Background

A German company and its U.S. subsidiary have agreed to pay more than $22.2 million to resolve allegations that they violated the False Claims Act by knowingly making false statements on customs declarations to avoid paying import duties, according to a Department of Justice press release. The DOJ notes that this settlement amount reflects that the company made a partial disclosure to U.S. Customs and Border Protection before being informed of its investigation.

To enter goods into the U.S. an importer must declare, among other things, the country of origin of the goods, their value, whether they are subject to antidumping or countervailing duties, and the amount of duties owed. It is the importer’s affirmative duty to use reasonable care to make sure such information is accurate so CBP can assess the proper duties.

In this case, however, the U.S. alleged that between 2011 and 2017 the German company avoided duties owed to the U.S., including in some instances AD and CV duties, by misrepresenting the nature, classification, and valuation of imported goods as well as the applicability of free trade agreements. According to a press release from the law firm representing the whistleblower who brought the original case, the company’s methods included “failing to report the raw materials and components, known as ‘assists,’ that it provided to manufacturers to make the imported goods.”

For more information on AD/CV duty evasion, please contact Kristen Smith at (202) 730-4965.

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