P. M. BRIEFING : Amway Pays $38-Million to Canada

Amway Corp. has agreed to pay $38.1 million to settle charges it avoided paying Canadian duties, and in exchange the government dropped a $125.4-million suit against the direct sales company, an official said today.

A spokesman for Revenue Minister Otto Jelinek said the government filed notice to drop the suit Wednesday in the Federal Court of Canada. Amway initiated negotiations to settle the case a year ago, he added.

“It’s not a bad settlement,” said the spokesman, who asked not to be identified.

Amway officials at the company’s headquarters in Ada, Mich., were not immediately available for comment.

Canada’s revenue agency had accused Amway of avoiding custom duties by undervaluing merchandise it exported from the United States to Canadian distributors during a six-year period beginning in 1974.

The 9-year-old lawsuit sought money for unpaid customs duties, sales taxes and the value of the Amway products that crossed into Canada during those six years.