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US Customs Duties - Reporting Evasion

Editorial Staff

Unlike reporting suspected tax fraud to the IRS, reporting suspicions of customs duty or tariff fraud can be a simple matter. But if you want to claim a reward, it's far more complex.

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Customs and Border Protection is a division of the Department of Homeland Security. For this reason, they are concerned with far more than tax, etc. offences.

Customs duties are paid on goods imported into a country, but it is not the only form of financial or trade-related activity across the US Borders which, incidentally, include electronic borders not only physical borders.

Customs and Border Protection's website provides three classes of conduct to be reported.

These are "suspected criminal/illegal activity" and consist of "
Immigration crime, human rights violations and human trafficking or smuggling
Smuggling of weapons, narcotics, or other contraband
Financial crimes, money laundering, bulk cash smuggling
Cybercrime, website fraud"
International art and antiquity theft

The second classification is "Trade Violations," for which read "breaches" to avoid hyperbole

These include "

Intellectual Property Rights infringement
Textile or Free Trade Agreement violations
Health and Safety issues
Classification and Value violations
Forced Labour Violations

Finally there is a class for reporting allegations of evasion or orders relating to countervailing duty or anti-dumping). This is highly technical and should be used only by those who fully understand it.

The ideal place to start making an on-line report is at https://www.cbp.gov/travel/int... and then https://eallegations.cbp.gov/H...

Reporting Customs fraud can result in substantial rewards being paid to informants. A report is made to the Department of Justice for the district where the alleged offence takes place. There is no specific form for making such a report but many DoJ / District Attorneys' websites have online forms. When making the report, you should make it clear that your report includes a claim under the False Claims Act. This is a complex piece of legislation, made worse by a silly title. What is essentially means is that someone has filed, with a Federal department or agency, a fraudulent document that reduces their liability to the government.

Typical conduct which governments all over the world struggle to identify is where the country of origin is falsely stated, where the value of the goods is falsely stated, where goods are misdescribed or allocated to an incorrect classification to reduce the duty, etc. payable or, even, to permit passage of goods that would otherwise not be allowed without inspection or at all.

Understating the invoice value of goods that are exported may be part of an income-related fraud in the country of departure and/or part of a duty evasion offence in the destination country. Therefore goods shipped to the USA are reportable under this provision but goods exported from the USA should be reported to the IRS.

 


 

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