Fighting Trade Cheats Act of 2023

I 118TH CONGRESS 1ST SESSION H. R. 2667 To amend the Tariff Act of 1930 to increase civil penalties for, and improve enforcement with respect to, customs fraud, and for other purposes. IN THE HOUSE OF REPRESENTATIVES APRIL 18, 2023 Mr. BOST (for himself, Ms. SEWELL, Mr. MURPHY, Mr. MRVAN, and Ms. TENNEY) introduced the following bill; which was referred to the Com- mittee on Ways and Means A BILL To amend the Tariff Act of 1930 to increase civil penalties for, and improve enforcement with respect to, customs fraud, and for other purposes. Be it enacted by the Senate and House of Representa- 1 tives of the United States of America in Congress assembled, 2 SECTION 1. SHORT TITLE. 3 This Act may be cited as the ‘‘Fighting Trade Cheats 4 Act of 2023’’. 5 VerDate Sep 11 2014 21:28 Apr 23, 2023 Jkt 039200 PO 00000 Frm 00001 Fmt 6652 Sfmt 6201 E:\BILLS\H2667.IH H2667 pbinns on DSKJLVW7X2PROD with $$_JOB 2 •HR 2667 IH SEC. 2. INCREASE IN CIVIL PENALTIES FOR FRAUDULENT 1 AND GROSSLY NEGLIGENT VIOLATIONS OF 2 UNITED STATES CUSTOMS LAWS. 3 Section 592 of the Tariff Act of 1930 (19 U.S.C. 4 1592) is amended— 5 (1) in subsection (a)— 6 (A) by redesignating paragraph (2) as 7 paragraph (3); and 8 (B) by inserting after paragraph (1) the 9 following: 10 ‘‘(2) PRESUMPTION.— 11 ‘‘(A) IN GENERAL.—For purposes of para- 12 graph (1)(B), if a person purchases merchan- 13 dise from two or more affiliated persons after 14 such persons are determined by U.S. Customs 15 and Border Protection or a court of competent 16 jurisdiction to have violated subsection (a) by 17 means of fraud or gross negligence, there shall 18 be a presumption that the purchaser had knowl- 19 edge of such violation with respect to purchases 20 from the second or subsequent such affiliated 21 person. 22 ‘‘(B) AFFILIATED PERSON DEFINED.—In 23 subparagraph (A), the term ‘affiliated person’ 24 has the meaning given that term in section 25 771(33).’’; and 26 VerDate Sep 11 2014 21:28 Apr 23, 2023 Jkt 039200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6201 E:\BILLS\H2667.IH H2667 pbinns on DSKJLVW7X2PROD with $$_JOB 3 •HR 2667 IH (2) in subsection (c)— 1 (A) in paragraph (1)— 2 (i) by striking ‘‘A fraudulent viola- 3 tion’’ and inserting the following: 4 ‘‘(A) IN GENERAL.—A fraudulent viola- 5 tion’’; 6 (ii) in subparagraph (A) (as so des- 7 ignated), by inserting before ‘‘the domestic 8 value’’ the following: ‘‘three times’’; and 9 (iii) by adding at the end the fol- 10 lowing: 11 ‘‘(B) ADDITIONAL PENALTIES.—A per- 12 son— 13 ‘‘(i) that commits a fraudulent viola- 14 tion of subsection (a) shall be prohibited 15 from importing merchandise into the 16 United States during a period of five years 17 beginning on the date of entry of a final 18 judgment with respect to such violation; 19 and 20 ‘‘(ii) that is an affiliated person of a 21 person described in clause (i) shall be pro- 22 hibited from importing merchandise into 23 the United States during the period de- 24 scribed in such clause. 25 VerDate Sep 11 2014 21:28 Apr 23, 2023 Jkt 039200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6201 E:\BILLS\H2667.IH H2667 pbinns on DSKJLVW7X2PROD with $$_JOB 4 •HR 2667 IH ‘‘(C) AFFILIATED PERSON DEFINED.—In 1 subparagraph (B)(ii), the term ‘affiliated per- 2 son’ has the meaning given that term in section 3 771(33).’’; and 4 (B) in paragraph (2)— 5 (i) by striking ‘‘A grossly negligent 6 violation’’ and inserting the following: 7 ‘‘(A) IN GENERAL.—A grossly negligent 8 violation’’; 9 (ii) by striking ‘‘(A) the lesser of—’’ 10 and inserting the following: 11 ‘‘(i) the lesser of—’’; 12 (iii) by striking ‘‘(i) the domestic 13 value’’ and inserting the following: 14 ‘‘(I) three times the domestic 15 value’’; 16 (iv) by striking ‘‘(ii) four times’’ and 17 inserting the following: 18 ‘‘(II) 10 times’’; 19 (v) by striking ‘‘(B) if the violation’’ 20 and inserting the following: 21 ‘‘(ii) if the violation’’; 22 (vi) in clause (ii) of subparagraph (A) 23 (as so redesignated), by striking ‘‘40 per- 24 cent of’’ and inserting ‘‘three times’’; and 25 VerDate Sep 11 2014 21:28 Apr 23, 2023 Jkt 039200 PO 00000 Frm 00004 Fmt 6652 Sfmt 6201 E:\BILLS\H2667.IH H2667 pbinns on DSKJLVW7X2PROD with $$_JOB 5 •HR 2667 IH (vii) by adding at the end the fol- 1 lowing: 2 ‘‘(B) ADDITIONAL PENALTIES.—A per- 3 son— 4 ‘‘(i) that commits a grossly negligent 5 violation of subsection (a) shall be prohib- 6 ited from importing merchandise into the 7 United States during a period of two years 8 beginning on the date of entry of a final 9 judgment with respect to such violation; 10 and 11 ‘‘(ii) that is an affiliated person of a 12 person described in clause (i) shall be pro- 13 hibited from importing merchandise into 14 the United States during the period de- 15 scribed in such clause. 16 ‘‘(C) AFFILIATED PERSON DEFINED.—In 17 subparagraph (B)(ii), the term ‘affiliated per- 18 son’ has the meaning given that term in section 19 771(33).’’. 20 SEC. 3. PRIVATE ENFORCEMENT ACTION FOR CUSTOMS 21 FRAUD. 22 The Tariff Act of 1930 is amended by inserting after 23 section 592A (19 U.S.C. 1592a) the following: 24 VerDate Sep 11 2014 21:28 Apr 23, 2023 Jkt 039200 PO 00000 Frm 00005 Fmt 6652 Sfmt 6201 E:\BILLS\H2667.IH H2667 pbinns on DSKJLVW7X2PROD with $$_JOB 6 •HR 2667 IH ‘‘SEC. 592B. PRIVATE ENFORCEMENT ACTION FOR CUS- 1 TOMS FRAUD. 2 ‘‘(a) CIVIL ACTION.—An interested party the busi- 3 ness, property, or other financial interest of which is in- 4 jured by a fraudulent or grossly negligent violation of sec- 5 tion 592(a) may bring a civil action against any person 6 that causes such injury, or any person that aids or abets 7 that person in violating section 592(a), in any United 8 States District Court located in a district in which the in- 9 terested party has suffered injury, without regard to the 10 amount in controversy. 11 ‘‘(b) RELIEF.—Upon proof by an interested party in 12 a civil action brought under subsection (a) that the busi- 13 ness, property, or other financial interest of the interested 14 party has been injured by a fraudulent or grossly negligent 15 violation of section 592(a), the interested party shall— 16 ‘‘(1)(A) recover compensatory damages equal to 17 the amount of such injury plus an additional penalty 18 equal to three times the amount of compensatory 19 damages; and 20 ‘‘(B) be granted such equitable relief as may be 21 appropriate, which may include an injunction 22 against further importation into the United States 23 of the merchandise imported into the United States 24 in violation of section 592(a); and 25 VerDate Sep 11 2014 21:28 Apr 23, 2023 Jkt 039200 PO 00000 Frm 00006 Fmt 6652 Sfmt 6201 E:\BILLS\H2667.IH H2667 pbinns on DSKJLVW7X2PROD with $$_JOB 7 •HR 2667 IH ‘‘(2) recover the costs of bringing the civil ac- 1 tion, including reasonable attorney’s fees. 2 ‘‘(c) INTERVENTION BY THE UNITED STATES.— 3 ‘‘(1) IN GENERAL.—The court shall permit the 4 United States to intervene in an civil action brought 5 under subsection (a), as a matter of right. The 6 United States shall have all the rights of a party. 7 ‘‘(2) SHARING OF INFORMATION.—Upon a rea- 8 sonable request by the United States Government, 9 any interested party that brings a civil action under 10 subsection (a) shall provide to the United States 11 Government— 12 ‘‘(A) a copy of the complaint; 13 ‘‘(B) any memoranda of law or briefing 14 filed with a court in support of the complaint 15 as of the date of the request; and 16 ‘‘(C) if the United States Government 17 agrees to reimburse the interested party for all 18 reasonable costs and expenses associated with 19 responding to the request, any information ob- 20 tained by the interested party through discovery 21 processes in the civil action as of the date of 22 the request. 23 ‘‘(d) NULLIFICATION OF ORDER IN NATIONAL 24 EMERGENCIES.—An order by a court under this section 25 VerDate Sep 11 2014 21:28 Apr 23, 2023 Jkt 039200 PO 00000 Frm 00007 Fmt 6652 Sfmt 6201 E:\BILLS\H2667.IH H2667 pbinns on DSKJLVW7X2PROD with $$_JOB 8 •HR 2667 IH is subject to nullification by the President under the au- 1 thority provided by section 203 of the International Emer- 2 gency Economic Powers Act (50 U.S.C. 1702). 3 ‘‘(e) INTERESTED PARTY DEFINED.— 4 ‘‘(1) IN GENERAL.—In this section, the term 5 ‘interested party’ means— 6 ‘‘(A) a manufacturer, producer, or whole- 7 saler in the United States of like merchandise 8 or competing merchandise; 9 ‘‘(B) a certified union or recognized union 10 or group of workers that is representative of an 11 industry engaged in the manufacture, produc- 12 tion, or wholesale in the United States of like 13 merchandise or competing merchandise; or 14 ‘‘(C) a trade or business association a ma- 15 jority of the members of which manufacture, 16 produce, or wholesale like merchandise or com- 17 peting merchandise in the United States. 18 ‘‘(2) COMPETING MERCHANDISE.—For pur- 19 poses of paragraph (1), the term ‘competing mer- 20 chandise’ means merchandise that competes with or 21 is a substitute for merchandise being imported into 22 the United States in violation of section 592(a). 23 ‘‘(3) LIKE MERCHANDISE.—For purposes of 24 paragraph (1), the term ‘like merchandise’ means 25 VerDate Sep 11 2014 21:28 Apr 23, 2023 Jkt 039200 PO 00000 Frm 00008 Fmt 6652 Sfmt 6201 E:\BILLS\H2667.IH H2667 pbinns on DSKJLVW7X2PROD with $$_JOB 9 •HR 2667 IH merchandise that is like, or in the absence of like, 1 most similar in characteristics and uses with, mer- 2 chandise being imported into the United States in 3 violation of section 592(a).’’. 4 SEC. 4. EXCLUSION OF PERSONS THAT HAVE COMMITTED 5 FRAUDULENT OR GROSSLY NEGLIGENT VIO- 6 LATIONS OF UNITED STATES CUSTOMS LAWS 7 FROM PARTICIPATION IN THE IMPORTER OF 8 RECORD PROGRAM. 9 Section 114 of the Trade Facilitation and Trade En- 10 forcement Act of 2015 (19 U.S.C. 4320) is amended— 11 (1) by redesignating subsections (c) and (d) as 12 subsection (d) and (e), respectively; and 13 (2) by inserting after subsection (b) the fol- 14 lowing: 15 ‘‘(c) EXCLUSION.— 16 ‘‘(1) IN GENERAL.—The following persons shall 17 be ineligible to participate in the importer of record 18 program: 19 ‘‘(A) Any person determined by U.S. Cus- 20 toms and Border Protection or a court of com- 21 petent jurisdiction to have committed a fraudu- 22 lent or grossly negligent violation of section 23 592(a) of the Tariff Act of 1930 (19 U.S.C. 24 1592(a)). 25 VerDate Sep 11 2014 21:28 Apr 23, 2023 Jkt 039200 PO 00000 Frm 00009 Fmt 6652 Sfmt 6201 E:\BILLS\H2667.IH H2667 pbinns on DSKJLVW7X2PROD with $$_JOB 10 •HR 2667 IH ‘‘(B) Any person that is an affiliated per- 1 son of a person described in subparagraph (A). 2 ‘‘(2) REVOCATION.—The Secretary shall revoke 3 the importer of record number assigned to any per- 4 son under the importer of record program if the Sec- 5 retary subsequently determines that the person is a 6 person described in subparagraph (A) or (B) of 7 paragraph (1). 8 ‘‘(3) AFFILIATED PERSON DEFINED.— 9 ‘‘(A) IN GENERAL.—For purposes para- 10 graph (1)(B), the term ‘affiliated person’ has 11 the meaning given that term in section 771(33) 12 of the Tariff Act of 1930 (19 U.S.C. 1677(33)). 13 ‘‘(B) DEEMED AFFILIATED PERSONS.—In 14 order to prevent commercial fraud, protect the 15 revenue, and help prevent the use of shell com- 16 panies by importers that seek to evade the cus- 17 toms and trade laws of the United States, a 18 person may be deemed to be an affiliated per- 19 son for purposes of paragraph (1)(B) based 20 upon information declared to U.S. Customs and 21 Border Protection suggesting a formal or ongo- 22 ing relationship between that person and a per- 23 son described in paragraph (1)(A), including 24 similarities in imported merchandise (including 25 VerDate Sep 11 2014 21:28 Apr 23, 2023 Jkt 039200 PO 00000 Frm 00010 Fmt 6652 Sfmt 6201 E:\BILLS\H2667.IH H2667 pbinns on DSKJLVW7X2PROD with $$_JOB 11 •HR 2667 IH article classification upon importation), common 1 declared exporters and shippers, and historical 2 import volumes.’’. 3 Æ VerDate Sep 11 2014 21:28 Apr 23, 2023 Jkt 039200 PO 00000 Frm 00011 Fmt 6652 Sfmt 6301 E:\BILLS\H2667.IH H2667 pbinns on DSKJLVW7X2PROD with $$_JOB