U.S. Department of Justice Establishes Formal Trade Enforcement Division, Tightening Cross-Border Compliance Oversight

[Ebrun Exclusive] Recently, the U.S. Department of Justice formally established the Global Trade and Commerce Enforcement Section (GTCES). This section, under the National Fraud Enforcement Division (NFED), is responsible for investigating and prosecuting various cross-border trade violations. This move signals a shift in U.S. trade enforcement from administrative penalties to a criminal accountability model, significantly elevating compliance risks for the cross-border trade industry.

Information officially disclosed by the U.S. Department of Justice indicates the investigation focus revolves around four categories of illegal activities: First, customs duty and tax fraud, such as deliberately understating product values or falsifying country-of-origin documents to circumvent tariffs or fraudulently claim export tax rebates. Second, violations by supply chain entities, including the use of shell importers to evade liability, customs brokers assisting in providing false documentation for entry, and choosing ports with relatively lax enforcement for illegal clearance. Third, product safety and regulatory fraud, such as concealing safety-defective products through forged certification documents or importing unapproved medical products with potential for counterfeiting. Fourth, trade control violations, including circumventing forced labor bans, illegally importing timber and wildlife products, and failing to declare sensitive goods subject to export controls.

In the past, U.S. Customs primarily handled import violations with administrative penalties, targeting only the import declaration entity. The consequences typically involved cargo detention, duty repayment, administrative fines, or revocation of customs brokerage licenses. With the establishment of GTCES, offending companies will not only face substantial fines, but their executives, operational, and financial personnel will also bear criminal liability, including imprisonment, to deter the industry.

Furthermore, industry insiders point out that the new enforcement logic targets the industry in a penetrating manner. The enforcement focus is no longer limited to U.S. importers; the entire supply chain will be brought into the accountability system. Beyond importers, related entities such as overseas manufacturers, freight forwarders, customs brokers, warehousing companies, and downstream distributors will be affected.

"Facing the comprehensive upgrade of the enforcement and regulatory system, cross-border enterprises primarily engaged in U.S.-bound business must abandon gray-area cost-cutting approaches and adhere to the bottom line of compliant operations. Actionable steps include: conducting a comprehensive review of the compliance history of all U.S.-bound orders; prudently evaluating overseas transit and transportation plans; establishing a complete upstream and downstream traceability archive system to strengthen internal compliance controls. Simultaneously, it is crucial to proactively establish emergency response plans for customs investigations," the industry insider added.