Bass, Berry & Sims attorney Denise Barnes provided insight for an article in Global Investigations Review outlining how increases in duties and tariffs under the Trump administration may lead to an increase in customs fraud cases as companies and individuals try to find ways to reduce costs. As tariffs are imposed on more countries and more products, Denise notes, “This really opens up the floodgates to a wide range of companies that import goods.”
One way the Department of Justice (DOJ) polices fraud is under the False Claims Act (FCA) – a law banning misstatements to the government. DOJ is using the FCA more in customs cases. “There has already been a shift to utilize the False Claims Act to engage in customs-related fraud enforcement,” said Denise. “I think with this administration’s focus on tariffs, that is only going to continue to increase.”
Whistleblowers can also use the FCA to bring charges against companies that attempt to defraud the government. “When you hear the word ‘whistleblower,’ you generally think of a person, not an entity. But fraud cases are a competitive disadvantage in the market,” which could force companies to make allegations against competitors. “If a company is trying to be compliant with policy change, and they’re instituting it but others aren’t, they’re being harmed,” Denise noted.
The full article, “Tariffs Could ‘Open Up the Floodgates’ for Customs Fraud,” was published by Global Investigations Review on August 8 and is available online (subscription required).