 More False Claims Act Cases Highlight Importance of Compliance Measures |
Source |
American Shipper |
Post Date |
11/13/2025 |
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The Department of Justice has made clear 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.
Earlier this year the deputy assistant attorney general for the DOJ? Commercial Litigation Branch said that under the Trump administration ?llegal foreign trade practices?will continue to be a focus for FCA enforcement. High on the list of such practices are efforts to evade the ever-broadening list of tariffs that have been and may yet be imposed by the White House. Particular areas of concern include undervaluation, misclassification, and false country of origin statements.
The DOJ? actions since then have borne out that pledge. The department has announced several enforcement actions imposing tens of millions of dollars in penalties to settle ges that companies have violated the FCA by evading tariffs and duties, including antidumping and countervailing duties.
Moreover, the Department of Homeland Security (including U.S. Customs and Border Protection) has many tools at its disposal to aid these enforcement efforts, including formal investigations, the issuance of Customs forms 28 (requests for information) and 29 (notice of action), and risk assessment surveys and full-blown audits. Available evidence indicates that the use of these tools is increasing.
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 risk assessment and/or 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.
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