How Dahua Avoids US Tariffs With Vietnam Assembly
Dahua is importing cameras assembled in Vietnam, helping it avoid 10% to 25% tariffs imposed by the US on PRC cameras.
In this report, IPVM examines how this works and the potential legal risks this poses.
IPVM previously examined how Dahua's ex-subsidiary Lorex violated US customs law by failing to disclose Country of Origin and even claiming "Made in China and/or Vietnam".
Executive *******
***** ***** ************* ** ********* **** Vietnam ***** ********** ***** *** *** covered ** *** **-**%******* *** ************** ** *** ** ** ******* PRC *****.
*** ******* ********* **** ***** **** cameras **** ******* *** **** ******** of ****** ********** ******** **** ***** China, *** ** ***** ** * PRC ****** **** ** ****** ******* of ***** ************ *************.
****** ********** ******* ********** ** * certain *******, *** **** ******** **** place ** *** ******* ** ******, could **** ***** ***** ** ** does *** ********* ********** *** ******** 'substantial **************', ***** ******* **** ****.
***** **** ** ** "*********" **** "all ** *** ****** ************* *** import/export ********* *** ********* **** *** relevant ******** *** ************* ****".
China ** ******* ******* ********
******* *** ********* **** ***** **** under *** ***'*****.**.**** **** (********** *******, ******* ******* and ***** ****** *********") ***** *** a **% ******.
**** ***-****** ******* **** **% *******, as **** *** ********** ** ******.**.**("******* ***** ***** ***** *******") ***** a ****** **** ** ***** ********* that**** ********.
Major ***** ********* ******
***** **-**% ****** ************** **** ***** ** ***, *** Vietnam, *****. *** ********* ******** **** ******* by ***** ******* ******** ** ** cameras *** ****, *** **** ** Dahua's ***-******* *****. *****'* ******* ***** margin *** **.**%, ********* ** *** 2021****** ******.***** *****'* *** ***** *** ***** margins, ******** ***** ******* ****** * major **** *********.
Dahua ********* *******, **** **** *******
**** ***** **** ** ******** ****, Dahua *** ******** ** ********* - almost *** **** - ** ******* and ***** ***** ************ ********* **** Kangyin ********** ********** **, ****** ** ******* *******, **** ******* ****** ** *** Country ** ******. *** ******** *** largely ******* *** ****, **** **** vaguely ********* ** "******", ********************* *******:
***** ** ***** ***** ****, **** the **** ****** ******** ******** ******** 6, ****.
Vietnam ******* **** ***** *****
*** ******* *****, ** ****, ******* its ****** ***** ****** ******** **** Dahua *****. *** ** **,*** ******* Vietnam ******* ********** *** **** "******", 14,534 (**.**%) *** **** ***** *****, e.g.:
*** *** ***** ********** *** ****** an ** ****** *** ******** **** Dahua *****, *.*. ****, *******, ****, PCBs, *******, **** ******, ***., *.*.:
******* **** ******* ******** ** ******* and ********* **** ***** *****, ********** them ** "*******," ******** *** ** large ******* (** ***** **** **** to ****):
Lorex ***********
******** ***** ***'* ******* **** ******* do *** ******* *****, ******* ********* from ***** ***** ** ******* ******* mention ***** **** ************:
**** **** ***** ** ******** **** although***** **** *** ***** ** ******'* Skywatch.
Kangyin ** ****** ****** ** ****** *************
******* ******* ** ***** *********, * ******** ************ ***** ** Dongguan, ***, **** **** ***** ********** bases ** *******, ******* (***), *********, and *****. *********'* ************* *** ******* ****, ** **** not ******* ***** ************ ** ******** but ***** *** **** ******** ** chiefly ********* *** **** ******:
**** ***** **** ** ******** ** Kangyin ** *** ******* ************ ********** video ************-******* *********.
Risks ********
***** ******* **** **** **** ********** PRC ***** ** * ******** ** typically *** ****** ** ********** ******* of ****** *** **** ***** *** US' ******* ** *** *****. ********* must **** "*********** **************" ** *** ******* ** ****** as ****.
***** ****, ********* ********* ** ********* ** the ********** ** *********, **** "***** assembly" ** ******** ***** **** *** qualify ** ******* ** ******:
*** ** ***** *** ************* ***** has ******* *********** **** ***mere ******** ** * ******* **** *** **** *** *********** ************** ********. One example was a 2016 case where Energizer was assembling a flashlight that, essentially, only used imported parts. Another example is an older case from 1992 involving National Hand Tool where the court said thestandard ***** *** ** *** ***** ** * ***** ******** ******* involving the "skill and dexterity to put components together with a screwdriver" [emphasis added]
***** ******, ********* ********* ** ******* ************* University, **** "**** ** ********* *** desperate ** ***** ******* *** ****** of **% ** **** ******* *******", so **** **** ******:
No, ********** **** *** ********* ********* * ******* over move it into a new classification. There have been a number of cases whereparts *** ********** **** **** ** *** ******* *** ********* **** ******* *** **** ****** ** ** *********. Parts are often classified using the completed article classification. Yes, this can be subjective given the complexity of international sourcing these days, but many ** ********* *** ********* ** ***** ******* *** ****** ** **% ** **** ******* *******, ** **** ***** ***. Assembling will draw scrutiny though Customs may not get around to you when your broker is filing the entry, but they will come. [emphasis added]
***** ******, ********* ** ******** *** ************* affairs ** *********, **** ***** ******** of ********** ** ******* ***** ****** not ********** "*********** **************":
*** **** *** ******** **** **** like ** ******* *** ****** **********might ** ****** ** **** **** ***** ** *** * *********** **************, given that all the components (if that is in fact the case) originate in China, and the only value added/activity in Vietnam is the final assembly. [emphasis added]
****, ****** ******* ** ******** ******** is ******** ** ******* ***, ******************* *** ** *** ****** *** of **** (** *.*.*. ****). **** *** ** *** **** of ******* *********** (** ***§ ***) ********** *** ******* ** ****** marking ************ *** *** ********** ** 19 *.*.*. ****.
Dahua ********: "*********"
***** **** ** ** "*********" **** "all ** *** ****** ************* *** import/export ********* *** ********* **** *** relevant ******** *** ************* ****":
***** ***** *** ********** **************** *********, including ***** ******* ** ************* *****. We *** ********* **** *** ** our ****** ************* *** ******/****** ********* are ********* **** *** ******** ******** and ************* **** *** ***********.
******* *** ** ******* *** *** respond ** ****'* ******* ********. ** they **, ** **** ******.
*******, **** *** ***. * **** reminded **** ***** **** **** ** case.
* **** ** ** ******* (*** Kangyin) ***** *********.