View Full Version : Customer tried to avoid addt’l China duties - caught by Customs :D
You might remember I’m a customs broker. Last year when the additional China duties were introduced, a customer asked us if we would classify their shipments as something else so they wouldn’t have to pay the additional. I refused. Customer was pissed and pulled their business. They had another broker they had been working with somewhat. That other broker had no problem changing the classification so the customer wouldn’t have to pay the additional China duty. It was changed to something that had no relation to what they were importing. I had been clearing their shipments with the same classifications since 2012 when I took over the clearances from someone else in my office. Customer had been with my company since the early 90s.
Customer got away with it for about 6-8 months. Couple months ago they advised us they were being investigated by Customs. They had to get a lawyer. They’re probably going to be paying the lawyer a lot more than what they saved in duties.
The current leadership of the company is the second generation and greedy. The founder had to retire in the past couple of years due to health issues and was very nice to deal with. I’m only sorry founder’s hard work is being destroyed by second generation.
Customs requested paperwork from us last week for the few clearances we had done since the additional duties had been in effect. They are obviously comparing how I did it to how the other broker did it. We can show going back to 2012 (you only have to keep hard copies going back 5 years per CBP regs, but our system has info back 7 years) that we’ve been doing it the same way. We supplied the requested paperwork.
Customer actually told us they want us to contact them next time BEFORE we respond to Customs. We plainly told them that whatever they say has no bearing on our responses to Customs. We are required to respond to Customs.
Customer has come crawling back to us and we have all their business back. They complain the other broker is not being cooperative.
What’s even worse about this situation is that the other broker appears to have not declared the shipments to another gov’t agency. If that truly is the case, whatever Customs does to this customer will look like child’s play when the other agency is done with them. The other agency will nail customer to the wall.
I’m enjoying the whole situation immensely. The customer complained to my company’s executives months ago that I was being VERY unwilling to work with them and that I am very black and white. I actually used the correct word for what this whole this is - FRAUD - with the customer and they didn’t like it. I told them I was not risking my hard-won brokers license for them. I told the same to our executives, who agreed with me. When I learning the customer was under investigation by CBP, I did a happy dance right at my desk and laughed. Karma bites. :moon:
I told them multiple times that Customs was going to watch out for importers suddenly changing their classifications to avoid the China duties. They were greedy and could only see the short term savings.
Teacher Terry
12-9-19, 2:45pm
That’s funny Tradd. I can’t believe the other broker was willing to commit fraud.
Tradd, it is satisfying when you have to fight to hold the line on accuracy and get confirmation on your decision. Good!
Good for you, Tradd. When you just do the right thing, you can always sleep at night. Your customer tried to cheat and now he's living a customs nightmare. The other broker obliged the fraud, and now they are in deep crap. That's life.
Have you ever thought of working for the customs agency as an investigator?
Have you ever thought of working for the customs agency as an investigator?
No, because I’d have to give up my brokers license (can’t be a fed employee) and I’d never do it. Plus, that sort of thing is done mostly by uniformed officers.
I retired from the IRS and the stories we had about crooked practitioners who would do whatever the client wanted were endless. And also endless were the recriminations when the scheme was found out. Dont ever do anything you would be embarrassed seeing on the front page of the newspaper. And as this company found out, consider the costs of litigation. It is amazing what people will do for pathetic sums of money.
I. Dont ever do anything you would be embarrassed seeing on the front page of the newspaper..
I like this adage, good advice.
It must be so satisfying, Tradd, that you were vindicated in the eyes of the bosses. Hope they learn from this. You worked darned hard for that brokerage license and they should respect that.
JaneV2.0
12-10-19, 10:50am
Character may be unfashionable, but it's never wrong. Good for you.
Way to go, Tradd. It is VERY satisfying. Thanks for sharing.
Yes, VERY satisfying. I had history with this customer. I’d been handling their shipments since 2006 when I started with the company and customs clearances since 2012. Customer was always trying to reduce his duties in small ways when new products were released, but I always checked with the corporate customs gurus and my instinct to say no was always correct.
I’d love to say, I told you so! to customer, but can’t do that. I always laugh my butt off when we’re done with a phone call with them. :D
Interesting development today.
CBP contacted me looking for paperwork on another clearance we did for this customer. I advised the customer right after I sent the paperwork to CBP. Customer is demanding to have my head. He is again insisting we tell him BEFORE we send paperwork to CBP if we receive other requests. We have to call him and if we can’t reach him, he doesn’t want us to respond to CBP until we can talk to him. I asked him what if he was on vacation, etc. Still the same.
Customer is being petty. They got themselves in trouble and now they are trying to take me down with them. CBP
Told their lawyer they are facing a large fine, but there has been nothing in writing. The company may not make it. They have several shipments in the pipeline, but behind those, they are waiting to see how big the fine is before they order anything else more from overseas.
They are demanding a meeting with my boss and head of US division (based in my city) next week. I am told they are demanding I be fired. Things have been contentious with my boss lately over other things and if she fires me over this, so be it.
If they fire you it will be very easy for you to collect unemployment insurance at a minimum, and possibly also win a wrongful discharge lawsuit.
Yes, keep the paperwork as I know you will.
Teacher Terry
1-24-20, 2:46pm
You are totally in the right and if you get fired your boss is a moron.
iris lilies
1-24-20, 3:01pm
I am curious to know what your manager says about “Notify customer before sending requested paperwork to CBP. “
Certainly the principle is right that your relationship and your communications with CBP are separate and necessary from your communications with your customer. But it seems to me you could call the customer and say “hey customer I’m sending paperwork to CBP today just so you know.” And then not listen to any complaints or requests to hold off on sending the requested documents that same day.
I guess I am distinguishing here difference between notification timing and action according to request of CBP.
ToomuchStuff
1-25-20, 12:27pm
This smacks to me as if they are trying to send "their copy" aka forged paperwork and want to make sure they send matching paperwork of whatever she has been requested to send.
This smacks to me as if they are trying to send "their copy" aka forged paperwork and want to make sure they send matching paperwork of whatever she has been requested to send.
Ooh, maybe so--that's brilliant deduction.
Actually CBP comes to the broker for the paperwork, not the importer.
Iris, my boss is now siding with the customer that I should let the customer know before I send paperwork to CBP. I don’t know what’s changed her mind from before. I think all she sees are dollar signs. The customer insists we forward our email sending the paperwork to CBP, rather than just telling them XYZ paperwork was requested and sent.
I’m being told “they’re still a customer” and my response is “they knowingly committed fraud and I’m supposed to bend over backwards for them?” Answer is yes.
Actually CBP comes to the broker for the paperwork, not the importer.
Iris, my boss is now siding with the customer that I should let the customer know before I send paperwork to CBP. I don’t know what’s changed her mind from before. I think all she sees are dollar signs. The customer insists we forward our email sending the paperwork to CBP, rather than just telling them XYZ paperwork was requested and sent.
I’m being told “they’re still a customer” and my response is “they knowingly committed fraud and I’m supposed to bend over backwards for them?” Answer is yes.
I think you gotta go with your instincts on this one, and do what you think is right, and protect your license.
What absolutely baffles me is the insisting on us notifying the customer before we send the paperwork to CBP. It makes NO difference. Absolutely none. And to get in trouble like this for notifying customer immediately after sending to CBP is crazy.
Boss tells to me she doesn’t want to hear it when I remind her they did this to themselves. I repeatedly warned them this is fraud and that CBP would look closely at any sudden changes made at the same time as the increase China duties.
Now I’m being made out to be the bad guy because I sent the paperwork to CBP so quickly. I don’t have to dig through files like in the old days. It’s all uploaded to our system so very simple and quick to retrieve.
iris lilies
1-26-20, 11:53am
What absolutely baffles me is the insisting on us notifying the customer before we send the paperwork to CBP. It makes NO difference. Absolutely none. And to get in trouble like this for notifying customer immediately after sending to CBP is crazy.
Boss tells to me she doesn’t want to hear it when I remind her they did this to themselves. I repeatedly warned them this is fraud and that CBP would look closely at any sudden changes made at the same time as the increase China duties.
Now I’m being made out to be the bad guy because I sent the paperwork to CBP so quickly. I don’t have to dig through files like in the old days. It’s all uploaded to our system so very simple and quick to retrieve.
Oh I think you complying the same day that you get a request from CBP is reasonable, and for the reason you state. The documents CBP requested are at your fingertips.
But there is no point to telling your boss if they did this to themselves, just comply with CBP and remind everyone involved that is your obligation.
The troublesome Company head is angry and lashing out, and you’re falling into the sphere of his lashing out. That’s just what comes with that sort of mindset.
It seems like there are a couple of different problems here, and you conflate them at your peril, unfortunately. You are absolutely right, but it does you no good to remind the boss of that, unfortunately.
Yuck. I like the angle to keep reminding everyone that you are the broker, and you have to be in strict compliance, and that being in strict compliance helps the company. Or just try to do what's right and keep a very low profile about it.
Yuck.
Well, things have abruptly changed. My company’s big executive seems to have talked some sense into my boss. They didn’t end up visiting customer, who was also told that it can’t be reached via phone (guy could fake no being able to take our calls), we’ll advise him via email then send to Customs.
Guess I can live with that. It’s still crazy.
fingers crossed they have seen the light.
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