Key Takeaways
- The U.S. Department of Justice (DOJ) and U.S. Department of Homeland Security (DHS) have issued A Resource Guide to Trade Fraud Enforcement.
- The joint DOJ-DHS Trade Fraud Task Force, the new Guide and DOJ’s public emphasis on criminal prosecution and civil FCA enforcement show that customs and tariff issues are no longer being treated solely as technical import-compliance matters.
- Importers should reassess whether their controls are sufficient not only for customs compliance but also for FCA risk, and companies should view customs documentation as an evidentiary record not merely a filing requirement.
In July 2026, the U.S. Department of Justice and Department of Homeland Security issued A Resource Guide to Trade Fraud Enforcement, a new enforcement guide prepared by their joint Trade Fraud Task Force in coordination with DOJ’s National Fraud Enforcement Division, Homeland Security Investigations (HSI) and U.S. Customs and Border Protection (CBP). The Guide describes the principal civil, criminal and administrative authorities the federal government may use to investigate and prosecute customs and trade fraud, including the False Claims Act, customs penalty statutes, money laundering, wire fraud, securities fraud and RICO.
The Guide provides a public roadmap for how federal agencies are likely to evaluate trade fraud, customs violations and supply chain misconduct. For companies that import goods, rely on third-party brokers, purchase from overseas suppliers, or resell imported products, the practical message is clear: customs compliance failures may now be evaluated through a broader enforcement lens that includes civil False Claims Act liability, criminal prosecution, forfeiture and whistleblower-driven reporting.
Although the Guide surveys a broad range of enforcement tools, its examples and enforcement discussion underscore a central point for companies engaged in international trade: the False Claims Act has become one of the government’s most significant vehicles for pursuing customs fraud, tariff evasion and duty underpayment cases. The Trade Fraud Task Force also announced that it has surpassed $1 billion in civil and criminal recoveries, penalties, forfeitures and publicly charged losses since its August 2025 launch, emphasizing DOJ’s intent to treat customs fraud as a serious civil and criminal enforcement priority rather than a routine administrative compliance issue.
The False Claims Act as a Trade Fraud Enforcement Tool
The FCA imposes liability on any person who knowingly submits, or causes the submission of, a false or fraudulent claim to the United States, or knowingly makes or uses a false record or statement material to such a claim. 31 U.S.C. § 3729(a)(1)(A), (B). In the customs context, the most relevant provision is often the FCA’s “reverse false claim” provision, which reaches conduct that knowingly conceals, avoids or decreases an obligation to pay money to the government. 31 U.S.C. § 3729(a)(1)(G). The FCA authorizes treble damages and civil penalties, subject to statutory inflation adjustments. 31 U.S.C. § 3729(a)(1).
That framework is particularly important for importers because customs duties, tariffs and fees are obligations owed to the United States. Alleged schemes involving undervaluation, misclassification, false country-of-origin declarations, improper use of preferential tariff treatment, transshipment, or evasion of antidumping and countervailing duties may therefore be framed not only as customs violations, but also as FCA violations where the government contends the company knowingly avoided paying duties owed. The Trade Fraud Task Force announcement expressly identifies tariff and duty evasion, transshipment, mislabeling and false declarations as priority areas.
The FCA’s knowledge standard is broad. “Knowing” and “knowingly” include actual knowledge, deliberate ignorance and reckless disregard of the truth or falsity of information. 31 U.S.C. § 3729(b)(1). The statute does not require proof of specific intent to defraud. 31 U.S.C. § 3729(b)(1)(B). That standard is significant for companies that rely on suppliers, brokers, manufacturers or logistics providers for classification, valuation, origin or supply chain information. A company that ignores red flags, fails to test supplier representations, or lacks a process for escalating inconsistent import documentation may face FCA exposure even if it did not set out to deceive CBP.
Customs Statutes Remain Central, but FCA Exposure Raises the Stakes
The Guide should be read against the backdrop of existing customs obligations. Importers of record must use “reasonable care” when entering merchandise and providing the information needed by CBP to determine admissibility, classification, value, origin, rate of duty, statistical reporting and other legal requirements. 19 U.S.C. § 1484(a)(1). Section 1592 of Title 19 separately prohibits any person, by fraud, gross negligence or negligence, from entering or attempting to enter merchandise by means of a material false statement, act, document, electronic transmission, omission, or from aiding or abetting such conduct. 19 U.S.C. § 1592(a)(1).
The practical consequence is that the same conduct may implicate multiple enforcement regimes. A misstatement regarding origin, value or classification may support a CBP penalty proceeding under 19 U.S.C. § 1592. If the government alleges the misstatement also caused the United States to lose duties, tariffs or fees, DOJ may pursue the matter as an FCA reverse false claim under 31 U.S.C. § 3729(a)(1)(G). That dual-track risk changes the enforcement calculus because FCA matters carry treble damages, statutory penalties and qui tam exposure.
The Guide also highlights trade enforcement risks beyond duty underpayment, including forced labor concerns. Section 307 of the Tariff Act prohibits the importation of goods made with forced labor, convict labor or indentured labor under penal sanctions. 19 U.S.C. § 1307. CBP identifies 19 U.S.C. § 1307, the Uyghur Forced Labor Prevention Act (“UFLPA”) and related authorities as central forced-labor enforcement tools. The UFLPA authorizes CBP to presume that goods mined, produced or manufactured, wholly or in part in the Xinjiang Province of China or by designated entities on the UFLPA list, are made with forced labor and may be denied entry into the United States. Under the UFLPA, CBP applies a rebuttable presumption that goods mined, produced or manufactured wholly or in part in Xinjiang, or by entities identified on the UFLPA Entity List, are made with forced labor and are therefore barred from entry unless the importer satisfies the statutory exception.
The enforcement risk is not limited to the importer of record. DOJ has emphasized that trade fraud enforcement may extend across the supply chain, including brokers, distributors, wholesalers, retailers, commercial end-users and others who knowingly benefit from goods imported through false statements or other unlawful means. That broader framing is important for companies that purchase imported goods domestically but participate in sourcing, pricing, supplier management, origin substantiation or post-entry decision-making.
Whistleblowers and Private Reporting Will Continue to Drive Cases
Trade fraud enforcement risk is not limited to government audits or CBP inquiries. The FCA allows private relators to file qui tam actions in the name of the United States and, if successful, share in the government’s recovery. 31 U.S.C. § 3730(b), (d). Qui tam complaints are filed under seal and served on the government with a written disclosure of substantially all material evidence and information in the relator’s possession. 31 U.S.C. § 3730(b)(2).
That mechanism matters in the trade context because potential relators may include employees, former employees, customs brokers, logistics providers, suppliers, competitors or other market participants with access to invoices, origin certifications, emails, sourcing records or pricing documents. The Guide’s discussion of common fraud typologies, including undervaluation, false origin claims, transshipment and misuse of preferential tariff programs, may make it easier for individuals to recognize potential trade fraud theories and report them to the government.
DOJ’s Corporate Whistleblower Awards Pilot Program adds another incentive structure. The program allows eligible whistleblowers who provide original, truthful information about certain corporate misconduct resulting in successful forfeiture to receive an award, and DOJ guidance states that companies that voluntarily self-report within 120 days of receiving an internal whistleblower report may be eligible for a presumption of declination under the Criminal Division’s Corporate Enforcement and Voluntary Self-Disclosure Policy if other conditions are met. DOJ’s Criminal Division website also indicates that DOJ expanded the program’s priority areas to include trade, tariff and customs fraud.
The Importance of Customs Documentation
The Guide reinforces a basic but critical point: trade fraud cases are usually built from records companies already create and retain. Importers, owners, consignees, importers of record, entry filers, agents and others involved in import activity must make, keep and produce records that pertain to import activity or information required under the customs laws and that are normally kept in the ordinary course of business. 19 U.S.C. § 1508(a). Some importers outsource their recordkeeping to their customs brokers, but that practice can be risky. CBP regulations generally require covered customs records to be retained and available for inspection for five years from the date of entry, or five years from the date of the activity that required creation of the record, subject to specified exceptions. 19 C.F.R. § 163.4(a).
Those records may include commercial invoices, purchase orders, payment records, bills of materials, classification analyses, valuation support, country-of-origin certifications, supplier communications, broker instructions, sourcing records and internal emails. From an FCA perspective, these materials can be used to prove both falsity and knowledge, including whether the company had notice of conflicting information, failed to investigate irregularities, or continued to rely on supplier representations after red flags emerged. The same documents may also be central to defending a matter by showing reasonable care, good faith analysis, appropriate escalation and reliance on qualified trade professionals.
Practical Takeaways for Companies
1. Trade fraud enforcement is now a sustained DOJ priority
The Trade Fraud Task Force, the new Guide and DOJ’s public emphasis on criminal prosecution and civil FCA enforcement show that customs and tariff issues are no longer being treated solely as technical import-compliance matters. DOJ has stated that the Task Force was created to pursue entities seeking to evade tariffs and duties, smuggle prohibited goods, or otherwise defraud the United States through trade-related misconduct. Companies should expect continued coordination among DOJ, DHS, HSI and CBP, with FCA enforcement playing a central role.
2. Supply chain diligence should be tested against FCA standards
Importers should reassess whether their controls are sufficient not only for customs compliance, but also for FCA risk. Reasonable-care obligations under 19 U.S.C. § 1484 require importers to provide accurate information needed by CBP to assess duties and determine compliance with applicable legal requirements. The FCA’s deliberate-ignorance and reckless-disregard standards mean that undocumented reliance on suppliers, brokers or intermediaries may be insufficient where red flags exist. 31 U.S.C. § 3729(b)(1).
3. Documentation should show the analysis, not just the conclusion
Companies should view customs documentation as an evidentiary record, not merely a filing requirement. Classification memoranda, valuation analyses, origin determinations, supplier certifications and broker instructions should demonstrate the basis for the company’s decisions and the diligence undertaken to verify key facts. Because customs records are generally subject to five-year retention requirements, these materials may become the core record in a later CBP audit, DOJ investigation, FCA demand, or qui tam action. 19 U.S.C. § 1508; 19 C.F.R. § 163.4.
4. Internal reporting systems are an important first line of defense
The combination of FCA qui tam incentives and DOJ whistleblower award programs increases the likelihood that trade-related concerns will be reported externally if they are not taken seriously internally. Companies should ensure that compliance, legal, procurement, logistics and finance personnel know how to escalate concerns involving origin, valuation, classification, forced labor, tariff treatment or inconsistent supplier documentation. Internal investigations should be prompt, appropriately privileged and well documented.
5. Disclosure decisions should be assessed early
The FCA provides for reduced damages in certain circumstances where a person furnishes the United States with all known information about the violation within 30 days after first obtaining the information, fully cooperates and meets other statutory conditions. 31 U.S.C. § 3729(a)(2). DOJ’s whistleblower program also creates timing considerations for companies that receive internal reports, including a potential 120-day self-reporting window under DOJ guidance. Once a relator, broker, competitor or employee reports the issue first, a company may lose strategic advantages associated with voluntary self-disclosure. Companies that identify potential duty underpayments, false entry information, origin issues, or other trade irregularities should promptly evaluate remediation, disclosure and privilege considerations with counsel. Different regimes may create different timing, eligibility and strategic considerations. A customs issue may implicate CBP prior disclosure, FCA cooperation credit, DOJ voluntary self-disclosure expectations, whistleblower timing, privilege concerns and remediation obligations. Companies should avoid treating disclosure as a binary “report or do not report” decision and instead assess promptly which agencies, statutes and potential exposure pathways are implicated.
