Insights

Trade enforcement is no longer limited to customs entry reviews, export license questions, or isolated sanctions screening. Recent actions coming out of the White House and key regulatory agencies including, U.S. Customs and Border Protection (“CBP”), the Department of Homeland Security (“DHS”), Homeland Security Investigations (“HSI”), the Department of Commerce’s Bureau of Industry and Security (“BIS”), the Department of the Treasury’s Office of Foreign Assets Control (“OFAC”), and the U.S. Department of Justice (“DOJ”) demonstrate that customs, export controls, economic sanctions, and related trade fraud risks are increasingly being treated as national security, economic security, and whole-of-government enforcement priorities.

Familiar customs issues such as misclassification, undervaluation, unsupported country-of-origin claims, transshipment, forced labor exposure, and incomplete importer information, remain central enforcement concerns. But those issues increasingly overlap with export-control and sanctions risks where shipments involve sensitive technology, restricted parties, diversion concerns, sanctioned jurisdictions, or inconsistent payment and routing patterns.

Customs Reform as Part of a Broader National Security Enforcement Agenda

Executive Order 14411 (the “EO”), “Strengthening Customs Enforcement,” expressly ties customs enforcement to national security, foreign policy, and the U.S. economy. Although the EO focuses on import-related risks such as undervaluation, incomplete importer information, forced labor, misclassification, and transshipment, its policy rationale mirrors enforcement trends in export controls and sanctions: the government is looking beyond individual transactions to the parties, ownership, supply chains, end users, and routes that may reveal broader evasion or national security risk.

For my previous article covering this EO in more detail, please visit New Executive Order Directs CBP to Strengthen Importer Oversight, Bonding, and Customs Enforcement.

DOJ’s Expanded Role in Trade-Related Enforcement

The DOJ’s Trade Fraud Task Force, operated jointly with DHS, is one example of how agencies are working together to prioritize trade enforcement. The DOJ has described the initiative as a coordinated effort to pursue importers and other parties that engage in tariff evasion tactics, smuggling, and related customs violations to defraud the United States. At the same time, the DOJ’s National Security Division has emphasized that enforcing export-control and sanctions laws is a top priority because unlawful exports of sensitive commodities, technologies, and services, and transactions with sanctioned countries or designated parties, can harm U.S. national security.

Taken together, these developments point to a broader enforcement model. Customs cases may begin with alleged evasion of Section 301, 232, and other tariffs, antidumping or countervailing duties, forced labor restrictions, or product-safety requirements. Export and sanctions cases may begin with diversion red flags, restricted-party exposure, end-use concerns, or suspicious financial flows. In practice, the same facts including who is involved, where goods are going, how they are described, how they are paid for, and whether the transaction matches the paperwork, can matter across all of these regimes.

For our previous articles discussing the DOJ’s role in the enforcement of trade and national security laws, visit HERE. You can also tune into the Torres Talks Trade podcast Season 3, Episode 5 – DOJ Then & Now: Trade, National Security and What’s changed.

Data-Driven Enforcement Is Becoming Part of the Trade Compliance Story

DOJ’s launch of the National Fraud Detection Center (“NFDC”) reinforces the government’s broader move toward analytics-driven enforcement. The NFDC is not a customs, export-control, or sanctions program specifically, but DOJ’s description of a prosecutor-led, multi-agency team using shared analytical capabilities is highly relevant to trade compliance. Customs, export controls, and sanctions enforcement all depend on the government’s ability to connect patterns across parties, transactions, shipments, end users, intermediaries, and financial flows.

Core Risk Areas: Customs, Export Controls, and Sanctions

Customs-related risks are familiar: origin, value, classification, AD/CVD exposure, forced labor, and transshipment. But companies should now view these issues alongside export-control and sanctions risks. For example, the same shipment may raise import valuation or origin questions, export diversion concerns, and sanctions-screening issues if parties, end users, routing, or payment flows are inconsistent with the stated commercial transaction and transaction documentation.

Forced labor is a useful example of the broader trend. CBP guidance encourages importers to trace inputs, evaluate supplier risk, and maintain supply-chain documentation before goods are detained or enforcement escalates. That same discipline – knowing the parties, the product, the origin, the route, and the end use – is also central to export-control and sanctions compliance.

The False Claims Act Remains Central to Customs Fraud Enforcement

As our firm has previously discussed, the False Claims Act (“FCA”) remains an important customs enforcement tool where a party knowingly avoids or decreases an obligation to pay money to the U.S. government. In the customs context, that often involves alleged misclassification under the U.S. Harmonized Tariff Schedule (“HTS”), undervaluation, false origin claims, or avoidance of Section 301 tariffs, AD/CVD duties, or other lawful duties.

Recent DOJ resolutions confirm that customs issues can create exposure beyond CBP penalties, particularly where the government alleges knowledge, deliberate ignorance, reckless disregard, or coordinated supply-chain conduct. The same lesson applies in export and sanctions matters, where DOJ’s National Security Division has emphasized voluntary self-disclosure, cooperation, and remediation as important, and potentially mitigative, factors in enforcement outcomes.

Practical Takeaways for Trade and National Security Compliance

Companies should treat trade compliance as part of a broader national security, fraud, and enterprise risk program. Not every error is fraud, and not every red flag means a violation has or will occur. But repeated or uncorrected issues, especially after supplier red flags, prior audits, internal warnings, screening hits, end-use concerns, or government inquiries, can change the enforcement posture quickly. Companies engaged in international trade transactions should take proactive steps to ensure compliance with U.S. trade laws:

• Review importer-of-record structures, bonding, domestic presence, broker relationships, exporter responsibilities, and sanctions-screening protocols as connected risk areas—not separate silos.

• Reassess processes and procedures related to country-of-origin determinations, valuation, import and export classification, tariff application, AD/CVD exposure, licensing, end-use, end-user, and restricted-party screening.

• Evaluate whether internal controls recognize repeated patterns across vendors, products, origin claims, import programs, restricted-party screening, routing, and payment flows and identify potential transaction red flags.

• Strengthen supplier, customer, and end-user due diligence, particularly for forced labor, transshipment, diversion, and sanctions risk.

• Maintain documentation showing the basis for reasonable care, export control/sanctions screening, and escalation decisions.

• Consider whether a prior disclosure, voluntary self-disclosure, or other proactive government engagement is appropriate when material issues are identified. For more information on voluntary self-disclosures, please download our Voluntary Self-Disclosure Handbook.

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The current enforcement environment reflects a convergence of customs, export controls, sanctions, national security, and fraud enforcement. CBP remains the frontline agency for import compliance, BIS remains central to export-control enforcement, OFAC administers and enforces economic sanctions, and DOJ, DHS, HSI, and other partners are increasingly coordinating when facts suggest evasion, diversion, restricted-party exposure, sanctions risk, or broader supply-chain misconduct. For companies with robust compliance programs already in place, these enforcement trends can help level the playing field. But companies with weak internal controls, poor visibility, and limited engagement by upper management in compliance processes now have an increased need for proactive compliance review and development.