False Claims Act and Criminal Enforcement in the Tariff Context

Practical Guidance for Companies, Corporations, and Executives

Barnes & Thornburg: Scott Hulsey, Partner, Latin America Practice Group Co-Chair Washington, D.C. Atlanta; Adetayo Osuntogun, Partner, Washington, D.C.; Emily Harake, Associate, Nashville

The Department of Justice recovered a record $6.8 billion under the False Claims Act in fiscal year 2025, and a growing share of that enforcement is aimed at ordinary importers. In May 2026, DOJ secured the largest customs-related FCA settlement in the statute's history, $549.5 million. By August, it had grown its new Fraud Division to roughly 500 attorneys, with a section built specifically to prosecute similar cases.

For years, tariff compliance sat with the customs broker and the back office, treated as an administrative cost of doing business. That assumption no longer holds. A misclassified HTS code, an inflated country-of-origin claim, or an undervalued invoice is no longer just a duty underpayment — it's a potential false claim — carrying treble damages, per-claim penalties, and, increasingly, criminal charges against the executives who signed off.

Our new guide, "False Claims Act and Criminal Enforcement in the Tariff Context: Practical Guidance for Companies, Corporations, and Executives," examines how this enforcement wave took hold, and what companies and their executives can do to stay out of its path.

Read the guide here

Inside the Guide

Our international trade and white collar practice groups break down the civil and criminal frameworks driving these cases, the enforcement typologies behind recent settlements, misclassification, undervaluation, country-of-origin fraud, AD/CVD evasion, and forced labor violations, and the full roster of agencies now coordinating to pursue them, from CBP and Homeland Security Investigations to DOJ's new Global Trade and Commerce Enforcement Section.

We pair that analysis with a practical playbook:

• The red flags that invite scrutiny

• The compliance controls DOJ expects to see

• The self-disclosure calculus companies face once a problem surfaces

• A ready-to-use model compliance checklist and CID/subpoena response protocol

Our core message: tariff compliance is no longer a back-office function, it's a fraud-risk function, and it needs to be treated that way at the board level. Companies that build real compliance infrastructure now are far better positioned than those that wait for a subpoena to start asking the right questions.

The EU Update is a monthly TerraLex newsletter developed by Gecić Law’s EU practice in Brussels, providing timely insights into key EU legislative and policy developments impacting clients doing business across the European Union’s 27 Member States and 450 million consumers.

The fourth issue focuses on three significant regulatory developments: new EU foreign investment screening rules, making FDI review an increasingly important part of cross-border deal planning alongside merger control and the Foreign Subsidies Regulation; new Cyber Resilience Act reporting requirements, requiring manufacturers to report certain cybersecurity incidents and actively exploited vulnerabilities within 24 hours; and the Packaging and Packaging Waste Regulation, which introduces new compliance responsibilities for businesses placing packaged products on the EU market.

Designed as a valuable resource for cross-border advisory work, the EU Update combines high-level analysis with practical insights, helping members identify how evolving EU requirements may affect clients while connecting them with TerraLex experts across Europe for deeper, jurisdiction-specific guidance.

Antitrust Compliance in Cross-Border Distribution Agreements: Four High-Frequency Risk Clauses for Chinese Companies Entering the EU Market

In recent years, more and more Chinese companies have established a presence in European markets. Some enter retail channels through distributors, while others sell directly to European consumers using e-commerce platforms. In addition, some Chinese manufacturers establish franchise or supply partnerships with European companies. Throughout this expansion, legal and compliance teams often focus on market access, data protection, and product certification. However, they often overlook the antitrust compliance risks that may arise in distribution agreements.

There are significant differences between China and the EU in how they regulate vertical agreements, safe harbour thresholds, and specific contract clauses. As a result, practices that are routine under Chinese law may violate EU competition law. For example, a standard contractual term under Chinese law could fall under the prohibition in Article 101(1) of the Treaty on the Functioning of the European Union (TFEU). This may expose companies to investigations by the European Commission or national competition authorities, which risks fines of up to 10 percent of their global annual turnover. In some circumstances, such as when a company is a repeat offender and recidivism is taken into account, the actual penalties may be even higher.

This article identifies four types of antitrust risk clauses that Chinese companies frequently overlook in their European distribution agreements. Each type is considered with reference to the differences between Chinese and EU competition law. The aim is to help companies build a perspective that takes EU rules into account during contract drafting and review, rather than relying only on domestic compliance practices.

In this article, an arrangement that does not meet the safe harbour conditions of the Vertical Block Exemption Regulation (VBER) is not automatically unlawful. It simply means the arrangement cannot benefit from the legal certainty provided by the block exemption and must instead be assessed on a case-by-case basis. This involves two main steps. First, determine whether the arrangement appreciably restricts competition under Article 101(1) TFEU, for which the De Minimis Notice may provide guidance. Second, if it does appreciably restrict competition, consider whether it qualifies for an individual exemption under Article 101(3) TFEU. Any use of the term "individual assessment" below refers to this process.

Please click here to read the full article in Chinese and English.