DOJ’s New Stance on Tariff Evasion: Why “Isolated Errors” Are Now Being Treated as Fraud

1. INTRODUCTION

U.S. tariff enforcement has entered a materially more aggressive phase. Recent public enforcement actions and policy statements from the U.S. Department of Justice indicate that conduct historically described as isolated mistakes is increasingly being evaluated under fraud statutes. This shift matters now because tariff exposure remains elevated across multiple sectors, including steel, aluminum, consumer goods, electronics, and agricultural products subject to additional duties.

For importers, customs brokers, and supply chain partners, this enforcement posture materially increases compliance risk. Classification errors, undervaluation, or country of origin misstatements that lack strong internal controls can now escalate beyond civil penalties into criminal investigations. The compliance standard is no longer limited to intent alone but extends to whether reasonable compliance systems existed and were actively enforced.

2. REGULATORY OR POLICY CONTEXT

Tariff evasion enforcement is grounded in long standing statutory authority, including the Tariff Act of 1930, the False Statements Act, and federal fraud statutes. Civil enforcement authority remains with U.S. Customs and Border Protection, particularly under the Enforce and Protect Act, which authorizes CBP to investigate allegations of evasion of antidumping and countervailing duties.

What has changed is the enforcement coordination and prosecutorial posture. The Department of Homeland Security, CBP, and the Office of the U.S. Trade Representative increasingly refer matters to the Department of Justice when patterns of errors suggest systemic control failures. DOJ has publicly stated that repeated inaccuracies, even if individually small, may demonstrate reckless disregard for compliance obligations rather than simple negligence.

3. WHAT CBP OR REGULATORS EXPECT

CBP and DOJ expectations are increasingly audit focused and control driven. Regulators are assessing not only what error occurred, but why it occurred and whether it could have been prevented.

Key expectations include:
• Documented tariff classification rationale supported by HTS analysis.
• Consistent valuation methodology aligned with transaction value rules.
• Verifiable country of origin determinations, including substantial transformation analysis where applicable.
• Internal escalation procedures for correcting discovered errors.
• Broker oversight and importer participation in entry review.
• Evidence of training, internal audits, and compliance governance.
The absence of these elements can convert an error narrative into a fraud narrative during an investigation.

4. COMMON COMPLIANCE GAPS

Based on audit outcomes, enforcement actions, and CBP public guidance, the following gaps are frequently identified:

• Repeated use of incorrect tariff classifications without documented review.
• Reliance on supplier provided classifications or origin statements without validation.
• Failure to reconcile post entry corrections across multiple shipments.
• Inadequate communication between import compliance, procurement, and logistics teams.
• Lack of written compliance procedures or outdated internal manuals.
• Over reliance on automated systems without human review of anomalies.

These issues are often cited as indicators of systemic weakness rather than isolated mistakes.

5. HOW S. J. STILE ASSOCIATES HELPS

S. J. Stile Associates approaches tariff compliance as a risk management function, not a transactional task. Our role is to help importers demonstrate reasonable care through defensible processes.

Our support includes:
• Classification and origin reviews supported by written analysis.
• Entry pattern reviews to identify recurring risk indicators.
• Guidance on voluntary disclosures and corrective action strategies.
• Alignment of broker procedures with importer compliance programs.
• Support during CBP inquiries, audits, or focused assessments.

Our objective is to help clients reduce enforcement exposure by strengthening compliance alignment before issues escalate.

6. FREQUENTLY ASKED QUESTIONS

Can a single misclassified entry still be treated as an error?
Yes. However, regulators assess context. Repeated similar errors across shipments can change that assessment.

Does lack of intent protect an importer from DOJ action?
Not necessarily. Reckless disregard or failure to maintain reasonable controls may be sufficient for escalation.

Are antidumping and countervailing duties a higher risk area?
Yes. AD and CVD cases receive heightened scrutiny due to their trade remedy nature.

Can a customs broker be held responsible?
Importers remain legally responsible for entry accuracy. Brokers may be reviewed for compliance practices and supervision.

Should companies voluntarily disclose tariff errors?
Voluntary disclosures may mitigate penalties when handled correctly. Timing and documentation are critical.

7. References

U.S. Department of Justice, Criminal Division, Trade Fraud Initiative
https://www.justice.gov/criminal-fraud/trade-fraud

U.S. Customs and Border Protection, Enforce and Protect Act
https://www.cbp.gov/trade/enforce-and-protect-act

U.S. Customs and Border Protection, Reasonable Care Guidance
https://www.cbp.gov/trade/rulings/informed-compliance-publications

U.S. Department of Homeland Security, Trade Enforcement Overview
https://www.dhs.gov/trade

Office of the U.S. Trade Representative, Trade Remedy Enforcement
https://ustr.gov

8. Final Thoughts

The line between error and fraud in tariff enforcement has narrowed. Importers can no longer rely on the assumption that small or infrequent mistakes will remain civil matters. Demonstrable compliance systems, documented oversight, and proactive correction are now essential to managing enforcement risk.

Preparation, not reaction, is the most effective defense.

The Stile Associates Advantage

• More than 55 years of continuous industry experience
• Family leadership with modern trade vision
• Licensed Customs Brokers and compliance professionals
• CTPAT certified supply chain security
• Full service customs and logistics solutions
• Technology driven visibility and control
• Dedicated, personalized client service
• Nationwide U.S. coverage with global support

Choosing S.J. Stile Associates means partnering with a customs broker that understands the realities of today’s trade environment and is fully invested in protecting your business.

Contact S.J. Stile Associates today to learn how we can strengthen your compliance posture and streamline your supply chain.

Final Call to Action:

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