A British women’s clothing company has agreed to pay $610,000 to resolve allegations that it improperly avoided customs duties when shipping merchandise from the United Kingdom to U.S. customers, including some in Maine.
The settlement resolves allegations that Selective Marketplace Ltd., shipping merchandize under its two brand names, Wrap London and Poetry, violated the False Claims Act, according to the U.S. attorney’s office for Maine.
U.S. customers owed no customs duties on single shipments of merchandise into the U.S. worth less than $200, the complaint against Selective said. The Department of Justice alleged that Selective improperly evaded customs duties that would have been paid by U.S. customers by breaking up single shipments worth more $200 into multiple shipments of lesser value in order to avoid the applicable duties.
Goods imported into this country, including those sold by Selective, are subject to a tariff for clothing that could be as high as 32 percent to be paid by the buyer, the complaint said.
It was the second time in 15 months a British clothing company agreed to pay a large fine for splitting up orders to avoid paying customs duties. Pure Collection Ltd. of Harrogate, England, which sold cashmere sweaters, in February 2018 agreed to pay $908,100 to end similar litigation.
Federal prosecutors in the U.S. were alerted to the violations in both cases by whistleblowers, who are entitled to receive 18 percent of settlements.