Wood Importer Says Its Hardwood Plywood Made in Cambodia, Wrongly Assessed Duties

Wood importer Richmond International Forest Products launched a challenge in the Court of International Trade claiming its imports of hardwood plywood from Cambodia were erroneously deemed to be of Chinese origin by CBP. In an April 21 complaint, RIFP said its imports were improperly hit with antidumping and countervailing duties, Section 301 tariffs, Merchandise Processing Fees and additional Harbor Maintenance Fee. In addition, RIFP claims that CBP's failure to consider what it sees as key evidence violated the Administrative Procedure Act and the importer's Fifth Amendment rights of due process.

According to the complaint, RIFP began sourcing hardwood plywood made in Cambodia in February 2018. To ensure proper due diligence and compliance, the importer hired Benchmark International to audit the supply chain and make sure the plywood was truly being produced in Cambodia. After determining it was, RIFP imported the goods as being of Cambodian origin -- a claim CBP rejected. The agency defended its determination. CBP said that following an agency visit to the manufacturer in Cambodia it "determined that the actual country of origin of the merchandise is China as only minor processing occurs in Cambodia." No other legal or other factual basis for the finding was provided, RIFP said.

RIFP then met with CBP twice to discuss the rejection, receiving no further explanation of the decision, according to RIFP's court filing. The importer filed a timely protest with CBP that included evidence from the auditor and the importer. RIFP's supplier was subsequently ensnared in an Enforce and Protect Act investigation on the origin of its plywood, though RIFP itself was not one of the importers under investigation. According to RIFP, the supplier, LB Wood, imports Chinese veneer for producing plywood in Cambodia, which CBP has previously ruled a substantial transformation.

RIFP said CBP's refusal to consider what the company believes is strong evidence violates its due process rights and led to the imposition of hefty duties on its plywood imports. “This Court has found that when an importer is subject to AD/CVD duties by CBP based on allegations on evasion, it must be given adequate notice and 'an opportunity to present ... objections” in a 'meaningful manner,'” the complaint read. “CBP failed to provide RIFP with any factual or legal basis for its conclusion that only minor processing occurred in Cambodia or any opportunity for RIFP to review whatever evidence CBP had in its possession that supposedly showed only minor processing took place in LB Wood. In this matter, CBP’s action violated RIFP’s constitutional rights.”