Recent DOJ Actions on Tariffs Underscore Trade Enforcement Focus

On December 18, the U.S. Department of Justice (“DOJ”) announced resolution of two significant tariff evasion cases. Each highlights key lessons for enforcement under the Trump Administration, including with respect to self-disclosure and organizational culture, the significance of the False Claims Act (“FCA”), and the risk of individual liability. Collectively, these cases—announced the same day—highlight the Administration’s continued focus on trade and tariff cases, which are sure to be an area of continued enforcement.

The Enforcement Actions

DOJ announced a $54.4 million settlement with Ceratizit USA LLC (“Ceratizit”), a distributor of tungsten carbide products.¹ The resolution, coordinated by DOJ’s Trade Fraud Task Force (the “Task Force”) and other agencies, related to an alleged scheme by Ceratizit to knowingly misrepresent the country of origin of Chinese-manufactured products transshipped via Taiwan to avoid paying heightened duties imposed pursuant to Section 301 of the U.S. Trade Act of 1974 (“Section 301”). This case was an FCA action initially brought by a private relator, who received approximately $9.75 million of the proceeds.

The same day, DOJ also announced the resolution of a case targeting MGI International, LLC and its subsidiaries, Global Plastics LLC and Marco Polo International LLC (collectively, “MGI”), a leading global plastic resin distributor.² The resolution, which was also coordinated by the Task Force and other components of DOJ, involved a similar alleged scheme by MGI to falsify Country of Origin declarations to avoid paying Section 301 duties on Chinese origin goods. Notably, the resolution followed a voluntary self-disclosure to DOJ by MGI. As part of the resolution, DOJ—following the Criminal Division’s Corporate Enforcement and Voluntary Self-Disclosure Policy (the “VSD Policy”)³—declined to prosecute MGI, and agreed to credit $6.8 million previously paid to resolve MGI’s civil liability under the FCA for the same conduct.

Takeaways

The FCA Is a Key Enforcement Tool

The significant settlement paid by Ceratizit, and the smaller amount paid by MGI, were both pursuant to the FCA. Liability under the FCA can attach when a person or company “knowingly conceals or knowingly and improperly avoids or decreases an obligation to pay or transmit money or property to the Government” or knowingly makes a false record or statement material to such an obligation. When duties are owed to the U.S. government, and a company knowingly avoids paying those duties, the government can bring an FCA claim and seek treble damages (plus penalties) for proven violations. As in the Ceratizit case, FCA claims can also be brought by private third-party relators, who are incentivized with awards of up to 30% of the proceeds of suits they generate. The FCA is thus an attractive tool for the Trump Administration to pursue significant damages against those who seek to avoid tariffs. The media’s frequent coverage of tariffs—as well as statements made by DOJ officials at events attended by key members of the relator’s bar regarding the Administration’s keen interest in customs-related enforcement—also makes it more likely that relators will bring cases involving allegations of actual, suspected, or speculative tariff-related violations.⁴ As such, the Ceratizit and MGI matters may be merely the start of a wave of FCA cases targeting customs fraud.

Considerations for Self-Disclosure

In declining to prosecute MGI, DOJ highlighted MGI’s timely and voluntary self-disclosure, proactive cooperation, and substantial remedial efforts.

Under the VSD Policy, in order to secure a declination, a company must (1) voluntarily self-disclose misconduct to the Criminal Division; (2) fully cooperate with the Criminal Division’s investigation; (3) timely and appropriately remediate the misconduct; and (4) ensure there are no aggravating circumstances. Aggravating factors may include the nature and seriousness of the offense, egregiousness or pervasiveness of the misconduct, severity of harm caused by the misconduct, or criminal adjudication or resolution within the last five years based on similar misconduct by the entity.

DOJ ultimately found those factors weighed in MGI’s favor. In connection with the July 2025 FCA resolution, DOJ acknowledged that MGI was entitled to cooperation and self-disclosure credit. DOJ highlighted that MGI made a timely voluntary self-disclosure of the potential violations; performed a thorough and independent internal investigation; preserved, collected, and disclosed facts not known to the government but relevant to its investigation; conducted an analysis of potential damages that was shared with the government; and implemented appropriate remedial actions, including disciplining personnel and making improvements to compliance procedures.⁵ DOJ also observed that the degree of seriousness of the offense, the absence of disqualifying or aggravating factors, and repayment of evaded tariffs were factors in determining not to prosecute MGI.⁶

The case illustrates the potential benefits of self-disclosure. But the case also demonstrates that certain steps—including appropriate investigatory and remedial work—are necessary, both to allow for an appropriate evaluation of whether to make a disclosure and, if a disclosure is made, to secure a favorable resolution that brings global peace for the disclosing entity and any relevant affiliates. A company must also have in place robust policies and procedures, including monitoring and investigation protocols, as those practices may receive government scrutiny in the context of a self-disclosure. For these reasons, decisions related to a potential self-disclosure should be made in close consultation with experienced counsel. In addition, organizational culture—including one that values speaking up and creating systems that foster disclosure—is critical.⁷

Individual Liability Is Possible

While MGI avoided criminal liability, MGI’s former Chief Operating Officer was not so lucky. On December 17, 2025, he was charged by criminal information and agreed to plead guilty to conspiracy to smuggle goods into the United States. According to court documents, in 2021, the former executive instructed subordinates to misrepresent the manufacturer and country of origin on paperwork that was submitted to U.S. Customs and Border Protection (“CBP”). While individual liability has been relatively rare in trade compliance cases, this plea—and DOJ’s dual decision to prosecute the executive while providing the company a declination—demonstrate that individual liability remains an option where individual behavior is willful and egregious. Indeed, among the factors DOJ prosecutors are instructed to consider when evaluating whether to charge a corporation is the “adequacy of the prosecution of individuals responsible for the corporation’s misconduct,”⁸ thus potentially increasing the likelihood of individual prosecutions in matters involving corporate declinations.

Trade and Tariff Enforcement Is on the Rise

The dual resolutions further underscore the Administration’s focus on trade fraud as a core civil and criminal enforcement priority. In connection with President Trump’s broader America First Trade Policy, DOJ has highlighted numerous times, including in its white collar enforcement plan titled Focus, Fairness, and Efficiency in the Fight Against White-Collar Crime, that “[t]rade and customs fraud, including tariff evasion” is one of the Administration’s top priorities. The involvement of the Task Force in both matters signals that the Task Force’s focus on enforcement against parties that seek to evade tariffs or engage in other import-related misconduct will continue to escalate.⁹

Notably, both the Ceratizit and the MGI cases involve efforts to evade application of longstanding Section 301 tariffs targeting China. These cases thus reflect an exercise of enforcement prioritization, but they are not yet cases challenging alleged misconduct involving the new tariffs imposed by the Administration throughout 2025. As such, it is reasonable to assume that the number of similar enforcement actions may proliferate over the coming years, in line with the dramatic proliferation of new tariffs.

The Administration’s focus on trade and customs enforcement highlights the critical need for importers to ensure they have robust and appropriate policies and procedures addressing key areas such as classification, country of origin, and valuation. In addition, ongoing monitoring steps—such as conducting audits of import practices, carefully evaluating modifications to supply chains, investigating potential violations, and managing customs brokers—will also be important to ensure importers are not exposed to risk in this period of heightened regulatory change and enforcement scrutiny.