DOJ / DHS TRADE FRAUD ENFORCEMENT GUIDE · JULY 2026

Trade fraud enforcement if you buy from China. The file lives in the factory.

In July 2026 the Department of Justice and the Department of Homeland Security published their first joint Resource Guide to Trade Fraud Enforcement. It says, in plain words, that the era of claiming ignorance about your suppliers is over, and that customs violations are no longer "pay the fine and move on."

It isn't asking whether you trust your Chinese supplier. It's asking whether origin, value, composition and labour conditions can be proven from inside the building.

Here is what the Guide is, what it changed, which schemes catch buyers who didn't mean to commit one, what it costs, and how to check your own exposure in ten minutes. Then, if you want it, what we do.

What is the Trade Fraud Guide, and why does it matter if I buy from China?

A 27-page joint publication by DOJ and DHS through their Trade Fraud Task Force: the National Fraud Enforcement Division, HSI, and CBP among them. It sets out the customs entry process, the enforcement statutes, forced labour, and the schemes the government sees most, with real cases attached.

It's the third government document on this in one summer. In June, Executive Order 14411 ordered a penalty floor of at least 50% and an end to mitigation for repeat offenders. The same month, CBP's Forced Labor Enforcement Operational Guidance told importers what evidence it wants and how to format it. In July, the Guide said why: candour is not best practice, it is a legal requirement, and any imported good that presents a risk usually begins with a lie: about value, origin, composition, or the conditions under which it was produced.

Four facts. All four live in a building in China.

Source: DOJ/DHS Trade Fraud Guide, July 2026, foreword and pp.1–2; Executive Order 14411, 3 June 2026; CBP Forced Labor Enforcement Operational Guidance, June 2026.

What did the Guide actually change?

Reasonable care can't be handed to the factory or the broker. Your name is on the entry. The Guide cites a court ruling that relying on the exporter and the broker does not remove the importer's obligation. You cannot contract it away.

"I didn't know" is now a category, not a defense. The Guide says DOJ will look at whether a failure was negligence, reckless disregard, willful blindness, or intentional criminality. Not asking, when the signs were there, is willful blindness. That's the second rung, not the first.

Liability runs past the importer of record. Distributors and brands who received, bought or sold goods that were imported contrary to law (and knew, or looked away) can be in it too. The Guide says so explicitly: for every illegal market there is both supply and demand, and it investigates down-chain.

Forced labour is written up as trade fraud. Chapter 4 of the Guide. UFLPA's high-priority sectors are now twelve, not four: apparel, cotton, polysilicon, tomatoes, aluminum, PVC, seafood, steel, copper, lithium, caustic soda, red dates.

Records for five years. Importers and brokers must keep entry records for five years. Every document you'd need to answer a question has to exist for that long.

Source: DOJ/DHS Trade Fraud Guide, July 2026, pp.2–4, 12, 16–17.

Which of these schemes catches a China buyer who didn't mean to?

Chapter 5 of the Guide lists the schemes. Most were done to importers, not by them. Here's how each one arrives at your desk without your knowledge, and what the government did about it.

False country of origin and transshipment. Your supplier "moves" to Cambodia or Vietnam. The invoice changes. The machines don't. You never stood in either building. A Charlotte distributor paid $54.4 million for tungsten carbide routed through a third country. A Florida couple got 57 months for plywood.

False classification. The factory describes your product one way on the PI, and the broker files it. Finished goods as "parts." Virgin material as recycled. A high-duty article under a neighboring heading. An importer paid over $53 million for misclassifying automotive components to avoid antidumping duties above 92 per cent.

Undervaluation and double invoicing. The supplier offers to "help with the invoice": one number for CBP, another for payment. A Miami importer pleaded guilty to a double-invoice scheme on truck tyres. Two apparel importers paid $10 million for a decade of understated invoices. If a supplier offers this, it tells you how they handle their other paperwork.

Antidumping and countervailing duty evasion. You didn't know the product sat in a scope. The supplier did. Two California companies paid $549.5 million over aluminum extrusions declared as "pallets" that were never sold as pallets.

Shell importers. The supplier sells DDP and "arranges the importer of record": a company with no assets that dissolves after entry. CBP comes looking for the beneficial owner. That's you

Forged safety and environmental certificates. The CPSC children's product certificate, the EPA certificate of conformity: supplied by the factory, never verified. A car maker's subsidiary paid $1.6 billion for falsified emissions certificates on 105,000 engines.

Broker fraud. Your own broker misclassifies or files a low invoice. You're still liable.

The pattern: in every one, someone behind the wall did something to your entry that benefited them, and your name is on it.

Source: DOJ/DHS Trade Fraud Guide, July 2026, Chapter 5, pp.19–25.

The guide starts with the foundation, then builds upward step by step.

What can it cost?

Section 592 penalties. Scaled by culpability: negligence, gross negligence, fraud. A pre-penalty notice gives you one chance to put contrary evidence on the table. And Executive Order 14411 ordered a penalty floor of at least 50% and an end to mitigation for repeat offenders.

False Claims Act. Three times the duties evaded, plus penalties. "Knowingly" includes deliberate ignorance and reckless disregard. And a private person (a competitor, an ex-employee, a former supplier) can file the case on the government's behalf and keep a share of the recovery. Most of the settlements in the Guide started that way.

Forced labour. Knowingly benefiting from a venture that used forced labour, or reckless disregard of it, is a crime under 18 U.S.C. §1589, from the importer down to the retailer.

The duties themselves. Section 301 back-owed. AD/CVD that the Guide says can exceed 600 per cent of declared value. The 10 per cent marking duty. Applied to entries already sold.

Source: DOJ/DHS Trade Fraud Guide, July 2026, pp.10–13, 17, 19–21; Executive Order 14411

Am I exposed?

Three or more incorrect answers usually point to a documentation problem, not fraud.

Most people in this position have done nothing deliberate. However, under the Guide, they may still be exposed.

1. Is the legal name of the company that made your goods on your commercial invoice, or is it a trading company?

2. Do your wire transfers match your invoices, entity for entity, amount for amount?

3. Has your declared country of origin changed in the last two years?

4. Has anyone from your side stood in the building where the goods are made?

5. Do you have a bill of materials by country, not by supplier?

6. Can you name your supplier's main material supplier?

7. Has any supplier ever offered to "adjust" an invoice for customs?

8. Are your product safety or compliance certificates issued by the factory itself?

9. Do your goods or their inputs touch any of the twelve UFLPA priority sectors?

What should I do this month?

Not today. This month. Nobody's holding your goods. That's the point of doing it now.

1. Pull your last twelve months of entries with your broker. Check the manufacturer name, the origin, the classification on each. Ask the broker: if CBP questioned this one, what would we send?

2. Fix the paper on your side. Your Form 5106 and bond are current and accurate. That's your broker's job, ask them to confirm it. Your classification is reviewed, not inherited from the factory's description.

3. Get the legal name and address of the actual manufacturer for every product you import. Business license.. Not the PI.

4. Follow your own money once. Wires against invoices. Note every mismatch.

5. Ask your supplier for a bill of materials by country. How they answer tells you as much as what they answer.

6. Check your inputs against the twelve sectors. If cotton, aluminum, polysilicon, PVC or steel is in your product, you're in the priority lane whether you knew or not.

7. Decide who stands in the building. Someone has to. It's the only way half the questions above get a real answer.

Source: DOJ/DHS Trade Fraud Guide, July 2026, pp.3–6, 16–17.

WHERE WE COME IN

What we do, and what we don't

We produce the China-side file. On site, in Chinese.

Legal entity against the name on your PI and the name on the bank. Whether the address is a factory or a desk. The origin trail: who made it, who sold it, what was transformed, where. An input and labour map deep enough to survive a CBP question. Dated photographs, chopped affidavits, a payment trail that matches the invoices. If a CF-28, CF-29, UFLPA hold or detention is already in your inbox, the packet is built through Asia Agent, in the format CBP's guidance describes, and your counsel files it.

What we are not.

We are not US trade counsel. Your broker and lawyer file and argue. The Guide doesn't require you to hire us or anyone like us; it requires you to know your chain, and we're one way to know it. We don't fix your 5106 or your bond. We're not the independent forced-labour auditor CBP describes. That's SGS or TÜV SÜD, and we coordinate it when a sector calls for it. And we never source and take no commission from any factory, which is the only reason a factory's own suppliers will talk to us.

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