Ford Motor Company Settles Claims Relating to Under-Valued Vehicles for $365M
Ford Motor Company has agreed to pay $365 million for allegedly misclassifying and understating the value of hundreds of thousands of vehicles.
According to the Department of Justice, Ford engaged in a scheme to avoid higher duties by misclassifying cargo vans. Between 2009 and 2013, the company imported Transit Connect cargo vans into the United States but presented them to Customs and Border Protection (CBP) with temporary seats and other features to make them appear to be passenger vehicles. The seats were never intended to carry passengers and Ford removed them as part of post-importation processing. The inclusion of the seats allowed Ford to avoid paying the 25% duty rate for cargo vehicles and instead they paid a duty rate of just 2.5%.
This case dates back to February 2012 when the Port of Baltimore advised Ford it was initiating an investigation into Ford’s classification practices. (Typically, prior to investigating an entity, CBP sends a request for information first. For more information on how this process typically begins read “Now, More than Ever, Be Wary of and Responsive to a CBP Form 28!”).
In 2013 Customs determined that the vans were improperly classified and liquidated the vehicles at the 25% duty rate. Ford protested, and Customs denied the protest. Ford then filed a complaint with the U.S. Court of International Trade (CIT). The CIT agreed with Ford, finding that Ford engaged in legitimate tariff engineering. The government appealed to the United States Court of Appeals for the Federal Circuit where […]
