News
Compliance to Prosecution: The DOJ’s Evolving Approach to Tariffs and Customs Law
For decades, tariffs functioned as a largely technical component of U.S. trade policy. Once little more than a line item on an import form, tariffs have now become a focal point of aggressive federal enforcement. On August 29, 2025, the Department of Justice announced the creation of the Trade Fraud Task Force, a joint initiative with the Department of Homeland Security (DHS) aimed at increasing enforcement against tariff and duty evasion, as well as related smuggling offenses.[1] In line with the principles outlined by President Trump’s America First Trade Policy[2], the task force’s objective is to pursue criminal enforcement against those engaged in unfair trade practices in an effort to support American manufacturing.[3]
In announcing the task force, Acting Assistant Attorney General Matthew R. Galeotti of the DOJ’s Criminal Division emphasized that the Department “is committed to using every available tool to hold bad actors accountable and prevent the theft of money intended to reduce the deficit and fund government programs.” Complementing this criminal enforcement, Deputy Assistant Attorney General Brenna Jenny of the DOJ’s Civil Division highlighted the Department’s recent settlements resolving allegations of improperly evaded duties.[4] Taken together, these statements underscore the Justice Department’s coordinated approach to customs violations, utilizing both civil and criminal enforcement to address tariff and duty evasion. While the majority of tariff enforcement actions are still pursued civilly, recent DOJ statements and select criminal prosecutions indicate an increasing willingness to bring criminal charges where conduct is intentional, concealed, or involves transshipment and falsified documentation.
In practice, the government relies on a range of criminal statutes to pursue allegations of tariff evasion. One of the most utilized statutes is 18 U.S.C. § 545, which prohibits the smuggling of goods into the United States.[1] Prosecutors frequently invoke § 545 where goods are misdeclared, undervalued, or routed through third countries to conceal their true country of origin or evade applicable duties. Conversely, prosecutors also utilize 18 U.S.C. § 554, which prohibits smuggling of goods out of the United States to other countries.[2]
Other relevant statutes include 18 U.S.C. § 1001, which prohibits making false statements to government entities.[3] This statute is commonly charged when importers submit false information to U.S. Customs and Border Protection or other regulatory agencies, and its broad scope allows prosecutors to easily stack it with other criminal offenses.
Similar to other white-collar prosecutions, the government often relies on 18 U.S.C. § 1343 (Wire Fraud) in tariff evasion cases.[4] By charging wire fraud, prosecutors frame tariff evasion as a financial fraud scheme rather than a technical customs violation, expanding potential exposure to enhanced penalties, forfeiture, and related money-laundering allegations. Tariff evasion cases also frequently include conspiracy charges under 18 U.S.C. § 371, which permits the government to pursue individuals based on an alleged agreement to violate federal law, even where the underlying conduct was carried out by third parties or intermediaries.[5]
In addition to criminal prosecution, tariff evasion investigations often proceed alongside civil enforcement actions, typically pursued under 19 U.S.C. § 1592 and the False Claims Act (31 U.S.C. §§ 3729–3733)[6]. These civil proceedings allow the government to seek additional monetary penalties, forfeiture, and administrative sanctions while conducting criminal investigations. For defendants, the presence of parallel civil and criminal proceedings significantly increases exposure risk.
While tariff evasion cases frequently rely on traditional fraud and smuggling statutes, export-control violations have been increasingly approached through a different statutory framework. The Export Control Reform Act of 2018 (ECRA) serves as the statutory basis for the Export Administration Regulations (EAR), which controls the export, reexport, and transfer of sensitive technologies.[7] Although ECRA itself is not a criminal statute, 50 U.S.C. § 4819 authorizes both civil and criminal penalties for willful violations of the EAR, including unauthorized exports, false statements, and conspiracy to violate export controls.[8]
Under 50 U.S.C. § 4819, criminal violations of ECRA can face a fine of up to $1 million or imprisonment for up to 20 years, or both. In addition to criminal exposure, defendants face civil fines and the denial or revocation of export privileges, actions which can significantly impact business operations.[1]
In practice, these penalties reflect a broader enforcement that has increasingly translated into investigations and prosecutions. Recent enforcement actions demonstrate the escalation with which federal authorities are pursuing customs and tariff violations. On November 17, 2025, the U.S. Attorney’s Office for the District of New Jersey filed a criminal complaint against Indonesian jewelry company UBS Gold, its co-owner, and two employees. The complaint alleges that the defendants engaged in a multi-year scheme to evade more than $86 million in customs duties and tariffs on approximately $1.2 billion in jewelry imports into the United States.[2]
According to the complaint, UBS Gold produced the jewelry in Indonesia and shipped it to Jordan, a country that previously maintained a free trade agreement with the United States. The defendants allegedly then falsely represented that the jewelry had been manufactured in Jordan, consequently avoiding the duties applicable to Indonesian-origin goods.
The scheme allegedly evolved following the implementation of new tariffs earlier this year. Prosecutors state that the defendants and their co-conspirators began exporting scrap gold from the United States to Jordan under the false pretense that the material consisted of jewelry requiring assembly or finishing. Once in Jordan, the scrap gold was allegedly exchanged for UBS jewelry manufactured in Indonesia, which was then shipped to the United States and falsely declared as Jordanian-origin goods.[3] As for penalties, the defendants are charged with conspiracy to commit wire fraud, an offense carrying a maximum penalty of 20 years’ imprisonment. Additionally, the defendants face significant fines, up to $250,000 per individual defendant or $500,000 for the corporate entity (or alternatively twice the gain or loss resulting from the offense, whichever is greater.)[4] In sum, the UBS Gold case represents the types of cases that can draw criminal scrutiny, particularly where tariff evasion is paired with deliberate deception, foreign re-routing, and significant financial figures.
UBS Gold is not an outlier. On December 18, 2025, the Department of Justice announced a civil settlement with the American subsidiary of Chinese auto parts manufacturer Wanxiang Group, resolving allegations of long-running customs violations.[5] After nearly a decade of litigation, the United States recovered more than $53 million in civil penalties from the company.[6]
According to the government, Wanxiang engaged in a multi-year scheme involving repeated violations of 19 U.S.C. § 1592, including the intentional misclassification of imported auto parts and the circumvention of applicable duties over a five-year period.[7] While the matter was resolved civilly rather than through criminal prosecution, the size of the recovery and the length of the alleged misconduct underscore the government’s willingness to pursue significant penalties in cases involving intentional customs violations. Additionally, cases like Wanxiang illustrate the civil enforcement foundation from which criminal investigations may arise when similar conduct involves broader concealment, foreign routing, or coordinated fraud.
Taken together, these enforcement actions reflect a clear shift in how federal authorities approach customs and tariff violations. Conduct that once resulted primarily in civil penalties now increasingly carries the risk of criminal exposure, particularly with allegations involving intentional misclassification, false documentation, or transshipment through third countries. For companies and individuals, this enforcement creates substantial exposure to not only monetary penalties, but also to criminal charges, forfeiture, and reputational harm. As tariff enforcement continues to evolve, early engagement with experienced counsel can be critical in navigating routine customs inquiries that may escalate into high-stakes enforcement actions.
[2] America First Trade Policy – The White House
[4] Id.
[6] https://www.law.cornell.edu/uscode/text/18/554
[10] Cracking down on Customs Fraud using the False Claims Act – AAEI
[11] https://www.congress.gov/bill/115th-congress/house-bill/5040
[13] Id.
[15] Id.
[16] Id.
[18] Id.
[19] Id.