March 2, 2026

Trump Administration Announces New Trade Fraud Enforcement Initiative: What Companies Need To Know

Joel Cohen, Marietou Diouf, T. Markus Funk, David Lim, Carolyn Pelling Gurland, Brent Wible White & Case LLP + Follow Contact LinkedIn Facebook X Send Embed

Background

On February 23, 2026, the US Department of Justice's (DOJ's) Cody Herche introduced himself as the new head of the recently-created Trade Fraud Task Force 1. He then went on to announce 2 a significant initiative, making the fight against trade fraud part of the Administration's "America First Agenda" 3 and elevating enforcement to an "economic and national security priority."

This development signals a new era of heightened compliance expectations and risks for multinational corporations, importers, and government contractors operating in or with the United States.

Key Developments

Trade Fraud as a National and Economic Security Imperative

• Shift in approach. The DOJ made clear that trade fraud, including customs violations, forced labor, and tariff evasion, is no longer viewed as a regulatory formality. Instead, it will be treated as a front-line threat to US national and economic security to be addressed through criminal enforcement actions.
• Dismantling "two-tier pricing structure." The Administration said it is determined to dismantle the "two-tier pricing structure" that allows non-compliant actors to gain unfair advantages over law-abiding businesses.
• Chicago US Attorney's Office as the "Lead Partner." A February 24, 2026, press release 4 announced that the Chicago US Attorney's Office, which has deep experience bringing criminal trade fraud cases, will be the Trade Fraud Task Force's "leading prosecutorial partner."

Expanded Enforcement Priorities

• Focus on vertically integrated companies. The DOJ said it will focus on vertically integrated businesses, which it said are best-positioned to police their own supply chains through robust internal controls and prompt response to red flags.
• No ignoring red flags. Companies with fragmented supply chains are not immune, however. The DOJ was explicit that failure to address red flags or self-disclose issues will expose them to significant legal risk.
• Blowing the whistle on corrupt (overseas) competitors. Whistleblowers, notably including companies blowing the whistle on suspected corrupt competitors (particularly when they are non-US companies competing with US companies), are expected to play an increasingly central role in identifying and reporting trade fraud. This approach, the DOJ said, is consistent with, and supports, the Administration's broader "America First" philosophy – and is something US and foreign companies must remain aware of.

Mandatory Disclosure and Jurisdictional Reach

• Mandatory disclosure. The DOJ emphasized mandatory disclosure obligations under the Federal Acquisition Regulation (FAR).
• Wide jurisdictional need. The DOJ also noted that, under 18 U.S.C. § 3237's broad jurisdictional reach, companies must be prepared for enforcement actions in, among other places, any jurisdiction through which goods are moved or sold.

Forced Labor: A Central Enforcement Pillar

• Goods made with forced labor. The DOJ, in coordination with the Forced Labor Enforcement Task Force, said it going forward will aggressively enforce prohibitions on importing goods made with forced labor, referencing statutes including the Uyghur Forced Labor Prevention Act (UFLPA), the Tariff Act of 1930 (Section 307), and Federal Acquisition Regulation 52.222-50 (Combatting Trafficking in Persons).
• Government contractors under the microscope. Government contractors, per the DOJ, now face heightened scrutiny and must be more diligent when certifying that their products and supply chains are free from forced labor; going forward, non-compliance carries enhanced risks of contract termination, suspension, debarment, and criminal liability.

Self-Reporting and Honest Self-Assessment Critical

• Self-reporting. The DOJ said it is making self-reporting of potential violations a central expectation. Prompt, voluntary disclosure and cooperation can mitigate penalties and, in some cases, avoid prosecution.
• Risks for the non-compliant. According to the DOJ, companies failing to timely self-report suspected violations, or who conduct what the DOJ considers inadequate professional internal reviews when red flags are identified, will face severe penalties, including criminal prosecution and debarment for government contractors.

DOJ-Endorsed Compliance Best Practices

To address the DOJ’s new enforcement posture, companies should consider the following steps:

• Conduct comprehensive global compliance audits: Engage experienced outside counsel, working with internal audit teams, to perform a privileged and confidential gap analyses of trade-related compliance programs across jurisdictions.
• Benchmark and remediate: Compare existing programs to DOJ guidance and industry best practices, prioritize remediation of critical gaps, and update policies to reflect evolving legal requirements.
• Strengthen supplier due diligence: Ensure robust onboarding, monitoring, and auditing of suppliers, especially in high-risk regions, and require certifications regarding forced labor and customs compliance.
• Enhance training and awareness: Provide targeted practical training for employees, suppliers, and third parties, and foster a culture of compliance and whistleblower protection.
• Leverage technology: Utilize supply chain mapping, blockchain, and data analytics to improve traceability and detect anomalies.
• Prepare for government scrutiny: Develop crisis response protocols, maintain clear documentation, and establish cross-functional response teams for investigations and disclosures. Be prepared to "show you work" to government enforcers or regulators.

Conclusion

The DOJ’s new initiative marks a decisive shift in trade fraud enforcement, with significant implications for global businesses. Companies that act now to enhance compliance position themselves to not only reduce legal and reputational risks but may also gain a competitive advantage in a more demanding marketplace.

1 Departments of Justice and Homeland Security Partnering on Cross-Agency Trade Fraud Task Force (Aug. 29, 2025), available at https://www.justice.gov/opa/pr/departments-justice-and-homeland-security-partnering-cross-agency-trade-fraud-task-force.
2 T. Markus Funk, What DOJ’s Focus On Trade Fraud Means For Companies (Feb. 24, 2026), available at https://papers.ssrn.com/sol3/Delivery.cfm/6300539.pdf?abstractid=6300539&mirid=1&type=2.
3 President Trump’s America First Policy (Jan. 20, 2025), available at https://www.whitehouse.gov/briefings-statements/2025/01/president-trumps-america-first-priorities/.
4 Department of Justice Selects US Attorney’s Office in Chicago As Leading Prosecutorial Partner on Trade Fraud Task Force (Feb. 24, 2026), available at https://www.justice.gov/usao-ndil/pr/department-justice-selects-us-attorneys-office-chicago-leading-prosecutorial-partner.

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DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.
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