Fighting Trade Cheats Act of 2023

Bill: 118-s-805
Sponsor: full_name: Sen. Brown, Sherrod [D-OH]
Introduced: 2023-03-15
Policy area: Foreign Trade and International Finance
Subjects: Civil actions and liability

Criminal procedure and sentencing

Customs enforcement

Fraud offenses and financial crimes
Latest action: action_date: 2023-03-15
text: Read twice and referred to the Committee on Finance.

Summaries:
action_date: 2023-03-15
action_desc: Introduced in Senate
text: <p><b>Fighting Trade Cheats Act of 2023</b></p> <p>This bill increases penalties for, and establishes additional enforcement mechanisms related to, fraudulent and grossly negligent violations of U.S. customs laws.</p> <p>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.</p> <p>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.</p> <p>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.</p> <p>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.</p> <p>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.</p>

tv_txt: II 118th CONGRESS 1st Session S. 805 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.

1. Short title This Act may be cited as the Fighting Trade Cheats Act of 2023 . 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). . 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: 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). . 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. .