Bass, Berry & Sims attorney Denise Barnes recently co-authored a two-part article series for the American Association of Exporters & Importers (AAEI) examining the U.S. government’s expanding use of the False Claims Act (FCA) to pursue customs fraud, highlighting a growing enforcement priority for companies involved in international trade. As discussed in the first installment, federal agencies are increasingly leveraging the FCA – alongside whistleblower-driven litigation – to target alleged tariff evasion and duty underpayments, placing heightened scrutiny on importers and their compliance practices.
The second article in the series further explores how the FCA operates in the customs context and the significant risks companies face in defending these claims. The authors explain that the FCA’s “reverse false claims” provision is a central theory of liability in customs cases, applying where a company is alleged to have knowingly avoided paying duties owed to the government. The article also emphasizes the statute’s powerful enforcement mechanisms—including treble damages, per-claim penalties, and incentivized whistleblower actions, which can expose companies to substantial financial and operational burdens even before liability is established.
Drawing on these developments, the second installment provides practical guidance for companies seeking to mitigate risk, underscoring the importance of proactive compliance, internal controls, and careful review of import practices. Together, the two-part series highlights an evolving enforcement landscape in which FCA exposure extends well beyond traditional sectors, reinforcing the need for companies engaged in global trade to reassess their compliance strategies in light of increased regulatory scrutiny.
Both articles are available on the AAEI website: