The United States division of Samsung has been charged with deceiving the US government into believing that several of its products met the necessary US government policies, resulting in the US government buying unauthorised Chinese-made electronics.
The South Korean electronics giant has agreed to pay the Government $2.3 million in fines to settle the charges of violating trade agreements, the Justice Department announced Tuesday.
Under federal contracting rules, Government agencies are only required to purchase products made in the United States or in countries that have a trade agreement with the United States.
Federal agencies purchased products from Samsung through authorised resellers, believing they were manufactured in South Korea or Mexico, comply with government procurement rules — namely the US trade agreement act.
SAMSUNG LIED TO U.S GOVERNMENT
Despite complying with the terms of the contract, Samsung was found to have breached the US government between the year 2005 and 2013 by providing the resellers "inaccurate information" about the country of origin of the products and supplying those products that they claimed to have produced in Mexico or South Korea, but were actually manufactured in China, which is not part of the agreement.
According to the Justice department, this settlement is not an admission of liability by Samsung. Samsung has yet to comment on the settlement.
"This settlement upholds important trade priorities by ensuring that the United States only uses its buying power to purchase from countries that trade fairly with us," Stuart F. Delery, the Assistant Attorney General for the Justice Department's Civil Division, said in a statement on Tuesday.
The settlement was a joint effort by the U.S. Attorney's Office for the District of Maryland, the commercial litigation branch of the Justice Department's civil division and the General Service Administration inspector general.
This matter came to light after a former Samsung employee, Robert Simmons, shared the information with the United States federal agency, under whistleblower provisions in the False Claims Act. The act allows whistleblowers to sue for false claims on behalf of the US and to share in its recovery. Of course, he will be rewarded with a portion of the settlement amount by the US government for alerting them about the issue.
WITH LOVE — FROM CHINA
The United States has an increasingly distrustful relationship with both China and with leading Chinese tech firms. Networking giant Huawei has effectively closed down its American presence after scrutiny of US lawmakers and regulators who believe that Huawei's alleged put backdoors for the Chinese government.
In 2012, US government banned its federal agencies to use chinese products that could pose a threat to US national-security interests.
China hit back, after the former NSA contractor Edward Snowden leaked several documents about the United States world-wide surveillance program and pressured its domestic banks to replace high-end IBM servers with similar equipment manufactured within the country.
The country also banned the procurement of technology from a number of foreign firms, including Microsoft, Apple, Symantec and Kaspersky.