Ford has agreed to pay $365 million to settle a customs dispute with the U.S. government over the misclassification and undervaluation of Transit Connect vehicles imported from Turkey between 2009 and 2013. Authorities have accused Ford of implementing a strategy to circumvent customs duties by temporarily modifying vehicles to avoid disabling them as passenger vehicles and then returning them to useful status after clearing customs. Although Ford denied several of the allegations, the automaker decided to settle the case to avoid a potential $1.3 billion fine. This settlement marks the end of a complex dispute, highlighting problems related to trade and customs practices in the automotive industry.

Ford objects but agrees to pay

Ford has agreed to pay a whopping $365 million to end a customs dispute with the US government. The charges against Ford allege the company violated federal tariff laws by misclassifying and understating the value of hundreds of thousands of its Transit Connects. According to the Department of Justice, the agreement eliminates charges that Ford has reportedly implemented a system to avoid higher customs duties by misclassifying vans imported from Turkey from April 2009 to March 2013. A Ford representative said that e

n strongly disagrees with the numerous allegations made by the Department of Justice and that it does not accept any responsibility in this matter. However, in an effort to end this complex and protracted dispute, Ford agreed to settle the matter once and for all. The problems began when authorities ruled in 2013 that Transit Connects, imported from Turkey as passenger vehicles and then converted into utility vehicles, should be subject to a 25% customs tax instead of the 2.5% rate for passenger vehicles.

A file that could have cost him much more

The Department of Justice highlighted Ford’s rather daring strategy to avoid customs duties. The manufacturer allegedly imported its cars with fake rear seats and other temporary gimmicks to make them look like cars. But the deception did not end there. After customs clearance, once these Transit Connects fell off the customs radar, Ford cleverly removed these temporary items. In a short time, these vehicles have regained their identity as two-seater SUVs, ready to enter the market. But even with this little trick, Ford was in big trouble. The government slapped him on the wrist, threatening a whopping $1.3 billion fine. Imagine what a blow to the company’s finances! So to avoid every bolt, Ford decided to sign a check for a cool $365 million to put out the fire before it destroyed everything in its path.

This is what we call bailing out at a high price, but it’s always better than risking losing everything in endless litigation.