Webinar Recap: Navigating Tariff, Trade, and Customs Compliance

As tariff complexity escalates and enforcement intensifies, U.S. importers and exporters face unprecedented regulatory scrutiny. On this informative webinar, Citrin Cooperman's Partners Kevin Tanaka and Atul Chandra, alongside Tom Cook, CEO and Managing Director of Blue Tiger International, delivered critical insights into the evolving enforcement landscape, actionable compliance strategies, and practical mitigation solutions. This recap synthesizes key takeaways for business leaders and compliance professionals navigating today's challenging trade environment.

The New Enforcement Environment: DOJ Expansion and Multi-Agency Coordination

The most significant development reshaping tariff compliance is the Department of Justice's expansion into trade and customs fraud enforcement. Previously, Customs and Border Protection (CBP) held primary responsibility for tariff enforcement. Today, the DOJ augments the CBP, bringing substantially higher stakes to any investigation.

In May 2025, the DOJ's Criminal Division issued a strategic memo explicitly designating trade, tariff, and customs fraud as a top priority. This announcement introduced a formal DOJ whistleblower program for the first time, amending the corporate whistleblower program to include tariff evasion as a designated subject matter. The shift signals that the government is treating tariff violations not merely as administrative infractions but as serious federal crimes with potential criminal referrals, civil remedies, and enhanced whistleblower awards.

The Trade Fraud Task Force and Cross-Agency Coordination

Launched in August 2024, the Trade Fraud Task Force represents joint coordination between the DOJ and Department of Homeland Security (DHS). This collaboration mobilizes resources across multiple agencies and explicitly targets antidumping duties, countervailing duties, Section 301 duties, and parallel criminal prosecutions where appropriate — with particular emphasis on voluntary self-disclosure as a mitigating factor.

Expanding Whistleblower Channels

The government has enhanced whistleblower programs, creating multiple pathways for reporting violations including:

1. Enforce and Protect Act (EPA): Administered by CBP, targeting antidumping and countervailing duty violations. Notably, this program requires whistleblowers to provide their true identity and direct interest in the trade dispute.
2. e-Allegations Program: Open to the general public, anonymous, and extending beyond antidumping to misclassification, undervaluation, false country of origin, and transshipment violations.
3. DOJ Corporate Whistleblower Program: Launched in August 2024 and revised in May 2025, now explicitly includes trade, tariff, and customs fraud as eligible subject matter with significant monetary awards.
4. False Claims Act (qui tam provisions): The oldest but most powerful tool, allowing whistleblowers (called "relators") to sue on behalf of the government with potential awards of 15–30% of recovered amounts.

Core Components of an Effective Compliance Program

The DOJ's "Evaluation of Corporate Compliance Programs" document provides the blueprint for what regulators expect. Key elements include:

1. Tone at the Top: Clear messaging from senior leadership establishing zero tolerance for noncompliance — this must be documented and communicated organization wide.
2. Governance and Structure: Define how the compliance function is organized: dedicated chief compliance officer, outsourced arrangement, or embedded department. The DOJ recognizes no one-size-fits-all model but demands transparent rationale for chosen structure.
3. Risk Assessment: Conduct formalized risk assessments addressing geographic location, supply chain complexity, international operations, and import/export patterns. Annual or periodic re-assessment ensures evolving risks are captured.
4. Policies and Procedures: Document explicit controls governing classification (HTS numbers), valuation, record-keeping, and related-party transactions. These must be tailored to your operational footprint.
5. Training and Communication: Ensure policies and procedures are adequately disseminated and understood across the organization, with regular refresher training for relevant personnel.
6. Internal Controls and Monitoring: Establish third-party testing mechanisms, including internal audit departments and compliance audits, to verify controls operate as intended. This independent oversight is critical.
7. Confidential Reporting and Internal Investigations: Companies must establish internal whistleblower hotlines and investigation procedures. If a whistleblower reports externally to the government in parallel with an internal report, the company has 120 days to self-report and qualify for a potential declination of criminal charges.
8. Third-Party Due Diligence: Document how relationships with customs brokers, freight forwarders, and overseas suppliers are managed and supervised.
9. Documentation and Record-Keeping: Maintain complete, accurate records for a minimum of five years. This is a common area of deficiency noted in CBP audits and a critical vulnerability in DOJ investigations.

A company with a thoughtful, well-resourced, and operational compliance program significantly improves its chances of obtaining favorable treatment in enforcement scenarios.

Primary Mitigation Solutions

Blue Tiger International works with businesses to make informed decisions, working with 19 effective mitigation solutions including:

1. Bonded Warehouses and Foreign Trade Zones (FTZ)

These facilities sit outside the U.S. economy until goods enter commerce.

Benefits include:

• Duty Deferral: No customs clearance or duty obligation until goods enter U.S. commerce
• Extended Timeframe: Five years to move goods through a bonded warehouse; unlimited time in an FTZ
• Export Advantage: Goods exported from FTZ face zero duty obligation
• Manufacturing Option: FTZs allow assembly and manipulation; bonded warehouses do not

2. First Sale Rule

When purchasing through intermediaries (buying agents, commission representatives), companies often declare inflated values to customs that include agent fees. The first sale rule allows extraction of these legitimate costs:

• Benefit: Reduce duty base by the percentage represented by intermediary commissions (often 15–25%)
• Eligibility: Identify arms-length relationships with suppliers and agents

3. Tariff Engineering

Legally alter product design, materials, or composition to achieve a lower Harmonized Tariff Schedule (HTS) number:

• Example: Replace steel/aluminum components with alternative alloys or composites
• Requirement: Document engineering changes with detailed paper trails and lab validation
• Complexity: Ranges from simple ingredient changes (food products) to complex industrial redesign

4. Demand Planning and Freight Optimization

Improve logistics efficiency to reduce air freight dependency:

• Problem: Companies often overspend on expedited air freight (18x more expensive than ocean freight)
• Solution: Strengthen demand planning to shift to ocean freight
• Threshold: Spending more than 5 – 6% of total spend on air freight signals planning failure

5. Near-shoring and Alternative Sourcing

Diversify sourcing away from high-tariff countries:

• Friend-Shoring: Move to countries with favorable U.S. trade relationships (South Korea, Taiwan, Vietnam, Malaysia)
• Near-Shoring: Relocate to geographically closer regions (Canada, Mexico, Caribbean)
• Re-Shoring: Return manufacturing to the United States
• Risk Benefit: Reduces Chinese tariff exposure while building supply chain resilience

Immediate Action Items for Importers and Exporters

1. Conduct an Internal Audit: Review HTS classifications, valuations, country-of-origin determinations, and record retention compliance.
2. Establish an Internal Whistleblower Hotline: The 120-day self-reporting window only applies if internal mechanisms exist to catch violations before external disclosure.
3. Document Compliance Governance: Ensure tone-at-top messaging, written policies, training records, and risk assessments are in place and evidenced.
4. Third-Party Supervision: If using brokers, forwarders, or overseas suppliers, document your review and oversight processes.
5. Engage Supply Chain Professionals: Evaluate tariff mitigation strategies — bonded warehouses, FTZs, first-sale optimization, tariff engineering, and near-shoring.

Ongoing Compliance

• Conduct periodic compliance risk assessments
• Refresh training for relevant personnel annually
• Monitor regulatory developments via industry associations and advisors
• For related-party transactions, implement arm's-length valuation controls
• Request bills of materials from overseas suppliers; validate origin claims
• Maintain meticulous five-year record retention

If violations are discovered:

• Act Quickly: Self-report within 120 days to maximize mitigation
• Engage Outside Counsel and Forensic Investigators: Independent investigations carry more credibility
• Cooperate Fully: Proactively provide organized, complete information; exceed government expectations
• Remediate Thoroughly: Discipline personnel, close compliance gaps, tender back duties and penalties
• Document Everything: Build a paper trail demonstrating good-faith remediation

Conquer Compliance for Sustained Success

Companies that proactively strengthen governance, conduct genuine risk assessments, implement credible controls, and engage supply chain expertise will position themselves to avoid costly investigations, reduce enforcement penalties, and potentially achieve favorable declinations if violations are self-disclosed and remediated. Conversely, companies that do not adapt to this evolving landscape increase their risk of non-compliance alongside rising exposure to civil and potential criminal liability.

The path forward demands commitment from the top, investment in compliance infrastructure, and partnership with experienced professionals who understand both regulatory expectations and practical mitigation strategies. The cost of preventive compliance is substantially lower than the cost of reactive enforcement. To learn more about how Citrin Cooperman can help your business position itself for success, reach out to John Giordano, Kevin Tanaka, Atul Chandra, or your Citrin Cooperman professional.