Key Notes:
- On August 29, 2025, the DOJ announced a new cross-agency Trade Fraud Task Force aimed at aggressively pursuing importers and other parties who evade tariffs or attempt to smuggle prohibited goods.
- The task force enhances interagency coordination and signals the Trump administration’s readiness to treat trade fraud as a national security concern, escalating the compliance burden for multinational companies.
- Companies that fail to comply with customs obligations risk severe financial penalties, reputational harm, and a greater risk of criminal liability, including multi-million-dollar fines and lengthy prison terms.
On August 29, 2025, the U.S. Department of Justice (DOJ) announced a new Trade Fraud Task Force, an interagency initiative aimed at “robust enforcement” against importers and other parties who defraud the United States by evading tariffs or importing prohibited goods. The task force will coordinate closely with DHS agencies, including U.S. Customs and Border Protection (CBP) and Homeland Security Investigations (HSI), to strengthen enforcement against trade fraud that threatens U.S. economic and national security.
This initiative is part of the broader America First Trade Policy announced by President Trump on Inauguration Day and will pursue enforcement through a combination of tools, including:
- Duty and penalty collection actions under the Tariff Act of 1930
- Civil actions under the False Claims Act
- Criminal prosecutions and asset seizures under Title 18 trade fraud and conspiracy provisions
The effort also aligns with Executive Order 14243, which strengthens the federal government’s ability to detect and eliminate waste, fraud, and abuse.
Whistleblower Referrals and Voluntary Disclosures
Because domestic industries are often the first to detect irregularities in import activity, the Trade Fraud Task Force is actively encouraging businesses and whistleblowers to report credible allegations of fraud.
In parallel, the DOJ is urging importers to:
- Conduct internal audits of their importing practices;
- Self-disclose and remediate violations; and
- Align with DOJ guidance under Justice Manual §§ 4-4.112 and 9-74.120.
By incentivizing whistleblower referrals and voluntary disclosures, the task force is expected to substantially expand the enforcement pipeline, increasing scrutiny for companies with cross-border supply chains. Even unintentional violations, such as misclassified goods or incorrect country-of-origin declarations, can trigger civil penalties, criminal exposure, and significant reputational damage. Businesses should act now to fortify their compliance programs.
Recommended Best Practices
Review Trade Risk Exposure
- Imports from or routed through high-risk jurisdictions
- High-risk third-party suppliers
- Degree of oversight of import activity
- Culture of compliance
Companies importing large volumes of regulated goods should evaluate:
- Whistleblower response protocols
- False Claims Act exposure
Assess Customs Compliance Programs
- Review internal controls related to:
- Tariff classification
- Country-of-origin
- Customs valuation
- Ensure your compliance program can detect and respond to:
- Misdeclared shipments
- Underpaid or avoided duties
Monitor for Creeping Risk – Periodically reassess long-term suppliers and import channels for changes in ownership, geography, or product lines that could increase customs compliance risk.
Contractual Risk Management – Update supplier and logistics agreements to include Customs and trade compliance clauses.
Employee Training and Internal Reporting –
- Train relevant personnel — including procurement, logistics, and legal — to identify red flags in tariff classification, country-of-origin labeling, and valuation.
- Maintain secure, anonymous reporting channels and establish clear escalation procedures.
Conduct Targeted Audits – Regularly review import practices, especially for high-risk suppliers or jurisdictions.
Ensure Executive and Board Oversight – Regularly brief senior leadership and compliance committees on trade fraud risks and enforcement trends to maintain effective oversight. Designate crisis management personnel to respond to government inquiries or whistleblower actions.
Conclusion
The creation of the Trade Fraud Task Force marks a strategic escalation in how the federal government approaches customs enforcement. What was once episodic and reactive is now shifting to proactive, sustained scrutiny with civil and criminal consequences for noncompliance.
Companies that have traditionally relied on transactional customs practices should transition to comprehensive, programmatic strategies. These programs must be capable of producing historical data, tracing supplier inputs, validating admissibility correctly, and demonstrating “reasonable care” under 19 U.S.C. § 1484. The cost of inaction is now too high. Thompson Hine LLP’s Trade Crimes Defense Group is actively advising clients on these developments and stands ready to assist with risk assessments, compliance reviews, and enforcement response planning.
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