Vynce breakdown · the paper trail

The seat trick, on the record

From 2009 to 2013 Ford built Transit Connect vans in Turkey. The cargo versions were ordered as cargo vans, but each one shipped with a cheap two-seat back bench, so it was entered at the US border as a passenger vehicle. Right after customs, the seat came out. Here is every step in the courts' and Customs' own words, the money map, and a kit to check your own tariff line.

Why a seat was worth it

Two lines in the US tariff schedule (settlement agreement, para B.1). Both still apply today.

2.5%
Motor cars and other vehicles principally designed for the transport of persons (HTSUS 8703)
25%
Motor vehicles for the transport of goods (HTSUS 8704). The "chicken tax".

Where the 25% comes from: Proclamation 3564, signed by President Johnson on 4 Dec 1963, after the European Economic Community restricted imports of US poultry. It raised the duty on imported "automobile trucks" to 25%, effective 7 Jan 1964. The US schedule still lists 25% for these goods vehicles (checked 10 Nov 2026).

The money map

Each step with its source. Allegations are marked as allegations.

  1. 2009 – 2013
    Built in Turkey, ordered as cargo vans, shipped with a back seat
    "Although these vehicles are made to order and are ordered as cargo vans, Ford manufactures and imports them with a second row seat." (Trade court, 2017, p. 4)
  2. At the border
    Entered as passenger vehicles: 2.5%, not 25%
    "Citing the presence of rear seating and windows, Ford enters all of the Connect vehicles under heading 8703, HTSUS, as passenger vehicles." (CBP ruling H220856)
  3. Baltimore marine terminal
    The seat comes out in under a minute
    "The removal of the rear passenger seat takes less than a minute ... (as observed by CBP personnel at the conversion site)." (CBP ruling H220856)
  4. March 2010
    An engineer at the Turkish plant: the seats "will be scrapped in US"
    Quoted in the trade court opinion, p. 21 (undisputed record).
  5. 2012 – 30 Jan 2013
    Customs reviews it and rules: heading 8704, 25%
    The seats had "no other apparent purpose than to claim the lower duty rate for passenger vehicles." (CBP ruling H220856)
  6. 9 Aug 2017
    Ford sues and wins at the Court of International Trade
    "Plaintiff's Motion for Summary Judgment is granted." (Slip Op. 17-102, p. 1)
  7. 7 Jun 2019
    The appeals court reverses: "sham rear seats"
    "... by using sham rear seats that would be stripped from the vehicles." (Federal Circuit, No. 18-1018)
  8. 29 Jun 2020
    The Supreme Court declines to hear it
    "Petition DENIED." (Docket 19-1026)
  9. 18 Nov 2021
    Customs assesses a $1.3 billion penalty plus $181 million in duties
    As reported in Ford's own 10-K for 2021 ("We intend to vigorously defend our actions").
  10. March 2024
    Ford pays $365 million to settle the government's customs claims
    Over about 162,833 Transit Connects; the claims covered the seats and under-declared values. $183,476,539.62 is restitution for lost duties, the rest penalties. Ford denies the conduct and admits no liability. For five years Ford asks Customs for classification rulings on new vehicles. (Settlement agreement, paras C, F, III.1, III.2)

The receipts

The lines from the video, as they appear in the record.

Again I want to remind that, these seats will be scrapped in US, will not be used anytime, however we should send the seats with meeting requirements.Ford Otosan seat engineer, March 2010, quoted in Ford Motor Co. v. United States, CIT Slip Op. 17-102, p. 21
The rear seating is therefore present solely prior to importation, and has been added for no other apparent purpose than to claim the lower duty rate for passenger vehicles.CBP Headquarters Ruling HQ H220856, 30 Jan 2013
Ford employed the CRSV-2 to reduce costs, while facilitating post-importation processing of converting the Transit Connect 6/7s into cargo vans by using sham rear seats that would be stripped from the vehicles.Ford Motor Co. v. United States, 926 F.3d 741 (Fed. Cir. 2019)
This Agreement is not an admission of liability by Ford or the United States, nor an admission by Ford or the United States that their respective claims are not well founded.Settlement agreement, executed 8 Mar 2024, para F

Your tariff line, checked

If you import anything, the code on your entry decides the rate. Here is what one wrong line costs, and how to get it in writing first.

Duty difference
Duty you pay / year
–
Duty at the other rate
–
The gap / year
–
Back duty if reclassified
–

Get it in writing, in 4 steps
  1. Find your line. Search your product on hts.usitc.gov (the official Harmonized Tariff Schedule). Note the 8-10 digit code and its "General" rate.
  2. Write down why. Which heading, which note, which feature of the product puts it there. If the answer is a part you add only for the border, that is the Transit Connect problem.
  3. Ask Customs before you ship. A binding ruling request goes through CBP's eRulings under 19 CFR Part 177: a description, what it is made of, how it is used, photos or a sample, and the code you think applies.
  4. Keep the ruling with your entries. Ford's settlement now requires exactly this for its new vehicles for five years.

Not legal advice. It points to the official tools; a licensed customs broker or trade lawyer can check your case.