HR1284-119

What This Bill Does

The Fighting Trade Cheats Act strengthens enforcement against fraudulent and grossly negligent customs violations. It creates a presumption that purchasers know of violations when they continue buying from multiple affiliated violators after CBP or a court has found fraud or gross negligence. It raises civil penalties, including trebling domestic value measures and increasing gross-negligence formulas, and adds import bans: five years for fraudulent violators and affiliates, and two years for grossly negligent violators and affiliates after final judgment. It creates a private civil action for injured domestic manufacturers, producers, wholesalers, unions, worker groups, and trade associations, allowing compensatory damages plus a penalty equal to three times damages, equitable relief including injunctions against further importation, costs, and attorney fees. The United States may intervene as of right, and CBP must exclude violators and affiliates from importer-of-record participation.

Who Benefits and How

U.S. manufacturers harmed by customs fraud benefit from a private lawsuit with treble penalties and injunctive relief. Certified labor unions benefit because they can sue when fraudulent imports injure represented industries. U.S. Customs and Border Protection officers benefit from stronger penalties, knowledge presumptions, and importer-of-record exclusions. Trade associations representing domestic producers benefit from private enforcement rights against customs fraud.

Who Bears the Burden and How

Importing companies found fraudulent face higher penalties, five-year import bans, private damages, injunctions, and importer-of-record exclusion. Customs brokers serving grossly negligent importers face disruption when clients receive two-year import bans and possible private suits. Affiliated corporate entities can be swept into import bans and importer-of-record exclusion when they are tied to violators. Federal courts must hear new private customs-fraud actions and allow U.S. intervention. Customs compliance attorneys must advise clients on the new affiliated-person and private-enforcement risks.

Key Provisions

• Increases civil penalties for fraudulent and grossly negligent customs violations.
• Authorizes injured domestic interested parties to sue for compensatory damages, treble penalties, equitable relief, costs, and attorney fees.
• Prohibits fraudulent violators from importing for five years and grossly negligent violators for two years.
• Requires importer-of-record exclusion and revocation for violators and affiliated persons.