US Seeks $18 Million Over Fraudulently Misclassified Metal Lid Imports in CIT
The U.S. is seeking more than $18 million from importer Crown Cork & Seal in a July 28 complaint filed in the Court of International Trade alleging that the company fraudulently misclassified its metal lid imports to skirt a 2.6% duty rate. The goods -- metal lids for food, beverage, household and consumer products -- are properly classified under Harmonized Tariff Schedule subheading 8309.90.0000 and are dutiable at that 2.6% rate, the Department of Justice said. Instead, CCS attempted to classify its metal lid imports from Europe between 2004 and 2009 under HTS subheading 7326.90.1000, which has duty-free treatment (The United States v. Crown Cork & Seal, USA, Inc. et al., CIT #21-361).
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This was a fraudulent misclassification, DOJ said, since CCS applied the 8309 classification for its metal lid imports from Canada during the same period. CCS did this since its Canadian metal lids could be entered duty-free under the North American Free Trade Agreement at this time. This led the importer to file "material false statements" in which it "knowingly misdescribed and misclassified the metal lids as 'Other articles of iron or steel: Other: Of tinplate' under the duty-free HTSUS subheading 7326.90.1000."
Should the court agree, CSC should fork over $18,092,348.96, DOJ said. In the event the court rules against fraud but instead finds gross negligence, the defendant should pay over $5 million. Failing this, if the court should instead find negligence, then CCS should pay over $2.5 million -- a penalty equal to two times the duties, taxes and fees of the entries. DOJ also demanded a jury in the case, filing the demand concurrent with its complaint.