Samsung C&T America to Pay $1 Million to Settle Charges It Underpaid Duties on Footwear Imports

The U.S. settled a civil suit against global trading and investment firm Samsung C&T America -- a subsidiary of Korean conglomerate Samsung C&T Corp. -- over charges SCTA violated the False Claims Act by misclassifying footwear imports to avoid paying customs duties, the U.S. Attorney's Office for the Southern District of New York announced. The importer will pay $1 million to the U.S. and make admissions over its conduct, specifically that it misclassified its imports on entry documents filed with CBP and underpaid custom duties, the U.S. Attorney's Office said.

From May 2016 to December 2018, SCTA imported footwear made in China and Vietnam. The company violated the False Claims Act by misclassifying the footwear under the Harmonized Tariff Schedule and by causing entry summary forms to be sent to CBP that the company "knew or had reason to know contained false classifications." The invoices either misclassified the footwear or had inaccurate information concerning the materials and construction of the footwear -- details that change the duties owed on the imports.

As part of the settlement, SCTA admitted it "had reason to know that certain documents provided to its customs brokers, including invoices, inaccurately stated the materials and construction of the footwear at issue" and it failed to verify the accuracy of the information submitted to its customs brokers.

“SCTA improperly avoided paying the full customs duties owed to the United States by misclassifying certain footwear that it imported and thereby reducing the duty rate applied," U.S. Attorney Damian Williams said. "This Office is committed to combatting customs fraud by holding companies accountable when they misclassify goods and evade paying their legally required duties.”