Ford ‘Scheme’ Hid Fake Cargo Van Seats to Get False, Lower-Taxed ‘Passenger’ Label, Feds Say
Turkey Shipments to U.S. — 2009-2013; Hidden Rear Seats Immediately ‘Stripped’ After CBP Entry
By JOSH MITCHELL
Editor
River Mississippi News
UNITED STATES — Almost 95 years since the creation of the Tariff Act, Ford Motor Company will pay $365 million to the United States in order to “resolve allegations” that it misrepresented to Customs and Border Patrol officials that cargo vans with hidden rear seats were passenger vehicles, federal justice department officials formally announced Monday.
The U.S. Department of Justice on Monday issued a formal press release stating that the Henry Ford-founded company misclassified and understated values on “hundreds of thousands” of “Transit Connect” vehicles.
According to the DOJ statement, the settlement goes as far as saying that “Ford devised a scheme to avoid higher duties” through the misclassification of cargo vans.
The scheme covered the period from “April 2009 to March 2013” when Ford had the Transit Connect cargo vans shipped from Turkey into the United States,” the DOJ statement says.
These cargo vans were then presented to U.S. Customs and Border Protection with fake rear seats in order to make the vans appear as passenger vehicles, the press release states.
“These temporary rear seats were never intended to be, and never were, used to carry passengers,” the DOJ asserts.
Moreover, federal justice officials charged that Ford dishonestly used the fake rear seats to avoid a 25 percent “duty rate” put on cargo vehicles, the statement continues.
According to the DOJ, this resulted in Ford only paying a fraction of that “duty rate” – just 2.5 percent – since they were falsely classified as passenger vehicles.
Furthermore, paperwork submitted by Ford Motor Company to customs and border officials declared the cargo vans as being subject to the 8703 “tariff heading.”
This label was mainly intended for motor vehicles that move people, DOJ says. But once the cargo vans were cleared by customs, all of the “Transit Connect vehicles” were immediately “stripped” of the hidden rear seats and made to be two-seat cargo vans.
The settlement Ford reached with the United States on Tuesday also “resolves allegations” that Ford dodged paying “import duties” by “under-declaring to CBP the value of certain Transit Connect vehicles.”
“When companies misclassify imports to avoid paying what they owe, they will be held accountable,” said Acting Associate Attorney General Benjamin C. Mizer said in the DOJ news release. “Today’s settlement is a victory for American taxpayers and for our efforts to combat trade fraud and ensure compliance with United States trade laws. Companies that attempt to evade customs duties with sham representations and workarounds will not be rewarded.”
The DOJ release goes on to say that the settlement is one of the larger “customs penalty settlements in recent history.”
The official DOJ settlement with Ford Motor Company announced Monday can be read here.
