, subject to duty that can run as high as 300 percent. 

U.S. Cabinet Depot ships cabinets flat packed or assembled.

U.S. Cabinet Depot ships cabinets flat packed or assembled (as shown above). 

U.S. Customs and Border Protection began conducting an investigation after KCMA’s legal counsel, Shagrin Associates, requested that it look into potential evasion by BGI Group. As part of its determination, U.S. Customs found BGI evaded the duties by importing cabinets and vanities that were made in China, by trans-shipment through Cambodia, which was falsely designated as their country of origin.

On November 23, U.S. Customs and Border Protection issued a memorandum detailing evidence of the evasion addressed to BGI Group’s legal counsel, portions of which are excerpted here: 

“This letter is to inform you that U.S. Customs and Border Protection as commenced a formal investigation under Title IV, Section 421 of the Trade Facilitation and Trade Enforcement Act of 2015 …. for BGI Group Inc. dba U.S. Cabinet Depot. U.S. Customs and Border Protection (CBP) is investigating whether BGI has evaded the antidumping and countervailing duty orders A-570-106 and C-570-107, respectively, on wooden cabinets and vanities and component parts thereof from the People’s Republic of China. Because evidence reasonably suggests that BGI entered covered merchandise for consumption into the customs territory of the United States through evasion, CBP is issuing a formal notice of investigation. 

“In assessing the claims made and evidence provided in the allegation, the Trade Remedy Law Enforcement Directorate (TRLED) found that the allegation reasonably suggests that BGI is evading AD/CVD orders A-570-106 and C-570-107, respectively, by importing Chinese origin wood cabinets and vanities into the United States that had been transshipped through Cambodia and failing to declare the merchandise as subject to the applicable AD/CVD orders.”

The letter goes on to detail shipment data sourced from research firm Panjiva and a sworn affidavit that indicate wood cabinets and vanities produced in China were being repackaged in Cambodia and then shipped to the United States for entry by BGI. An affidavit from an industry figure said the owners of Gaomi City Haitian Wooden Ware Co., Ltd. and Xuzhou Longyuan Wood Industry Co. – the Chinese companies believed to have manufactured the cabinets in question in China – had established Cambodia Golden Coast Wood Products Co., Ltd., a Cambodian company that claimed to be a manufacturer but may have been merely repackaging components. 

Following this initial determination, U.S. Customs and Border Protection has seven months to continue its investigation and collect additional information before issuing a final determination as to evasion, according to KCMA.

“This is a huge win for our industry and the American workforce,” said Betsy Natz, CEO of KCMA. “The filing of this allegation is one of the many ways that KCMA is working with Customs and other law enforcement agencies to hold responsible any foreign producers and U.S. importers that attempt to evade payment of the AD/CVD duties.” 

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