breaking

Federal enforcement actions target widespread tariff evasion across multiple industries

U.S. authorities are intensifying efforts to combat customs fraud through multiple enforcement mechanisms: False Claims Act litigation, whistleblower complaints and Customs and Border Protection investigations. Recent actions have focused on auto parts, aluminum, steel and rail components. First Brands Group, a bankrupt auto-parts supplier, faces allegations it systematically reduced transfer prices reported to CBP by approximately 32 percent to lower tariff obligations, despite raising customer prices amid rising global manufacturing costs. The Justice Department is pursuing repayment through bankruptcy proceedings. In a separate enforcement action, Perfectus Aluminum Inc. and affiliated warehousing companies agreed to a $549.5 million settlement over allegations they evaded duties on 2.2 million aluminum extrusions from China by misclassifying them as duty-exempt finished pallets. Federal prosecutors determined the pallets lacked actual customers between 2011 and 2014. Canada-based Farjess Inc. also settled customs violations for $19 million.