From Wikipedia, the free encyclopedia
U.S. bound Ford Transit Connect
: pieces of
its interior are shredded — immediately upon importation — to
circumvent the 1963 Chicken Tax
which imposes a 25% tariff on imported light trucks
Ford imports all Transit Connects
with rear windows, rear seats and rear seatbelts.
The vehicles are exported from Turkey, arrive in Baltimore, and are
converted into light trucks
: rear windows are replaced
with metal panels and rear seats removed.
The process exploits a loophole
in the customs
definition of a commercial vehicle. As cargo doesn't need seats
with seat belts or rear windows, mere presence of those items
exempts the vehicle from light truck
conversion process costs Ford only hundreds of dollars per van, but
saves thousands in taxes.
A loophole is a weakness or exception that
allows a system, such as a law or security, to be circumvented
or otherwise avoided. Loopholes are searched for and used strategically in a variety of
circumstances, including taxes, elections, politics, the criminal
justice system, or in breaches of security.
A loophole in a law often contravenes the intent of the
law without technically breaking it. For example, in some places,
one may avoid paying taxes to the jurisdiction by forming a second
residence in another location, or a commercial property can be
built in a residential zone if it is made also for residential
In a security system, the one who breaches the system (such as
prison or a terrorist) exploits the loophole during
breach. Such weaknesses are often studied in advance by the
violator, who spends time observing and learning the routine of the
system and sometimes conducts surreptitious tests until such a
loophole can be found.
An example of a legal loophole:
- In 2005, Wal-Mart
planned a store in Calvert County, Maryland.
While a law in the county restricted the size of a retail store to
75,000 square feet, Wal-Mart considered a plan
that would dodge this restriction by building two separate smaller
stores. Though Wal-Mart later withdrew this controversial plan, the
plan highlighted a legal loophole.
- ^ a
"To Outfox the Chicken Tax,
Ford Strips Its Own Vans". The Wall Street Journal, Matthew
Dolan, September 22, 2009. http://online.wsj.com/article/SB125357990638429655.html.
Wal-Mart Drops Plan for
Side-by-Side Calvert Stores