Sleepy Comfort is a well-established Canadian mattress company with large market share. They have a good record as an importer and never had a problem with clearing goods. In the past, Sleepy Comfort imported mattress from China but an anti-dumping rate of 146.6% for all mattress from China was introduced in 2022. To avoid the anti-dumping duty, Sleepy Comfort started a search for a new supplier and landed on one in Vietnam. Executives from Sleepy Comfort visited the factory in Vietnam and met the owner. They were invited for a tour and inspection of the factory. No issues were found during the onboarding of the new supplier. Sleepy Comfort started importing mattress from the new supplier from Vietnam. Soon after, they received several communications from an industry expert warning that factories operating in countries nearby China may be importing mattresses from China and exporting mattresses as products of Vietnam. The industry association has since also released a statement warning about the issue. Sleepy Comfort sent representatives to visit the factory to verify the claims, but they were prevented from entering the factory due to construction. In January 2023, CBSA announced that Sleepy Comfort was under investigation for anti-dumping because of possible of fraudulent claims of country of origin. During the CBSA investigation, they did not observe any manufacturing activities at the factory location. The registered address of the factory in Vietnam was found to be a vacant warehouse. After the investigation, it was concluded that the majority of mattresses Sleepy Comfort imported were indeed manufactured in China and relabeled in Vietnam and then shipped to Canada. Sleepy Comfort paid over 1 million dollars for unpaid antidumping duties and penalties.During the investigation, the following was identified:

• Sleepy Comfort knew that the supplier in Vietnam was owned by a Chinese company.
• The new supplier did not have production capacity to fill Sleepy Comfort's order.
• There were many warning signs within the industry about potential dumping of mattresses originating from China through Vietnam.
• A person from the logistics team at Sleepy Comfort made their manager aware that some of the documents contain Chinese writing and suspected that mattresses may be originating from China. This information was never escalated to the upper management.
• Some employees were assigned to manage trade compliance and were aware of the potential dumping issue but due to turnover the information was never transferred to the new employees.

The CEO of the Sleepy Comfort hired you as a compliance consultant to provide insight into the following:

1. Contributing factors that caused Sleepy Comfort to be in this position even though they are a well-established company with experience in the industry?
2. What Sleepy Comfort could have done to prevent this from happening?
3. Suggest how Sleepy Comfort could prevent a similar situation from happening in the future.

You may add any other comments to CEO how they can move forward as a company after this incident. Relate your report to this specific case. You are presenting your report to the CEO of Sleepy Comfort. Do not offer general discussion. Be specific and apply the given information in the scenario.