U.S. firm admits faking invoices for trade treaty benefits

A New Orleans, Louisiana, firm has pleaded guilty to transporting German-made hearing aides into Latin America and ducking import duties by pretending the devices were made in the United States. Such devices are exempt from customs duties if made in the United States under the Central American Free Trade Treaty and trade treaties with other countries.

One of the shipments intercepted by U.S. Immigration and Customs Enforcement involved a package to a Costa Rican customer valued at $22,946.50. The case was based on U.S. export laws that require accurate information about countries of origin.

The firm, American Overseas Trading Corp., admitted guilt in U.S. federal court. Sentencing is set for October, and the fine could range as high as $500,000, said the government.

By falsely classifying the German made hearing aids as products of the United States, the company also helped their customers avoid paying import duties under the North American Free Trade Agreement, which eliminated import tariffs on U. S. products in Mexico, said the U.S. Justice Department.

The investigation also revealed that the firm was carrying out the smuggling scheme by falsifying the country of origin on the shipper’s export declarations/certificates of origin, providing inaccurate values on the corresponding invoices and illegally repacking the merchandise, the agency said.
In the case of Costa Rica, customs enforcement agents intercepted a shipment in October 2008, at an office of DHL Express. The package contained a large quantity of hearing aids manufactured by A&M Hearing, a subsidiary of Siemens Audiologische Technik, which is based Germany, said the Justice Department. The shipping invoice, valued at $22,946.50, noted that the merchandise was manufactured in the United States of America, said the government, adding that later that day agents conducted a search of the firm’s records of imports and discovered that it had imported the A&M Hearing aids from Germany.

Other countries involved in intercepted shipments were Paraguay, Nicaragua, Brazil, Argentina and Chile, the government said. The company also used human smugglers to carry hearing aides overseas, said the Justice Department.

Double invoicing or stating a lower value on a shipment to reduce import duties is a traditional activity by some business people in Latin America and in the United States. One Costa Rican scammer actually set up a company in Florida with a name similar to a large manufacturer of electronic equipment so he could issue himself false invoices that looked like the real one to save Costa Rican import duties.

Law enforcement agents in the United States and Latin America are increasing oversight because of the various trade treaties. U.S. officials worry about falsely labeled merchandise coming in from the south as well as mislabeled products being exported.

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