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An Overview of Tariff and Customs Fraud

When importers intentionally fail to pay the required tariffs on goods that they bring into the country, this is a form of fraud. Not only does this type of activity deprive the government of valuable revenue, but it undermines our country’s trade policy and gives cheating companies an unfair advantage over their law-abiding competitors. Unfortunately, due to the high number of containers that enter the country each year, tariff and customs fraud are difficult for the government to detect. It is for this reason that the government relies on whistleblowers to assist with the identification of fraudulent activity. Under the False Claims Act, a whistleblower who provides information of this kind to the government may be entitled to significant financial compensation. Below is an overview of tariff and customs fraud. 

Common Types of Tariff and Customs Fraud 

Importers have developed a variety of ways to cheat the nation’s tariff and customs laws. Some of the most common types of tariff and customs fraud include:

  • Misstating a shipment’s country of origin – A good’s tariff rate is usually based on its country of origin. In order to receive a lower rate, companies sometimes misstate a goods’ country of origin.  
  • Misclassifying goods – Goods that come into the country are classified according to a standard system. Unscrupulous companies sometimes attempt to circumvent this system by misstating the characteristics or nature of goods. 
  • Undervaluing goods – Another common type of tariff and customs fraud occurs when a company intentionally misstates the value of goods in order to receive a lower tariff.
  • Split shipments – By illegally splitting products into multiple shipments, companies can underpay or even avoid tariffs altogether.

Reporting Tariff and Customs Fraud 

If you have knowledge that a company has violated the nation’s customs and tariff laws, you may be entitled to financial compensation under the False Claims Act. If your report is successful, you may be eligible for an award of up to 30% of funds recovered by the government. In addition, the False Claims Act provides strong protections against employer retaliation, so you shouldn’t fear punishment from your employer by reporting this information. In fact, if your employer retaliates you in any way, you may be entitled to additional compensation for the information you provide. 

Contact a Tariff and Customs Fraud Whistleblower Attorney 

Fraud involving tariffs and customs cheats the government, hurts law-abiding companies, and costs consumers money. If you have information that an entity or individual has committed tariff or customs fraud, you may be entitled to significant financial compensation. However, in order to ensure that you report this information in an efficient and effective manner, you need an experienced tariff and customs fraud whistleblower attorney on your side. At Jeffrey Newman Law, we make it our mission to help expose fraud and protect the rights and interests of whistleblowers. When you come to us with your information, we’ll ensure that you cover all your bases when reporting tariff and customs fraud under the False Claims Act, and we’ll diligently pursue a financial award on your behalf. Please contact us today for a consultation.