The United States collected over $53 million in settlement of a civil penalty lawsuit against Wanxiang America Corporation, a domestic importer for Wanxiang Group Corporation, a multinational conglomerate in the People’s Republic of China that manufactures and sells automotive components. The settlement marks the conclusion of nearly 10 years of contentious litigation, with the United States collecting all the lost revenue it sought and over $30 million in civil penalties.
“The Department of Justice is committed to pursuing those individuals and companies who evade customs and antidumping duties or otherwise engage in unfair trade practices that harm U.S. manufacturers,” said Assistant Attorney General Brett A. Shumate of the Justice Department’s Civil Division. “We will continue to employ all of our tools to ensure that U.S. manufacturers are competing on a level playing field.”
“Misclassification and other illicit methods used to evade the payment of lawfully-owed duties undermine the American economy by harming legitimate U.S. businesses,” said Acting Executive Assistant Commissioner Susan S. Thomas for U.S. Customs and Border Protection’s (CBP) Office of Trade. “Various CBP employees from Trade Regulatory Audit, and staff at the Automotive and Aerospace Center of Excellence and Expertise, worked closely with the Department of Justice on this matter to ensure the U.S. Government collected the revenue owed. I am proud that our CBP trade personnel worked alongside our Department of Justice colleagues to achieve this result.”
The lawsuit brought by the United States against Wanxiang alleged that, for a period of five years, Wanxiang committed multiple violations of 19 U.S.C. § 1592 by making false statements to customs officials when importing automotive components, including tapered roller bearings and wheel hub assemblies incorporating tapered roller bearings. During that time, wheel hub assemblies were covered by a Department of Commerce antidumping duty order for tapered roller bearings from China, and except for specifically identified Chinese exporters, the China country-wide liquidation rate for goods covered by the antidumping duty order was 92.84%. Although it was aware of the antidumping duty order, Wanxiang falsely classified its imported wheel hub assemblies and failed to disclose that those importations were covered by the antidumping duty order. Wanxiang also misclassified multiple categories of automotive components, parts, and accessories under incorrect tariff provisions. These misrepresentations resulted in Wanxiang vastly underpaying the amount of customs and antidumping duties owed on its merchandise.
CBP’s Trade, Regulatory Audit (Ken Bingham and Amy Johnson) conducted the investigation with assistance from CBP’s National Threat Analysis Center and CBP’s Automotive and Aerospace Center for Excellence and Expertise (Detroit), the CBP’s Fines, Penalties, and Forfeitures Office (Chicago), and CBP’s Office of Regulations and Rulings. CBP is the agency responsible for enforcing U.S. laws related to the importation of merchandise into the United States, including the collection of duties and assessment of penalties.
This case was handled by Senior Trial Counsel Mikki Cottet of the Commercial Litigation Branch (National Courts Section) of the Justice Department’s Civil Division, with investigative support from CBP’s Office of Associate Chief Counsel (Great Lakes Region) and CBP’s Trade, Regulatory Audit.
The case, which was filed in the Court of International Trade, is captioned United States v. Wanxiang America Corporation, No. 22-00205. Following the settlement, the parties stipulated the dismissal of the civil action.
To combat trade fraud, including avoidance of import duties, the Justice Department created a Trade Fraud Task Force. The Task Force partners with CBP and other law enforcement agencies to ensure compliance with United States trade laws.
The claims resolved by the settlement are allegations only and there has been no determination of liability.