Fighting Trade Cheats Act of 2023

Subjects: Foreign Trade and International Finance


<html><body><pre>[Congressional Bills 118th Congress]
[From the U.S. Government Publishing Office]
[S. 805 Introduced in Senate (IS)]

&lt;DOC&gt;






118th CONGRESS
  1st Session
                                 S. 805

 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 SENATE OF THE UNITED STATES

                             March 15, 2023

 Mr. Brown (for himself and Mr. Tillis) introduced the following bill; 
     which was read twice and referred to the Committee on Finance

_______________________________________________________________________

                                 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.''.
                                 &lt;all&gt;
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