MINNEAPOLIS, MN -- U.S. Customs and Border Protection (“Customs”) has determined the existence of a wide-ranging illegal evasion scheme by a network of Chinese producers, international logistics companies, Malaysian companies and U.S. importers all working together to evade the antidumping and countervailing duty (“AD/CVD”) orders on quartz surface products from China. As a result of Customs’ investigation, which was conducted under The Enforce and Protect Act (“EAPA”), the importers will have to pay duties in excess of 300% on the imported goods.
Through its investigation, Customs found substantial evidence that the following importers illegally imported quartz surface products from China into the United States by misclassification and/or transshipment through Malaysia and therefore attempted to avoid the payment of existing AD/CVD duties:
- Artist Kitchen and Stone Inc.
- Big D LLC
- Bourbon Building Supply Inc.
- Cedar Trading Inc.
- Colorquartz New York Inc.
- Cumberland Cabinet and Design Inc.
- Durian Kitchen Depot Inc.
- Ever Raising Building Inc.
- Flowery Stone Inc.
- Green Mountains Trading Inc.
- Kat Specialties Inc.
- Kingway Construction Supplier Inc.
- MS Stone Co. Ltd.
- Nio Home Depot Inc.
- Nio Kitchen Depot Inc.
- Nomadic Barters Inc.
- Opaly USA LLC
- Star Home Plus Inc.
- White Swan Kitchen Depot Inc
Customs began its investigation after Cambria Company LLC submitted EAPA allegations to the agency on June 10, 2021 that provided details of the evasion scheme by numerous importers. After consolidating the allegations into a single case, Customs conducted a thorough and wide-ranging investigation that uncovered the illegal activities of multiple Chinese producers and exporters, several Malaysian companies involved in transshipping merchandise, and the numerous importers that were participating in this evasion scheme.
During the course of the investigation, Customs found that a Chinese logistics company, Shenzhen Ark Cross-Border Logistics Co., Ltd. (the “Ark Trans Group”), was coordinating and controlling the activities of the Malaysian exporters under investigation as well as certain U.S. importers. After Customs began making inquiries of members of the Ark Trans Group, some of its members began changing the names of its importers and Malaysian exporters to avoid detection by Customs. In addition, in an effort at diversification to avoid the risk of being caught by Customs, Ark Trans expanded the number of Chinese, Malaysian and U.S. companies involved in its evasion schemes.
Customs found that in addition to the illegal transshipment of merchandise through Malaysia, the Ark Tans Group was involved in misclassification of merchandise to evade payment of the AD/CVD duties. After several U.S. importers associated with the Ark Trans Group claimed that they were importing “crushed glass products” or “aluminum hydroxide surface products,” Customs conducted lab tests of their products. These lab tests showed that the importers had lied and misclassified their entries to evade payment of the AD/CVD duties.
“This action by Customs will deal a devastating blow to a large network of companies operating in China, Malaysia, and the United States to evade payment of the AD/CVD duties,” said Kari Barber, associate general counsel of Cambria. “Custom’s strong enforcement of U.S. trade remedy laws will allow Cambria and other domestic producers to continue making investments in American manufacturing and American workers.”
“Customs went above and beyond in this investigation to hold accountable all parties involved in illegal evasion activities,” said Luke Meisner of the law firm of Schagrin Associates, Cambria’s legal counsel in this matter. “We hope that this action teaches the industry that crime does not pay.”
In April of 2018, Cambria initiated a case before the Department of Commerce and the United States International Trade Commission alleging unfair trading of quartz surface products from China. At that time, dumped and subsidized Chinese quartz imports harmed American industry and workers by displacing over $1 billion per year of domestic product. Cambria’s successful petition resulted in U.S. Customs levying duties of up to 500% to halt the import of unfairly traded Chinese quartz into the U.S. marketplace.
While the AD/CVD duties have provided tremendous relief to Cambria and other U.S. producers, Cambria has continued the battle against dishonest firms who prioritize profits over American workers by concealing the true origin of their products. Customs’ announcement confirms that quartz surface products made in China remain subject to the payment of AD/CVD duties, even when they undergo further processing in a third country. Cambria continues to work with Customs to identify and hold responsible any foreign exporters and U.S. importers that are evading the AD/CVD duties through this or any other evasion scheme. If you suspect an importer of duty evasion, you can submit an allegation through Customs’ online portal.