20 May 2016
CBP Seizes Mainland Chinese Honey, Assesses Hefty Penalty on Furniture Importer for AD Violations
U.S. Immigration and Customs Enforcement’s Homeland Security Investigations recently seized nearly 60 tonnes of bulk honey falsely declared as originating from Vietnam to evade antidumping duties on mainland Chinese-origin honey. HSI states that it was notified of the suspect honey by a domestic packer after laboratory reports provided to the packer appeared fraudulently altered. A subsequent lab analysis by CBP determined that the honey had a greater than 99 percent probability match with mainland Chinese-origin honey. HSI is now trying to determine where in the supply chain the private lab reports were altered.
AD duties on honey from mainland China were first imposed in December 2001 and now amount to US$2.63 per net kilogramme. Federal authorities have been investigating allegations of circumvention of these duties through transshipment, mislabelling and other means for many years. To date, nine individuals have been convicted in a series of global schemes that evaded nearly US$260 million in AD duties and that also involved honey containing antibiotics prohibited in food.
In a separate enforcement action, a U.S. company has agreed to pay US$15 million to resolve allegations that it violated the False Claims Act by engaging in a years-long scheme to evade AD duties on wooden bedroom furniture imported from mainland China through misclassification, according to an 27 April press release from the U.S. Department of Justice. CBP Commissioner R. Gil Kerlikowske said that under the recently enacted Trade Facilitation and Trade Enforcement Act “CBP will likely see an increase in these types of settlements as the streamlined processes take effect concerning allegations of duty evasion.”
The press release states that the allegations resolved by the settlement were originally brought by a whistle-blower under the qui tam provisions of the FCA, which permits private parties to sue on behalf of the United States those who falsely claim federal funds or, as in this case, those who avoid paying funds owed to the government or cause or conspire in such conduct. The FCA also allows whistle-blowers to receive a share of any funds recovered, which in this case will be US$2.4 million.