Z Gallerie LLC Settles False Claims Act Case of Alleged Customs Duties Evasion for $15 Million

In April of 2016, the Department of Justice (DOJ) announced that Z Gallerie LLC agreed to pay $15 million to resolve allegations that Z Gallerie tried to evade customs duties on imports of wooden bedroom furniture from the People’s Republic of China (PRC).

The California based company is headquartered in Los Angeles and sells furniture and accessories in stores across the United States.

The allegations claim Z Gallerie evaded antidumping duties on wooden bedroom furniture imported from the PRC by misclassifying, or conspiring with others to misclassify, the imported furniture as pieces intended for non-bedroom use on documents filed with Customs and Border Protection (CBP). For example, furniture used in the bedroom were misclassified as “grand chests” and “hall chests” in order to avoid antidumping duties on wooden bedroom furniture.

The purpose of antidumping duties is to protect domestic manufacturers against overseas companies “dumping” goods in the U.S. market at prices below cost. Since 2004, imports of wooden bedroom furniture manufactured in China have been subject to antidumping duties.

Importers of wooden bedroom furniture should be aware that under the new Trade Facilitation and Trade Enforcement Act of 2015, CBP will be increasing their enforcement of antidumping evasion schemes.

It is important to note that the settlement by Z Gallerie LLC were for allegations only and there were no determinations of liability.

Leave your thoughts or comments below.