The U.S. Department of Justice is expanding its use of the False Claims Act (FCA) to address customs fraud and tariff evasion. In 2025, the DOJ, working with U.S. Customs and Border Protection (CBP) and the Department of Homeland Security (DHS), intensified civil enforcement against companies accused of misclassifying imports, misrepresenting the country of origin, or improperly avoiding duties.
For companies involved in international trade, this shift signals increased scrutiny and greater civil and potential criminal exposure. Businesses concerned about FCA risk should speak with a False Claims Act lawyer before enforcement issues escalate.
What happened in the Ceratizit USA LLC settlement?
In December 2025, Ceratizit USA LLC agreed to pay $54.4 million to resolve allegations that it evaded customs duties on tungsten carbide products imported from China.
According to the allegations:
- From May 2015 through March 2024, the company misclassified products under the Harmonized Tariff Schedule (HTS) to reduce duties.
- From August 2020 through March 2024, it allegedly misrepresented the country of origin, including routing products through Taiwan and declaring Taiwan as the origin to avoid Section 301 tariffs.
- From May 2019 through March 2024, certain products were allegedly not properly marked with their country of origin.
The qui tam relator filed suit in 2022 and is expected to receive approximately $9.75 million from the settlement.
The conduct at issue reached back nearly a decade. That time frame is significant. It demonstrates that historical import practices remain subject to enforcement review.
Why is the False Claims Act being used in customs cases?
The False Claims Act allows private whistleblowers to file lawsuits on behalf of the United States when they believe a company knowingly submitted false claims or improperly avoided government obligations.
In the customs context, this can include:
- Misclassification under the HTS
- False country-of-origin designations
- Improper marking of imported goods
- Knowingly underpaying duties
FCA liability includes treble damages and statutory penalties. Whistleblowers may receive between 15% and 30% of any recovery, creating a strong financial incentive to report suspected violations.
For the DOJ, the FCA provides a powerful civil enforcement tool that supplements traditional customs penalties.
What is the Trade Fraud Task Force?
The federal government has created a coordinated enforcement initiative known as the Trade Fraud Task Force. This effort brings together the DOJ, DHS, CBP, and Homeland Security Investigations to pursue complex customs and tariff evasion matters.
The initiative reflects several policy priorities:
- Increased focus on tariff enforcement
- Protection of domestic industries
- Expanded use of civil remedies to deter trade fraud
Although many cases are resolved civilly, the DOJ has stated that criminal prosecution may be pursued when the facts warrant it.
For importers and exporters, the risk now includes coordinated civil and criminal scrutiny.
What should importers and companies understand about this enforcement shift?
First, enforcement may examine historical conduct. In the Ceratizit matter, the government reviewed practices dating back to 2015.
Second, whistleblowers are central to FCA enforcement. Employees and third parties may initiate investigations by filing qui tam complaints.
Third, internal remediation alone may not prevent exposure if violations occurred in prior years.
Companies involved in cross-border trade should consider:
- Reviewing HTS classifications
- Auditing country-of-origin determinations
- Evaluating trans-shipment practices
- Strengthening documentation and internal reporting procedures
The DOJ has emphasized that both civil penalties and potential criminal charges remain available tools.
How can companies respond to FCA customs risk?
Early legal guidance matters. Companies that identify potential exposure should evaluate their position carefully before responding to government inquiries or whistleblower allegations.
A structured response may involve:
- Independent compliance review
- Risk assessment of import classifications and tariff positions
- Preservation of internal documentation
- Careful evaluation of disclosure strategy
Consult Griffin Durham Tanner & Clarkson LLC about FCA exposure
Griffin Durham Tanner & Clarkson LLC advises companies and individuals nationwide facing federal enforcement scrutiny. When FCA allegations intersect with customs or trade practices, the legal strategy has to account for civil liability and potential criminal implications.
If your company is under investigation or concerned about exposure related to customs duties or tariff classifications, call us at (404) 891-9150 or contact us online for a confidential consultation.
