Fighting Trade Cheats Act of 2025: New Penalties and Private Lawsuits Target Customs Fraud

The Fighting Trade Cheats Act of 2025 aims to crack down on customs fraud with hefty new penalties and, in a major shift, lets private companies sue over shady import practices. This bill doesn't mess around – it's all about hitting fraudsters where it hurts: their wallets and their ability to keep importing.

Tripling Down on Penalties

This bill significantly increases the financial pain for companies caught cheating on customs declarations. If you're found to have committed fraudulent violations, the penalty jumps to three times the domestic value of the goods (SEC. 2). And it's not just a slap on the wrist; you (and any "affiliated persons") also get banned from importing into the U.S. for five years after a final judgment. Gross negligence isn't let off easy, either – penalties can reach three times the domestic value of the merchandise or 10 times the lost revenue, plus a two-year import ban for the guilty party and their affiliates. The definition of "affiliated persons", borrowed from section 771(33) of existing law, is key here – it determines who else gets caught in the net.

For example, imagine a furniture company knowingly misdeclares the value of imported wood to dodge tariffs. Under this bill, they're not just paying back the lost taxes – they're facing a penalty potentially three times the actual value of that wood. Plus, they, and potentially related businesses, are locked out of the U.S. market for years. This is a big deal for any company that relies on imports.

Private Eye on Imports

The biggest change is the new power given to private parties. Section 3 lets "interested parties" – U.S. manufacturers, producers, wholesalers, unions, or trade associations – sue anyone they believe is committing customs fraud, or even aiding someone else in doing so. If they win, they get compensated for their losses, plus a penalty of three times that amount, and their legal fees covered. The courts can also issue injunctions to stop further illegal imports.

Think of a U.S. steel manufacturer losing business because a competitor is importing steel using fraudulent documents. Now, that manufacturer can directly sue the importer (and anyone helping them) for damages, potentially recovering far more than just their lost profits. This could lead to a surge in lawsuits, as companies now have a direct financial incentive to police their competitors' import practices.

The U.S. government isn't left out – they can intervene in these lawsuits and get access to information from the suing party (SEC. 3). However, there's a catch: the President can nullify any court order from these private lawsuits during a declared national emergency, using the International Emergency Economic Powers Act (SEC. 3). This raises a flag about potential executive overreach.

Importer of Record Crackdown

Section 4 targets the Importer of Record program. If you, or your affiliates, are found guilty of customs fraud or gross negligence, you're out of the program. The Secretary can even revoke your importer record number. The bill also tries to close loopholes by allowing authorities to deem someone an "affiliate" based on things like shared exporters, similar merchandise, or import volumes – a move to prevent shell companies from dodging penalties.

This means that if you're a small business owner relying on imports, and your supplier (or even a company related to your supplier) gets caught cheating, you could lose your ability to import, even if you weren't directly involved. This puts a lot more pressure on businesses to vet their entire supply chain.

Overall, the Fighting Trade Cheats Act of 2025 is a serious attempt to strengthen customs enforcement. It gives both the government and private companies powerful new tools, but also introduces potential challenges around legal battles, executive power, and the broad reach of "affiliated persons."