Articles Tagged with #tariffevasion

A furniture business executive who falsified documents to avoid more than $1.4 million in import duties on the Chinese goods he sold was sentenced to a year of home detention Monday.

Jeff Zeng, president of Blue Furniture Solutions, was also sentenced to spend two additional years on supervised release for his role in mislabeling customs forms to make it appear that wooden furniture subject to a 216 percent import tax was instead made of metal. Documents filed with U.S. District Court in Charleston show Zeng and Blue Furniture Solutions, located in Miramar, Fla., submitted 49 falsified customs forms in 2015 for 14,542 pieces of furniture used primarily in college dormitory rooms. Some of that furniture was imported through the Port of Charleston.

There are companies in China which offer services to Chinese companies to transship their products to other nations such as Malaysia in order to evade U.S. tariffs and re-label them as if they came from Malaysia, Vietnam, Cambodia, Mexico and other nations. One such company is Settle Logistics which stated on its website “…For those unfair trade barriers targeting our industries from certain countries, we can adopt other approaches to bypass trade tariffs to expand markets,” according to the New York Times. Another Chinese company CT-Chan also promises that it can help manufacturers avoid American tariffs. “Product requirement: Do not have ‘Made in China logo” said its website.

Yet another company, Top & Profit International Forwarding in Shenzhen says that it is “breaking the barriers of international trade and anti-dumping to let Chinese products enter international markets successfully” Settle Logistics in Hangzhou says that it works with a factory in Malaysia and can obtain Malaysian certificates of origin for goods made in China.

Shipping goods from China to Malaysia costs $3,000 to $4,000 per 40-foot shipping container which is about $2,000 more than shipping directly to the U.S. There are additional costs for Malaysian certificates of origin and packing and unpacking the goods in different containers.

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.

According to a Bloomberg news report, Vietnam said on Sunday that it found dozens of fake product-origin certificates and illegal transfers by companies evading U.S. tariffs on everything from agriculture to textiles and steel. It was the first time an Asian government has publicly said this was happening since the trade war between the U.S. and China started.

Vietnam pledged to increase penalties on trade-related fraud. U.S. trading partners including Vietnam are being asked to stop on illicit exports.

Vietnam is concerned it may be punished by the U.S. for allowing mislabeled Chinese products to flow to America, Do Van Sinh, a standing member of the National Assembly’s economic committee, was quoted as saying in the government’s statement.

The Synthetic Turf Council (STC) has learned that U.S. Customs and Border Protection (CBP) is investigating U.S. importers of synthetic turf that may be willfully evading tariffs placed on synthetic or artificial turf.

Based on publicly available information, the STC and industry participants have filed hundreds of e-Allegation violations that question whether the synthetic turf that is being imported into the U.S. is properly coded and subject to tariffs. CBP is using this data and other information in order to conduct its investigation.

According to CBP, e-Allegations provide a means for the public to report to CBP any suspected violations of trade laws or regulations related to the importation of goods into the U.S. These types of violations include misclassification of merchandise, false country of origin markings, health and safety issues, valuation issues and intellectual property rights.