Antidumping and Countervailing Duty Evasion: The Money Behind a False Entry

Antidumping duty fraud hides the product, producer or country that makes the duty payable. The goods can stay exactly the same while a false entry makes the duty disappear. The importer gets the saving, the competitor paying full duty gets undercut, and the government loses the money. Someone in purchasing, production or the warehouse may know precisely where the customs description stopped matching the goods.

This form of customs fraud reaches beyond the entry form. A product catalog, a factory’s production records or instructions to a broker can tell a different story from the declaration. That difference, and who knew about it, is where a whistleblower’s knowledge matters.

What Is the Difference Between Antidumping and Countervailing Duties?

Antidumping duties offset imports sold at less than fair value, and countervailing duties offset foreign subsidies. Countervailing duty fraud conceals the facts that make those subsidy duties apply. Both kinds of duty can cover the same goods.

The Department of Commerce determines dumping or subsidies and sets the rates. The U.S. International Trade Commission determines injury to American industry. U.S. Customs and Border Protection collects the duties. For an importer, the practical questions are which goods the order covers, where they came from and which producer’s rate applies.

How Is Antidumping Duty Calculated?

Antidumping duty is calculated using the rate applicable to the goods and producer for the entry period. For a percentage rate, customs value supplies the base.

Ordinary duty and additional duties can apply to the same shipment. Section 301 tariff fraud can therefore accompany antidumping and countervailing duty evasion. We connect the actual goods and entry dates to the duties the declaration left out.

Antidumping Evasion Can Begin With the Cash Deposit

Antidumping evasion can begin with cash deposit reduction through a false AD/CVD declaration that conceals which goods entered, where they came from or who made them.

The importer deposits estimated duties when the goods enter. An administrative review of antidumping duties can later change the rate for those entries. Customs then fixes the final amount through liquidation. The goods may already have been sold and the sales margin booked before that final assessment arrives.

The duty obligation begins when the goods arrive. As the Ninth Circuit explained, the duty is owed before anyone fixes the final amount. A false declaration can deprive the government of money at the deposit stage. The later assessment and payment history show how much remained unpaid.

How Do I Know If AD/CVD Applies?

The order’s written description decides whether the goods are covered. The Harmonized Tariff Schedule codes listed with it help administer the order. The product’s material, dimensions, manufacturing method and condition at entry connect the physical goods to that written description.

A scope ruling can resolve whether a particular product falls within an order. The comparison may reach the product’s use and marketing, too. What the company tells its customers can be especially revealing when Customs receives a different description.

How False Declarations Hide the Duty

A Different Product on the Entry

Sigma Corporation sold welded outlets but entered them as steel couplings. Its Chinese outlets had a beveled end designed to be welded to a pipe and a threaded end for a sprinkler head or another attachment. Commerce found those outlets covered by the antidumping order on carbon steel butt-weld pipe fittings.

The company called the goods welded outlets in its catalog and on its website. Customs forms called them steel couplings, on which Customs did not assess antidumping duty. A competitor, Island Industries, brought the qui tam case. The government declined to join, and a jury found Sigma liable for more than $8 million in unpaid duties before the law tripled the damages. The product the customer bought and the product Customs was told about were the same object with different names.

A Different Producer’s Lower Rate

An importer can declare the right country but name the wrong manufacturer to claim a lower antidumping duty rate. Producer-specific rates make the factory’s identity part of the price advantage. Purchase orders, factory records and the producer named on the entry connect that identity to the shipment. Solar tariff evasion can conceal exposure to countervailing subsidy rates such as the 3,403.96% assigned to several Cambodian producers in Commerce’s April 25, 2025 determination.

A Different Country After a Stopover

Third-country routing can supply the paperwork for a false origin claim. The production and processing records show what work happened in each country, which factory did it and whether the declared origin fits the goods.

Evolutions Flooring agreed to an $8.1 million settlement in 2025 over allegations that it supplied false manufacturer and country-of-origin information for Chinese multilayered wood flooring. The alleged evasion reached antidumping, countervailing and Section 301 duties. Customs visited factories in Thailand, examined shipments with flooring specialists and reviewed import records.

Finished Goods That Were Not Finished

Perfectus Aluminum agreed to a $549.5 million civil settlement in 2026 over alleged aluminum extrusion tariff evasion. The Justice Department described more than 2.2 million aluminum extrusions spot-welded into supposed pallets and declared finished merchandise outside the orders. According to the department, the pallets had no customers and none was ever sold. A supposed finished product without a single sale is a warehouse fact as much as a customs fact.

Grosfillex agreed to a $4.9 million settlement in 2025 over allegations involving extruded aluminum furniture parts, including some packaged as sham furniture kits. The relator, a former employee, brought the case. The whistleblower’s complaint quoted an engineering manager describing how to present the components:

The complaint alleged that table legs would arrive with a cheap top that the company intended to discard, then pair with its usual tabletop. The manufacturing plan explains why a packing list alone could miss the point.

Is the Low Price a Supplier Discount or Unpaid Import Duty?

A tariff evasion landed cost analysis connects the competitor’s delivered price to the actual product, producer, origin and applicable duty. To distinguish a supplier discount from unpaid import duty, we trace both the commercial price and the duty calculation. The connection to a false declaration is what turns the pricing question into a potential whistleblower case.

The delivered price and customs value measure different things. International freight and insurance can sit in the delivered price while being excluded from the customs value. In the other direction, buyer-supplied molds and tools, certain royalties and proceeds returned to the seller can add to customs value beyond the factory invoice. Their contracts and payments may sit in different parts of the business.

Related-party purchases add another accounting layer. The 2020 Gazi Journal of Economics and Business paper Transfer Pricing and Customs Valuation Overlap: Is It Possible to Bridge Two Worlds? explains that customs valuation focuses on the individual import, while transfer-pricing analysis can follow the fiscal year. That distinction gives us a reason to put later accounting adjustments beside the original invoice and entry. The question is what price the business ultimately used and what Customs was told.

Who Is Responsible When Another Company Imports?

The importer of record is responsible for declarations and duty payments. Using a broker does not move that responsibility, and paying a broker does not settle the duty if the money never reaches Customs. The broker’s instructions show who supplied the product description and origin information used in the filing.

A business directing the transaction can also sit behind another company’s entry. Allied Stone agreed to a $12.4 million settlement in 2025 over allegations that Chinese quartz was described as marble or crystallized glass, which carried lower duties. The allegations included failures to ensure that manufacturers and third-party importers declared and paid the applicable duties. The Justice Department announced a whistleblower share of approximately $2.2 million.

Delivered-duty-paid arrangements can also involve use of a buyer’s importer number without authorization. Powers of attorney and filing instructions help identify who authorized an entry. The purchasing, logistics and accounting records connect that entry to the business that ordered and paid for the goods.

Who Knew the Entry Was Wrong?

Catalogs, broker instructions, scope rulings and warnings can show what the company knew about its declarations. Customs fraud can involve deliberate ignorance: a company avoids asking the question whose answer would change the duty bill.

Sigma supplied a sharp example. Its import executive testified that the company had not seen the China order or an earlier scope ruling on Taiwanese pipe fittings until 2017 or 2018. Island’s sales manager, investigating repeated price undercutting, found both within 24 hours. The competitor found the answer the importer had never looked for.

The decisions after a warning matter too. In the Grosfillex settlement, DOJ alleged that a separate group of previously filed entries went uncorrected after the company learned they were false. An insider may know both when the problem surfaced and who decided to leave it in place.

What Is an EAPA Allegation?

An Enforce and Protect Act allegation asks Customs to investigate antidumping and countervailing duty evasion. The process specifically built to investigate duty evasion offers no award while the FCA gives the whistleblower a share. If that process already concerns the goods you know about, we assess what it means for a potential whistleblower case with you.

A whistleblower case under the False Claims Act can pay 15% to 30% of what the government recovers. It reaches money an importer knowingly keeps from the government. We connect the unpaid duty, the false declaration and the decisions behind it to assess the case your knowledge can support.

What Evidence Is Needed to Prove Fraud?

For antidumping duty fraud, the evidence connects the goods and their producer to the declaration and unpaid duty. A shipment’s records may span supplier invoices, carrier manifests and broker entry summaries. If you know one part of that transaction, we can assess it with you.

For ocean cargo, the advance importer filing records manufacturer and origin information before the cargo reaches the United States. The entry summary carries value, classification and duty rate. Matching the shipment across those records lets us compare what each participant said, then connect the deposit to the final assessment, corrections and payments.

A 2020 U.S. Census Bureau Center for Economic Studies working paper, Are Customs Records Consistent Across Countries? Evidence from the U.S. and Colombia, found that matching trading companies was much easier than matching their individual transactions. Its proposed improvement was concrete:

Invoice and manifest numbers connect the supplier’s sale to the shipment behind the declaration. We use the insider’s knowledge to explain the differences between those documents and who controlled them.

Antidumping Duty Bills Can Go Unpaid

Final antidumping duty bills can exceed the deposits and go unpaid. In its 2016 study of antidumping and countervailing duties, the Government Accountability Office estimated that about $2.3 billion remained uncollected as of mid-May 2015 for goods entered during fiscal years 2001 through 2014. Just 20 importers accounted for about half of that unpaid balance.

GAO also found processing errors that closed bills at the initial rate instead of the final rate. The entry, the assessment and the payment each tell part of the money story. We follow all of them with you.

Sources

• Ninth Circuit Court of Appeals: the Sigma Corporation amended opinion, August 21, 2025
• Justice Department: the Perfectus Aluminum settlement announcement, May 12, 2026
• U.S. District Court for the Eastern District of Pennsylvania: the Grosfillex whistleblower complaint, January 29, 2020
• Gazi Journal of Economics and Business: Transfer Pricing and Customs Valuation Overlap: Is It Possible to Bridge Two Worlds?, 2020
• U.S. Census Bureau Center for Economic Studies: Are Customs Records Consistent Across Countries? Evidence from the U.S. and Colombia, 2020
• Government Accountability Office: Antidumping and Countervailing Duties, July 14, 2016

The Fact You Know Was Changed

If you know which fact on the entry made the duty disappear, whether from sourcing, production, logistics or a competing business, speak to one of our whistleblower experts about the fact that changed. We connect your knowledge to the goods, the unpaid duty and the decisions behind the declaration. We bring in customs fraud whistleblower lawyers who know antidumping fights and stay beside you through the case.