Bloomberg Law Article by Kirti Reddy and Ryan Rainey Covers Steps Importers Should Take to Minimize Risk Under False Claims Act
Quarles & Brady attorneys Kirti Reddy and Ryan Rainey wrote an article for Bloomberg Law about the increased scrutiny importers may now face when it comes to customs enforcement and the steps they can take to limit their exposure under the False Claims Act (FCA). Reddy is co-chair of the firm’s Government Enforcement Defense and Investigations team, and Rainey is a Madison-based associate in the Litigation & Dispute Resolution Practice Group.
With increased tariffs putting importers in the spotlight, the article notes that under the FCA, private whistleblowers can file suits against importers and, if the government takes up the case and recovers money, the whistleblower is eligible to receive 15-25% of the recovery. Careful attention to detail will help importers avoid these issues.
An excerpt:
Just as a passenger on an airplane self-reports goods on a customs form when entering the US, importers are responsible for self-reporting goods entering the country in accordance with US trade laws. That means anyone importing a good into the US must accurately report key information that determines what tariff rate applies and how much they owe the government.
The importer must declare the good’s country of origin, its proper classification under the Harmonized Tariff Schedule, and the total volume being imported, even through multiple shipments. If an importer knowingly reports one of those categories of information and that results in underpaying the amount of tariffs owed to the US, a whistleblower could bring a private, civil lawsuit that draws in the Department of Justice and recover a share of the final damages or settlement as a reward.
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As the government continues to tighten its focus on tariff and trade policy, companies should expect higher trade-related liability risks under the FCA. Compliance is always essential, and importers should not overlook FCA risks when importing goods or supervising employees who report duties to the government.
Please visit our Federal Policy Watch: Monitoring White House Developments page for more insight about navigating changes at the federal level.