Law firm investigating duty settlement fees
By Thomas Russell -- Furniture Today, July 6, 2009
HIGH POINT — A coalition of importers and Chinese wood bedroom furniture producers has hired a law firm to investigate an alleged process that allows factories to pay settlement fees to avoid facing higher duties on Chinese-made wood bedroom furniture.
Seattle-based Garvey Schubert Barer has been retained to research a process by which factories have been released from annual audits that show what duties Chinese factories should pay.
Furniture importers have told Furniture/Today that their Chinese source factories have gotten off the review list by paying a settlement fee to legal counsel representing domestic manufacturers that supported the initial antidumping case.
Some factory owners also have told Furniture/Today they have paid money to have their names taken off the review list. Having their names taken off the list, in effect, allows them to remain at their initial cash deposit rates and not be subject to a higher duty to be paid by their importer of record.
The U.S. Department of Commerce, which monitors the administrative review case and assigns duties to each factory, has declined comment on the matter, saying it has no direct knowledge of such private settlements.
King & Spalding, the law firm representing the petitioners, also has not commented on this aspect of the review process, nor has it acknowledged such settlements are taking place.
Some importers have said privately that while they don't like the nature of the process, they believe such settlements are legal and help their factories remain at competitive duty rates. But others say the settlement process is a form of extortion that violates the legitimacy of the review process.
William Perry, an attorney with Garvey Shubert Barer, indicated that the legal nature of such settlements remains in question.
“The statement that private settlements are legal is not based on a decision by the Commerce Department or the antidumping law itself,” he wrote. “In discussing this issue with Commerce, they have made it very clear to me that they are taking no position with regard to private settlement agreements.”
His firm's inquiry will be a factual investigation to understand the facts of the case and to “assess whether there are enough facts to warrant the filing of a complaint against the petitioners for their actions.”
He added that the firm also will look into conditions attached to the settlement agreements, including allegations that only certain companies are allowed to settle with the petitioners.
Perry declined to name members of the coalition for fear that they could face retaliation from the petitioners and their legal counsel, particularly during the annual review process. However, he said that any such action would violate law and only strengthen any case against the petitioners.
Perry also declined to reveal the cost of the inquiry and how much each coalition member is paying to fund it. He did say that he expects the factual investigation to be completed by the end of the year.
For more information about the coalition, contact Perry at BPerry@gsblaw.com or opposewbfadd@gmail.com.
Joe Dorn, an attorney with the petitioner's law firm, King & Spalding, declined to comment on the investigation.
