Antidumping and countervailing duties (AD/CVD) are critical tools used by the U.S. government to protect domestic industries from unfair trade practices. When foreign companies or governments subsidize exports or sell goods below fair market value, AD/CVD are imposed to level the playing field for U.S. businesses. However, some importers evade these duties through customs fraud, which not only undermines U.S. industries but also deprives the government of revenue. Whistleblowers play a crucial role in exposing these fraudulent schemes.
If you are aware of a company evading AD/CVD duties, you may have grounds to file a customs fraud whistleblower lawsuit under the False Claims Act (FCA). At Mark A. Strauss Law, we are committed to helping whistleblowers navigate these complex cases and pursue justice. Fraud is their game. Integrity is yours.
What Are Antidumping and Countervailing Duties (AD/CVD)?
Antidumping and countervailing duties are taxes imposed on imports to counteract unfair pricing practices. Antidumping duties are levied when foreign manufacturers “dump” goods in the U.S. market at prices below the cost of production. This practice harms U.S. companies by making it nearly impossible for them to compete. Countervailing duties, on the other hand, are imposed when foreign governments subsidize their exports, giving their industries an artificial advantage over U.S. competitors.
These duties ensure that foreign goods are priced fairly, preserving the competitiveness of U.S. manufacturers. However, AD/CVD duties can be substantial, sometimes exceeding 300% of the value of the imported goods. This creates strong incentives for importers to engage in fraud to evade these duties.
How Companies Circumvent Antidumping & Countervailing Duties
Companies involved in international trade may use several methods to evade antidumping and countervailing duties, including:
- Misclassifying goods: Importers may intentionally mislabel the type of product they are bringing into the country to avoid the higher duties associated with certain goods. By submitting an incorrect HTS code for their products, importers can evade high tariffs and duties. For example, classifying a product subject to antidumping duties as a different product category under the Harmonized Tariff Schedule.
- Falsifying the country of origin: Some companies engage in transshipping, where goods are routed through a third country that is not subject to AD/CVD orders before being imported into the U.S. They then falsely claim the goods were manufactured in that third country to evade duties.
- Undervaluing or misrepresenting products: Importers may underreport the value or quantity of goods on customs documents, thereby reducing the amount of AD/CVD they are required to pay.
These fraudulent actions violate U.S. customs laws and harm domestic businesses that rely on AD/CVD protections to compete fairly in the marketplace. Industries like steel, textiles, and manufacturing are often particularly affected by AD/CVD fraud, leading to job losses and economic injury in the U.S.
How Companies Circumvent Antidumping & Countervailing Duties
Whistleblowers are critical in detecting and exposing AD/CVD fraud. Many of these schemes are difficult to identify without inside knowledge. Employees responsible for customs documentation or competitors in the industry are often the first to recognize that AD/CVD duties are being evaded. Their decision to come forward is essential for ensuring that fraud is stopped and that the responsible parties are held accountable.
Under the False Claims Act (FCA), whistleblowers—referred to as relators—can file qui tam lawsuits on behalf of the U.S. government against companies that are defrauding it through customs fraud, including AD/CVD evasion. The FCA allows whistleblowers to remain anonymous during the investigation process and offers protections against retaliation by employers. Whistleblowers may also be eligible for substantial financial rewards, typically between 15% and 30% of the government’s recovery in a successful case.
Reporting AD/CVD Fraud to the Government
There are several legal pathways whistleblowers can use to report AD/CVD fraud:
The False Claims Act (FCA)
The FCA is the primary tool for fighting fraud against the U.S. government. It allows whistleblowers to file qui tam lawsuits against companies engaged in customs fraud, including AD/CVD violations. Under the FCA, companies that are found liable can face penalties including treble damages (three times the government’s loss) and substantial civil fines. Whistleblowers who provide original information leading to a successful recovery by the government can receive a reward of 15% to 30% of the amount recovered, along with reimbursement for attorney’s fees.
The Enforce and Protect Act (EAPA)
In addition to the FCA, the Enforce and Protect Act (EAPA) provides another mechanism for reporting AD/CVD fraud. The EAPA enables interested parties, including whistleblowers, to submit allegations of customs duty evasion directly to U.S. Customs and Border Protection (CBP). While the EAPA strengthens the enforcement of AD/CVD laws, it does not offer whistleblower rewards as generous as those under the FCA, nor does it provide for attorney’s fees.
For those seeking financial rewards and legal protections, filing an AD/CVD fraud claim under the FCA is often the most effective option.
How to File an AD/CVD Whistleblower Claim
Filing an AD/CVD fraud whistleblower claim is a serious decision that requires careful consideration and legal expertise. If you suspect that a company is evading antidumping or countervailing duties, here are the steps you should take:
- Gather Evidence: Collect any documentation that supports your allegations. This might include customs records, invoices, shipping manifests, or internal company communications.
- Maintain Confidentiality: It is essential to keep your concerns confidential until you consult with an attorney. Publicly discussing your claims before filing a whistleblower lawsuit can jeopardize the success of your case.
- Consult an Experienced Whistleblower Attorney: Whistleblower cases, especially those involving AD/CVD fraud, are complex. An experienced whistleblower attorney can guide you through the process, ensuring your case is handled properly and protecting your rights throughout.
Why Choose Mark A. Strauss Law
At Mark A. Strauss Law, we have extensive experience representing whistleblowers in customs fraud cases under the False Claims Act. We understand the courage it takes to come forward. That’s why we provide our clients with the highest level of confidentiality, protection, and guidance throughout the legal process. All communications with Mark A. Strauss Law are confidential and protected by attorney-client privilege.
Remember: you must file a qui tam lawsuit under the False Claims Act to be eligible for compensation. Simply reporting the fraud to the government is not sufficient.
Our firm is committed to holding companies accountable for their fraudulent actions and helping whistleblowers pursue justice. Fraud is their game. Integrity is yours.
Contact Mark A. Strauss Law for a Confidential Consultation
If you believe a company is evading antidumping or countervailing duties, contact customs fraud whistleblower lawyer Mark A. Strauss Law for a free, confidential consultation. We are ready to help you understand your legal options and guide you through the process of filing a whistleblower claim. Reach out to us today to discuss your case.
Fraud is their game.
Integrity is yours.
Free Consultation
No Fee Unless We Win!
Call or Text Now
Practices
Whistleblower Practices
- False Claims Act/Whistleblower Lawsuits
- Import Duty Evasion & Customs Fraud
- COVID-19 Relief Fraud
- Healthcare Fraud
- Government Contracting & Procurement Fraud
- Grant Fraud
- Federal Credit Assistance Fraud
- Securities Law Violations & the SEC Whistleblower Program
- Tax Fraud & the IRS and New York State Whistleblower Programs
- State False Claims Acts
