Worldwide: Importers and Consignees Increasingly Facing Criminal Prosecutions in Trade Remedy and Customs Enforcement Cases

Originally published May 17, 2011

Keywords: importers, consignees, criminal prosecutions, customs enforcement, antidumping duties

A recent case involving circumvention of antidumping duties highlights the US government's strategy of using criminal charges in trade enforcement cases. The US government has traditionally enforced its trade laws through customs-related civil penalties (e.g., 19 U.S.C. § 1592), but, of late, it has begun subjecting trade law violators to criminal penalties as well. Moreover, in a sign of the breadth of these prosecutions, the US Department of Justice (DOJ) is coupling these prosecutions with the enforcement of criminal statutes promulgated by non-trade-related agencies that regulate import safety.

On May 5, 2011, two co-owners of seafood wholesale companies were sentenced to prison terms after pleading guilty to 13 felony offenses related to the illegal importation and mislabeling of foreign-sourced fish and other seafood. In US v. Blyth, et al. (Southern District of Alabama), a team of prosecutors from the DOJ charged the defendants with various crimes including conspiracy, receiving smuggled goods, and violations of mislabeling under the Lacey Act and misbranding under the Food, Drug and Cosmetic Act. The case was investigated by the Department of Homeland Security, Immigration and Customs Enforcement, as well as the National Oceanic and Atmospheric Administration, Office of Law Enforcement, the US Air Force Office of Special Investigations, and the Department of Defense, Defense Criminal Investigative Service.

Among other things, the defendants in Blyth bought farm-raised catfish from Vietnam, which they knew had been imported into the United States and falsely declared as sole, in order to avoid US antidumping duties on imports of Vietnamese catfish. An antidumping duty has been in place on imports of catfish from Vietnam since 2003, after a determination by the US Department of Commerce that such fish were being sold in the United States at less than fair value. By their actions, the defendants in Blyth avoided paying approximately $145,000 in tariffs.

The criminal convictions in Blyth follow another recent trade enforcement case, US v. Wolff, et al. (Northern District of Illinois), where the defendants were charged with a number of wide ranging criminal violations, including obstruction of justice related to their efforts to circumvent antidumping duties on honey imported from China. (For more information, see our article, "The "Wolff" at Importers' Doors: Criminal Statute Is New Tool in Trade Enforcement Cases".) Although the Wolff defendants were charged with obstruction of justice and trade offenses, the defendants in Blyth were charged under two trade-specific criminal statutory provisions, 18 U.S.C. § 542 and § 545,¹ as well as under other statutes regulating imports, the Lacey Act (16 U.S.C. §§ 3371–3378) and the Food, Drug and Cosmetic Act (21 U.S.C. §§ 301 et seq.).

Although the US government has used various civil statutes against trade violators, it appears now to have added criminal sanctions to its trade enforcement methods, and it has also demonstrated a willingness to commit substantial resources to the enforcement of these matters with a large number of investigators from various agencies and prosecutors from different sections within the DOJ. With this new reality, it is more important than ever that US importers and consignees ensure that they are in full compliance with US antidumping duty orders, US customs laws, and other trade laws.

Learn more about our Global Trade practice.

Footnote

1. Section 542 criminalizes the provision of false information to US Customs and Border Protection while section 545 criminalizes the smuggling of goods into the United States.

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