Company fined $450,000 for selling Chinese-made goods to the US government in violation of TAA.

The Department of Justice recently announced a $450,000 settlement with Direct Resource, Inc.  Did they sell counterfeit merchandise?  Was it improperly marked?  No trademark authorization from the rights holder?

No, no, and no.  The company violated the Trade Agreements Act, which prohibits the sale of merchandise to federal agencies from a country which does not have a reciprocal trade agreement with the Untied States.  Direct is contracted with the GSA to sell a variety of products to the U.S. government, including office supplies.  Contracting with the GSA requires a company certify that all products sold be manufactured in one of a list (and it’s a pretty darn long list) of designated countries deemed to trade fairly with the United States.  The goods sold were of Chinese origin, and there is no agreement between China and the United States.

The allegations were also brought to light by a whistleblower lawsuit filed in federal court in the District of Columbia.  The whistleblower, under federal statute, shares in the proceeds of the settlement or judgement, which in this case will amount to $67,500.

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