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Government Seeks $15 Million in Unpaid Duties for Imported Artist Canvases

DOJ is seeking nearly $15 million in unpaid customs duties and civil penalties from five Florida importers at the Court of International Trade for alleged evasion of antidumping duties, according to a May 15 complaint (U.S. v. Lexjet, et al., CIT # 23-00105).

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The government is seeking $4.7 million in unpaid duties plus an additional $11 million, twice the original owed, in penalties from Lexjet, Abaqa, BMG, S-One Nevada and S-One Holdings. DOJ said that the companies were "operated by common individuals, from the same business address, and in coordination with one another." Between 2014 and 2017, the companies, "operating in concert," evaded antidumping duties on artists’ canvas manufactured in China with 167 entries of canvas.

The companies falsely declared that entries of artists’ canvases were “Type 01” entries not subject to the AD order, the complaint said. The companies also falsely omitted the fact that entries of artists’ canvases were subject to the order from entry documents and falsely misclassified artist canvas as other merchandise subject to lower duty rates, DOJ said. The false statements and omissions impacted CBP’s determinations regarding the amount of duty owed on the entries and resulted in approximately $5.5 million in duty losses, DOJ said.

The false statements resulted from failure to exercise "reasonable care and competence" in ensuring information provided in connection with the entries was accurate, DOJ said, classifying the culpability level as negligence. The companies and their agents imported canvases since at least 2005 and by 2015, the time a Commerce scope ruling sajd the print canvas they imported was subject to duties, knew about the proper classification of merchandise and the related AD order. The companies sought no clarification or guidance from CBP or their customs brokers when they continued to import covered canvases, DOJ said.

When CBP issued pre-penalty notices in April, the companies responded by claiming that the false statements were caused by a "reputable, highly experienced Customs broker that failed to flag the antidumping duties at time of entry" who advised that the duties were not applicable.