Yesterday I wrote about the CEO of a clothing company who has been charged criminally by the U.S. Attorney in the Southern District of New York for falsely stating the value of children’s clothing imported from China, to evade U.S. customs tariffs. A quick review of recent criminal and civil cases reveals that the Department of Justice is now pursuing cases involving customs tariff fraud particularly as so many goods are imported from China and so many companies are creating ways of evading the tariffs placed on those goods. The issue has become even more prominent since tariffs have been hiked recently. Here are some other cases:
- The Virginia based home furnishing company Bassett Mirro Company paid the U.S. $10.5 million to settle allegations that it knowingly made statements on customs declarations to avoid paying duties. This involved bedroom furniture that the company imported from China.
- Toyo Ink SC Holdings Co Ltd paid $45 million to settle charges of tariff evasion by knowingly misrepresenting the country of origin for a particular colorant product. Toyo said it was made in Japan and Mexico when it was actually imported from China.
- *Perfectus Aluminum Inc. was charged with evading $1.5 Billion in tariffs by conducting an illegal effort to smuggle banned aluminum into the U.S. for China’s aluminum maker Zhongwang Holdings Inc. According to the Complaint, aluminum pallets were made in China and shipped to Mexico and then trucked into the United States.
- American steelmakers have been complaining that Chinese companies are avoiding US tariffs by shipping products to Vietnam for minor processing before they are shipped to the U.S. with stamps stating made in Vietnam.
- Mexico is not the only point of entry for Chinese companies seeking to evade tariffs, sometimes with the aid of American counterparts. Goods are also coming in through Canada that is mislabeled and paying substantially less under the NAFTA treaty. Canada says it is trying to stop the activity but it is difficult to detect.