Ambu A/S will pay $3.3 million to resolve allegations that it manufactured products in China and Malaysia for sale to U.S. government agencies in violation of the federal Trade Agreements Act (TAA), according to the U.S. Department of Justice.
The government claims that the Danish medtech company submitted false claims to the Defense Logistics Agency and the Department of Veterans’ Affairs between December 2011 and March 2015. The Trade Agreements Act (“TAA”) requires that products sold to government agencies must come only from countries with which the United States has a trade agreement.
Although China and Malaysia do not qualify as TAA-compliant countries, more than 80% of Ambu’s sales to the agencies under these contracts were from these non-compliant countries during the years covered by the settlement, according to the justice department. Ambu executives certified that its products came from compliant countries despite allegedly knowing that most of the products were manufactured in non-compliant countries, the department said.
“Congress passed the Trade Agreements Act as an important part of the United States’ economic, diplomatic, and defense strategy,” said U.S. Attorney McSwain of the Eastern District of Pennsylvania in a news release. “Contractors must follow the law and manufacture their products in TAA-compliant countries, whether they like it or not. By investigating the allegations and reaching a settlement in this case, we have put all companies doing business with the United States government on notice that the TAA is an important law that must be respected.”
The claims resolved by the settlement are allegations only, according to the U.S. Attorney’s office. There has been no determination of liability.
Ambu did not immediately respond to a request for comment.