Fighting Trade Cheats Act of 2026
- Sponsor
- Sen. Britt, Katie Boyd [R-AL]
- Committees
- Finance Committee (primary)
- Last action
- Feb 9, 2026
Bottom line
The Fighting Trade Cheats Act of 2026 aims to drastically strengthen enforcement against customs fraud by imposing severe financial and market access penalties, while also empowering private parties to pursue legal action against violators.
What it actually does
This bill significantly increases civil penalties for fraudulent and grossly negligent violations of United States customs laws, including imposing multi-year import prohibitions on violators and their affiliated persons. It also establishes a new private right of action, allowing domestic industries injured by such violations to sue for treble damages and injunctive relief. Furthermore, the bill excludes persons found to have committed these violations, and their affiliated entities, from participating in the Importer of Record program.
Proponents argue
Supporters argue that this bill is essential to deter rampant customs fraud, which undermines American industries and jobs by allowing illegally imported goods to compete unfairly. They contend that current penalties are insufficient and that empowering private parties will provide a crucial additional layer of enforcement, ensuring a level playing field for legitimate businesses.
Opponents contend
Critics might contend that the bill's penalties are excessively harsh, particularly for gross negligence, and could disproportionately impact legitimate businesses that make honest mistakes. Concerns could also be raised about the potential for an increase in litigation, including vexatious lawsuits, and the broad definition of 'affiliated person' potentially ensnaring innocent parties or disrupting global supply chains.
The bill is short and relatively straightforward, making it accessible for an informed reader to understand its core provisions within a short timeframe.
Section 2(2)(A), amending 19 U.S.C. 1592(c)(1)
Enhanced Penalties and Import Bans for Fraudulent Customs Violations
This provision increases the civil penalty for fraudulent customs violations to three times the domestic value of the merchandise. Additionally, it prohibits any person who commits such a violation, along with their affiliated persons, from importing merchandise into the United States for a period of five years following a final judgment.
Supporters argue
Supporters argue that these significantly increased penalties and import bans are necessary to create a powerful deterrent against fraudulent activities, making it unprofitable and risky for bad actors, thereby protecting legitimate businesses and ensuring fair trade practices.
Critics contend
Critics might argue that such severe penalties, especially the five-year import ban, could be disproportionate or lead to unintended economic disruptions, particularly if applied broadly or based on complex interpretations of fraud.
Tradeoffs
The provision balances the need for strong deterrence against customs fraud with concerns about the potential for overly punitive measures that could impact trade flows or legitimate businesses.
Section 2(2)(B), amending 19 U.S.C. 1592(c)(2)
Enhanced Penalties and Import Bans for Grossly Negligent Customs Violations
This provision raises the civil penalty for grossly negligent customs violations. If there is a loss of revenue, the penalty is increased to three times the domestic value of the merchandise. If there is no loss of revenue, the penalty is increased to ten times the potential loss of revenue. Similar to fraudulent violations, the offending person and their affiliated persons are prohibited from importing merchandise for two years.
Section 3, inserting new Section 592B into the Tariff Act of 1930
Creation of Private Right of Action for Customs Fraud
This section establishes a new civil action allowing 'interested parties'—defined as domestic manufacturers, unions, or trade associations—to sue any person who causes injury to their business or financial interest through fraudulent or grossly negligent customs violations. Successful plaintiffs can recover compensatory damages, an additional penalty of three times the damages, equitable relief (including injunctions against further imports), and attorney's fees. The United States government is permitted to intervene in such actions.
Section 4, amending Section 114 of the Trade Facilitation and Trade Enforcement Act of 2015
Exclusion from Importer of Record Program for Customs Violators
This section makes any person (and their affiliated persons) found to have committed a fraudulent or grossly negligent customs violation ineligible to participate in the Importer of Record program. It also mandates the revocation of existing Importer of Record numbers for such persons. The definition of 'affiliated person' is expanded for this program to include entities 'deemed' affiliated based on factors like similar merchandise, common exporters/shippers, and historical import volumes, specifically to prevent evasion through shell companies.
This provision creates a legal presumption that a person has knowledge of a customs violation if they purchase merchandise from a second or subsequent affiliated person who has previously been determined by CBP or a court to have committed fraud or gross negligence.
Section 2(1), inserting new 19 U.S.C. 1592(a)(2)
Why it matters:While amending existing statutes by inserting new paragraphs is standard legislative practice, the legal implication of a presumption of knowledge is significant and could easily be missed without close attention to the specific wording and its legal consequences.
Case for: Proponents argue this presumption is essential to prevent sophisticated bad actors from simply shifting fraudulent operations to different affiliated entities to evade penalties, making enforcement more effective against organized schemes.
Case against: Critics might argue that presumptions of knowledge can be overly broad and potentially undermine due process, as they could penalize purchasers who genuinely lack direct knowledge of a prior violation, shifting the burden of proof unfairly.
Estimated impact: This provision could significantly expand the scope of liability for customs fraud, particularly for larger corporate structures or networks, requiring increased due diligence from businesses when dealing with affiliated suppliers.
The bill repeatedly uses the term 'affiliated person' and refers to its definition in 19 U.S.C. 1677(33), a broad definition from existing trade law. For the Importer of Record program, Section 4(3)(B) further allows persons to be 'deemed' affiliated based on factors such as similarities in imported merchandise, common declared exporters and shippers, and historical import volumes, specifically to prevent commercial fraud and the use of shell companies.
Section 2(1)(B), Section 2(2)(A)(C), Section 2(2)(B)(C), Section 4(3). References 19 U.S.C. 1677(33) and Section 4(3)(B) further expands it.
Why it matters:Referring to existing definitions is standard legislative drafting. However, the specific expansion of 'deemed affiliated persons' for the Importer of Record program is a critical detail for enforcement against evasion and could be considered subtly buried given its significant implications.
Case for: Proponents argue that a robust definition of 'affiliated person,' including the ability to 'deem' affiliation, is crucial to prevent sophisticated fraudsters from evading penalties and import bans by simply reorganizing or using shell companies, thereby ensuring effective enforcement.
Case against: Critics might contend that a broad or 'deemed' affiliation could inadvertently ensnare legitimate businesses or individuals who have only tangential connections to a violator, leading to unfair penalties, administrative burdens, and potential disruptions to legitimate supply chains.
Estimated impact: This broadens the reach of penalties and import bans significantly, making it more difficult for bad actors to escape liability through corporate restructuring or the creation of new entities, but also potentially increasing compliance risk for legitimate businesses.