In December 2025, the U.S. Department of Justice (DOJ) announced a landmark USD 54.4 million settlement with Ceratizit USA LLC, resolving allegations of customs fraud and violations of the False Claims Act (FCA). The case highlights the U.S. government’s intensified enforcement focus on tariff evasion, country-of-origin fraud, and customs compliance, particularly in the context of Section 301 duties on Chinese-origin goods.
The DOJ alleged that over a four-year period, Ceratizit knowingly misstated the country of origin of tungsten carbide products by transshipping Chinese-origin goods through Taiwan to falsely declare them as non-Chinese. This scheme allegedly allowed the company to avoid Section 301 tariffs imposed on imports from China. In addition, the DOJ asserted that Ceratizit misclassified tungsten carbide under the Harmonized Tariff Schedule (HTS) for approximately nine years, further reducing applicable duties, and failed to properly mark the country of origin, resulting in unpaid marking duties.
The investigation originated from a whistleblower (qui tam) action, a hallmark of FCA enforcement, and involved coordination between DOJ attorneys, U.S. Customs and Border Protection (CBP), and federal investigators. The case underscores how customs violations – traditionally viewed as regulatory matters, can escalate into high-value FCA liability when false statements are made to the U.S. government.
Without admitting wrongdoing, Ceratizit agreed to pay USD 54.4 million to resolve the allegations. The settlement sends a clear message: origin determination, tariff classification, and supply-chain routing are high-risk compliance areas, and misstatements, intentional or reckless, can carry severe financial and reputational consequences.
Please refer to the official press release from DOJ: