Tag: shoes

Importer Allegedly Undervalues Shoe Imports and Gets Criminally Charged

Imports into the United States must be properly classified and valued. Classification has to do with categorizing them on the Harmonized Tariff Schedule of the United States (HTSUS) in an 8 digit tariff code, and a 2 digit statistical suffix; valuation has to do with reporting the dutiable value of the merchandise which is usually the amount paid for the merchandise, plus certain other charges. Classification and valuation are bedrock principles of customs compliance.

In this vein, I was alerted Ā toĀ a story about about a company that sells shoes/footwear which was, allegedly, reporting incorrect values to customs in order to save on duties. It looks like the company has been making its way in the courts for other reasons to, including trademark and breach of contract disputes. This story illustrates the importance of verify correct classification and valuation of merchandise; this can easily be done by requesting a prospective ruling from customs.

A federal grand jury in Sacramento on Thursday charged Romeo with evading about $5.6 million in customs duties. The company imports the popular BearpawĀ brand of shearling slippers and boots and sells them nationally.Customs Classification and Valuation

. . .

“Tom has been fully cooperating with customs over the past several years,” said attorney Malcolm Segal, with Segal & Associates PC in Sacramento.

Romeo has deposited more than $4 million with U.S. Customs while the issue remains unsettled, Segal said.

Segal said the dispute arises from a technical issue over whether the shoes are completed products or component parts. The duties are different depending on how the shoes are classified.

Romeo owns and operates Romeo & Juliette Inc., a company that imports shoes and boots made in China and distributed under the brand names Bearpaw and Attix. The company sells to many national retailers.

The indictment alleges that from 1994 through 2011 Romeo had employees and others create false invoices that undervalued footwear he imported from China.

Source: Sacramento Business Journal. It sounds as though Romeo & Juliette filed a prior disclosure based on their attorney’s statement that $4 million was deposited with customs while it considers if it owes any money. That’s a smart move. Unfortunately, violations of the customs laws often involve criminal consequences in addition to severe civil penalties. It appears in vogue for Customs to pursue criminal charges for import violations:Ā In August we posted analysis of a story of smugglers circumventing anti-dumping duties by transshipping aluminum extrusions from China to Malayasia and importing them via false documentation in San Juan.
If you need help conducting due diligence, or face duty or penalty liability with customs you should contact our office by e-mailĀ or call (734) 855-4999. We areĀ experienced in defending customs 592 penalties, disclosing potential violations through prior disclosures, responding to notices of penalties, and preparing detailed and well argued petitions for mitigation of penalties or liquidated damages You can also make use of our other articles, such as: