Toyo Ink to Pay $45 Million for AD/CV Duty Evasion; Whistleblower Gets $7.8 Million Share
Japan-based Toyo Ink SC Holdings Co. and affiliates will pay $45 million, plus interest, to settle allegations that they violated the False Claims Act by knowingly failing to pay antidumping and countervailing duties, said the Justice Department. DOJ alleged the company misrepresented the country of origin on documents submitted to CBP to avoid paying antidumping and countervailing duties on its imports of carbazole violet pigment number 23 (CVP-23).
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From 2002 and 2010, Toyo Ink misrepresented Japan and Mexico as the countries of origin for its CVP-23 imports, DOJ alleged. China and India were the company’s sources for raw CVP-23, it said. Imports of CVP-23 from the PRC and India have been subject to AD/CV duties since 2004; there are no such duties on imports from Japan or Mexico. Although Toyo Ink’s CVP-23 from the PRC and India underwent a finishing process in Japan and Mexico before it was imported into the U.S., the government alleged that this process was insufficient to constitute a substantial transformation to render these countries as the countries of origin.
The allegations resolved by today’s settlement were initially alleged in a whistleblower lawsuit filed under the False Claims Act by John Dickson, president of a domestic producer of CVP-23, DOJ said. Under the False Claims Act, private citizens can sue on behalf of the U.S. and share in any recovery. Mr. Dickson will receive more than $7,875,000 as his share of the government’s recovery.