Ford to pay $365M settlement over cargo van tariff scheme

Ford settlement overview: 

• Who: Ford Motor Co. agreed to a $365 million settlement with the U.S. Department of Justice. 
• Why: The settlement resolves claims alleging Ford violated the Tariff Act of 1930 by putting sham back seats in cargo vans to make them appear to be passenger vehicles and avoid a 25% duty rate. 
• Where: Ford imported cargo vans from Turkey to the United States.

Ford Motor Co. agreed to pay a $365 million settlement after the company allegedly put a sham row of back seats in cargo vans to avoid a 25% duty rate on cargo vans.

Ford imported the cargo vans from Turkey between April 2009 and March 2013 subject to the Tariff Act of 1930, according to the settlement. U.S. Customs and Border Protection (CBP) brought information to the U.S. Department of Justice (DOJ) that led to the charges.

Cargo vehicles are subject to a 25% tariff while passenger vehicles only have a 2.5% fee, the Ford settlement says.

“Importers have an obligation to truthfully declare the nature of their products and pay the duties that are owed,” Brian M. Boynton, principal deputy assistant attorney general and head of the DOJ’s civil division, says in a statement. “The government will not permit companies to evade duties by adding sham features to their products and then misclassifying them.”

Ford outfitted the Transit Connect Ford cargo vans with back seats featuring no headrests, loose wires and cheap fabric, the Ford settlement says.

“After customs clearance, each of these Transit Connect 6/7 vehicles was immediately transported to a port processing facility and stripped of its rear seats and second row seat belts, among other things,” according to the Ford settlement.

Ford knew cargo van seats not intended to carry passengers in, DOJ says

Ford knew the cargo vans and seats were not intended to carry passengers but still continued the scheme, the DOJ says.

Ford claimed the way CBP handled and processed some of the Transit Connect vehicles in the past created an established practice that allowed Ford to add the seats. 

Last month, Ford issued a seat belt recall of more than 77,000 model year 2018-2020 Ford Expedition and Lincoln Navigator vehicles.

Have you purchased a Ford cargo van? Let us know in the comments.

Read About More Class Action Lawsuits & Class Action Settlements:

• Chrysler recall issued for Dodge Hornets, Alfa Romeo Tonales due to incorrect weight capacity label
• Nissan class action claims some vehicles have radiator cooling fan defect
• GM expands recall over tailgate issue to include more vehicles
• Jeep Wrangler PHEV class action alleges defect can cause fires, explosions