DOJ Sues Energy Executive for Evading Tariffs on Chinese Solar Panels

Workers are making solar photovoltaic modules used for small solar panels at a factory in Haian in China's eastern Jiangsu Province on Jan. 7, 2022. STR/AFP via Getty Images

The Department of Justice on Oct. 10 has brought civil action against a company executive for allegedly evading U.S. tariffs on imported Chinese solar panels.

Ecosolargy is a corporation that imported solar panels into the United States and from 2014 to 2018 imported Chinese products, according to the complaint.

Ecosolargy executive Paul Bakhoum is accused of making multiple false statements between 2014 and 2018 to customs officials in order to evade tariffs meant to counter the Chinese regime’s oversupply and dumping trade practices.

Examples include solar cells that were misclassified as LED lights to evade antidumping duties, and imports incorrectly naming the country of origin as Turkey instead of China to similarly evade duties.

“Ecosolargy, operating through Mr. Bakhoum, repeatedly failed to correctly classify the subject merchandise and/or otherwise evaded duties owed by undervaluing the subject merchandise and failing to identify the antidumping and countervailing duties owed on the subject merchandise,” the complaint reads.

The DOJ seeks $300,000 to recover lost revenue to CBP in import duties, and close to $800,000 in civil penalties.

“The Justice Department is committed to pursuing those who evade customs duties or otherwise engage in unfair trade practices that harm U.S. manufacturers,” stated Brian Boynton, head of the DOJ’s civil division, in an Oct. 10 statement. “We will continue to employ all of our available tools to ensure that U.S. manufacturers are competing on a level playing field.”

CBP’s Cargo and Conveyance Security Office of Field Operations Executive Director Susan Thomas stated, “These civil penalties should serve as a warning to those who attempt to do harm to our economy and American businesses.”

In May 2022, CBP fined Bakhoum $284,000 and proposed a penalty of more than $989,000 for gross negligence in classifying imports, but Ecosolargy had already moved and the bill did not reach Bakhoum. A June 2022 attempt was similarly returned to CBP, and the following month the CBP reached Bakhoum, who executed a statute of limitations waiver as requested by the CBP. The waiver expired on Oct. 9.

According to the complaint, Bakhoum has not paid any of the bill or penalties.

The United States has in recent years raised tariffs on Chinese products in competitive industries for multiple reasons. This is largely due to what officials describe as predatory pricing to eliminate competing foreign companies, and for national security concerns because the Chinese Communist Party is considered the top cybersecurity threat to the United States.

The lawsuit is a part of the administration’s enforcement of these new trade rules, which have received industry pushback. The case arose from a DOJ joint task force with the Customs and Border Protection (CBP) and other agencies to combat trade fraud.