On July 14, 2026, the Department of Justice (DOJ) and Department of Homeland Security (DHS) jointly issued A Resource Guide to Trade Fraud Enforcement (the “Resource Guide”) through the newly established Trade Fraud Task Force, which includes DOJ's National Fraud Enforcement Division, DHS Homeland Security Investigations (HSI), and U.S. Customs and Border Protection (CBP).
Although the Resource Guide is not legally binding, it sends a clear enforcement-intent signal: DOJ now views customs and trade violations as serious civil and criminal matters, not merely administrative infractions. The guide outlines the statutory framework governing trade fraud while providing practical insight into how DOJ and DHS investigate and pursue these matters. It also may help prosecutors rebut arguments that targets and defendants were unaware of their legal obligations. For companies and their counsel, the message is clear: the federal government is investing in coordinated, aggressive trade fraud enforcement and expects robust compliance throughout the supply chain.
Two Core Compliance Expectations
The Resource Guide emphasizes two overarching compliance principles.
First, candor is a legal obligation. The customs system relies on truthful disclosures from all participants in the import process. According to the Resource Guide, nearly every trade fraud case “begins with a lie” regarding a product’s value, country of origin, composition, or labor conditions. Accurate and complete disclosures are therefore fundamental to compliance with U.S. trade laws.
Second, companies are expected to maintain meaningful oversight of their supply chains. Importers that fail to modernize their compliance programs assume significant legal and business risk, including reputational harm and potential criminal, civil, and administrative penalties. The government makes clear that companies can no longer credibly defend allegations of noncompliance by claiming they were unaware of misconduct elsewhere in their supply chains.
Trade Fraud Enforcement Reaches Beyond Importers
Although importers bear ultimate responsibility and cannot “contract away” liability, the Resource Guide makes clear that enforcement reaches well beyond the importer of record.
- Customs brokers have independent compliance obligations, including exercising due diligence and reporting known or suspected client violations.
- Downstream participants — including distributors, wholesalers, retailers, transporters — may face prosecution under 18 U.S.C. § 545 if they knowingly receive or sell illegally imported goods.
- Corporate executives may face conspiracy charges even if they did not personally commit the underlying trade fraud. Executives may also incur liability under the Responsible Corporate Officer (Park) Doctrine of the Federal Food, Drug, and Cosmetic Act, which provides for strict-liability misdemeanor offenses.
- Public companies may face books-and-records requests, internal controls, and disclosure issues under the federal securities laws when trade fraud affects their financial reporting.
DOJ’s Trade Fraud Enforcement Toolkit
DOJ and CBP often pursue parallel administrative, civil, and criminal enforcement actions. The table below summarizes several of the principal enforcement tools available to the government.
| Tool | Practical Effect |
| CBP Section 592 (19 U.S.C. § 1592) | Prohibits the entry, introduction, or attempted introduction of merchandise into U.S. commerce through material false statements, omissions, or by aiding others in such violations. Administrative penalties vary depending on whether the conduct involves negligence, gross negligence, or fraud. |
| False Claims Act | Allows recovery of treble damages for "reverse false claims," including unpaid duties. "Knowing" violations include actual knowledge, deliberate ignorance, and reckless disregard. Companies also face potential whistleblower (qui tam) actions under the False Claims Act. |
| 18 U.S.C. § 545 | Prohibits knowingly and willfully smuggling merchandise into the U.S. with intent to defraud. Violations carry a statutory maximum penalty of 20 years’ imprisonment, criminal fines, and require forfeiture of the smuggled goods or their equivalent value. |
| Other criminal customs statutes (18 U.S.C. §§ 541, 542, 548, 550, 551) | Various prohibitions on importing goods into U.S. commerce through false statements, fraudulent practices, false classifications, misrepresentations, concealment of imported merchandise, destruction or concealment of invoices, and related customs fraud offenses. Penalties vary depending on the violation. |
| Money laundering (18 U.S.C. §§ 1956–1957) | Financial transactions exceeding $10,000 involving proceeds of trade fraud, including transferring funds or goods to a parent company, may give rise to separate money laundering charges. |
| RICO | Can be used to prosecute organized trade fraud schemes and those directing them, including senior executives. Violations carry penalties of up to 20 years’ imprisonment and potential treble civil damages. |
| Health/safety statutes (FDCA, CPSA, Lacey Act) | Prohibits import of adulterated or misbranded food, drug, device, tobacco, or cosmetic products, and other provisions (FDCA); hazardous consumer goods (CPSA); and illegally sourced fish, wildlife, and plants taken, possessed, transported, or sold in violation of any underlying U.S. law (Lacey Act). Independent criminal exposure (FDCA up to 3 years; CPSA and Lacey Act up to 5) that also serves as a predicate for customs-related charges. |
Forced Labor Presents a Distinct Compliance Risk
Forced labor enforcement warrants particular attention because the burden of proof effectively shifts to the importer. Under the Uyghur Forced Labor Prevention Act (“UFLPA”), goods linked to China’s Xinjiang region are presumed to have been produced with forced labor unless the importer rebuts the presumption with clear and convincing evidence.
CBP may detain goods through a Withhold Release Order based on reasonable suspicion or seize and forfeit them through a Finding based on probable cause. The government’s high-priority enforcement sectors have grown from four to twelve and now include aluminum, PVC, seafood, steel, copper, lithium, caustic soda, and jujubes, in addition to apparel, cotton, polysilicon, and tomatoes.
Criminal statutes may also reach anyone who “knowingly benefit[s]” from forced labor, including retailers and distributors, and may require mandatory restitution and forfeiture.
Recent Enforcement Actions Highlight DOJ Priorities
DOJ and DHS identify several recent enforcement actions that illustrate the government’s priorities. These matters reveal recurring enforcement themes and the substantial financial exposure companies face when trade compliance failures occur.
- False country-of-origin claims and transshipment: Routing goods through third countries to conceal their true origin (including a $54.4 million resolution involving tungsten carbide transshipment).
- HTS misclassification: A $365 million resolution involving sham rear seats installed to classify cargo vans as passenger vehicles.
- Undervaluation and dual invoicing: Presenting artificially low-value invoices to CBP while separately paying the true purchase price.
- Misrepresentation of goods and AD/CVD evasion: A $549.5 million resolution involving aluminum disguised and misrepresented as finished "pallets."
- Shell company, customs broker, drawback, and free trade agreement fraud: An $86 million scheme involving Indonesian jewelry falsely claimed as Jordanian-origin merchandise.
- Port shopping and FDA import-alert evasion: Re-entering rejected goods through different ports or mislabeling regulated food products.
- Forged certifications and unreported defects: The $1.6 billion diesel emissions resolution and multimillion-dollar penalties for failing to report fire-prone consumer products.
- Lacey Act timber/wildlife and adulterated pharmaceuticals: Cases involving illegally sourced timber, caviar imported without CITES permits and smuggled veterinary drugs.
Effective Trade Compliance Is More Important Than Ever
The Resource Guide reinforces that trade compliance is no longer simply an operational or customs function—it is an enterprise-wide risk management issue. Companies should proactively assess their supply chains, verify supplier representations, investigate potential red flags, and maintain compliance programs that emphasize transparency and accountability at every level of the organization, including senior management and the board.
With a single inaccurate customs declaration potentially triggering administrative penalties, False Claims Act liability, criminal prosecution, forfeiture, and whistleblower actions, organizations should evaluate whether their existing compliance programs are sufficient to address today’s heightened enforcement environment. A well-documented and consistently enforced compliance program remains the strongest defense against government scrutiny.
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