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Largest Civil Penalty Ever Under U.S. Customs Laws Assessed in Vehicle Emissions Case

Friday, January 13, 2017
Sandler, Travis & Rosenberg Trade Report

U.S. Customs and Border Protection reports that a major automaker has agreed to pay more than $4.3 billion to settle criminal and civil charges stemming from a scheme to cheat U.S. automobile emissions tests. The deal includes a $2.8 billion criminal penalty and a $1.45 billion civil penalty to resolve customs fraud, environmental, and financial claims, marking what CBP said is the largest civil penalty ever issued or collected under U.S. customs laws.

According to a CBP press release, the company violated criminal and civil customs laws by knowingly submitting material false statements to CBP and omitting material information over multiple years with the intent of deceiving or misleading CBP concerning the admissibility of vehicles into the U.S. Specifically, the company falsely represented to CBP at the time of importation that nearly 590,000 imported vehicles complied with all applicable environmental laws while knowing those representations to be untrue.

A Department of Justice press release states that under the terms of its plea agreement the company will be on probation for three years, will be under an independent corporate compliance monitor who will oversee the company for at least three years, and has agreed to fully cooperate in the DOJ’s ongoing investigation and prosecution of individuals responsible for these crimes. A federal grand jury returned an indictment Jan. 11 charging six company executives and employees for their roles in this conspiracy.

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