Ford Compliance Crash

I'm not sure there is much to say about this except: "Oh, my!" There are plenty of big companies all over the country breathing a sigh of relief that this happened to Ford and not to them.

What happened is that Ford got hit with a $20 million penalty for failing to properly declare the value of imported merchandise.

The decisions of the Court of International Trade (there are two, reported here and here) are interesting reading. Basically, Ford entered merchandise and failed to mention to Customs that the declared values were tentative. They never got around to notifying Customs of the correct final values even though they apparently understood that they were supposed to do so. The merchandise ended up being under valued and duties were under paid. Ford had a not unreasonable argument about the transaction value being the price paid or payable at the time of export, so it was properly declared. Heck, I have used that myself. But, in this case, everyone knew the price was tentative at the time of export so that argument did not fly.

Judge Tsoucalas went through a pretty exhaustive analysis of the facts, the credibility of the numerous witnesses, and the basis on which he determined the penalty amount. The case is an object lesson for anyone trying to get upper management to focus on compliance as a cost savings measure. So, even though the opinions are long, they are worth a read.

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