6 March 2015
Three U.S. Importers Fined Heavily for Evading Duties on Mainland Chinese Aluminium Extrusions
The U.S. Department of Justice announced on 12 February more than US$3 million in penalties against three U.S. importers accused of evading antidumping and countervailing duties. This case illustrates the increasing use of the False Claims Act to pursue the fraudulent avoidance of tariffs and other import charges.
According to a DOJ press release, the three importers have agreed to pay penalties of US$2.3 million, US$650,000 and US$100,000, respectively, to resolve a lawsuit alleging that they engaged in schemes to evade AD and CV duties on imports of aluminium extrusions from mainland China. The United States alleged that these companies, which sell shower doors and shower enclosures made with the extrusions, misrepresented to CBP that the country of origin of the imported goods was Malaysia when in fact they were transshipped through Malaysia from mainland China. The government's complaint also alleged that the companies purchased mainland Chinese aluminium extrusions imported by other domestic companies and caused or conspired with those importers to make false declarations to CBP to evade duties. U.S. imports of mainland Chinese aluminium extrusions are currently subject, in addition to the applicable most-favoured-nation duty, to an AD duty of 33.18 percent and a CV duty of 137.65 percent.
The DOJ notes that the allegations resolved by these settlements were originally brought by a whistle-blower under the qui tam provisions of the FCA. This law permits private parties to sue on behalf of the government those who falsely claim federal funds or avoid paying funds owed to the government and to recover a share of any settlement. In this case, the whistle-blower will receive US$555,100.