Fighting Trade Cheats Act of 2023
This bill increases penalties for, and establishes additional enforcement mechanisms related to, fraudulent and grossly negligent violations of U.S. customs laws.
Specifically, the bill increases the maximum civil penalty for a fraudulent violation to three times the domestic value of the merchandise. Further, the bill prohibits a person who commits a fraudulent violation from importing merchandise into the United States for a five-year period.
Additionally, the bill increases the maximum civil penalty for a grossly negligent violation to the lesser of (1) 3 times the domestic value of the merchandise; or (2) 10 times the lawful duties, taxes, and fees. It also prohibits a person who commits a grossly negligent violation from importing merchandise into the United States for a two-year period.
Further, the bill applies these importation bans to an affiliated person (e.g., a family member, partner, or employee) of the person who committed the fraudulent or grossly negligent violation.
The bill also establishes a private right of action for customs fraud or grossly negligent violations. In particular, the bill allows manufacturers, producers, wholesalers, labor unions, or trade associations to bring a civil action against a violator or any person that aids or abets a violator.
The bill prohibits any person (or an affiliated person) who commits a fraudulent or grossly negligent violation from participating in the U.S. Customs and Border Protection's Importer of Record program, and further requires their importer of record numbers to be revoked.
[Congressional Bills 118th Congress]
[From the U.S. Government Publishing Office]
[H.R. 2667 Introduced in House (IH)]
<DOC>
118th CONGRESS
1st Session
H. R. 2667
To amend the Tariff Act of 1930 to increase civil penalties for, and
improve enforcement with respect to, customs fraud, and for other
purposes.
_______________________________________________________________________
IN THE HOUSE OF REPRESENTATIVES
April 18, 2023
Mr. Bost (for himself, Ms. Sewell, Mr. Murphy, Mr. Mrvan, and Ms.
Tenney) introduced the following bill; which was referred to the
Committee on Ways and Means
_______________________________________________________________________
A BILL
To amend the Tariff Act of 1930 to increase civil penalties for, and
improve enforcement with respect to, customs fraud, and for other
purposes.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Fighting Trade Cheats Act of 2023''.
SEC. 2. INCREASE IN CIVIL PENALTIES FOR FRAUDULENT AND GROSSLY
NEGLIGENT VIOLATIONS OF UNITED STATES CUSTOMS LAWS.
Section 592 of the Tariff Act of 1930 (19 U.S.C. 1592) is amended--
(1) in subsection (a)--
(A) by redesignating paragraph (2) as paragraph
(3); and
(B) by inserting after paragraph (1) the following:
``(2) Presumption.--
``(A) In general.--For purposes of paragraph
(1)(B), if a person purchases merchandise from two or
more affiliated persons after such persons are
determined by U.S. Customs and Border Protection or a
court of competent jurisdiction to have violated
subsection (a) by means of fraud or gross negligence,
there shall be a presumption that the purchaser had
knowledge of such violation with respect to purchases
from the second or subsequent such affiliated person.
``(B) Affiliated person defined.--In subparagraph
(A), the term `affiliated person' has the meaning given
that term in section 771(33).''; and
(2) in subsection (c)--
(A) in paragraph (1)--
(i) by striking ``A fraudulent violation''
and inserting the following:
``(A) In general.--A fraudulent violation'';
(ii) in subparagraph (A) (as so
designated), by inserting before ``the domestic
value'' the following: ``three times''; and
(iii) by adding at the end the following:
``(B) Additional penalties.--A person--
``(i) that commits a fraudulent violation
of subsection (a) shall be prohibited from
importing merchandise into the United States
during a period of five years beginning on the
date of entry of a final judgment with respect
to such violation; and
``(ii) that is an affiliated person of a
person described in clause (i) shall be
prohibited from importing merchandise into the
United States during the period described in
such clause.
``(C) Affiliated person defined.--In subparagraph
(B)(ii), the term `affiliated person' has the meaning
given that term in section 771(33).''; and
(B) in paragraph (2)--
(i) by striking ``A grossly negligent
violation'' and inserting the following:
``(A) In general.--A grossly negligent violation'';
(ii) by striking ``(A) the lesser of--''
and inserting the following:
``(i) the lesser of--'';
(iii) by striking ``(i) the domestic
value'' and inserting the following:
``(I) three times the domestic
value'';
(iv) by striking ``(ii) four times'' and
inserting the following:
``(II) 10 times'';
(v) by striking ``(B) if the violation''
and inserting the following:
``(ii) if the violation'';
(vi) in clause (ii) of subparagraph (A) (as
so redesignated), by striking ``40 percent of''
and inserting ``three times''; and
(vii) by adding at the end the following:
``(B) Additional penalties.--A person--
``(i) that commits a grossly negligent
violation of subsection (a) shall be prohibited
from importing merchandise into the United
States during a period of two years beginning
on the date of entry of a final judgment with
respect to such violation; and
``(ii) that is an affiliated person of a
person described in clause (i) shall be
prohibited from importing merchandise into the
United States during the period described in
such clause.
``(C) Affiliated person defined.--In subparagraph
(B)(ii), the term `affiliated person' has the meaning
given that term in section 771(33).''.
SEC. 3. PRIVATE ENFORCEMENT ACTION FOR CUSTOMS FRAUD.
The Tariff Act of 1930 is amended by inserting after section 592A
(19 U.S.C. 1592a) the following:
``SEC. 592B. PRIVATE ENFORCEMENT ACTION FOR CUSTOMS FRAUD.
``(a) Civil Action.--An interested party the business, property, or
other financial interest of which is injured by a fraudulent or grossly
negligent violation of section 592(a) may bring a civil action against
any person that causes such injury, or any person that aids or abets
that person in violating section 592(a), in any United States District
Court located in a district in which the interested party has suffered
injury, without regard to the amount in controversy.
``(b) Relief.--Upon proof by an interested party in a civil action
brought under subsection (a) that the business, property, or other
financial interest of the interested party has been injured by a
fraudulent or grossly negligent violation of section 592(a), the
interested party shall--
``(1)(A) recover compensatory damages equal to the amount
of such injury plus an additional penalty equal to three times
the amount of compensatory damages; and
``(B) be granted such equitable relief as may be
appropriate, which may include an injunction against further
importation into the United States of the merchandise imported
into the United States in violation of section 592(a); and
``(2) recover the costs of bringing the civil action,
including reasonable attorney's fees.
``(c) Intervention by the United States.--
``(1) In general.--The court shall permit the United States
to intervene in an civil action brought under subsection (a),
as a matter of right. The United States shall have all the
rights of a party.
``(2) Sharing of information.--Upon a reasonable request by
the United States Government, any interested party that brings
a civil action under subsection (a) shall provide to the United
States Government--
``(A) a copy of the complaint;
``(B) any memoranda of law or briefing filed with a
court in support of the complaint as of the date of the
request; and
``(C) if the United States Government agrees to
reimburse the interested party for all reasonable costs
and expenses associated with responding to the request,
any information obtained by the interested party
through discovery processes in the civil action as of
the date of the request.
``(d) Nullification of Order in National Emergencies.--An order by
a court under this section is subject to nullification by the President
under the authority provided by section 203 of the International
Emergency Economic Powers Act (50 U.S.C. 1702).
``(e) Interested Party Defined.--
``(1) In general.--In this section, the term `interested
party' means--
``(A) a manufacturer, producer, or wholesaler in
the United States of like merchandise or competing
merchandise;
``(B) a certified union or recognized union or
group of workers that is representative of an industry
engaged in the manufacture, production, or wholesale in
the United States of like merchandise or competing
merchandise; or
``(C) a trade or business association a majority of
the members of which manufacture, produce, or wholesale
like merchandise or competing merchandise in the United
States.
``(2) Competing merchandise.--For purposes of paragraph
(1), the term `competing merchandise' means merchandise that
competes with or is a substitute for merchandise being imported
into the United States in violation of section 592(a).
``(3) Like merchandise.--For purposes of paragraph (1), the
term `like merchandise' means merchandise that is like, or in
the absence of like, most similar in characteristics and uses
with, merchandise being imported into the United States in
violation of section 592(a).''.
SEC. 4. EXCLUSION OF PERSONS THAT HAVE COMMITTED FRAUDULENT OR GROSSLY
NEGLIGENT VIOLATIONS OF UNITED STATES CUSTOMS LAWS FROM
PARTICIPATION IN THE IMPORTER OF RECORD PROGRAM.
Section 114 of the Trade Facilitation and Trade Enforcement Act of
2015 (19 U.S.C. 4320) is amended--
(1) by redesignating subsections (c) and (d) as subsection
(d) and (e), respectively; and
(2) by inserting after subsection (b) the following:
``(c) Exclusion.--
``(1) In general.--The following persons shall be
ineligible to participate in the importer of record program:
``(A) Any person determined by U.S. Customs and
Border Protection or a court of competent jurisdiction
to have committed a fraudulent or grossly negligent
violation of section 592(a) of the Tariff Act of 1930
(19 U.S.C. 1592(a)).
``(B) Any person that is an affiliated person of a
person described in subparagraph (A).
``(2) Revocation.--The Secretary shall revoke the importer
of record number assigned to any person under the importer of
record program if the Secretary subsequently determines that
the person is a person described in subparagraph (A) or (B) of
paragraph (1).
``(3) Affiliated person defined.--
``(A) In general.--For purposes paragraph (1)(B),
the term `affiliated person' has the meaning given that
term in section 771(33) of the Tariff Act of 1930 (19
U.S.C. 1677(33)).
``(B) Deemed affiliated persons.--In order to
prevent commercial fraud, protect the revenue, and help
prevent the use of shell companies by importers that
seek to evade the customs and trade laws of the United
States, a person may be deemed to be an affiliated
person for purposes of paragraph (1)(B) based upon
information declared to U.S. Customs and Border
Protection suggesting a formal or ongoing relationship
between that person and a person described in paragraph
(1)(A), including similarities in imported merchandise
(including article classification upon importation),
common declared exporters and shippers, and historical
import volumes.''.
<all>
Introduced in House
Introduced in House
Referred to the House Committee on Ways and Means.
Referred to the Subcommittee on Trade.
Llama 3.2 · runs locally in your browser
Ask anything about this bill. The AI reads the full text to answer.
Enter to send · Shift+Enter for new line