Import Enforcement Efforts Likely Here to Stay Under Biden, Lawyer Says
Ramped up import enforcement efforts are likely here to stay under President Joe Biden, Sidley Austin's Ted Murphy said in an email. The multi-agency effort to crack down on import violations is expected to continue unencumbered and Murphy views these efforts as not administration-specific, particularly dealing with questions of forced labor, Section 301 tariff evasion and USMCA compliance.
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This past year has seen a flurry of increased import enforcement action, particularly from CBP. For instance, the agency detained cargo worth $55.5 million due to forced labor-related withhold release orders during fiscal year 2020, up from $1.2 million in FY19 (see 2012020032). CBP also conducted more audits and issued more penalties and notices of liquidated damages than ever before, completing 466 audits and collecting $44.6 million in additional duties from those audits in FY20. These numbers are 75 and $3.5 million more in audits and duties collected, respectively, than were completed in FY19.
Murphy said he expects these increased audit and duty-collection rates will continue based on what his firm is seeing with its clients. Beyond CBP's administrative actions, increased trade enforcement can be expected through whistleblower cases and Department of Justice prosecutions of customs-related violations, he said.
False Claims Act lawsuits with large settlements and payouts to the individual whistleblower are also likely to continue, Murphy said. In September, a Germany-based multinational engineering company paid more than $22.2 million to resolve allegations it violated the FCA by misrepresenting the valuation of its imported merchandise. The whistleblower received $3.7 million of that settlement (see 2009280025). More recently, a whistleblower received 20% of a $160,933 settlement over a claim that a roofing materials importer avoided its Chinese country of origin labels (see 2101210004). All of these actions, plus greater trade enforcement action by other government agencies, such as the Federal Trade Commission (see 2012280016), will continue, Murphy said.