Feds Step Up Timber Smuggling Fight with Cases Against Coastal Forest Products and BC, Plus Interagency Work

By Craig Webb

Both in deeds and words, the federal government is taking action against companies that it believes are avoiding duties and tariffs by sneaking lumber into the United States.

The U.S. Customs and Border Patrol Agency issued a notice May 4 concluding that Coastal Specialty Forest Products, Inc., doing business as Coastal Forest Products, avoided anti-dumping and countervailing duties on Western red cedar lumber from Canada by arrange to ship the wood through New Zealand and then declaring that Pacific nation as the country of origin. The shipments in question date from as far back as mid-2024.

A few weeks earlier on April 27, Boise Cascade pleaded guilty and was sentenced for a felony violation of the Lacey Act involving an import of Chinese plywood into the United States . The company was fined more than $6.3 million—twice the gross profits it illegally obtained, a law firm noted—and was required to implement a compliance plan.

And three days before the BC case, on April 24, Principal Deputy Attorney General Adam Gustafson called the illegal cross-border trade of timber and wood products "one of the most pervasive and lucrative forms of transnational crime."Associate Attorney General Stanley E. Woodward Jr. declared at the same event that "the American timber industry ... should not be stifled by foreign supply chains."

Coastal Forest Products

The Coastal Forest Products case involves the New Zealand company Herman Pacific Ltd. (Hermpac). That business takes rough green Western red cedar and then dries, cuts and sands it before export. Customs said Hermpac described its operations as a “secondary manufacturer” and said that it performs “downstream processing including resawing and optimization.”

Hermpac and Coastal Forest Products argued that the "substantial transformation" that the Canadian Western red cedar underwent at Hermpac makes New Zealand the end product's rightful country of origin.

But Customs concluded that these acts weren't enough to disqualify the wood from being covered under U.S. anti-dumping and countervailing duties. It ordered Coastal Forest Products to pay unpaid duties and post cash deposits on future entries of the covered merchandise.

The decision represents a victory for the U.S. Lumber Coalition, a trade group that has pushed for years against what it regards as the dumping of Canadian product in the U.S. The Coalition has been an influential force in the creation of antidumping and countervailing duties on Canadian lumber imports, putting it at odds against builders and dealers. It also was the group that alerted Customs and Border Patrol to Coastal Forest Products.

"The message to Canada is clear: transshipment of lumber into the United States via a third country to evade antidumping and countervailing duties is not tolerated, nor possible," said. Zoltan van Heyningen, Executive Director of the Coalition. "... Continued full enforcement of the U.S. trade laws is exactly what must happen to further expand U.S. lumber manufacturing and strengthen U.S. supply lines to build more American homes with American lumber."

Coastal Forest Products was not immediately available for comment on the decision.

Boise Cascade

According to the Justice Department, Boise Cascade sold in the U.S. between $25 million and $65 million of illegally imported plywood that it had purchased from Horizon Plywood between 2018 and 2021. Horizon's whose principals, Noel and Kelsy Quintana, were sentenced in February 2024 for conspiracy and Lacey Act violations based on their illegal importation of hardwood plywood. The wood was handled at BC's distribution center in Pompano, FL.

“Trade fraud is not a paperwork violation. It is theft from the American taxpayer and an attack on lawful American commerce,” U.S. Attorney Jason A. Reding Quiñones for the Southern District of Florida said in a statement.

The government alleged BC bought hardwood plywood from Horizon known it was illegally improted from China. It said Horizon had violated the Lacey Act by falsifying import declarations. "Boise Cascade knew that Horizon had previously tried to hide the origin of the wood that it imported," the government said. "For example, Horizon transshipped products from China to Malaysia, where it moved product into new containers, and then from Malaysia to the United States. Boise Cascade knew or should have known the plywood purchased from Horizon was sourced from China."

Communications Director Amy Evans told Webb Analytics that “Boise Cascade is pleased to resolve this legacy matter involving plywood purchases at our company’s distribution facility in Pompano, FL, between 2017 and 2021 from a former U.S. based supplier and that supplier’s importation of those products. We move forward as a stronger company with an even greater vigilance towards trade policies and procedures. Boise Cascade is committed to rigorous compliance across our businesses, as evidenced by the time and resources we have invested in these programs. Looking ahead, we remain focused on delivering exceptional value to our customers and partners and will continue to be guided by our longstanding core values of Safety, Integrity, Respect, and the Pursuit of Excellence.”

The law firm Akin Gump called the case "a stark reminder that DOJ is now treating customs duty evasion, environmental import controls and supply chain due diligence as a single, integrated enforcement priority. It also underscores DOJ’s continued willingness to predicate criminal liability on a theory of willful blindness, holding downstream purchasers accountable for ignoring red flags about a supplier’s unlawful conduct."

DOJ Speaks at TIMBER

Gustafson and Woodward from the Justice Department spoke at a meeting of the Timber Interdiction Membership Board and Enforcement Resources Working Group — better known as the TIMBER Working Group. TIMBER brings together officials from four federal agencies to investigate and take action against illegal timber trafficking.

"Illegal logging was the third most profitable form of transnational crime with an estimated annual value of $52 billion to $157 billion," Gustafson said. "The only more profitable crimes were counterfeiting and drug trafficking. The U.S. Forest Service estimates the U.S. forest products industry loses $500 million annually to trafficking through lost export opportunities and depressed wood prices.

"The United States is one of the largest producers of timber and wood products," he continued. "On the flip side, we are also one of the largest consumers of these products. The only way we can end the illegal timber trade is to cut off the demand for illegal wood products. This is done through effective and collaborative enforcement efforts."

Woodward said America "must take action to stymie the United States’ continued reliance on foreign timber. We have been ceding influence to foreign producers, who exploit the complexity of the global supply chain and then benefit from their illicit activities."