A group of Chinese garlic companies, a U.S. law firm and a group of small New Mexico farmers apparently worked in league to increase another Chinese exporter’s antidumping duty rate, the Commerce Department said in a memorandum issued in connection with its recently completed AD duty administrative review on garlic from China. Finding the law firm and the New Mexico farmers it represented made misstatements to hide their effort, Commerce in recent days ended its review of that exporter rather than assign it a high China-wide rate (see 1706140022).
International Trade Today is providing readers with some of the top stories for Nov. 21-25 in case they were missed.
Huber agreed to pay more than $2 million to settle a whistleblower lawsuit alleging it misclassified its imports of pigment to avoid paying a higher tariff rate, according to documents unsealed by the Western North Carolina U.S. District Court. According to the False Claims Act complaint filed by the whistleblower -- John Dickson, chief executive officer of National Ford Chemical -- two companies now owned by Huber, Hostmann-Steinberg and Micro Inks, fraudulently obtained rulings from CBP that directed classification under a tariff subheading for printing ink. The pigment they were actually importing required further processing before being used as printing ink, a fact they did not convey to CBP, the complaint said. Printing ink is subject to a lower tariff rate. The companies also undervalued the merchandise, the settlement said. Huber did not admit to the allegations as part of the settlement. Under the agreement, Huber will pay $2 million to the government and $187,000 to the whistleblower. The court still has yet to accept the settlement and dismiss the case. The government, which chose to intervene in the case, said in a July filing that the issue of how much Dickson will receive in the settlement was still undecided. Dickson received nearly $8 million of a $45 million settlement with another ink company in 2012 resolving a False Claims Act case (see 12121804).
International Trade Today is providing readers with some of the top stories for Oct. 3-7 in case they were missed.
False Claims Act whistleblower lawsuits may be filed for failure to pay marking duties on unmarked or improperly marked imports, the U.S. Court of Appeals for the 3rd Circuit said Oct. 5 as it resurrected a whistleblower lawsuit filed by a company founded to investigate customs fraud (here). Reversing the dismissal of Customs Fraud Investigations’ (CFI) lawsuit against pipe fitting importer Victaulic by the U.S. District Court for the Eastern District of Pennsylvania in September 2014 (see 1504290070), the Appeals Court sent the case back down with instructions to allow CFI to amend its complaint to include new evidence of Victaulic’s alleged fraud.
An importer of college dormitory furniture, a sourcing firm, and the owner of both companies will pay a total of $1,525,000 to settle charges that they falsely claimed on customs documentation that they were importing office furniture in an effort to evade antidumping duties on wooden bedroom furniture from China, the Department of Justice said Sept 30 (here). In a whistleblower case brought by a former Omni employee, the government claimed Ecologic Industries, Omni Supply Chain Management and Daniel Scott Goldman “conspired with others” to make false statements and misclassified the furniture on entry documentation to avoid paying antidumping duties, DOJ said.
Federal prosecutors filed a civil complaint against a garment importer, its executive and a clothing wholesaler for an alleged customs duty evasion scheme, the U.S. Attorney's Office for the Southern District of New York said in a Sept. 23 news release (here). The importer, Yingshun Garments, "avoided paying millions of dollars in customs duties" by undervaluing garments on false invoices, the USAO said in the complaint (here). The complaint was the result of an investigation by CBP and ICE's Homeland Security Investigations, ICE said (here).
A federal judge unsealed documents related to antidumping duty evasion allegations brought by a third party after the Department of Justice declined to get involved, recent court filings show. The lawsuit, brought by Customs Fraud Investigations (CFI), claimed that Mueller Industries and a subsidiary schemed to "fraudulently import its standard pipe as line pipe" to avoid antidumping duties on the product. The complaint, filed in 2014, was unsealed on Sept. 15 in U.S. District Court for the North District of Illinois Eastern Division.
A Chinese apparel exporter agreed to pay more than $13 million to settle allegations that it engaged in a double-invoicing scheme that resulted in the underpayment of millions of dollars in duties, ICE said (here). Motives Far East and Motives China, along with their U.S. affiliate Motives, Inc., admitted that they worked with U.S. wholesalers to create the false invoices, and filed some of them with CBP on their own entry summaries, settling a False Claims Act suit filed by an undisclosed whistleblower. The settlement (here) was approved July 12 in Manhattan federal court, the U.S. Attorney’s Office for the Southern District of New York said (here).
Z Gallerie, an upscale furniture retailer, agreed to pay $15 million to the U.S. government as part of a settlement related to allegations of antidumping duty evasion, said the Justice Department in a news release (here). Z Gallerie, which sells furniture in stores and over the Internet, allegedly "engaged in a scheme to evade customs duties on imports" of wooden bedroom furniture from China, in violation of the False Claims Act," said DOJ. As an example of the alleged fraud, the DOJ said the company "sold certain Bassett Mirror Company products, including a six-drawer dresser and three-drawer chest, as part of a bedroom collection; however, these goods were misidentified on CBP documents, using descriptions such as 'grand chests' and 'hall chests,' in order to avoid paying antidumping duties on wooden bedroom furniture." Such settlements are likely to increase as "streamlined processes" for duty evasion allegations take effect a result of the Trade Facilitation and Trade Enforcement Act, said CBP Commissioner Gil Kerlikowske. The allegations originally came from Kelly Wells, an e-commerce furniture retailer, who will receive $2.4 million of the settlement under the qui tam provisions of the False Claims Act, said DOJ. "The claims resolved by this settlement are allegations only; there has been no determination of liability," DOJ said.