Harman Fined $11.8M for AD/CVD Duty Evasion

In a significant enforcement action, the U.S. Department of Justice (DOJ) announced that Harman International Industries, Inc. (Harman)—the parent company of iconic consumer audio brands JBL und Harman Kardon—has agreed to pay $11,809,628 to settle allegations that it violated the False Claims Act by evading antidumping (AD) and countervailing (CVD) duties on Chinese aluminum extrusions.

This case also resulted in a substantial financial reward for the whistleblower who brought the misconduct to light. Under the False Claims Act’s qui tam provisions, the whistleblower, Jesrel Mitre, will receive $2,302,877.46 for his role in exposing the violations.

Case Background

Importers entering goods into the United States must accurately report the classification, origin, and applicable duties for all products. AD/CVD duties—assessed by the U.S. Department of Commerce and collected by U.S. Customs and Border Protection (CBP)—are imposed to protect domestic industries from unfair trade practices.

The investigation revealed the following:

The products involved were aluminum heat sinks, commonly used in consumer electronics and subject to high AD/CVD duty rates on Chinese aluminum extrusions.
Von June 1, 2011 to March 31, 2023, Harman imported these heat sinks into the U.S. while allegedly failing to pay required AD/CVD duties.
When the government later requested payment, the company was accused of knowingly concealing its duty obligations and failing to make proper declarations.
The settlement was the result of coordinated efforts between the DOJ, CBP, and the Department of Commerce.

The case was filed under United States ex rel. Jesrel Mitre v. Harman International Industries, Inc., Case No. 2:20-cv-12487 and handled by Assistant U.S. Attorney Anthony Gentner of the Eastern District of Michigan.

Whistleblower Award Under the False Claims Act

The False Claims Act allows private individuals to file lawsuits on behalf of the U.S. government when they discover fraud or duty evasion. If the government recovers money, the whistleblower is entitled to a percentage of the settlement.

In the Harman case, the whistleblower secured:

$2.3 million in reward payments

This marks one of the more prominent AD/CVD enforcement whistleblower payouts in recent years and highlights the increasing use of qui tam actions in customs and trade fraud cases.

What This Case Means for Importers and the Global Supply Chain

1. Stronger Compliance Pressure for Importers

The Harman investigation demonstrates that:

CBP and the DOJ are intensifying scrutiny of AD/CVD compliance.
Failure to declare duties accurately can lead to massive financial penalties far exceeding the avoided duties.
Even well-known multinational corporations are not exempt from enforcement.

This case sends a clear message: misclassification, undervaluation, or concealment of duty liabilities will not be tolerated.

2. Higher Expectations for Supply Chain Transparency

Importers must ensure complete transparency and traceability in their supply chains. This includes:

Accurate origin declarations
Correct material descriptions
Proper HTS classification
Verified supplier documentation

Any incorrect or misleading information from a supplier can expose the importer to severe penalties.

3. Compliance Risks Span the Entire Supply Chain

Duty-related risks are not limited to the customs broker or procurement team. They affect:

Procurement
Supply chain management
Finance
Logistik
Legal and compliance
Customs declaration teams

Companies must build cross-departmental compliance frameworks to prevent errors, fraud, or oversight.

Key Takeaways for Exporters, Importers, and Freight Forwarders

Accurate HTS classification and origin reporting are essential
Products involving aluminum, steel, chemical materials, and wood/furniture remain high-risk for AD/CVD enforcement.

Conduct regular supplier audits and compliance checks
Ensure suppliers provide transparent and verifiable product data.

Work closely with licensed customs brokers or experienced freight forwarders
Professional support can help reduce misclassification risk and ensure proper duty declaration.

Implement internal compliance training
Misunderstanding AD/CVD rules can lead to unintentional violations with serious consequences.

Fazit

The Harman settlement is a powerful reminder of the U.S. government’s commitment to combating trade fraud and enforcing AD/CVD duty regulations. As global supply chains become increasingly complex, importers must prioritize compliance, transparency, and accurate reporting to avoid costly penalties.

For companies engaged in cross-border trade—whether exporters, importers, or logistics providers—robust customs compliance is no longer optional. It is a critical component of risk management and long-term business stability.