S. 3808: Fighting Trade Cheats Act of 2026

This bill, known as the Fighting Trade Cheats Act of 2026, aims to amend the Tariff Act of 1930 to enhance the enforcement of customs laws and impose stricter penalties for violations related to customs fraud and gross negligence. Here are the key provisions of the bill presented in straightforward terms:

1. Increased Civil Penalties

The bill proposes to increase penalties for individuals and businesses that commit fraudulent customs violations. Specifically, it makes the following changes:

• Renames certain types of violations and establishes clear presumptions regarding knowledge of violations when dealing with affiliated sellers.
• Increases the multiplier for calculating penalties from two to three times the domestic value of the merchandise in case of a fraudulent violation.
• Imposes stricter penalties, such as:
  • A five-year import ban for individuals or businesses found guilty of fraudulent violations.
  • A two-year import ban for those found guilty of grossly negligent violations.

2. Private Right of Action

The bill allows private parties to take legal action against those who violate the customs laws. If a business or individual suffers financial damage due to someone else's fraud, they can:

• File a civil lawsuit against the violator in federal court.
• Recover damages equal to their losses plus an additional penalty equal to three times their damages.
• Seek an injunction to prevent further violations or imports of the goods in question.
• Claim for court costs and attorney fees incurred during the legal process.

3. Government Intervention

The bill allows the U.S. government to intervene in private lawsuits concerning customs violations, ensuring that federal authorities can participate in these legal proceedings effectively. This includes:

• Permitting the government to access relevant information and documentation related to the case.

4. Exclusion from Importer Programs

Individuals or businesses that have been found guilty of customs fraud or gross negligence would be excluded from participating in the importer of record program. This includes:

• Revocation of importer numbers for those convicted of such violations.
• Defining “affiliated persons” who may also be barred from the program to prevent related entities from evading consequences.

5. Impact on Affiliated Individuals

The bill defines “affiliated persons” to clarify who may be held accountable. If one member of an affiliated group is found in violation of customs laws, others in the group can also face penalties.

Relevant Companies

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