Ford Motor Company has agreed to pay $365 million to settle allegations brought by the US government regarding violations of federal tariff laws. The settlement resolves claims that Ford misclassified and understated the value of hundreds of thousands of its Transit Connect vehicles, thereby evading higher import duties.
The Justice Department accused Ford of devising a scheme to avoid paying higher duties by misclassifying cargo vans imported from Turkey between April 2009 and March 2013. Customs and Border Protection determined in 2013 that the Transit Connect vehicles, initially imported as passenger wagons and later converted into cargo vans, should have been subject to the higher 25% duty applicable to cargo vehicles, rather than the lower 2.5% duty for passenger vehicles.
According to the government, Ford imported the vehicles with temporary features, such as sham rear seats, to make them appear as passenger vehicles. These features were quickly removed after Customs clearance, returning the vehicles to their original identity as cargo vans. The Justice Department asserted that Ford included these temporary features to circumvent the higher duty rate.
In response to the settlement, a spokesperson for Ford stated that the company disagreed with many of the characterizations made by the DOJ but chose to settle the matter to move on from the decade-old dispute. The settlement, one of the largest customs penalty settlements in recent history, brings closure to a long-running legal battle between Ford and the US government.
Brian Boynton, head of the DOJ Civil Division, emphasized that the government would not tolerate companies evading duties through deceptive practices. The resolution of this case underscores the importance of compliance with import regulations and the consequences of non-compliance for corporations.
The settlement amount of $365 million represents a significant financial repercussion for Ford. While the company admits no liability in the matter, the settlement signifies a resolution to the protracted legal dispute, allowing Ford to move forward and focus on its operations.
Importantly, the case highlights the broader implications of tariff evasion and the government’s commitment to enforcing trade laws. As companies navigate international trade, adherence to customs regulations remains paramount to avoid legal entanglements and maintain integrity in global business practices.
The settlement between Ford and the US government underscores the importance of transparency and compliance in international trade. By addressing allegations of tariff evasion and reaching a resolution, Ford aims to uphold its commitment to ethical business conduct and regulatory compliance in its operations.
