Justice Intervenes in AD/CV Duties Suit Filed Against Japanese Firm by Whistleblower
The U.S. Justice Department said it intervened in a lawsuit against Japanese company, Toyo Ink Manufacturing Co. Ltd., that is accused of misrepresenting the country of origin on documents presented to U.S. Customs and Border Protection to avoid paying antidumping and countervailing duties on imports of the colorant carbazole violet pigment number 23 (CVP-23).
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The case also involves Toyo's U.S. subsidiaries: Toyo Ink International Corp. of New York; Toyo Ink America LLC of Illinois; and Toyo Ink Manufacturing America LLC of New Jersey, the Justice Department announced today. Toyo Ink, which has operations worldwide, is a leading provider of printing inks. Imports of CVP-23 from China and India have been subject to antidumping and countervailing duties since 2004. The suit alleges that Toyo misrepresented Japan and Mexico as the countries of origin for its CVP-23 imports to avoid these duties. Although Toyo’s CVP-23 imports from China and India underwent a finishing process in Japan and Mexico, the complaint alleges that this process was insufficient to change the country of origin.
The lawsuit was filed in the U.S. District Court for the Western District of North Carolina by whistle blower John Dickson under the qui tam, or whistleblower, provisions of the False Claims Act. The act permits private parties to sue companies and individuals on behalf of the U.S. for making misrepresentations to avoid paying funds owed to the government. The government may intervene and take over the action, as it has done in the Toyo case. The whistle blower is entitled to a share of any funds recovered through the lawsuit.
Toyo responded that it was "disappointed" that Justice is intervening in a whistleblower lawsuit "initiated by a Toyo Ink competitor. The whistleblower allegations that Toyo Ink engaged in any fraudulent activity are false and appear to be driven by business considerations rather than facts." It said the allegations that Toyo Ink intentionally misidentified its PV-23 product as Japanese origin are wrong because Toyo Ink's PV-23 is manufactured in only one location, Toyo's Factory in Japan. "At all times, Toyo Ink believes that it acted in good faith, in accordance with industry practice, and made every effort to comply with the applicable U.S. laws," it said. The statement is available (here).