Heightened DOJ Trade Enforcement Creates Risks—and Opportunities—for Importers

In a sign that the Trump administration may be turning up the heat on trade enforcement, the Department of Justice (DOJ) recently announced a major action against importers violating trade law. Importers are encouraged to take care to ensure their own compliance with law and to consider taking action against competitors who are not doing the same.

DOJ’s Developing Plan for Trade Fraud Prosecution

In August of last year, DOJ created its Market, Government and Consumer (MGC) Fraud unit within the Criminal Division, which unit was to undertake prosecution of cases involving misclassification and undervaluation, transshipping and relabeling of goods, in the effort to evade import duties. As we noted in our client alert in August, “What’s Influencing DOJ’s New Trade Fraud Focus,” the new unit was purportedly going to address trade evasion, particularly in light of the administration’s increased use of trade duties under the International Emergency Economic Powers Act. We expected the new unit to focus on False Claims Act (FCA) cases against importers, consistent with congressional requests to “strengthen enforcement against the PRC’s unlawful trade practices, including by criminally prosecuting trade criminals, stepping up civil enforcement ….”

Not long after this action, DOJ announced the creation of a cross-agency task force (Trade Taskforce) to combat trade fraud. Targeting “those who violate customs laws,” the Trade Taskforce was identified as using collections actions, FCA actions and criminal prosecutions, and was to be comprised of personnel from DOJ’s civil and criminal divisions and the Department of Homeland Security. In February of 2026, the Trade Taskforce identified a lead prosecutor and associations with United States attorney’s offices to pursue its work.

In April, after investigations surfaced significant levels of fraud in Medicaid payments, DOJ announced the creation of a new National Fraud Enforcement Division (Fraud Division) to target those who sought to defraud the federal government. It appears that many of the personnel in the MGC unit were reassigned to the Fraud Division. As we noted then in our client alert, “U.S. Department of Justice Reorganizes to Pursue Fraud,” it appeared that the new division was being set up to go after the trade fraud issues that the government had previously identified were a priority, but on which there had been little public action.

A Major Development Shows That Trade Prosecution Is Occurring

On May 12, DOJ announced a $549.5 million settlement with aluminum importers on a civil FCA claim. See https://www.justice.gov/opa/pr/perfectus-aluminum-inc-and-related-companies-agree-pay-5495m-settle-false-claims-act. The nature of the claim was that the importers were evading antidumping and countervailing duties owed on aluminum extrusions, which they had imported from the People’s Republic of China. Specifically, the allegation is that the importers made false statements on Customs Form 7501 Entry Summaries to avoid antidumping and countervailing duties, by claiming imported aluminum was finished products (pallets), when in fact the goods were aluminum bars that had been welded to appear to be pallets, but were intended to be broken apart and sold as aluminum for other products. DOJ attributes the prosecution to its Trade Taskforce, not to its Fraud Division.

The Road Ahead Is Likely to Be Filled with Trade Prosecutions

Although DOJ’s announcement of the Fraud Division could have signaled a pull away from the Trade Taskforce, it now appears that DOJ intends to pursue claims through both units. The aluminum settlement suggests that more high-profile FCA trade claims will be coming. At the same time, DOJ’s press release on that settlement also references the Fraud Division as an ongoing participant in this effort. Thus, we believe that importers should expect both civil and criminal prosecutions on trade fraud to increase in the months ahead.

For importers who suspect trade evasion by their competitors, this can be an opportunity. DOJ is actively looking for enforcement matters to pursue and fact-based leads could be well-received. Additionally, there is the possibility for private suits under the FCA. Such suits serve the purposes of putting trade evasion on trial and give an award of partial recovery to the private entity who brought the claim.

DOJ is poised to use a combination of existing and newer legal tools to prosecute trade fraud, particularly schemes that emanate from China and have tentacles throughout Southeast Asia and other global supply chains. In addition to using more traditional, country-specific tools to prosecute parties who circumvent U.S. import duties, expect DOJ to leverage newer tools to block illicit imports, such as the Uyghur Forced Labor Prevention Act (UFLPA) and perhaps the Trafficking in Victims Protection Act (sometimes referred to the TVPA or TVPRA). As shown with the recent settlement referred to above, the use of the FCA can add additional pressure on parties engaging in international trade fraud that leaves an evidentiary trail based on false statements to the U.S. government (such as false declarations to U.S. Customs and Border Protection (CBP)). The UFLPA’s requirement that importers effectively demonstrate to CBP that products from China do not contain illicit forced Uyghur labor in particular may require extensive declarations to the CBP about supply chain tracing, which can often trap the unscrupulous fraudster into making inconsistent statements.

In addition to legal investigations and prosecutions, Congress continues to play a role in highlighting such activity as yet another flavor of “waste, fraud and abuse.” Congressional investigations focusing on trade fraud are expected to intensify, regardless of who controls the Congress after the midterm elections. The administration’s interests are also aligned with Congress and DOJ, because effective prosecutions can help protect law-abiding companies that operate in the United States, yield hefty monetary penalties and fines, and create high-profile cases with potentially high political value.

THIS DOCUMENT IS INTENDED TO PROVIDE YOU WITH GENERAL INFORMATION REGARDING TRUMP ADMINISTRATION ENFORCEMENT OF TRADE POLICIES. THE CONTENTS OF THIS DOCUMENT ARE NOT INTENDED TO PROVIDE SPECIFIC LEGAL ADVICE. IF YOU HAVE ANY QUESTIONS ABOUT THE CONTENTS OF THIS DOCUMENT OR IF YOU NEED LEGAL ADVICE AS TO AN ISSUE, PLEASE CONTACT THE ATTORNEYS LISTED OR YOUR REGULAR BROWNSTEIN HYATT FARBER SCHRECK, LLP ATTORNEY. THIS COMMUNICATION MAY BE CONSIDERED ADVERTISING IN SOME JURISDICTIONS.