Ford agrees to pay DOJ $365MILLION after 'dodging 25% import tariffs by adding sham rear seats to vans so that they were classified as passenger vehicles'

• DOJ said Ford presented customs officers with ‘sham rear seats’ and other temporary features to make them falsely appear to be passenger vehicles 
• This allowed Ford to avoid paying the 25 percent duty rate that is placed on all cargo vehicles, prosecutors alleged, instead paying duty of just 2.5 percent

Ford are set to pay $365 million to resolve allegations the auto giant violated US federal tariff law by understating the value of its Transit Connect vehicles.

The Department of Justice said the settlement has resolved the allegations, which centered on a suspected scheme to avoid higher duties by misclassifying cargo vans imported from Turkey from April 2009 to March 2013.

The government said the settlement is one of the largest customs penalty settlements in recent history.

‘When companies misclassify imports to avoid paying what they owe, they will be held accountable,’ declared Acting Associate Attorney General Benjamin C. Mizer following the settlement.

Ford is accused of adding fake rear seats to its Ford Transit Connect vehicles (pictured) to trick US border patrol into believing they are passenger cars, before ripping them out to avoid a 25 percent cargo tax

Mizer praised the settlement as a ‘victory for American taxpayers’, and to ‘combat trade fraud and ensure compliance with United States trade laws.’

The settlement is notably not an admission of guilt on the part of Ford, but rather settles the allegations against it levied by the US government.

‘Companies that attempt to evade customs duties with sham representations and workarounds will not be rewarded,’ he added.

Specifically, the DOJ accused Ford of carrying out a multi-year scheme in its importation of cargo vans into the US from Turkey.

Prosecutors said the company presented customs officers with ‘sham rear seats’ and other temporary features to make them falsely appear to be passenger vehicles.

‘These temporary rear seats were never intended to be, and never were, used to carry passengers,’ the DOJ alleged in a statement after the settlement.

It was claimed that the fake door features would allow Ford to avoid paying the 25 percent duty rate that is placed on all cargo vehicles, as they would technically be classified as passenger vehicles instead.

By carrying out the alleged scheme, Ford would instead pay a duty rate of just 2.5 percent.

Despite telling border patrol that they were ‘principally designed for the transport of persons’, Ford would then allegedly modify the transits and rip out the rear seating.

David Westerman, Managing Director of Ford’s Asia Pacific Emerging Markets division, at the presentation of the Transit Connect

Principal Deputy Assistant Attorney General Brian M. Boynton, head of the Justice Department’s Civil Division, said after the settlement: ‘Importers have an obligation to truthfully declare the nature of their products and pay the duties that are owed.

‘The government will not permit companies to evade duties by adding sham features to their products and then misclassifying them.’

‘This settlement, which is one of the largest customs penalty settlements in recent history, demonstrates that U.S. Customs and Border Protection will pursue even the largest companies to ensure that all importers follow the rules,’ added Senior Official Performing Duties of the Commissioner Troy A. Miller of CBP.

‘Our intent is to enforce the customs laws fairly, which means that non-compliance is not an option for anyone.

‘The partnership between CBP and the Justice Department provides a critical safeguard to protect the revenue of the United States.’

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