U.S. Customs and Border Patrol(CBP, the agency which is now met with the monumental task of policing the import tariffs. The list of new reciprocal tariffs on 86 countries is effective effective at 12:01 a.m. on April 9. Also, there is a separate baseline 10% tariff on nearly all countries on April 5. The CBP must collect billions in duties on the new rates and ensure companies don’t try to skirt the rules. The expectation is that many companies will try to evade the tariffs in various ways.
A recent new report stated that agency was requesting a slight increase of about $22 million for the ACE trade system for this fiscal year “to keep pace with ongoing enhancements related to EOs and Presidential Proclamations” which would be part of a bigger request of roughly $183 million in new funds.
Presently,the department’s 2025 budget request allocates $19.7 billion which is intended to support the four mission areas laid out in its strategy for 2024 to 2028: Securing the border.Oct 17, 2024.
At the same time, to enforce the new tariffs, the US Department of Justice (DOJ), in conjunction with the Department of Homeland Security (DHS), is expected to use traditional criminal statutes – such as conspiracy, smuggling and wire fraud – to investigate and charge companies and individuals for alleged trade violations. Companies should be aware that participants in their supply chains may seek to mitigate the impact of tariffs by engaging in evasive practices.
The US customs tariff system – known as the Harmonized Tariff Schedule (HTS) – sets forth the tariffs on imported products based on categories for classification. One common tactic of tariff evasion involves misclassifying the imported goods by moving them from a higher tariff category to a lower or exempted tariff category.
Jeff Newman JD MBA, represents whistleblowers in major tariff fraud casesconcerning imported Chinese goods. His firm also represents whistleblowers in Medicare and Medicaid fraud cases under the False Claims Act (Qui Tam), and SEC, IRS and FINCEN whistleblower programs. He can be reached at Jeff@JeffNewmanLaw.com or at 617-823-3217
