Trade Fraud Enforcement: What Professionals Need to Know

Trade fraud is a multidimensional threat that touches every part of the supply chain, and it has serious consequences for U.S. revenue, labor, national security, and public safety. Enforcement of anti-fraud laws has expanded since 2025, with the launch of the Trade Fraud Task Force, a cross-agency partnership of the U.S. Department of Justice (DOJ) and the Department of Homeland Security (DHS). Following a June 2026 executive order to strengthen customs enforcement, the Trade Fraud Task Force issued a detailed resource guide to trade fraud enforcement.

The resource guide offers guidance on the customs entry process, selected anti-fraud provisions, forced-labor regulations, and lists examples of common types of trade fraud. Core enforcement priorities of the Trade Fraud Task Force are:

• protecting revenue by preventing duty and tariff evasion
• protecting consumers from unsafe, counterfeit, adulterated, or non-compliant products
• preventing forced-labor goods from entering U.S. supply chains

Preventing and minimizing trade fraud is a shared responsibility that involves all participants in the supply chain, including importers, customs brokers, freight forwarders, non-vessel operating common carriers (NVOCCs), customs compliance professionals, and logistics professionals. All of these professionals should become familiar with the trade fraud resource guide.

Key Takeaways From The Trade Fraud Resource Guide

Customs entry process

When importers misrepresent goods to evade duties and fees, compliant businesses and consumers suffer. In response, federal authorities are stepping up investigations and enforcement of suspected trade fraud.

Importers of record (IORs) and customs brokers are key conduits of trade, and each is responsible for ensuring imported goods comply with laws and regulations. The Trade Fraud Task Force is closely watching activities including:

• Classification under the Harmonized Tariff Schedule (HTS)
• Reporting the country of origin
• Declared value of goods
• Application of any tariffs or duties, including antidumping/countervailing duties (AD/CVD)
• Shell company involvement, potentially to obscure the true origin or nature of imported goods
• Duty evasion schemes

In addition to documenting all goods entering the United States and reporting safety-related defects, IORs and customs brokers must retain importation records for at least five years.

Tips for customs compliance

How importers and customs brokers can avoid problems on customs entry:

• Verify suppliers
• Validate country of origin
• Review HTS classifications
• Check for AD/CVD evasion
• Conduct audits
• Screen for forced-labor risks
• Maintain records

Select anti-fraud provisions

The DOJ has enforcement authority over importers, customs brokers, and down-chain actors involved in importing goods, and it can use various laws to combat trade fraud. These laws include:

• False Claims Act. This civil law is used to recover losses incurred by the U.S. Treasury. The law provides protections for whistleblowers to file qui tam lawsuits against individuals and entities that attempt to defraud the U.S. government.
• Titles 18, 19 and 31 of U.S. Code. These statutes apply to trade fraud and have broad application to actors participating in illegal trade activities. Money-laundering crimes are addressed by Title 18, including the entry or attempted entry of goods through fraudulent invoices or declarations or false statements.
• Racketeer Influenced and Corrupt Organizations (RICO) Act. RICO violations can be civil or criminal, and litigation allows for recovery of treble damages.

In addition to the above are health and safety laws designed to prohibit hazardous or adulterated consumer goods.

Forced labor

The International Labour Organization estimates forced labor, which encompasses slave labor, convict labor, indentured labor, and child labor, generates $236 billion in illegal profits annually. Section 307 of the Tariff Act of 1930 prohibits the importation of goods via forced labor. If Customs and Border Protection (CBP) suspects goods are produced using forced labor, which can be deduced from supply-chain tracing and government-collected data, CBP can seize those goods, and the DOJ may pursue civil and/or criminal charges.

The Forced Labor Enforcement Task Force (FLETF) and the DHS Center for Countering Human Trafficking (CCHT) are the main departments in charge of . Laws such as the Uyghur Forced Labor Prevention Act (UFLPA) prevent goods produced with forced labor from entering the U.S. market. A list of high-priority sectors for enforcement can trigger additional screening for items that are more likely to be processed with forced labor. These include:

• Apparel
• Cotton
• Silica-based products (including polysilicon)
• Tomatoes
• Aluminum
• Polyvinyl chloride (PVC)
• Seafood
• Steel
• Copper
• Lithium
• Caustic soda
• Jujubes (red dates)

Trade fraud encompasses acts seeking to avoid the payment of tariffs or duties or bypass screening protocols that ensure the items aren’t a public hazard. Goods suspected of being manufactured or processed using forced labor may violate multiple laws, making it imperative for importers and customs brokers to conduct due diligence on imported items and suppliers.

Common types of trade fraud

To effectively combat trade fraud, importers, customs brokers, and other logistics industry professionals must be able to spot it. Below are examples of commonly perpetrated trade fraud.

Type of trade fraud	How it works
Manifest fraud	Intentional misstatement, omission or manipulation of cargo data in the manifest submitted to CBP. May include false commodity descriptions, concealment of prohibited or restricted items, and splitting shipments to avoid scrutiny.
False country of origin declarations and markings	Intentional misrepresentation on customs documents of the country where a good is manufactured. Fraud is committed by direct false declaration of the true country of origin and/or transshipping through a third country and reporting to CBP that the third country is the country of origin.
False HTS classification	Misclassification of goods by using HTS codes that have lower duties than the correct codes.
Undervaluation	Intentional statement of a lower price for goods on a commercial invoice than the actual price or the true market value. Sometimes fraud perpetrators and manufacturers conspire to issue two sets of invoices for the same transaction, using a falsified one for customs.
Antidumping/countervailing duty evasion	These duties are high tariffs, sometimes surpassing 600% of a good’s declared value. They are intended to discourage dumping goods at below-market value or offset unfair subsidies by foreign governments. AD/CVD evasion is often attempted by claiming a false country of origin or misclassifying a good to appear outside the scope of a given AD/CVD order.
Shell company fraud	Using a temporary entity that lacks assets as an IOR and dissolving the entity soon after the goods enter the country. This fraud hides the beneficiary of the goods under layers of corporate filings or third-party customs brokers, and it leaves the CBP with no individual or entity from which to recover unpaid duties.
Customs broker fraud	Facilitation of fraud schemes by a customs broker. A common example is the deliberate misclassification of goods through fraudulent invoices indicating a lower purchase price than the actual amount paid, to evade taxes.
Drawback fraud	The government refunds most of the duties on imported goods that are later exported, known as a drawback program. This scheme files drawback claims for goods that are never exported, using forged bills of lading or reusing the same documentation to seek refunds on a single shipment.
Free Trade Agreement fraud	In this fraud, an importer seeks preferential duties under a trade agreement for goods that do not qualify. Perpetrators may use fraudulent certificates of origin or ship raw materials to a trade agreement partner country but substitute non-qualifying finished goods for the shipment to the United States.
Port shopping	Importers commit this fraud by attempting to re-enter goods that were previously rejected at a different port, deliberately trying to bypass regulatory determinations that the goods are dangerous or restricted.
“Prior Notice” and imports alerts evasion	This scheme involves submitting false descriptions of regulated commodities to circumvent safety holds and import alerts issued by the Food and Drug Administration.
Forged product safety or environmental certifications	Importers forge or alter certifications to demonstrate compliance with regulatory requirements. A variation involves fraudulent certificates of conformity to bypass emissions or toxic substance regulations.
Failure to report dangerous or defective products or adverse effects	This fraud bypasses mandatory reporting on adverse events and known product defects in imported goods.
False declaration of regulated commodities	This scheme seeks to bypass agriculture inspections by falsely declaring high-risk food products as items that are less likely to be inspected. Sometimes perpetrators use high-volume container traffic or low-value shipments to prevent agriculture holds.
Illegal timber and wildlife laundering	Importation of protected timber or endangered wildlife products by falsely declaring them as nonprotected on customs forms. The Lacey Act and Endangered Species Act are among the laws designed to prevent such items from entering the United States.
Importing adulterated drugs and devices	Bypassing mandatory federal oversight of FDA-regulated goods. Perpetrators often use bulk shipments through private couriers to achieve this.

As regulators increase their focus on trade fraud, logistics professionals, customs brokers, and importers face growing pressure to strengthen compliance practices and maintain accurate trade documentation. In this environment, having the right risk management partners and financial security tools is more important than ever. Roanoke’s customs bond and trade-focused insurance solutions help support supply chain operations, facilitate customs compliance requirements, and provide access to specialized expertise developed through decades of serving the global trade and logistics industry. For organizations navigating an increasingly complex enforcement landscape, Roanoke delivers the resources, insights, and responsive support needed to help keep goods moving with confidence.

For more information and industry updates, follow Roanoke Insurance Group, a trusted partner in helping businesses navigate the complex trade environment, and take advantage of the information and insights in the Roanoke Resource Center.

 

Disclaimer: This information is provided as a public service and for discussion of the subject in general. It is not to be construed as legal advice. Readers are urged to seek professional guidance from appropriate parties on all matters mentioned herein.