HP accused of violating customs law, $323 million evasion

16th May, 2010 by adina
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The Directorate of Revenue Intelligence has accused Hewlett Packard of violating Indian customs laws. It claims the company has underpriced imports and has evaded about $323 million in customs duties.

The federal agency says that HP did not disclose the pricing mechanism of its imports. This discrepancy is supposed to have allowed the company to pay only a part of the amount of duties normally applicable in such situations. HP has been allowed to take advantage of the Indian “Accredited Client Program” to fast-track import. It is not yet clear whether the investigation will involve a temporary or permanent revocation with respect to the eligibility for this program.

According to analyst Partha Ivenygar, HP’s business could seriously be affected because the timeframes for getting equipment in or serving client needs could not be respected any more.

Other reports indicate that HP would also be under investigation by authorities from Germany, Russia and the United States over accusations of bribery. The company is incriminated for sending the equivalent of about $10.9 million to Russia’s prosecutor office in order to secure a contract for an important number of computers. A scheme involving a German partner and some shell companies in Caribbean islands was meant to hide the alleged bribery.

Hewlett Packard is supposed to have pre-deposited the equivalent of about $17.7 million, as the Indian agency claims, but the exact reason for this deposit is still unknown. The initial investigation has been completed by the Directorate of Revenue Intelligence. According to director general R. Venkataraman, it will be transmitted to an adjudicating authority.


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