WASHINGTON — In a victory for AICO, the U.S. Department of Commerce has rescinded an administrative review of supplier Tube-Smith Group, which AICO had said was using the review process to extort money.

Last year, AICO's Washington attorney from the firm Cassidy Levy Kent, said Tube-Smith was using the annual review of antidumping duties on Chinese wood bedroom furniture in an attempt to extort $2 million from AICO, which imported product from the Tube-Smith factory.

Administrative reviews are performed annually by the DOC to determine whether a producer warrants a change in its antidumping duty rate.

Duties are assigned to Chinese bedroom producers but are paid by companies such as AICO that are identified as importers of record. If Tube-Smith had succeeded in having the DOC assign it a higher rate, AICO would have had to pay more in duties.

AICO had asked the DOC to not perform a separate review of Tube-Smith's 2010 shipments, which could have resulted in a higher duty that would be retroactively have been applied to that year's purchases.

Petitioners, or U.S. producers that supported duties on unfairly priced Chinese-made bedrooms, had already agreed to remove Tube-Smith from the review list, meaning it could have kept its existing duty rate. In an email to AICO, Tube-Smith's owner said that even though it has been removed from the administrative review list, it would seek a review unless AICO agreed to pay the $2 million.

While petitioners traditionally have sought higher duties on Chinese producers, a case of a producer actively seeking a review that could have resulted in a higher duty is unusual. Tube-Smith acknowledged in previous correspondence that this could have resulted in it receiving a duty of 216%. Had that occurred, AICO would have to pay the difference between the original duty and the higher rate.

In an Aug. 20 memorandum, the DOC said that while Tube-Smith might have properly filed a request for review, the department was rescinding the review to protect the integrity of review proceedings.

The DOC said Tube-Smith abused the department's procedures and practices in threatening AICO. It said it will assess Tube-Smith's duties at a rate equal to the cash deposit or bonding rate of duties at the time of shipment in 2010.

In antidumping cases, the DOC imposes what's called a cash deposit rate for companies that are part of the investigation or review.

Importers of record pay these duties on shipments each year based on the percentage duty rate assigned to a given factory.

Prior to the request, AICO had done business with the factory for 15 years and was one of its major customers, but had stopped sourcing from the company in 2010.

Tube-Smith, which also operates under the name Billionworth Enterprises, is owned by Ho Re Shin.