Many U.S. companies are responding to tariff pressures by rethinking supply lines.

In a September 14, 2025, Wall Street Journal article, a major U.S. consumer goods manufacturer accused its competitors of dodging increased tariff costs by under-reporting the value of the goods imported into the United States. Such allegations are likely to incur scrutiny from the Department of Justice’s (DOJ’s) cross-agency Trade Fraud Task Force, which is aimed at investigating such allegations and prosecuting violations of law (see our September 5 blog post). 

In addition to consumer goods, this heightened scrutiny can also impact imported medical goods from everyday disposables to expensive imaging devices. Importers, manufacturers, and all parties involved in international supply chains, including end-users, should take notice: federal agencies and prosecutors have long used data mining to identify trends and to target investigations. Customs value data demonstrating the cost of imported goods is publicly available and can serve as an invaluable tool to help benchmark costs and conduct internal risk assessments.

This Alert explains: (a) what conduct may trigger liability; (b) how DOJ and other federal agencies use data mining to identify targets; (c) key statutes and penalties; (d) the implications of whistleblower complaints; and (e) steps companies should take to reduce risk.

What Conduct Is under Increased Scrutiny

Conduct currently under increased scrutiny by the government includes:

  • undervaluing import values (transaction values) significantly below fair market value, particularly in transactions with related parties, to reduce duty/tariff payments;
  • misclassifying goods to lower duties;
  • falsifying or omitting material statements about country of origin, origin of components, or cost contributions;
  • manipulating documents to obscure true cost/value; and
  • under-reporting freight, insurance, or other add-on costs that factor into customs value.

Data Mining

The U.S. Census Bureau maintains a robust dataset reflecting the value of most classes of goods imported into the United States. When those goods are imported, importers are required to state the value of those goods and where they originated, in order for the government to properly assess tariffs. 

For example, certain classes of everyday disposable medical goods imported from China into the United States have shown significant drops in reported value since the beginning of 2025. Many legitimate reasons may explain this significant reduction in cost, but regulators and enforcers often mine this type of data to identify potential targets who may be reporting undervalued prices in an effort to dodge high tariff prices.

Applicable Statutes & Enforcement Channels

Several civil and criminal laws expose companies and individuals that participate in these activities to serious penalties, including:

  • 18 U.S.C. §§ 2, 3, 4: Aiding, concealing or failing to report an offense;
  • 18 U.S.C. § 317: Conspiracy to violate the laws of the United States;
  • 18 U.S.C. § 541: Entry of goods falsely classified;
  • 18 U.S.C. § 542: Entry of goods by means of false statements;
  • 18 U.S.C. § 548: Repackaging goods in bonded warehouses;
  • 18 U.S.C. § 1001: False Statements;
  • 19 U.S.C. § 1592: Evading duties/taxes/fees on merchandise entering commerce; and
  • 31 U.S.C. § 3729: Reverse False Claims Act (FCA).

The FCA imposes civil penalties on, among other things, any person who knowingly presents, or causes to be presented, a false or fraudulent claim for payment or approval to the United States. Section 3729(a)(1)(G), known as “the reverse FCA,” imposes liability in the opposite situation, where money owed to the government is not paid. The reverse FCA applies to persons who knowingly make, use, or cause to be made or used, a false record or statement material to an obligation to pay or transmit money or property to the government; or knowingly conceals, or knowingly and improperly avoids or decreases, an obligation to pay money or property to the government. Consequently, avoiding increased tariff costs by under-reporting the value of the goods imported into the United States could trigger the reverse FCA.

Recent Allegation: A Warning Sign

As recently reported by the Wall Street Journal, a U.S.-based consumer goods manufacturer publicly requested an investigation into competitors allegedly reporting import values below fair market value to reduce tariffs. This kind of corporate whistleblower activity represents what enforcement actions may increasingly look like in practice—both in terms of who raises them (competitors, importers) and what evidence may be available (public filings, customs data). Such allegations may trigger investigations, audits, civil suits, reputational harm, or even criminal inquiry.

DOJ’s Cross-Agency Trade Fraud Task Force: Key Takeaways

As EBG has previously reported, DOJ formed a task force working in coordination with U.S. Customs and Border Protection and U.S. Department of Homeland Security Investigations. The Trade Fraud Task Force will focus on ensuring compliance with trade laws, including payment of all tariffs and duties (e.g., antidumping and countervailing duties, Section 301 tariffs, and other customs obligations). DOJ promises increased parallel civil and criminal actions under the FCA, Tariff Act, and federal criminal statutes related to trade fraud, and conspiracy. The focus of the Trade Fraud Task Force’s investigative efforts will include:

  • misvaluation, false origin claims, misclassification, and document fraud;
  • increased use of technology, data analytics, and interagency information sharing to detect patterns across companies; and
  • enhanced risk of whistleblower / relator lawsuits under the FCA.

What Importers & Businesses Should Do Now

To protect against risk, companies should:

  1. Conduct an internal risk assessment
    • Review valuation practices (especially with related-party transactions);
    • Evaluate import and country of origin declarations; and
    • Check accuracy of supplier documentation / invoicing.
  2. Strengthen compliance systems
    • Educate trade-compliance and supply-chain teams about documentation requirements;
    • Ensure that customs entries are audited internally; and
    • Consider use of third-party assessments or trade-compliance certifications.
  3. Document everything
    • Supplier invoices, cost breakdowns, rebates, adjustments;
    • Evidence of arm’s-length pricing, or good faith estimates if prices are non-standard; and
    • Any communication about valuation with industry actors.
  4. Review insurance and indemnification provisions
    • Contracts with suppliers should address responsibility for false or incomplete information.
    • Indemnification clauses may mitigate exposure (though not in criminal contexts).
  5. Consider whether disclosure is appropriate if errors are found
    • Proactive disclosure may reduce penalties in some cases.
    • BUT: Do so under advice of counsel, considering privilege, statute of limitations, and enforcement posture.
  6. Monitor enforcement activity
    • Track DOJ, U.S. Customs and Border Protection, and Homeland Security announcements;
    • Monitor import-policy rulemaking; and
    • Watch competitor-filed complaints or petitions (as in Whirlpool’s case) for protective actions.

Conclusion

While end-users, like hospital systems and providers, of medical goods that have been improperly imported likely do not face civil or criminal exposure if they were unaware of improprieties in their import process, association with organizations that engage in such practices can trigger substantial costs in the form of responding to government requests for information related to entities being investigated by the government.

The evolving enforcement environment means that trade compliance is no longer just a cost center or background function—it is now a potential liability center. Importers, manufacturers, and supply-chain entities should treat valuation, classification, and origin documentation with the same rigor as product safety or environmental compliance. Significant consumers of these products, like hospital systems and medical providers, should also be vigilant in ensuring their suppliers are operating compliantly.

If you would like a tailored review of your valuation practices, help with auditing class codes, or advice on voluntary disclosure options, please contact the authors of this post.

Epstein Becker Green Staff Attorney Ann W. Parks contributed to the preparation of this post.

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