PENTAX and Asahi Companies Reach Settlement Agreement With U.S. Customs Service

Business Wire, Nov 10, 1999

DENVER--(BUSINESS WIRE)--Nov. 9, 1999--

PENTAX Corporation, with its parent company, Asahi Optical Co., Ltd., and Asahi Optical (International) Ltd. announced that they have reached a settlement agreement with the United States Customs Service pertaining to government charges associated with the incorrect country of origin marking of certain goods.

PENTAX and the Asahi companies strongly deny engaging in any fraudulent conduct in this matter, which caused no loss of duties to the U.S. Customs Service. They also strongly deny that they intentionally misled Customs' investigators by destroying documents or otherwise. Nonetheless, they have decided that a settlement at this time would be in the companies' best interests so that they could concentrate on current and future business.

In March of 1991, PENTAX and the Asahi companies were advised by their legal counsel that markings on certain products were incorrect under U.S. law. As a result, they then voluntarily notified the government in writing that there were incorrect country of origin markings on three different camera models, one camera flash model and two different camera cases. This merchandise, which was marked "Assembled in Hong Kong" rather than "Assembled in China," had parts that were largely produced in Japan, imported to Hong Kong and partially assembled in China. The companies voluntarily remarked some six million dollars worth of warehoused merchandise so as to comply with U.S. law. At the same time, the companies began a compliance program to ensure that the incorrect markings of the types at issue would not reoccur.

This case raised a number of novel issues that presented litigation risks for both sides and could have consumed several more years before these issues finally were resolved. In these circumstances, the companies have concluded that, although they firmly believe they have substantial defenses to the Government's allegations, it is better to conclude this litigation now so that they can focus their efforts on bringing high-quality, reasonably priced products to consumers in the United States and around the world.

PENTAX Corporation is a wholly owned subsidiary of Asahi Optical Company, Ltd., of Japan. Corporate headquarters are located in Englewood, Colorado. PENTAX markets cameras, lenses, sport optics, surveying equipment, closed circuit television lenses, and a wide range of specialized lenses and accessories.