(WWJ) — Ford has agreed to a hefty settlement to resolve allegations it cheated on tariffs.
The Justice Department on Monday announced Ford agreed to pay the U.S. $365 million after allegedly devising a scheme to avoid higher duties by misclassifying cargo vans. The government says it’s one of the largest settlements of its kind.
The feds say Ford violated the Tariff Act of 1930 by “misclassifying and understating the value” of hundreds of thousands of its Transit Connect vans.
“The government charged that Ford put phony features in Transit Connect vans, like temporary rear seats, as they imported them from Turkey, making commercial vans seem like passenger vans,” said WWJ AutoBeat Reporter Jeff Gilbert.
“Why would you do that? Well, passenger vans only pay a 2.5% tariff; commercial vans pay 25%.” Gilbert said.
Ford is not admitting guilt, with officials saying they “strongly disagree” with some of the characterizations made by the DOJ.
Ford officials say they agreed to pay to move on from a “complex dispute” that dates back more than a decade.
Federal officials alleged Ford imported the purported passenger vans between April 2009 and March 2013. But after customs clearance, “each of these Transit Connect vehicles was immediately stripped of its rear seats and returned to its original identity as a two-seat cargo van,” the Justice Department said in a press release.