On August 29, 2025, the U.S. Department of Justice (“DOJ”) and U.S. Department of Homeland Security (“DHS”) announced the formation of the cross-agency Trade Fraud Task Force (the “Task Force”) to target importers and affiliates who defraud the United States government by evading tariffs, duties, and import restrictions. The Task Force is the latest incarnation of President Trump’s “America First Trade Policy” and furthers the Administration’s efforts to prioritize enforcement focused on tariff evasion.
The announcement was made on the same day that the U.S. Court of Appeals for the Federal Circuit (“Federal Circuit”) ruled that President Trump’s imposition of tariffs exceeded the president’s authority under the 1977 International Emergency Economic Powers Act (“IEEPA”). According to a September 9, 2025 order, the U.S. Supreme Court will fast-track its consideration of the government’s appeal of the Federal Circuit ruling. Oral arguments will be scheduled for the first week of November. These developments highlight the rapidly evolving nature of this area, and that companies, their management teams, and investors should continue to focus carefully on import compliance.
Enhanced cooperation between DOJ and DHS
The Task Force is designed to synchronize efforts among the DOJ’s civil and criminal divisions, U.S. Customs and Border Protection (“CBP”), and Homeland Security Investigations to enhance enforcement against importers and other parties that seek to evade tariffs and other duties, smuggle goods into the United States, and engage in other import-related misconduct. The Task Force appears designed to implement one core element of DOJ’s May 12, 2025 white-collar enforcement plan, titled Focus, Fairness, and Efficiency in the Fight Against White-Collar Crime, which included “[t]rade and customs fraud, including tariff evasion” among its top priorities (second only to combating waste, fraud, and abuse).
The DOJ press release announcing the Task Force notes that the Task Force will bring enforcement actions under a number of statutes, including the Tariff Act of 1930, the False Claims Act, and (where appropriate) parallel criminal prosecutions, penalties, and seizures under Title 18’s trade fraud and conspiracy provisions.1
As noted in our prior Alert, the False Claims Act allows for both the U.S. government and third-party relators to pursue claims against importers that knowingly avoid paying duties to the U.S. government. Historically, False Claims Act cases in the customs space have involved fact patterns in which importers understated the value of imported goods to reduce customs duties; masked or failed to accurately report the origins of imported goods; or miscategorized imports for customs purposes. Because the False Claims Act allows for treble damages, and allows relators to bring claims, this is a powerful, and potentially expansive, tool for both the Task Force and the private bar. In recent months, the Department of Justice has announced multi-million-dollar settlements involving the alleged evasion of customs duties on various products imported from the People’s Republic of China (“PRC”).2 Department of Justice officials have been vocal (at False Claims Act-focused conferences and otherwise) about encouraging whistleblowers and their counsel to file qui tam actions against companies that engage in evasion of tariffs or other customs duties.
The formation of the Task Force may also lead to more criminal trade and customs fraud cases under various criminal statutes, such as those covering wire fraud and smuggling.
Enlisting whistleblowers to root out trade fraud
The Task Force announcement was accompanied by a call for American manufacturers and workers to report unfair trade practices using the Criminal Division’s Corporate Whistleblower Program. Under the Corporate Whistleblower Program, individuals may receive an award if they provide information leading to a criminal or civil forfeiture exceeding $1,000,000 for “trade, tariff, and customs fraud by corporation,” among other areas, providing whistleblowers a means to benefit from trade and customs fraud allegations, even without filing qui tam actions.
The Federal Circuit’s decision
The Federal Circuit determined that Congress did not, through IEEPA, delegate to the President sufficient authority to impose tariffs related to either (i) Mexico, Canada, and China, in connection with the declared national emergency related to opioid trafficking; or (ii) nearly every country, in connection with the declared national emergency around perceived trade imbalances. If this ruling is ultimately upheld, it would reduce—but not eliminate—the number of new tariffs, meaning the Task Force’s work will continue regardless.
However, the government has already appealed the ruling to the Supreme Court (which has fast-tracked the case for consideration), and the tariffs remain in effect, pending ultimate resolution of the case. Accordingly, while importers should carefully monitor developments in this case, the work of the Task Force is unlikely to be deterred. Importers should expect continued, and likely escalating, enforcement.
What does this mean for importers?
- Monitor trade developments: It goes without saying that the regulatory environment surrounding tariffs and trade more generally is changing rapidly. Importers should continue to monitor developments in this area as the geopolitical, regulatory, and litigation environment continues to evolve.
- Enhance compliance programs: DOJ guidance continues to not only encourage robust compliance programs but to mitigate penalties for companies that take compliance seriously. That is true in this context as well, and importers should ensure that their policies and procedures around key areas—such as classification, country of origin, and valuation—are accurate and robust. Now, before enforcement has picked up, would be a good time for companies with robust import businesses to ensure their programs are fulsome and do not contain key gaps.
- Audit trade practices and disclose where appropriate: The Task Force announcement encourages importers to conduct robust audits of their import practices and to voluntarily self-disclose and remediate unlawful behavior. The Task Force intends to partner with CBP to use a data-driven approach to assess anomalies in import practices. To the extent that importers discover concerns, disclosure should be considered thoughtfully. By the same token, increased, data-driven scrutiny of import practices may mean that importers that alter their approaches—e.g., modify supply chains, update Harmonized Tariff Schedule classifications, and seek to use new duty-free provisions—will be more likely to receive scrutiny.
- Investigate potential violations: A robust compliance program means employing mechanisms to encourage robust reporting of allegations of violations, investigating allegations with the assistance of qualified counsel, and, where appropriate, implementing appropriate remedial action and discipline. These procedures can also mitigate the risk that reporters pursue other more costly avenues such as qui tam actions and better prepare companies for responding to government inquiries stemming from external reports.
- Customs Broker Management: Given the important role that customs brokers play in transacting business before CBP for importers, it is vital that companies have robust customs broker policies to mitigate risks and clearly outline the brokers’ obligations beyond standard agreements. Broker errors are at the root of many customs violations.
- Focus on key markets: The Task Force’s priorities are especially relevant for companies sourcing from the Asia-Pacific (“APAC”) region, which dominates global manufacturing, and where transshipment, mislabeling, and supply chain opacity are common risk factors, on top of environmental, social, and governance (“ESG”) concerns.
