Background

The Department of Justice reports that two U.S. importers of chain saw chains and blades manufactured in China have agreed to pay $525,000 to resolve allegations that they violated the False Claims Act by misclassifying their imports. By doing so the importers allegedly avoided paying the Section 301 tariffs otherwise due on imports of such goods from China.

Under 31 USC 3729(a)(1)(G), importers are civilly liable for (1) knowingly making, using, or causing to be made or used a false record or statement material to an obligation to pay or transmit money (e.g., import duties) or property to the U.S. government or (2) knowingly concealing or knowingly and improperly avoiding or decreasing an obligation to pay or transmit money or property to the U.S. government. Damages of up to three times the amount of money improperly withheld, as well as other penalties, may be imposed.

For more information on preventing or responding to duty evasion, please contact Kristen Smith at (202) 730-4965.

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