A senior Department of Justice official said recently that the Trump administration will aggressively enforce the False Claims Act and that trade will be a priority for those efforts.
Under the FCA importers are civilly liable for (1) knowingly making, using, or causing to be made or used a false record or statement material to an obligation to pay or transmit money (e.g., import duties) or property to the U.S. government, or (2) knowingly concealing or knowingly and improperly avoiding or decreasing an obligation to pay or transmit money or property to the U.S. government. Damages of up to three times the amount of money improperly withheld, as well as other penalties, may be imposed. The qui tam provisions of the FCA allow a private party to file an action on behalf of the U.S. and receive a portion of any recovery.
According to reports, Michael Granston, deputy assistant attorney general for the DOJ’s Commercial Litigation Branch, said at a Feb. 20 conference that under the Trump administration “illegal foreign trade practices” will continue to be a focus for FCA enforcement. High on the list of such practices are efforts to evade the tariffs that have been and may yet be imposed by the White House, from the 25 percent tariffs recently levied on goods of Canada and Mexico to the reciprocal tariffs the president has said will take effect April 2 on virtually all countries. Particular areas of concern include undervaluation, misclassification, and false country of origin statements.
Importers should therefore act to ensure they have strong trade and customs compliance measures in place so as to withstand increased federal scrutiny and avoid the financial and reputational costs that violations could incur. Conducting an internal compliance review can not only help identify potential vulnerabilities and prompt improved processes and procedures but can also reveal opportunities to lower duties and other costs.
For more information on how ST&R can assist your company with its compliance efforts, please contact messages@strtrade.com or your ST&R professional.
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