by Kelly B. Kramer, Sydney H. Mintzer, Arun G. Rao, and Julyana C. Dawson
Left to Proper: Kelly B. Kramer, Sydney H. Mintzer, Arun G. Rao and Julyana C. Dawson (images courtesy of Mayer Brown)
On December 4, 2025, Ceratizit USA LLC agreed to pay $54.4 million to resolve False Claims Act (“FCA”) allegations tied to the evasion of customs duties on tungsten carbide merchandise imported from China, concluding roughly three years of litigation. The 2022 qui tam submitting by the relator/plaintiff alleged that Ceratizit evaded duties and violated country-of-origin marking guidelines relevant to tungsten carbide rods imported into the US. This settlement stems from a coordinated effort between the Division of Justice (“DOJ”) and the Division of Homeland Safety (“DHS”), by the US Customs and Border Safety (“CBP”). The relator/plaintiff will obtain roughly $9,750,000 of the settlement proceeds.
The grievance additional alleged that from August 2020 by March 2024, Ceratizit misrepresented the nation of origin of Chinese language-manufactured tungsten carbide merchandise, together with by trans-shipping items by Taiwan and declaring Taiwan because the origin to keep away from Part 301 tariffs relevant to items of Chinese language origin. The settlement additionally resolves allegations that from Might 2015 by March 2024, the corporate misclassified tungsten carbide merchandise underneath the Harmonized Tariff Schedule (“HTS”) to scale back duties, and that, from Might 2019 to March 2024, sure imported merchandise weren’t correctly marked with nation of origin, resulting in unpaid duties earlier than distribution in the US.
As we famous in our December 8, 2025 Authorized Replace, the settlement underscores the second Trump Administration’s increasing use of the FCA to deal with commerce fraud and obligation evasion, signaling continued reliance on civil enforcement instruments to deal with customs violations. Notably, the conduct at challenge reaches again to 2015, demonstrating that historic import practices can stay inside enforcement crosshairs and should resurface regardless of inner remediation or the passage of time. Whistleblowers additionally proceed to play a pivotal position: the numerous relator share right here demonstrates the tangible incentive for workers, rivals, and watchdog organizations to report potential violations, notably to the Commerce Fraud Process Power (as we signaled in our September 8, 2025 Authorized Replace). Though this matter resolved civilly, the DOJ has emphasised its intent to discover the potential felony expenses when warranted by the details—heightening the significance of proactive compliance and counsel engagement.
- FCA as a trade-enforcement software: The settlement demonstrates that FCA theories stay a central avenue for pursuing obligation evasion, even the place the underlying conduct issues customs regulation.
- Put together for whistleblower-driven scrutiny: The numerous relator share on this case reinforces the probability that inner or third-party reviews will provoke investigations and guarantee strong inner reporting channels and response protocols.
- Anticipate coordinated civil-criminal danger: DOJ has emphasised the potential for felony enforcement alongside using civil instruments, making early engagement with counsel and remediation-planning important.
- Monitor Commerce Fraud Process Power developments: The Process Power is turning into a robust platform for Division of Justice efforts, accelerating enforcement in commerce and customs fraud issues.
The federal government has a broad arsenal—FCA theories, customs penalties, and potential felony expenses—to deal with tariff evasion and associated commerce fraud. Given the expansive time-frame encompassed by this matter and the precedence positioned on the brand new Process Power’s mission, firms ought to anticipate continued, aggressive scrutiny of origin determinations, trans-shipment practices, and HTS classifications. Corporations must also observe DOJ statements and interagency initiatives described in our latest trade analyses and Authorized Updates, together with these highlighting escalations in felony tariff evasion circumstances.
Kelly B. Kramer, Sydney H. Mintzer, and Arun G. Rao are Companions and Julyana C. Dawson is an Affiliate at Mayer Brown. This publish first appeared as an article for the agency.
The views, opinions and positions expressed inside all posts are these of the creator(s) alone and don’t characterize these of the Program on Company Compliance and Enforcement (PCCE) or of the New York College College of Regulation. PCCE makes no representations as to the accuracy, completeness and validity or any statements made on this website and won’t be liable any errors, omissions or representations. The copyright of this content material belongs to the creator(s) and any legal responsibility on the subject of infringement of mental property rights stays with the creator(s).
by Kelly B. Kramer, Sydney H. Mintzer, Arun G. Rao, and Julyana C. Dawson
Left to Proper: Kelly B. Kramer, Sydney H. Mintzer, Arun G. Rao and Julyana C. Dawson (images courtesy of Mayer Brown)
On December 4, 2025, Ceratizit USA LLC agreed to pay $54.4 million to resolve False Claims Act (“FCA”) allegations tied to the evasion of customs duties on tungsten carbide merchandise imported from China, concluding roughly three years of litigation. The 2022 qui tam submitting by the relator/plaintiff alleged that Ceratizit evaded duties and violated country-of-origin marking guidelines relevant to tungsten carbide rods imported into the US. This settlement stems from a coordinated effort between the Division of Justice (“DOJ”) and the Division of Homeland Safety (“DHS”), by the US Customs and Border Safety (“CBP”). The relator/plaintiff will obtain roughly $9,750,000 of the settlement proceeds.
The grievance additional alleged that from August 2020 by March 2024, Ceratizit misrepresented the nation of origin of Chinese language-manufactured tungsten carbide merchandise, together with by trans-shipping items by Taiwan and declaring Taiwan because the origin to keep away from Part 301 tariffs relevant to items of Chinese language origin. The settlement additionally resolves allegations that from Might 2015 by March 2024, the corporate misclassified tungsten carbide merchandise underneath the Harmonized Tariff Schedule (“HTS”) to scale back duties, and that, from Might 2019 to March 2024, sure imported merchandise weren’t correctly marked with nation of origin, resulting in unpaid duties earlier than distribution in the US.
As we famous in our December 8, 2025 Authorized Replace, the settlement underscores the second Trump Administration’s increasing use of the FCA to deal with commerce fraud and obligation evasion, signaling continued reliance on civil enforcement instruments to deal with customs violations. Notably, the conduct at challenge reaches again to 2015, demonstrating that historic import practices can stay inside enforcement crosshairs and should resurface regardless of inner remediation or the passage of time. Whistleblowers additionally proceed to play a pivotal position: the numerous relator share right here demonstrates the tangible incentive for workers, rivals, and watchdog organizations to report potential violations, notably to the Commerce Fraud Process Power (as we signaled in our September 8, 2025 Authorized Replace). Though this matter resolved civilly, the DOJ has emphasised its intent to discover the potential felony expenses when warranted by the details—heightening the significance of proactive compliance and counsel engagement.
- FCA as a trade-enforcement software: The settlement demonstrates that FCA theories stay a central avenue for pursuing obligation evasion, even the place the underlying conduct issues customs regulation.
- Put together for whistleblower-driven scrutiny: The numerous relator share on this case reinforces the probability that inner or third-party reviews will provoke investigations and guarantee strong inner reporting channels and response protocols.
- Anticipate coordinated civil-criminal danger: DOJ has emphasised the potential for felony enforcement alongside using civil instruments, making early engagement with counsel and remediation-planning important.
- Monitor Commerce Fraud Process Power developments: The Process Power is turning into a robust platform for Division of Justice efforts, accelerating enforcement in commerce and customs fraud issues.
The federal government has a broad arsenal—FCA theories, customs penalties, and potential felony expenses—to deal with tariff evasion and associated commerce fraud. Given the expansive time-frame encompassed by this matter and the precedence positioned on the brand new Process Power’s mission, firms ought to anticipate continued, aggressive scrutiny of origin determinations, trans-shipment practices, and HTS classifications. Corporations must also observe DOJ statements and interagency initiatives described in our latest trade analyses and Authorized Updates, together with these highlighting escalations in felony tariff evasion circumstances.
Kelly B. Kramer, Sydney H. Mintzer, and Arun G. Rao are Companions and Julyana C. Dawson is an Affiliate at Mayer Brown. This publish first appeared as an article for the agency.
The views, opinions and positions expressed inside all posts are these of the creator(s) alone and don’t characterize these of the Program on Company Compliance and Enforcement (PCCE) or of the New York College College of Regulation. PCCE makes no representations as to the accuracy, completeness and validity or any statements made on this website and won’t be liable any errors, omissions or representations. The copyright of this content material belongs to the creator(s) and any legal responsibility on the subject of infringement of mental property rights stays with the creator(s).
