Background

The Department of Justice announced recently that a company based in China, along with three businesses located in U.S., will pay substantial penalties after admitting to avoiding the payment of accurate U.S. import duties.

A DOJ press release describes a five-year scheme under which the Chinese company generated two sets of invoices – one that showed the amount actually paid and another that undervalued the goods – for sales of certain products to the U.S. importer. The Chinese company provided the accurate invoices to the importer while sending the false invoices to a U.S.-based freight forwarder that subsequently provided them to the importer’s customs broker for purposes of making customs declarations on the importer’s behalf.

To settle these charges the Chinese company has agreed to pay $500,000; the importer and its owner agreed to pay $20,000 and $5,000, respectively; and the forwarder and broker agreed to pay $15,000 each.

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