Customs Fraud Makes the Big Leagues: DOJ’s New White-Collar Priorities Confirm Heightened Risk
Last month, the Department of Justice put trade, customs, and tariff fraud squarely in the spotlight. This isn’t just another line item on the compliance checklist, it’s a loud-and-clear signal that import-related enforcement is no longer just an administrative concern. It’s now a front-and-center DOJ priority.
On May 12, DOJ Criminal Division Chief Matthew Galeotti announced 10 high-impact white-collar enforcement priorities. Sitting alongside health care fraud, corporate recidivism, and national-security-linked corruption was something you would not have seen from prior administrations: customs and trade fraud, including tariff evasion.
It’s not a surprising move — at least not to us. Back in March, our International Trade team at Foley predicted this turn in two separate publications:
- Criminal Enforcement of Trade, Import, and Tariff Rules: A Growing Risk for Businesses
- The Rising Risk of Customs False Claims Act Actions in the Trump Administration
We noted then that customs enforcement was moving out of the regulatory shadows and toward the aggressive tactics historically reserved for FCPA, health care, and financial crimes. With this new DOJ announcement, that evolution is now official policy.
What’s Driving the DOJ’s Shift?
This enforcement focus is no accident. It reflects the broader “America First” priorities of the Trump administration, a strategy aimed at reshaping global trade in favor of U.S. interests, as well as a means of collecting additional revenue. From sweeping tariffs to heightened scrutiny of Chinese imports, the administration is using every tool at its disposal — civil, criminal, and regulatory — to protect domestic industry, to close perceived trade loopholes, and to ensure collection of all tariffs. As Galeotti summarized the DOJ’s new approach, “[t]rade and customs fraudsters, including those who commit tariff evasion, seek to circumvent the rules and regulations that protect American consumers and undermine the Administration’s efforts to create jobs and increase investment in the United States. Prosecuting such frauds will ensure that American businesses are competing on a level playing field in global trade and commerce.” For companies that import goods, the message is clear: Compliance with trade laws is no longer just a regulatory obligation, it’s a frontline national priority.
What In-House Counsel Should Do Now: A Practical Framework
In response, manufacturers should elevate trade compliance to the same level of urgency as anti-corruption or sanctions compliance. Drawing from our comprehensive white paper, Managing Import and Tariff Risks During a Trade War, here’s a practical framework for GCs and compliance officers:
Identify Your Risks
- Retrieve and analyze your company’s ACE (Automated Commercial Environment) import data.
- Conduct a customs risk audit, focusing particularly on ensuring that HTS classifications and countries of origin are accurately (and consistently) reported to Customs for all imports.
- Map supply chain and broker relationships.
Plan for Disruption
- Diversify sourcing and build supply chain flexibility.
- Collaborate with finance to model tariff impact scenarios.
- Establish rapid-response strategies for emerging duties or bans.
Manage Contractual Exposure
- Build tariff pass-through mechanisms into commercial agreements.
- Include change-in-law clauses that allow flexibility in sourcing.
- Clearly define responsibility for customs classifications and compliance.
Minimize Legal Exposure
- Review and correct import declarations regularly.
- Confirm compliance with UFLPA and other partner agency rules.
- Implement internal controls around broker instructions and tariff engineering.
Identify Cost-Saving Opportunities
- Explore bonded warehouses, FTZs, and drawback programs.
- Assess opportunities for tariff engineering and preferential treatment under trade agreements like USMCA.
- Consider use of temporary importation bonds (TIBs) where appropriate.
Strengthen Supply Chain Integrity
- Perform due diligence on upstream suppliers.
- Map materials and origin to avoid forced labor violations.
- Implement traceability protocols and audit programs.
This isn’t just a customs compliance issue anymore, it’s a corporate integrity and reputational risk issue. The whistleblower incentives are real, especially under the False Claims Act. The penalties are large. And the prosecutorial appetite is growing.
The Takeaway
We’ve said it before, and we’ll say it again: Customs fraud has moved from the margins to the mainstream of DOJ enforcement.
If your company imports goods, trade compliance should be a priority. DOJ is not waiting for egregious cases; it is actively looking for systemic vulnerabilities, misclassifications, and tariff evasion strategies dressed up as “logistical creativity.”
The time for general counsel to engage is now. Audit. Adjust. Contract. Train. Fix. Because enhanced enforcement is not coming someday — it’s already here.
Additional content on all things Customs and international trade is found on our Tariff & International Trade Resources page. For more insights or a tailored compliance review, reach out to the author or International Trade or International Investigations teams at Foley & Lardner LLP. We’ve been tracking this shift since before it was fashionable.
