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2026

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The Largest Customs Fraud Settlement from the DOJ Trade Fraud Task Force: $549.5 Million and What This Means for Importers 

On May 12, 2026, the Department of Justice announced one of the largest customs fraud settlements in U.S. history. Perfectus Aluminum Inc., Perfectus Aluminum Acquisitions LLC, and four affiliated warehousing companies (“the Defendants”) agreed to pay $549.5 million to resolve False Claims Act (“FCA”) allegations that they knowingly evaded antidumping and countervailing duties on aluminum extrusions imported from China. 

The Scheme: Pallets That Weren’t Pallets 

The underlying conduct was relatively simple. According to the Settlement Agreement, between July 2011 and June 2014, the Defendants knowingly made false statements on CBP Form 7501 Entry Summaries, misrepresenting more than 2.2 million aluminum extrusions as finished merchandise not subject to antidumping and countervailing duties. The mechanism? The extrusions were spot-welded together to make them appear to be functional pallets — and there were no actual customers for these “pallets.” So, no merchandise was ever actually sold. 

Criminal Conviction Came First 

This civil settlement did not arise in a vacuum. In August 2021, a jury in the Central District of California convicted the Defendants of conspiracy to defraud the United States, wire fraud, and passing false or fraudulent documents through a customs house. Following sentencing, the defendants were ordered to pay restitution of approximately $1.83 billion to CBP. The May 2026 FCA settlement resolves the parallel civil litigation arising from the same conduct. Importantly, this civil resolution does not absolve the defendants from any criminal liability outlined in […]

By |2026-05-22T15:16:34-04:00May 22, 2026|AD/CVD, Enforcement, Import, International Trade, U.S. Customs and Border Protection (CBP), U.S. Department of Justice (DOJ), Uncategorized|0 Comments
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Breaking Trade News: CAFC 122 Stay, CAPE Progress Report, $549M FCA Settlement

Here is a recap of the latest customs and international trade law news:    

Courts 

  • On May 12, the Court of Appeals for the Federal Circuit (CAFC) issued a stay of the CIT’s decision finding Section 122 tariffs are unlawful. The stay suspends the implementation of the CIT’s order while the appeal proceeds.  

Customs and Border Protection (CBP) 

  • CBP filed an updated IEEPA refund progress report with the CIT. Since April 20, 2026, 126,237 CAPE declarations have been filed. Of those, 1,880 were not issued refunds because ACH account information was not provided.  
  • CBP reported a 22% pass rate of the April 2026 customs broker license exam. Exam takers reported discrepancies between answers they recorded on their own scratch paper and the digital score reports. CBP acknowledged an issue with answer recording, but says it was resolved prior to the tests being graded. Reporting courtesy ITT.   
  • CBP, in collaboration with the U.S. Coast Guard and the FDA, seized more than 18 million units of electronic nicotine delivery systems (vapes) valued at over $175 million, as part of a targeted initiative called Operation Red Mist. 
  • CBP officers in Norfolk, VA, seized 105 […]
By |2026-05-15T10:42:56-04:00May 15, 2026|news, Snapshot|0 Comments
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Commerce Releases Applications for Onshoring Agreements to Reduce Section 232 Tariffs

On May 11, 2026, the U.S. Department of Commerce published the procedures for companies to apply for agreements with the U.S. government to reduce Section 232 tariffs on imported patented pharmaceutical products by onshoring manufacturing.

Section 232 Background 

On April 2, 2026, President Trump issued a proclamation imposing Section 232 tariffs on certain pharmaceutical products imported into the United States. Section 232 authorizes the president to adjust imports to address national security threats. In the proclamation, the President stated that the U.S.’s reliance on imports of pharmaceuticals has created fragile supply chains, threatening national security.

President Trump imposed a 100% tariff on certain patented pharmaceuticals and their associated ingredients. The tariffs will take effect for certain large companies on July 31, 2026, and for small companies on September 29, 2026.

The proclamation also included several carveouts. For example, Companies that have entered into qualifying agreements with the US government and developed plans to onshore production of patented pharmaceuticals and associated ingredients will be subject to only a 20% tariff from September 29, 2026, through April 2, 2030. 

Onshoring Agreement Application Process

On May 11, 2026, Commerce published procedures for companies to apply for Onshoring Agreements that would qualify them for the reduced 20% tariff. 

Applications must include: 

  • Organization Information: Full legal name, address, ownership structure, and beneficial ownership, including the country where the company’s headquarters is located.
By |2026-05-14T13:30:30-04:00May 14, 2026|Import, International Trade, tariffs, U.S. Department of Commerce (DOC)|0 Comments
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Appeals Court Keeps Section 122 Tariffs in Place (For Now): What Importers Need to Know

On May 7, 2026, the U.S. Court of International Trade (“CIT”) issued a significant decision holding that the Trump Administration’s 10% global tariffs imposed under Section 122 of the Trade Act of 1974 were unlawful. Just days later, on May 12, 2026, the U.S. Court of Appeals for the Federal Circuit stepped in and temporarily stayed that ruling. 

Thus, despite a major legal victory for plaintiff-importers at the CIT, and the hope provided to non-parties seeking similar relief in their own proceedings, Section 122 tariffs remain in effect – for now – while the appeal proceeds.  

Key Takeaways from the Stay 

The stay issued by the Court of Appeals pauses the CIT’s judgment while the Appeals Court considers the government’s motion for a longer stay pending appeal. The original plaintiffs have seven days to respond to the government’s motion, and the Court of Appeals has set an expedited briefing schedule, signaling that further developments should come quickly. 

Since this decision does not adjudicate the merits of the case (i.e., agree or disagree with the CIT’s decision), importers who are not party to the original lawsuit can still plan to file their own lawsuits with the CIT because Section 122 tariffs are unlawful. Additionally, the Appeals Court’s order keeps the collection of the 122 tariffs in place.  

What This Order Means for Importers 

1. Duties Must Still Be Paid

CBP will continue to assess and collect the 10% Section […]

By |2026-05-14T12:45:13-04:00May 14, 2026|International Trade, tariffs, Trade Policy|0 Comments
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Can Importers Obtain Refunds After Section 122 Tariffs Were Invalidated? 

On May 7, 2026, the U.S. Court of International Trade (CIT) ruled that the Section 122 tariffs imposed by the Trump administration under the Trade Act of 1974 are invalid. Previously, tariffs imposed by the Trump administration under the International Emergency Economic Powers Act (IEEPA)—including the “reciprocal tariffs” and the “fentanyl tariffs”—had been ruled unlawful by the U.S. Supreme Court on February 20, 2026. On March 4, 2026, Judge Eaton of the CIT issued an order requiring the refund of all IEEPA tariffs paid by importers. 

So, what does the invalidation of the Section 122 tariffs mean? How does it relate to the IEEPA tariffs? Can importers who have paid Section 122 tariffs also apply for refunds?

I. The Launch and Termination of IEEPA Tariffs 

In fact, the Section 122 tariffs served as a “backup plan” for the IEEPA tariffs. To understand the relationship between the two, we must first clarify the entire process of the IEEPA tariffs from initiation to termination. 

The IEEPA tariffs were imposed by the Trump administration in 2025 under the International Emergency Economic Powers Act (IEEPA). IEEPA authorizes the President, after declaring a national emergency, to broadly regulate various economic transactions, and it is a core document of modern U.S. sanctions mechanisms. It originated from the Trading with the Enemy Act (TWEA), which was enacted after World War I to regulate transactions with hostile nations. The scope of TWEA was expanded in the 1930s, allowing the President to declare a […]

By |2026-06-08T13:43:11-04:00May 12, 2026|International Trade, tariffs, Trade Policy|0 Comments
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