On Friday, August 29, the Department of Justice (DOJ) launched a cross-agency Trade Fraud Task Force (Task Force), a significant step in the Trump administration's goal of increased enforcement action against those who seek to evade tariffs and other customs duties. The Task Force will draw resources from DOJ's Civil and Criminal Divisions and the Department of Homeland Security to "aggressively pursue enforcement actions" against tariff violators, smugglers, and "importers and other parties who seek to defraud the United States," according to DOJ's announcement. DOJ's enforcement efforts under the Task Force will include actions under the Tariff Act of 1930, the federal False Claims Act (FCA), and parallel criminal prosecutions, penalties, and seizures under Title 18 federal criminal statutes. DOJ also invited whistleblowers to report unfair trade practices and fraud, including by making use of the FCA's qui tam provisions to bring lawsuits against tariff violators on the government's behalf. Acting Assistant Attorney General Matthew Galeotti, the Head of DOJ's Criminal Division, stressed that "[t]he Criminal Division, led by the Fraud Section, is committed to using every available tool to hold bad actors accountable and prevent the theft of money intended to reduce the deficit and fund government programs." DOJ's announcement also highlighted recent civil settlements as examples of work done to combat trade and customs fraud already, including settlements that Miller & Chevalier has reported on here and here. 

The creation of the Task Force, which echoes a proposal for a similar structure in the Protecting American Industry from International Trade Crimes Act passed by the House of Representatives last year, is DOJ's most recent step to further its repeatedly expressed goal of rigorous tariff enforcement. In July, DOJ reportedly created the Market, Government, Consumer Fraud unit, drawing personnel from the Market Integrity and Major Frauds unit in the Fraud Section as well as the Consumer Protection Branch, to focus more on schemes to evade tariffs. 

In announcing the Task Force last week, DOJ emphasized the importance of compliance and controls to reduce enforcement risk, encouraging importers and their agents "to conduct thorough audits of their importing practices," and to remediate all unlawful behavior proactively. The Task Force will substantially increase scrutiny of trade practices, and companies dealing with imported goods are advised to redouble their supply chain due diligence, even if they are not acting as the importer of record themselves. As competitors, employees, and customers act as potential whistleblowers to an aggressive DOJ, ignorance of links in the supply chain can have significant consequences. 

For more information, please contact:

Joshua Drew, jdrew@milchev.com, 202-626-5811

Richard A. Mojica, rmojica@milchev.com, 202-626-1571

Bradley E. Markano, bmarkano@milchev.com, 202-626-6061

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