The House of Representatives passed the Protecting American Industry and Labor from International Trade Crimes Act on August 31, 2026, sending the Justice Department a mandate to build a dedicated trade crimes prosecution unit. The bill, H.R. 1869, cleared the chamber unanimously after a bipartisan push led by Representatives Ashley Hinson, John Moolenaar, Raja Krishnamoorthi and Ted Lieu.
What most coverage has missed is the version that actually passed. The engrossed text carries no authorization of appropriations, and the Justice Department’s 120-day deadline to stand up the task force does not begin until money is made available. For importers, marketplaces and retail brands, that turns a headline about new criminal exposure into a question of timing.
In short
- H.R. 1869 passed the House on August 31, 2026 and now sits with the Senate, where no companion action has been scheduled.
- The funding section was struck before the vote. The introduced text authorized $20 million for fiscal 2026 with 80% ring-fenced for the Criminal Division; the House-passed text authorizes nothing.
- The task force clock is conditional. Section 3 gives the Justice Department 120 days from the date appropriations are made available, not 120 days from enactment.
- The definition is broad. Section 2 reaches duty and tariff evasion, import and export restrictions, trade-based money laundering and smuggling, while carving out national security export control statutes.
- Enforcement is already running hot without the bill. CBP identified a record $1 billion in duty evasion under the Enforce and Protect Act in fiscal 2026, and the DOJ and DHS trade fraud task force has reported recovering more than $1 billion since August 2025.
What the House actually passed on August 31
H.R. 1869 is a structural bill, not a tariff bill. It does not raise a duty rate, change a classification or alter a trade remedy. It tells the Attorney General to build and staff a prosecutorial capability aimed at a category of conduct that until now has mostly been handled through civil channels.
The legislative path was fast for a Congress in its second session. The House Judiciary Committee advanced the measure on a reported 23 to 0 vote in early June, according to industry association accounts. The committee then reported the bill with an amendment on August 27, 2026 as Report No. 119-782, placing it on Union Calendar No. 683, and floor passage followed four days later.
Section 3 is the operative provision. It requires a task force, named program or other similar structure inside the Criminal Division of the Justice Department, coordinated by a supervisory criminal trial attorney selected by the Assistant Attorney General for the Criminal Division or another official designated by the Attorney General.
Section 3(b) adds staffing obligations. The Attorney General must create new criminal trial attorney positions and support roles, ensure that technically qualified prosecutors are assigned, and maintain contact with law enforcement, industry and the public on trade crime matters. That last clause matters for retailers: it contemplates a channel through which industry complaints reach prosecutors directly.
The definition of a trade-related crime
Section 2 defines the term by reference to the statutes it implicates rather than by listing offenses. It covers criminal activity in furtherance of evading duties, tariffs and other import and export fees, plus import and export restrictions or requirements imposed under the Tariff Act of 1930, the Trade Expansion Act of 1962, the Trade Act of 1974 and the Countering America’s Adversaries Through Sanctions Act.
It then extends to all other laws and regulations involving criminal activity relating to United States imports and exports, trade-based money laundering and smuggling. That residual clause is the widest part of the bill, and it is the reason compliance counsel have read the measure as covering ordinary commercial import fraud rather than only geopolitical cases.
The definition sits alongside the existing civil architecture rather than replacing it. Duty evasion cases that today travel through anti-dumping and countervailing duty proceedings would remain available, with criminal referral as a parallel track.
The 120-day clock that has not started
The deadline in Section 3(a) is written as 120 days after the date on which appropriations are made available to carry out the Act. That is a conditional trigger, not a calendar one. Without an appropriation, the clock never starts and the statutory command sits dormant.
This is the single most consequential drafting point for anyone modeling enforcement risk. A bill signed in October with no money attached produces no task force in February. A bill signed alongside a Justice Department appropriation that names the program produces a unit roughly four months later.
Why the funding line disappeared before the vote
The introduced version of H.R. 1869 contained a Section 6 authorization of appropriations. It authorized $20 million to the Attorney General for fiscal year 2026, required at least 80% of appropriated sums to be used by the Criminal Division for criminal prosecution of trade crimes, permitted the remainder to fund other components and civil enforcement, and made the amounts available until expended.
That section does not appear in the version the House Judiciary Committee reported on August 27, and it does not appear in the engrossed text that passed the chamber. The bill as passed ends at Section 5, the annual reporting requirement.
Several press accounts published after passage still describe the $20 million figure and the 80% set-aside as features of the bill. Those figures trace to the introduced text. Readers modeling the Justice Department’s likely capacity should treat them as the sponsors’ stated intent rather than as enacted law.
Stripping an authorization before floor consideration is a routine way to clear a jurisdictional or budget-point objection and to widen the vote. It also has a practical effect: the program becomes a line item in the ordinary appropriations negotiation rather than a standing authorization.
| Provision | Introduced text (H.R. 1869 IH) | House-passed text (H.R. 1869 EH) |
|---|---|---|
| Definition of trade-related crimes | Section 2, broad residual clause | Section 2, unchanged in substance |
| Task force inside Criminal Division | Required, 120 days after appropriations | Required, 120 days after appropriations |
| New prosecutor positions | Required | Required |
| Enumerated statutes for emphasis | 18 offense categories | 18 offense categories |
| Annual report to Congress | Required, first report at one year | Required, first report at one year |
| Authorization of appropriations | $20 million, FY2026, 80% Criminal Division | Not present |
The timing compounds the point. Fiscal 2026 ends on September 30, 2026. An authorization written for that fiscal year would have had weeks of life left even if the Senate had moved immediately, which is one plausible reason the sponsors did not fight to keep it.
What “trade-related crimes” covers for a retail importer
Section 4(a)(2) lists the statutes the task force is directed to emphasize. The list is instructive because it maps almost exactly onto the fact patterns that customs brokers see in ordinary consumer goods sourcing.
The customs offenses are the core: 18 U.S.C. 541 for entry of goods by false classification, 542 for entry by means of false statements, 543 for entry of goods at less than legal duty, 545 for smuggling goods into the United States, 546 for smuggling into foreign countries and 554 for smuggling goods from the United States.
Around that core sits the general fraud toolkit: conspiracy under 18 U.S.C. 371, false statements under 1001, mail fraud under 1341, wire fraud under 1343 and conspiracy to commit those frauds under 1349. Prosecutors already use this combination in customs cases, because a false invoice transmitted electronically is a wire.
The list then reaches beyond revenue. It names forced labor under 18 U.S.C. 1589, money laundering under 1956 and 1957, trafficking in counterfeit goods under 2320, misbranding under Section 301 of the Federal Food, Drug, and Cosmetic Act, and violations of Sections 15 and 16 of the Toxic Substances Control Act.
Section 4(a)(2) closes with an exclusion. The list does not include national security statutes, specifically the Arms Export Control Act, the International Emergency Economic Powers Act, the Export Control Reform Act and the Trading with the Enemy Act. The task force is being pointed at commercial trade fraud, not at export control and sanctions work that other components already own.
Why classification and valuation carry the most exposure
Three of the six enumerated customs offenses turn on what the importer declared. Classification, valuation and origin are the three levers that determine the duty owed, and each has a legitimate planning space and an illegitimate one.
Legal duty reduction through product design and tariff engineering remains lawful. The offense arises when the declaration does not match the goods, or when a transaction structure is documented to support a value the parties never used.
Origin is the sharpest edge in the current tariff environment. With Section 301 and Section 232 rates varying by country of origin, country-of-origin rules now decide whether a shipment carries a single-digit rate or a rate above 50%, which is precisely why transshipment dominates the enforcement caseload.
Where forced labor fits
Including 18 U.S.C. 1589 places forced labor in the same prosecutorial unit as duty evasion. In practice these cases already overlap, because goods routed to disguise a prohibited origin are often routed to disguise a labor issue as well.
For retail sourcing teams, that convergence means a supply chain map built for customs purposes and a map built for labor diligence are converging into one document. A gap in either is now evidence in the other.
How the bill fits the September enforcement calendar
The bill lands in the middle of the densest US import compliance quarter in years. Several of the items below are administrative rather than legislative, but they share a direction: more data, collected earlier, with identity of the filer as the control point.
| Date (2026) | Action | Who it binds |
|---|---|---|
| September 8 | Canadian counter-tariffs take effect on more than 700 US-origin product lines | US exporters and Canadian buyers |
| September 15 | Court of International Trade oral argument on refunds for AD/CVD entries subject to IEEPA tariffs | Importers with unliquidated refund claims |
| September 18 | CBP begins voiding importer of record numbers tied to inaccurate CBP Form 5106 data | Every importer of record |
| September 19 | ACE begins rejecting entries that omit copper smelt and cast origin | Importers of copper and copper derivatives |
| September 22 | Entry Type 13 electronic informal mail entry test opens in ACE | Postal and mail-channel shippers |
| September 23 | CBP Commercial Customs Operations Advisory Committee quarterly meeting | Trade advisory participants |
| September 29 | Second tranche of Section 232 pharmaceutical duties applies | Retail pharmacy and health importers |
| September 30 | Fiscal year 2026 ends | Any FY2026 authorization or appropriation |
| October 22 | CPSC eFiling requirement begins for international mail | Consumer product importers |
| December 1 | Comments close on CBP’s supply chain visibility proposal | Importers, platforms, carriers |
The September 18 milestone is the one that touches the widest population, because a voided importer of record number stops cargo regardless of whether any duty is in dispute. Our earlier reporting on CBP voiding importer of record numbers sets out the Form 5106 data fields that trigger the action.
Read together, the calendar and the bill point at the same objective. The administrative measures make the identity and supply chain behind each entry legible, and the bill supplies a prosecutorial destination for what that data reveals.
What the enforcement record already looks like without the bill
The case for the legislation is not that nothing is happening. It is that the volume has outgrown the staffing model. The numbers reported by CBP and the Justice Department over the past year make that argument on their own.
CBP has reported identifying $1 billion in duty evasion through Enforce and Protect Act investigations in fiscal 2026, described by the agency as the most in the program’s history and roughly 300% above its annual average. The agency issued 14 notices of determination across product lines including solar cells, lumber, pipes, xanthan gum, metal lockers, tow-behind lawn groomers and wooden furniture.
The historical distribution explains why country of origin sits at the center of the problem. Across fiscal 2016 through fiscal 2026, CBP data show 462 EAPA cases filed, with 314 involving China, 48 South Korea, 30 Vietnam, 23 Germany, 20 Indonesia and 15 India. Of those, 398 were transshipment cases, with Malaysia the most common routing country.
| Metric | Reported figure | Period |
|---|---|---|
| CBP duty evasion identified under EAPA | $1 billion | FY2026, program record |
| EAPA cases filed since program launch | 462, of which 398 transshipment | FY2016 to FY2026 |
| DOJ False Claims Act recoveries, all sectors | $6.8 billion | FY2025, statutory record |
| DOJ False Claims Act settlements, all sectors | More than $1.8 billion | First half of 2026 |
| Largest customs FCA settlement to date | $549.5 million (Perfectus Aluminum and related entities) | Announced May 12, 2026 |
| DOJ and DHS trade fraud task force recoveries | More than $1 billion | Since August 2025 |
The civil side has scaled faster than the criminal side, which is the gap H.R. 1869 addresses. The False Claims Act allows a whistleblower to file, and the Justice Department expanded its corporate whistleblower awards pilot to cover trade, tariff and customs fraud, which has pulled cases into a civil channel with a built-in referral source.
Two settlements define the current benchmark. Perfectus Aluminum and related entities agreed to pay $549.5 million in May 2026 to resolve allegations tied to antidumping and countervailing duty evasion, and Ceratizit USA resolved tungsten carbide duty evasion allegations for $54.4 million in December 2025.
What a criminal track changes
Civil resolution is a corporate cost. Criminal exposure reaches individuals, and it changes who inside a company has a personal stake in the accuracy of an entry summary.
Section 4(b) of the bill preserves both routes explicitly. Criminal Division litigation does not preclude additional criminal prosecution or civil action, and nothing in the Act stops the Criminal Division, the Civil Division and other components from acting in parallel.
Who is exposed across the retail and e-commerce chain
The exposure profile is not uniform. It tracks who signs as importer of record, who controls the commercial documents and who benefits from the declared value.
Brands and private label programs
A retailer that imports its own private label goods is the importer of record and owns the declaration. Where a factory supplies the commercial invoice and the retailer files it without verification, the retailer holds the legal risk for a document it did not build.
First sale valuation, tariff engineering and duty drawback all remain lawful. What has changed is that the documentation supporting each one now needs to survive a reader who is looking for a false statement rather than a classification disagreement.
Marketplaces and cross-border sellers
Marketplace models push the importer of record role onto small sellers who often lack the compliance function to support it. That distribution of legal responsibility is now under review on both sides of the Atlantic, with the EU moving platforms into the deemed importer position and US rulemaking moving toward more granular disclosure of every party in a chain.
The parcel channel is where the two trends meet. Since the de minimis rule for US imports was suspended, low-value shipments require informal or formal entry, which means a filer, a declared value and a classification for consignments that previously carried none.
Small importers and new entrants
The smallest importers carry the highest ratio of risk to compliance capacity. They typically rely on a broker’s default classification, accept the supplier’s stated origin and have no process for reviewing post-entry amendments.
For that group the practical protection is unglamorous: a written classification rationale per SKU, a supplier origin attestation with production records behind it, and a single named owner for entry data inside the business.
What happens next in the Senate, and what happens if nothing does
The bill now requires Senate action. No companion floor schedule has been announced, and the Senate Finance and Judiciary Committees share the subject matter, which is one reason similar measures have stalled in past Congresses.
A version of this legislation passed the House in the 118th Congress and did not become law. That history is the strongest argument for treating House passage as a signal of direction rather than as an enforcement event.
If the Senate does act, the most likely vehicle is attachment to a broader package rather than standalone consideration. The reporting requirement in Section 5 gives appropriators a reason to fund the program, since the Attorney General must report annually by February 1 on charged trade crimes, indictment volume, how appropriated funds were used and what additional funding is needed.
If the Senate does not act, the operational picture barely changes in the near term. The Justice Department and DHS already run a trade fraud task force, the civil pipeline is producing nine-figure settlements, and the data collection expansions continue on their own regulatory timetables, including the CBP proposal on heightened import disclosures whose comment period runs to December 1.
Three scenarios worth pricing
Scenario one: enactment with funding named in a fiscal 2027 appropriation. The task force stands up roughly four months later, and the first annual report lands within a year of enactment.
Scenario two: enactment without a dedicated appropriation. The statutory command exists, the 120-day clock never starts, and the Justice Department continues under existing task force arrangements.
Scenario three: no Senate action this Congress. The bill is reintroduced, and the enforcement trend continues to be driven by CBP administrative action and False Claims Act litigation.
How the US approach compares with the EU, Canada and Brazil
Every major import market is tightening low-value and cross-border controls at once, but they are pulling different levers. The US is building enforcement capacity around existing criminal statutes. The European Union is reassigning legal responsibility. Canada and Brazil are changing the rate and the threshold.
The distinction matters for how a retailer allocates compliance budget. Enforcement-capacity changes raise the cost of getting a declaration wrong. Responsibility reassignment changes who has to build a customs function at all.
The EU route is the most structural. Under the Union Customs Code recast, platforms move into the deemed importer position, which shifts duty liability from thousands of small sellers onto a handful of marketplaces that can absorb the compliance overhead.
The US has not taken that step. CBP’s proposal on supply chain disclosure asks for visibility into every party in a chain, which achieves a similar targeting outcome through data rather than through liability transfer.
Rate changes versus enforcement changes
Canada’s counter-tariff order takes effect on September 8, applying 15%, 25% or 50% surtaxes across more than 700 US-origin lines. That is a pure price event, and its effect on a retailer’s landed cost is calculable the day it lands.
Brazil’s expiry of the sub-$50 parcel exemption on the same date works the other way, restoring a 20% federal duty on shipments that had been flowing duty free. Both are arithmetic. Neither requires a retailer to change how it documents an entry.
Enforcement capacity is harder to price because it is probabilistic. The cost only appears if a declaration is wrong, which is why it tends to be underfunded inside retail organizations until the first inquiry arrives.
What converges across all four markets
All four are converging on the same requirement: a named, accountable party with verifiable data behind every consignment. The de minimis channel was the last place in global trade where that requirement did not apply at scale, and it is closing in every major market at roughly the same time.
For a cross-border retail operation, the practical consequence is that the same dataset now satisfies four regimes. Product classification, origin evidence, declared value and the identity of the responsible party are the four fields that every one of these programs is asking for.
What it means for landed cost and retail margin
The direct cost of H.R. 1869 to a compliant importer is zero. Its indirect cost is the compliance work required to demonstrate that compliance, and that work is now being pulled forward by the administrative calendar rather than by the bill.
Sourcing teams that priced a duty advantage from an origin shift over the past two years are the group most affected. If that advantage rests on documentation that would not survive scrutiny, it was never a margin gain, it was a deferred liability.
The market has already repriced part of this. Several US retailers reported IEEPA tariff refunds in their most recent quarters, and the way those refunds were treated in guidance showed how much of reported margin now depends on trade policy outcomes rather than on merchandising.
The reasonable planning assumption for the fourth quarter is that duty rates stay volatile and enforcement intensity rises regardless of what the Senate does. That combination favors accuracy over optimization in any classification decision taken between now and the holiday peak.
What retailers and sellers should do in the next 30 days
None of the following depends on the bill becoming law. Each is justified by the administrative calendar already in force this month.
- Confirm that CBP Form 5106 data matches current legal name, address and officer details before September 18, when voiding begins.
- Pull the last 12 months of entry summaries and identify every line where classification changed without a documented reason.
- Obtain origin attestations with production evidence for any SKU sourced from a country with a materially lower duty rate than its neighbors.
- Review related-party valuation files, including first sale documentation, for internal consistency between contracts, invoices and payment records.
- Name a single accountable owner for import data inside the business, separate from the customs broker.
- Decide whether to file comments on the CBP supply chain visibility proposal before December 1.
The prior disclosure route under 19 U.S.C. 1592(c)(4) remains the main mechanism for correcting an error before an investigation begins. Its value falls sharply once an agency has commenced a formal inquiry, which is the practical reason review work is worth more in September than in January.
What to watch
Three signals will tell you whether this becomes an enforcement event or stays a policy statement. First, whether any Senate committee schedules consideration before the end of the calendar year.
Second, whether a fiscal 2027 appropriations text names a Criminal Division trade crimes program, which is the condition that starts the 120-day clock. Third, whether the Justice Department announces criminal charges in a consumer goods duty evasion matter, which would show the existing task force operating in the retail supply chain rather than in industrial inputs.
The related litigation track also matters for cash. The Court of International Trade hears argument on September 15 in a case seeking a ruling that AD/CVD entries subject to IEEPA tariffs must ultimately be refunded, a question that affects the refund arithmetic for importers already carrying forced-labor tariff exposure from the July action.
Frequently asked questions
Did the trade crimes bill become law on August 31?
No. It passed the House of Representatives on August 31, 2026 and was engrossed for transmission to the Senate. It requires Senate passage and a presidential signature to become law.
How much money does the bill provide for the DOJ task force?
The version that passed the House provides none. The introduced text authorized $20 million for fiscal 2026 with at least 80% reserved for the Criminal Division, but that section is absent from both the reported and engrossed texts.
When would the task force have to exist?
Section 3 requires it within 120 days after the date appropriations are made available to carry out the Act. Because the trigger is an appropriation rather than enactment, an unfunded law would not start the clock.
What counts as a trade-related crime under the bill?
Criminal conduct furthering evasion of duties, tariffs and import or export fees, violations of import and export restrictions under the Tariff Act of 1930 and related trade statutes, plus trade-based money laundering and smuggling. National security export control statutes are explicitly excluded from the emphasis list.
Does this create new criminal offenses for importers?
No. It directs resources and structure toward existing offenses, principally the customs fraud statutes in Title 18 and the general fraud, conspiracy and money laundering provisions that prosecutors already pair with them.
Is tariff engineering still legal?
Yes. Designing or sourcing a product so that it falls into a lower duty classification remains lawful. The offenses in the bill’s emphasis list turn on false declarations, not on lawful planning that is accurately reported.
How exposed are marketplace sellers rather than the marketplace itself?
Exposure follows the importer of record. Where a small seller is named as importer of record, that seller carries the declaration risk even when the platform controls the listing and the logistics.
What is the fastest way to reduce exposure before enforcement escalates?
Reconcile Form 5106 data, document classification and origin decisions per SKU, and use the prior disclosure procedure to correct known errors before an agency opens a formal inquiry.
Has a bill like this passed the House before?
Yes. A predecessor version advanced in the previous Congress and did not become law, which is why the Senate calendar rather than the House vote is the meaningful indicator here.