The U.S. Supreme Court has declined to hear an appeal asked for by Ford regarding import duties on some Ford Transit Connect vans. The decision could cost Ford up to $1.3 billion in penalties.
The vans were built in Turkey and imported into the U.S. The problem, though, is that Ford declared that they were passenger vans. That meant that the company only had to pay 2.5% import duty on the vehicles, rather than the 25% duty levied against cargo vehicles as part of what is commonly referred to as the “chicken tax.”
The Justice Department said that they were “designed, marketed, sold, and delivered the van to consumers exclusively as a two-person cargo van.” It alleges that the Ford fitted the vans with “a temporary, cheap rear seat that was designed to be immediately removed as soon as the van cleared” customs.
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The seats, the Justice Department pointed out, did not have head restraints and were finished in a different, cheaper material than the front seats. Ford argued, though, that the seats met all federal safety standards and had seatbelts to make them street legal.
The legal dispute dates back to 2013 when the Customs and Border Protection (CBP) ruled that the vehicles should have been counted as commercial vehicles instead of passenger ones. Now that the Supreme Court has denied Ford’s appeal, the company told Reuters that CBP is seeking $181 million in additional duties and penalties amounting to “as much as $652 million to $1.3 billion.”
