On December 19, 2025, the Department of Justice (DOJ) announced a $54.4 million settlement with Ceratizit USA, LLC, a distributor of tungsten carbide products, resolving allegations that the company violated the False Claims Act (FCA) by evading customs duties on products imported from China. This settlement is believed to be the largest ever customs-related FCA resolution, and this high-water mark underscores the government’s heightened enforcement focus on tariff evasion.
The DOJ has made compliance with customs laws a priority for both civil and criminal enforcement. The DOJ and Department of Homeland Security (DHS) launched a cross-agency Trade Fraud Task Force in late summer. This is consistent with the DOJ’s intention to “aggressively” enforce the FCA, with a particular focus on “illegal foreign trade practices.” The alleged conduct Ceratizit resolved through the settlement agreement highlights three distinct categories of customs violations that can lead to FCA exposure for U.S. importers. Ceratizit resolved allegations that it had knowingly (1) misrepresented the origin of products that had been manufactured in China and transshipped through Taiwan, thereby avoiding Section 301 duties; (2) misclassified products under the Harmonized Tariff Schedule, thereby reducing the applicable general duty rate to zero; and (3) imported merchandise that was not properly marked with the country of origin and failed to pay required marking duties before distributing the unmarked...
On December 19, 2025, the Department of Justice (DOJ) announced a $54.4 million settlement with Ceratizit USA, LLC, a distributor of tungsten carbide products, resolving allegations that the compan...