Expect More Customs Penalty, Whistleblower Cases in 2020, Law Firm Says

The Justice Department is adding new lawyers to its international trade office, indicating that there could be an uptick in Section 592 penalty cases against importers, according to Crowell & Moring’s 2020 Litigation Forecast. The hiring comes amid increased scrutiny on valuation and country of origin issues as Section 301 tariffs incentivize importers to find ways to reduce duty liability. “This likely means that CBP has already determined that a significant amount of penalty cases are not going to be resolved administratively and will proceed to litigation,” said David Stepp, a customs lawyer with the law firm.

Likewise, importers should also be aware of the increased potential for False Claims Act lawsuits for similar reasons, Stepp said. “With the administration’s protectionist policies and increased scrutiny on making sure duties are paid, we anticipate seeing the government taking up more of these FCA cases,” he said. A recent Supreme Court decision extending the statute of limitations for whistleblower claims will only accelerate that trend, the report said. In an opinion issued in May, the court said whistleable have up to 10 years after a false statement was made if the government hasn’t learned of the violation, Crowell & Moring said.