The Department of Justice reports that a U.S. auto broker has agreed to pay $430,000 to settle allegations that it lied about the value of vehicles it imported to significantly lower its import duties. The DOJ is allowing the company to pay this amount over five years based on an analysis of its financial situation.
According to the DOJ, U.S. import duties on foreign-made light trucks jumped to 25 percent effective July 1, 2020. In response, the auto broker allegedly underreported the value of more than 80 light trucks it bought at auction in Canada and imported into the U.S., which saved it a substantial amount in import duties.
The DOJ notes that the discrepancy between what the broker paid for these vehicles and the value it reported to U.S. tax authorities was first brought to the government’s attention by a qui tam lawsuit filed by a former employee, who will collect 23 percent of the settlement amount. The matter was jointly investigated by U.S. Customs and Border Protection trade specialists at the Automotive and Aerospace Center of Excellence and Expertise, CBP’s Office of Chief Counsel, and the U.S. Attorney’s Office for the Western District of Washington.
As this case shows, understanding the fundamentals of customs valuation is critical to ensuring compliance and avoiding penalties. Learn more about these fundamentals at ST&R’s Feb. 16 webinar.
Copyright © 2023 Sandler, Travis & Rosenberg, P.A.; WorldTrade Interactive, Inc. All rights reserved.