U.S. Fines South Korean Firm $34 Million

The U.S. Court of International Trade has fined Daewoo of South Korea a record $34 million for violations of U.S. customs laws, the Justice Department announced Thursday.

The agency said Daewoo illegally and inaccurately reported the prices of steel and steel products it exported to the United States during 1980-1982 to avoid tariffs designed to curb the dumping of goods at below cost.

The judgment is the largest civil penalty ever imposed for violations of the U.S. customs fraud statute and is separate from an earlier criminal case over the alleged incidents.

The action concludes more than seven years of civil and criminal proceedings against Daewoo, one of Korea’s biggest industrial conglomerates.

‘Trigger Prices’

In 1985, Daewoo pleaded guilty to criminal violations of the U.S. law in connection with nine shipments of steel products.

The civil investigation was initiated after Daewoo’s criminal conviction. It uncovered some 800 alleged violations in connection with 225 shipments.

During 1980 to 1982, the Justice Department said, Daewoo routinely shipped steel to the United States and declared prices that were above the U.S. “trigger prices,” the levels at which anti-dumping import tariffs are imposed.

Trigger prices were established by the United States during the early 1980s. They are designed to monitor the prices of imported steel and detect the dumping of foreign steel in the United States at unfairly low prices.

Steel suppliers to the United States have to declare steel prices upon entry of the products. If the declared prices were lower than the trigger prices, the Commerce Department could have initiated an anti-dumping investigation that could ultimately have led to the imposition of additional duties.

The Justice Department said Daewoo routinely reported prices above the trigger prices to avoid any extra duties.

The previous biggest settlement was paid by Volkswagen in 1982, when it agreed to pay $25 million.