Feds Aim to Expand Trade Fraud Enforcement Efforts

The Department of Justice recently launched a “revitalized” interagency Trade Fraud Task Force that will “aggressively pursue enforcement actions,” potentially including criminal charges, “against any parties who seek to evade tariffs and other duties, as well as smugglers who seek to import prohibited goods into the American economy.”

The DOJ states that a “critical part” of President Trump’s America First Trade Policy is ensuring compliance with trade laws, including the payment of all applicable tariffs and duties. A DOJ press release mentions antidumping and countervailing duties and Section 301 tariffs in particular, but it can be assumed the department will focus on prosecuting evasion of other tariffs as well, including those imposed under the International Emergency Economic Powers Act and Section 232 of the Trade Expansion Act of 1962 and those that may be imposed in the future under separate authorities.

The press release asserts that “fraudsters seeking to destabilize and profit off of American markets increasingly are attempting to import below-market, industry-destabilizing goods without paying lawful tariffs and duties or by smuggling prohibited items that violate intellectual property rights of American companies or are otherwise illegal.”

The task force – described by one senior administration official as “revitalized and expanded” – will respond “by pursuing those who violate customs laws through duty and penalty collection actions under the Tariff Act of 1930, actions under the False Claims Act, and, wherever appropriate, parallel criminal prosecutions, penalties, and seizures under Title 18’s trade fraud and conspiracy provisions.” The task force will “leverage expertise from both the Civil and Criminal divisions” of the DOJ, include collaboration with U.S. Customs and Border Protection and Homeland Security Investigations, and welcome “referrals and cooperation from the domestic industries that are most harmed by unfair trade practices and trade fraud.”

Deputy Assistant Attorney General Brenna Jenny of the DOJ’s Civil Division pointed out that the department has already been active on trade fraud enforcement in recent months. “Since March of this year, the Commercial Litigation Branch has reached civil settlements to resolve allegations of improperly evaded customs duties across a wide range of products, including multi-layered wood flooring, plastic resin, extruded aluminum products, and quartz surface products,” she said (click here for one recent example). “We look forward to enhanced coordination and information sharing with our law enforcement colleagues.”