U.S. Intervenes in False Claims Lawsuit Alleging Knowing Failure to Pay Import Duties by Japanese and U.S. Companies

On April 24, 2012, the Justice Department announced that a lawsuit was filed by the Unites States and whistleblower, John Dickson under the qui tam, provisions of the False Claims Act.  The lawsuit was filed in the U.S. District Court for the Western District of North Carolina.

The Defendants include Japanese company, Toyo Ink Manufacturing Co. Ltd. and its U.S. subsidiaries: Toyo Ink International Corp., located in New York; Toyo Ink America LLC, located in Illinois; and Toyo Ink Manufacturing America LLC, located in New Jersey.  Toyo Ink, which has operations worldwide, is a leading provider of printing inks.

The government alleges that Toyo Ink Manufacturing Co. Ltd. and its subsidiaries knowingly misrepresented the country of origin on documents presented to U.S. Customs and Border Protection to avoid paying antidumping and countervailing duties on imports of the colorant carbazole violet pigment number 23 (CVP-23).  Although Toyo’s CVP-23 imports from China and India underwent a finishing process in Japan and Mexico, the complaint alleges that this process was insufficient to change the country of origin.

The Department of Commerce assesses antidumping and countervailing duties, which are collected by U.S. Customs, to protect U.S. businesses by offsetting unfair foreign pricing and government subsidies.  Imports of CVP-23 from China and India have been subject to these duties since 2004.

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