Customs Expert Archives | Customs & International Trade Law Blog

High Tariffs, High Stakes: The Rise in Customs Fraud and Enforcement Risk

As tariffs climb and global trade grows more complex, a growing number of importers are testing the limits, or outright breaking the law, to reduce or avoid duty payments. U.S. enforcement agencies, including Customs and Border Protection (CBP) and the Department of Justice (DOJ), have made it clear that customs fraud will not be tolerated and is a top enforcement priority.

High Tariffs = High Incentive to Cheat

High tariffs create an incentive to cheat. Whether it’s through misclassifying goods, undervaluing imports, or using deceptive transshipment routes, some companies are turning to creative or outright illegal strategies to reduce their tariff liability.

This is not theoretical, we’ve seen it before. During the U.S.–China trade war of 2018–2019, there was a surge in country-of-origin fraud, particularly Chinese goods re-labeled as “Made in Vietnam.” Known as a “country of origin wash,” this practice misleads CBP and avoids duties tied to China.

These incentives have contributed to the emergence of a cottage industry of “tariff reduction” companies that advertise ways to cut import costs. However, many of these so-called strategies amount to evasion, putting importers at serious legal risk.

DOJ Prioritizes Customs Fraud

The Department of Justice is watching closely. In a May 2025 memo, Matthew Galeotti, head of the DOJ’s Criminal Division, named trade and customs fraud as one of the top enforcement priorities in white-collar crime.

The DOJ also expanded its Corporate Whistleblower Awards Pilot Program […]

By Jennifer Diaz|2025-07-11T08:25:11-04:00July 11, 2025|Bloomberg, Customs Expert, Tariffs, U.S. Customs and Border Protection (CBP)|Comments Off

FDA Issues Proposed Rule on Front-of-Package Nutrition Labeling

The U.S. Food and Drug Administration (FDA) issued a proposed rule that would require a front-of-package (FOP) nutrition label on most packaged foods.

Rule Details

The label, referred to as the “Nutrition Info Box,” must contain the amounts (per serving) of three nutrients:

Saturated fat
Sodium
Added sugar

The label must also list whether the amount of these ingredients per serving is “Low,” “Med,” or “High.”

The FDA is proposing a compliance date of three years after the final rule’s effective date for businesses with $10 million or more in annual food sales. Businesses with less than $10 million in annual food sales would have four years to comply.

FDA Intent

The FDA stated that the Nutrition Info Box would complement the Nutrition Facts label that is already required on most packaged food. While the Nutrition Facts label is helpful to many consumers, the FDA found that some segments of the population do not regularly read the label.

Therefore, this rule is intended to provide accessible, at-a-glance information to help consumers quickly and easily identify how foods can be part of a healthy diet.

The agency conducted a literature review that included focus group testing and a peer-reviewed experimental study to explore consumer reactions and responses to various FOP nutrition labels.

The results indicated that interpretive FOP nutrition information is helpful for consumers and easy to understand.

Input on the Rule

The FDA is currently seeking public input on the proposed rule. The deadline to submit comments is May 16, 2025. If you will be impacted by the new requirements, […]

By Jennifer Diaz|2025-01-17T16:00:51-05:00January 17, 2025|CBD, China Trade War, Customs Expert, Enforcement, Food, ICE, Reasonable Care, Supply Chain, U.S. Federal Trade Commission (FTC), U.S. Food and Drug Administration (FDA)|Comments Off

FDA Issues New Rules on Use of the Term “Healthy” on Food Labeling

On December 19, 2024, the FDA announced a final rule to update the criteria that food must meet to qualify for use of the claim “healthy”.

New Requirements

To meet the updated criteria, a food product needs to:

Contain a certain amount of food from at least one of the food groups or subgroups (such as fruit, vegetables, grains, fat-free and low-fat dairy and protein foods) recommended by the Dietary Guidelines for Americans, and
Meet specific limits for added sugars, saturated fat and sodium.

The criteria vary for individual food products.

Under the new rule, nutrient-dense foods that are encouraged by the Dietary Guidelines with no added ingredients automatically qualify for the “healthy” claim. These include:

Vegetables
Fruits
Whole grains
Fat-free and low-fat dairy
Lean game meat
Seafood
Eggs
Beans
Peas
Lentils
Nuts
Seeds

Products that do not qualify for the healthy label under the updated rule include:

Fortified white bread
Highly sweetened yogurt
Highly sweetened cereal

These changes reflect current nutrition science and dietary guidance in the Dietary Guidelines for Americans.

What Food Manufacturers Should Do

The rule is effective February 25, 2025, and the compliance date of the rule is February 25, 2028. In preparation for the compliance date, food manufacturers should review their products to ensure that any product that uses a “healthy” label meets the new criteria. Diaz Trade Law has subject matter FDA expertise and can help you with a proactive compliance plan that meets the new requirements.

2022: A Year in Review

From all of us at Diaz Trade Law, we are immensely grateful for your support this year. While returning to a new normal post-pandemic, Diaz Trade Law still managed to save our clients MILLIONS of dollars in 2022. It is with great joy that we finish off 2022 filled with numerous achievements and accomplishments we are humbled to share with you. We look forward to assisting you in what we envision will be a better and brighter 2023!

Below we share some of our top 2022 success stories with you.

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By Jennifer Diaz|2022-12-30T15:46:57-05:00December 31, 2022|AD/CVD, Best Practices, Customs Expert, Export, Import, International Law, International Trade, U.S. Customs and Border Protection (CBP), U.S. Food and Drug Administration (FDA), U.S. Office of Foreign Assets Control (OFAC)|Comments Off

Customs and Trade Law Weekly Snapshot

Here is a recap of the latest customs and international trade law news:

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By Jennifer Diaz|2022-08-24T17:53:28-04:00August 26, 2022|Customs Expert, Food, International Business, International Law, International Trade, International Travel, U.S. Customs and Border Protection (CBP), U.S. Food and Drug Administration (FDA), Uncategorized|2 Comments

Customs and Trade Law Weekly Snapshot

Here is a recap of the latest customs and international trade law news:

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UFLPA DHS Guidance – What Importers Need to Know

On June 17, 2022, DHS published its long-awaited strategy guidance document which shed light on how UFLPA will be implemented, and what evidence may be provided to rebut the presumption that the goods were made with forced labor. This article provides an overview of the type of evidence importers should have readily available when importing goods into the United States. For general guidance on preventing the importation of goods produced with forced labor and how importers should audit their supply chain to ensure non-use of forced labor, please refer to our Bloomberg Law article, “U.S. Customs Targets Use of Forced Labor”.

UFLPA

The Uyghur Forced Labor Prevention Act (UFLPA) establishes a rebuttable presumption that goods mined, produced, or manufactured wholly or in part in the Xinjiang Province of China or by an entity on the UFLPA Entity List are prohibited from importation into the United States under 19 U.S.C. § 1307. However, if an Importer of Record can demonstrate by clear and convincing evidence that the goods in question were not produced wholly or in part by forced labor, fully respond to all CBP requests for information about goods under CBP review and demonstrate that it has fully complied with the guidance outlined in this strategy, the Commissioner of CBP may grant an exception to the presumption.

Clear and convincing evidence is a higher standard of proof than a preponderance of the evidence, and generally means that a claim or contention […]

By Jennifer Diaz|2022-06-28T12:22:23-04:00June 28, 2022|China, Customs Broker, Customs Expert, Enforcement, Forced Labor, Import, International Trade, Labor Rights, Pre-compliance, Reasonable Care, Seizures, U.S. Customs and Border Protection (CBP), U.S. Department of Homeland Security (DHS)|1 Comment

9801.00.10: Updated Requirements for Returned Goods

Background on HTSUS Subheading 9801.00.10

Ever hear of U.S. goods returned and wondered what it really meant? The Harmonized Tariff Schedule of the United States (“HTSUS”) subheading 9801.00.10 is used for re-importing U.S. made products back into the United States, duty-free. Previously, this classification only covered merchandise originally made in the United States and now reentering the country (hence “US Goods Returned”). In order to qualify for classification under subheading 9801.00.10 and duty-free treatment, these products entering the United States had to be unimproved in condition or value. In other words, the products had to not be subject to further processing abroad. For example, subheading 9801.00.10 may be used when goods are being re-imported as returned product to the seller or for repair. Under subheading 9801.00.10, the importer has the burden to prove their claim for duty-free treatment.

CBP Issues Updated Guidance

On August 20, 2021, subheading 9801.00.10 was expanded to include products which originated from foreign countries. HTSUS subheading 9801.00.10 now states: “Products of the United States when returned after having been exported, or any other products when returned within 3 years after having been exported, without having been advanced in value or improved in condition by any process of manufacture or other means while abroad.” In other words, non-U.S. origin products that are returned to the United States will ALSO qualify for duty-free treatment under subheading 9801.00.10. However, the timing requirements for U.S.-origin and foreign-origin products are different. U.S.-origin products currently have no time limit to file […]

By Jennifer Diaz|2021-11-09T12:23:27-05:00November 23, 2021|ACE, Best Practices, Customs Broker, Customs Expert, Enforcement, Import, International Trade, Pre-compliance, Reasonable Care, U.S. Customs and Border Protection (CBP)|Comments Off

How to Build and Maintain an Effective Import Compliance Plan

CBP enforcement is on the rise. If your business is importing into the U.S., or wants to start, our one-hour, NEI accredited, webinar on “Building & Maintaining an Effective Import Compliance Plan” will provide best practices and TOP tips to build an import compliance plan.

Register today to to hear directly from Senior Trade Advisor, Don Woods, DTL’s president, Jennifer Diaz, and Associate Attorney, Denise Calle as they discuss real life stories, current trends/risks associated with the import process, proactive ways to stay compliant, and the importance of training to avoid costly encounters with CBP. […]

By Jennifer Diaz|2021-10-01T09:43:08-04:00October 1, 2021|ACE, Best Practices, Counterfeits, CTPAT, Currency Seizure, Customs Broker, Customs Expert, Enforcement, Forced Labor, Freight Forwarding, ICE, Import, International Trade, IPR, Trademarks and Logos, Labeling, Labor Rights, Penalty, Pre-compliance, Reasonable Care, Seizures, U.S. Customs and Border Protection (CBP)|Comments Off

Keysight Technologies Pays $6.6M to State Department for Export Violations

The U.S. Department of State and the California-based company Keysight Technologies Inc. have reached a settlement of $6.6 million for violations of the Arms Export Control Act (AECA), 22 U.S.C. § 2751 et seq., and the International Traffic in Arms Regulations (ITAR), 22 C.F.R. Parts 120-130. This settlement comes after a compliance review by the Office of Defense Trade Controls Compliance (DDTC) in the Department’s Bureau of Political-Military Affairs for exporting unauthorized software used for testing radar equipment (on fixed or mobile platforms) to countries including Russia and China.

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By Jennifer Diaz|2021-10-07T14:34:25-04:00September 17, 2021|Customs Expert, Enforcement, Export, International Trade, ITAR|1 Comment