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Raises civil penalties and creates multi-year import bans for people who commit fraudulent or grossly negligent violations of U.S. customs law, and expands who can be treated as affiliated with a violator. Gives U.S. businesses, labor unions, and trade associations a new private right to sue parties who cause or assist customs fraud, with treble damages, attorney’s fees, and equitable relief. Also bars violators and their affiliates from participating in the importer-of-record program and requires revocation of importer numbers when violations are found.
Redesignate existing paragraph (2) of subsection (a) as paragraph (3) of subsection (a) of Section 592 of the Tariff Act of 1930 (19 U.S.C. 1592).
Insert a new paragraph (2) (Presumption) in subsection (a) providing that if a person purchases merchandise from two or more affiliated persons after those affiliated persons have been determined by U.S. Customs and Border Protection or a court to have violated subsection (a) by fraud or gross negligence, there is a presumption the purchaser had knowledge of the violation for purchases from the second or later affiliated person. The term “affiliated person” is defined by reference to section 771(33).
In subsection (c)(1), revise the text addressing fraudulent violations and add an “Additional penalties” clause that prohibits a person who commits a fraudulent violation from importing merchandise into the United States for five years beginning on the date of entry of a final judgment with respect to that violation. The clause also bars any affiliated person of that violator from importing during the same five-year period. The term “affiliated person” is defined by reference to section 771(33).
In subsection (c)(2), change the civil-penalty calculation language for a grossly negligent violation to use the “lesser of” formulation and specify components including (I) three times the domestic value and (II) 10 times (text inserts these specific phrases into the penalty formula). Also replace language in clause (ii) so that where the statute previously said “40 percent of” it now says “three times.”
Add an “Additional penalties” clause for grossly negligent violations that prohibits a person who commits a grossly negligent violation from importing merchandise into the United States for two years beginning on the date of entry of a final judgment with respect to that violation; an affiliated person of that violator is also prohibited from importing during that two-year period. The term “affiliated person” is defined by reference to section 771(33).
Who is affected and how
Importers and exporters: Face higher civil penalties and the risk of multi-year import bans if found to have engaged in fraud or gross negligence. Firms that rely on overseas suppliers or reseller networks will need stronger compliance controls and documentation.
Customs brokers, freight forwarders, marketplaces, and third-party sellers: Will see greater legal and compliance exposure because the bill broadens affiliation rules and presumes buyer knowledge in some cases. These intermediaries may be named in suits or deemed affiliated with violators.
U.S. businesses, labor unions, and trade associations harmed by customs fraud: Gain a new private legal tool to sue for lost profits, treble damages, and attorney’s fees. That can help compensate victims but will also generate litigation costs and require resources to bring and defend cases.
Corporate groups and affiliated persons (including parent companies, nominees, or repeat-seller networks): Are at greater risk of being treated as responsible for another entity’s misconduct, which can trigger import bans and civil liability across the group.
Federal agencies (Customs and Border Protection and DOJ): Will face increased administrative work to assess affiliation, revoke importer numbers, and coordinate with private litigation and government intervention requests. Enforcement priorities and resource allocation may shift toward investigating networks and supporting civil suits.
Courts and litigants: Anticipate new case volume and complex fact-finding over affiliation, buyer knowledge, and calculation of damages; treble-damage claims and requests for equitable relief will increase litigation stakes.
Potential benefits and risks
Benefits: Strengthens tools to deter and punish customs fraud; empowers harmed domestic actors to recover losses; can raise compliance standards and reduce illicit import practices.
Risks and tradeoffs: Creates a risk of aggressive affiliation findings and buyer presumptions that may harm legitimate small importers or resellers; may spur more litigation (including potentially high-cost treble-damage suits) and increase compliance costs. The President’s emergency nullification power raises separation-of-powers and due-process concerns for observers.
Overall effect
The measure tightens enforcement against customs fraud, expands civil remedies for harmed domestic parties, and increases compliance and legal exposure for import-related businesses and affiliated networks. Agencies and companies will likely need new procedures, documentation standards, and legal resources to manage the higher enforcement and litigation risk.
Inserts a new section 592B into the Tariff Act of 1930 (title 19) establishing a private civil cause of action for interested parties injured by fraudulent or grossly negligent violations of section 592(a), prescribing remedies (treble damages, equitable relief, costs and attorney’s fees), permitting United States intervention and information-sharing, allowing Presidential nullification under 50 U.S.C. 1702, and defining 'interested party', 'competing merchandise', and 'like merchandise'.
Amends 19 U.S.C. 1592 by (1) inserting a new paragraph (2) in subsection (a) establishing a presumption that a purchaser had knowledge of fraud or gross negligence when buying from a second or subsequent affiliated person after those affiliated persons have been determined by U.S. Customs and Border Protection or a court to have violated subsection (a); (2) redesignating the existing paragraph (2) as paragraph (3); (3) revising subsection (c) penalty provisions for fraudulent and grossly negligent violations (including replacing certain percentage language with multipliers such as 'three times the domestic value' and '10 times'); and (4) adding additional penalties barring importation for defined periods (5 years for fraudulent violations, 2 years for grossly negligent violations) for violators and their affiliated persons, and adding affiliated-person definitions referencing section 771(33).
Amends 19 U.S.C. 4320 by redesignating existing subsections (c) and (d) as (d) and (e), respectively, and inserting a new subsection (c) that makes persons who committed fraudulent or grossly negligent violations of 19 U.S.C. 1592(a), and their affiliated persons, ineligible to participate in the importer of record program; requires revocation of importer of record numbers upon such a determination; defines affiliated person by reference to 19 U.S.C. 1677(33) and allows deeming affiliation based on declared information (e.g., similarities in imported merchandise, common declared exporters/shippers, historical import volumes).
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Referred to the House Committee on Ways and Means.
Introduced February 13, 2025 by Mike Bost · Last progress February 13, 2025
Referred to the House Committee on Ways and Means.
Introduced in House