country of origin Archives | Customs & International Trade Law Blog

$5.15 Million Settlement Highlights Growing Customs Enforcement Under the False Claims Act

Short summary: A Taiwanese manufacturer has agreed to pay $5.15 million to resolve allegations that it violated the False Claims Act by underpaying customs duties on imported goods. According to the Department of Justice, the company used improper customs practices to reduce duties owed to CBP, resulting in significant lost tariff revenue. The settlement underscores the federal government’s continued focus on customs enforcement and the growing use of the False Claims Act to pursue alleged duty evasion.

The U.S. Department of Justice recently announced that a Taiwan-led manufacturer agreed to pay $5.15 million to resolve allegations under the False Claims Act and related administrative claims involving customs duties owed on imported goods. While the company did not admit liability, the settlement serves as another reminder that customs compliance remains a significant enforcement priority for the federal government.

The Case – What Happened

According to the DOJ, the alleged conduct went well beyond a simple classification error. The government alleged that the company used multiple methods over several years to reduce the customs duties it owed on imports. Specifically:

Country of Origin Misrepresentations: From July 2018 through January 2022, Everlight allegedly knowingly misrepresented the country of origin on Chinese-manufactured LEDs. Everlight knew these products were manufactured in China, and then transshipped to Taiwan, before shipping them to the U.S. Everlight allegedly misrepresented to CBP that the products originated in Taiwan rather […]

By Jennifer Diaz|2026-08-10T12:28:34-04:00August 10, 2026|Enforcement, Import, International Trade, U.S. Customs and Border Protection (CBP)|Comments Off

FTC Cracks Down on False “Made in the USA” Claims

The Federal Trade Commission (FTC) recently announced law enforcement actions involving three companies that falsely claimed that their products were made in the United States.

Made in the USA

The “Made in the USA” labeling rules were enacted to prevent deceptive advertising and ensure customers can make informed purchasing choices. The concept of labeling products with the correct country of origin dates all the way back to the McKinley Tariff Act in 1890, and Congress and federal agencies have updated “Made in the USA” rules over the years.

FTC Jurisdiction

The FTC is charged with preventing deception and unfairness in the marketplace. Under the FTC Act, the Commission may bring legal action against “false or misleading claims that a product is of U.S. origin”. The agency is authorized to issue a civil penalty of up to $40,654 per violation.

The FTC has issued guidance on complying with the “Made in the USA” standard, most recently in 2021. View the latest guidance here.

When Can I Say Made in the USA?

For a product to be considered as “Made in the USA” without qualification, that product must be “all or virtually all” made in the U.S. How the Commission determines whether a product is “all or virtually all” made in the U.S. is by looking at whether there was “a ‘reasonable basis’ to support the claim at the time it is made”. To prove […]

By Jennifer Diaz|2026-06-05T11:20:06-04:00June 5, 2026|Best Practices, Enforcement, Import, International Trade, Labeling, U.S. Federal Trade Commission (FTC)|Comments Off

The Fine Line Between Transshipment and Substantial Transformation

Zero dollars or millions of dollars, that can be the difference in duties assessed depending on a country of origin determination.

Country of origin sounds simple – where did the product you are importing come from? However, in today’s global manufacturing market, this determination isn’t always straightforward.

Country of Origin & Substantial Transformation

Sometimes determining the country of origin is straightforward. If the entire product is born and bred in a single country, then that’s the country of origin. But what about when inputs from various countries are shipped to another country where they are then manufactured together into a finished product? This is when things can get a bit more complicated.

Many US Free Trade Agreements (FTAs) stipulate the precise amount of inputs that must be from the country in question in order to qualify for a special, lower (usually zero percent) duty rate. Other times, what happens to those inputs and in what country, regardless of where said inputs were originally from, is what matters. So, if you are sourcing inputs from China, and transforming them into a finished product in a Mexico, then Mexico will likely be the country of origin for the product.

But there’s a fine line here. Would snapping some Mexican door handles onto a car that is otherwise made in China, in Mexico, make it a car from Mexico? What if we painted the exterior? Put in the engine? Pursuant to 19 C.F.R. § 134.1(b), Customs will generally consider the 2nd country to be the […]

By Jennifer Diaz|2024-07-26T12:13:26-04:00July 26, 2024|Import|Comments Off

Comment Now – CBP Proposed Rule on Country of Origin Determination for Imports under USMCA

Background on CBP Country of Origin Determination and USMCA

All merchandise of foreign origin imported into the United States (U.S.) must generally be marked with its country of origin, and it is subject to a country of origin (COO) determination by CBP. The country of origin of imported goods may be used as a factor to determine eligibility for preferential trade treatment under a free trade agreement.

[…]

By Jennifer Diaz|2021-10-07T14:33:42-04:00September 21, 2021|AD/CVD, Canada, Customs Broker, Import, International Law, International Trade, Mexico, NAFTA, Pre-compliance, Reasonable Care, U.S. Customs and Border Protection (CBP), USMCA|Comments Off

Hong Kong’s Initiates Dispute Regarding U.S.-Origin Marking Requirement

What Happened

On October 30, 2021, Hong Kong, China requested consultations with the United States regarding U.S. measures affecting origin markings on goods imported from Hong Kong to the United States. On November 24, 2020, the United States and Hong Kong held consultations on the matter. On January 14, 2021, Hong Kong requested the World Trade Organization (“WTO”) to establish a dispute settlement panel. In response, the WTO established a dispute settlement panel on February 22, 2021.

[…]

By Jennifer Diaz|2021-10-12T14:47:08-04:00March 12, 2021|China, China Trade War, Customs Expert, Enforcement, Export, International Business, International Law, International Trade|Comments Off

U.S. Ends Differential Treatment for Hong Kong

On Tuesday, August 11, 2020, United States Customs and Border Protection (CBP) announced via Federal Register Notice that all items made in Hong Kong and destined for the U.S. must now indicate “China” as the country of origin.

Hong Kong’s unique political situation as an autonomous city-state initially called for specially tailored laws and regulations governing items imported into the United States. For more than 20 years the US recognized the separation between China and Hong Kong, evidenced by the requirements to distinguish between the two. Additionally, in light of the Section 301 investigation of China’s acts, policies, and practices related to technology transfer, intellectual property, and innovation; as well as the regime’s human rights and forced labor abuses, the United States is especially keen on identifying items produced in China.

[…]

By Jennifer Diaz|2021-10-22T10:05:24-04:00August 19, 2020|AD/CVD, Best Practices, China, China Trade War, Customs Expert, Import, International Business, International Law, International Trade, IPR, Trademarks and Logos, U.S. Customs and Border Protection (CBP)|6 Comments

Should You Get a Binding Ruling?

What is a Binding Ruling?

Pursuant to the Customs Modernization Act, when importing merchandise into the U.S., it is now the responsibility of the importer of record to use “reasonable care” to “enter,” “classify,” and “value” the goods and provide any other information necessary to enable U.S. Customs and Border Protection (CBP) to properly assess duties, collect accurate statistics, and determine whether all other applicable legal requirements are met.

A binding ruing request can be extremely beneficial to importers, because it can provide them with certainty regarding concerns they may have about their merchandise. […]

By Jennifer Diaz|2021-10-29T15:26:10-04:00July 30, 2018|Best Practices, Customs Broker, Import, U.S. Customs and Border Protection (CBP)|4 Comments

NAFTA and Mexican Government Questionnaires to U.S. Exporters

The SAT of the Mexican Government has issued hundreds of questionnaires to U.S. exporters demanding proof that the country of origin of the merchandise shipped from the United States to Mexico really qualified under NAFTA. The problem is that U.S. exporters are not taking the Mexican Government questionnaires seriously enough, resulting in the Mexican Government penalizing the Mexican importer which then sues the U.S. exporter.

By Jennifer Diaz|2011-12-13T21:42:11-05:00December 13, 2011|NAFTA|Comments Off