Our previous article on What Every Multinational Company Should Know About … Customs Enforcement and False Claims Act Risks (Part I) outlined how import-related risks have substantially increased given the combination of the new high-tariff environment, the heightened ability of Customs (and the general public) to data mine import-related data, and the Department of Justice’s (DOJ) stated focus on using the False Claims Act (FCA). In Part II, we laid out how to prepare for the most common False Claims Act (FCA) risks arising from submitting false Form 7501 entry summary information. We now complete the series on “Customs Enforcement and False Claims Act Risks” with Part III, which focuses on preparing for the most common FCA risks arising from improper management of import operations.
If importers discover a systematic error, the position of Customs is clear: The importer is under an obligation not only to correct the error for future entries but also to use measures like post-summary corrections to update prior entries. This is demonstrated by a DOJ settlement in which an importer paid over $22 million to settle allegations that it “made no effort to right its wrongs even after acknowledging internally that it had underpaid millions of dollars of duties owed.” This type of knowing error is exactly the type of conduct that can expose importers to reverse FCA liability.
Banco do Brasil has asked Brazil's solicitor general to act against false claims that allege it is poised to face sanctions by the U.S. government because one of its clients is a judge sanctioned u...