CAPITALISM'S ACHILLES HEEL Dirty Money and How to

198 CAPITALISM’S ACHILLES HEEL
deprive a foreign government of revenues is problematic and will be discussed
under case law next.
Filing a False Customs Declaration
Imports into and exports out of the United States have to be accompanied
by a customs declaration, which states the classification and value of
the items. When a company has a normal price of 1X and then trades
overseas sometimes at 0.1X and sometimes at 10X, you would think
somewhere, someone is filing a false Customs declaration. How can
$0.10, $1.00, and $10.00 all be accurately stated prices for the same
thing? Well, because the U.S. Customs is not altogether clear on this subject.
First, Customs law is focused primarily on imports and the collection
of customs duties on imports. Customs officials say that applicable
regulations apply equally to exports, but for decades Customs has looked
the other way as U.S. exporters build kickbacks into export prices in order
to facilitate capital flight coming out of developing countries and into
the United States. Second, Customs defines value as “transaction value,”
meaning “the price actually paid or payable for the merchandise.” Customs
then goes on to modify this by stating that transaction value is “acceptable”
only when “the relationship between the buyer and seller did
not influence the price actually paid or payable.” 52 This is the arms-length
standard discussed earlier. But Customs seldom uses its extensive database
to ask questions of corporations that export at 0.1X, 1X, 10X, or other
levels of variation. Third, Customs hides behind Part 764.2(g) of its Export
Administration Regulations, which states that “No person may make
any false or misleading representation, statement, or certification . . .” in
connection with export documentation. The potential power of this is
undercut when price, no matter what it is or how much it varies, is taken
as “transaction value.”
General False Statements
The submission of false documents to Customs constitutes a legal violation
(18 U.S.C. §1001). Because Title 18 of the United States Code does not
contain a specific statute making it a crime to file false Customs declarations
for exports, such activity can probably also be successfully prosecuted under