On May 27, 2026, the Assistant Attorney General in charge of the Department of Justice’s (DOJ) Civil Division, Brett Shumate, that civil lawyers within the DOJ and U.S. Attorney’s Offices will need to fast-track and prioritize sealed False Claims Act (FCA) qui tam cases involving fraud against federally funded state administered benefits programs. According to the DOJ’s announcement, the Civil Division intends to evaluate these sealed matters within 60 days where possible, and no later than 120 days, pursuant to a March 2026 executive-order-driven enforcement initiative. This directive will require the DOJ’s civil lawyers to issue subpoenas, review records, and conduct interviews in an unusually compressed timetable.

This development has immediate consequences for recipients of Civil Investigative Demands (CIDs). For these state-based benefit matters, this directive will require companies and other entities that receive CIDs for documents, interrogatory responses, or testimony to mobilize quickly, preserve relevant information immediately, and make early strategic decisions about response scope and privilege. Extended deadline continuances may become harder to obtain if the DOJ is operating under internal review clocks tied to sealed-case decision points.

This accelerated decision schedule will necessarily shift the burden of litigation to relators and their lawyers requiring them to handle the resulting litigation with a minimal burden on the government. That reality makes the pre-intervention phase more consequential: presentations to the DOJ during the CID and seal period may now have an even greater impact on whether the government intervenes, narrows its theories, or declines the case altogether.

The DOJ’s leadership emphasized in the memorandum that a “whole-of-government” approach would apply: the DOJ will coordinate quickly with criminal prosecutors, fraud enforcement units, and affected agencies to evaluate criminal, civil, and administrative remedies, including payment suspensions and program-specific analysis. Overall, the goal is to accelerate meritorious benefits fraud cases and focus government resources on the most serious and complex schemes.

It will be essential for companies and individuals who receive these CIDs to retain counsel and start collecting the responsive records immediately upon receipt.

Practical Implications for Providers, Contractors, and Managed-Care Participants

Organizations participating in Medicaid, Medi-Cal and other state-administered benefit programs should expect faster information demands and less tolerance for slow internal collection efforts once a CID or related inquiry arrives. Entities that rely on decentralized claims, eligibility, utilization-management, pharmacy, or subcontractor data may face greater challenges because the government’s timeline will not pause while records are gathered across business units.

Three practical implications stand out:

• Preservation and collection must begin immediately. Legal, compliance, and business teams should identify custodians, systems, and third-party data sources at the outset rather than waiting for rolling negotiations over scope.
• Early case assessment becomes more important. Counsel should quickly test the factual theory, reimbursement pathway, damages assumptions, and any materiality arguments before the DOJ reaches an intervention decision.
• Parallel-enforcement planning should occur on day one. Because the DOJ has signaled closer coordination across enforcement channels, responses should account for potential criminal, administrative, suspension, and overpayment ramifications at the same time.

Given the importance of FCA matters to the healthcare industry, in-house counsel at such organizations should be extra attentive when CIDs arrive regarding Medicaid and Medi-Cal in light of these new, compressed deadlines. 

The U.S. government has fundamentally changed how Section 232 tariffs apply to steel, aluminum, and certain derivative products, replacing a content-based tariff methodology with a far broader entered-value approach that could significantly increase duty exposure for many importers.

Beginning June 2025, importers of certain steel and aluminum derivative products were required to calculate Section 232 duties based on the value of the “steel content” or “aluminum content” contained in the imported article. While conceptually straightforward, importers faced substantial uncertainty regarding how to calculate content values, allocate mixed-material costs, document sourcing information, and defend those calculations to U.S. Customs and Border Protection (CBP).

The Trump administration now has replaced that methodology with a new Section 232 metals tariff framework. Section 232 duties now generally apply to the full entered value of the imported product, with the applicable tariff rate determined by the product’s HTS classification and the corresponding Section 232 tariff category assigned to that product. To approximate the metal content, different HTS numbers subject to the Section 232 duties have differing tiered tariff rates.

This shift has significant implications for multinational companies. Although the revised methodology simplifies administration, it often materially increases Section 232 duty liability because lowered Section tariff rates can be more than offset by the fact that the Section 232 tariffs now generally apply to the entire entered value of the imported article rather than only its underlying metal content. The new framework also places even greater importance on accurate tariff classification, product scoping, landed-cost modeling, supplier documentation, and broader Customs compliance processes.

This article examines the revised Section 232 framework, explains how the new tariff structure operates in practice, and highlights the key compliance and risk-management considerations multinational companies should be evaluating now to cope with the new Section 232 metal tariff rules.

How We Got Here

The current revisions to the Section 232 framework are best understood against the backdrop of the government’s broader effort to expand steel and aluminum tariffs into downstream products. When Section 232 tariffs were first imposed, they focused on primary forms of steel and aluminum, gradually expanding to cover a growing list of derivative products that contain substantial amounts of metal content.

When many of these steel and aluminum derivative products were added in June and August of 2025, the Section 232 duties applied only to the steel or aluminum portion of the imported good. Conceptually, the approach aligned with the national security rationale underlying Section 232 by focusing on the steel or aluminum content. In practice, however, the methodology proved difficult to administer, partially because CBP provided only limited formal direction but mostly because the approach was unworkable. Although CBP stated in a Section 232 FAQ that importers should rely on “the invoice paid by the buyer of the steel or aluminum content,” this information often was not available to the importer of record and potentially not even known to foreign manufacturers, which often purchase steel inventory from a variety of sources.

As a result, importers were left with difficult judgment calls regarding which data sources to rely upon, including mill invoices, supplier invoices, transfer-pricing information, cost-accounting records, or other internal allocation methodologies. At the same time, importers were attempting to reconcile these approaches with existing Customs valuation principles and ensure consistency across products, suppliers, and entry filings. This increased compliance burden required extensive coordination among procurement, finance, logistics, engineering, and trade compliance personnel to identify, calculate, document, and support declared metal-content values. The combination of ambiguity, administrative complexity, and heightened enforcement exposure created growing pressure for a more predictable and administrable system.

In April 2026, the administration responded by fundamentally revising how Section 232 metal tariffs apply to derivative products. The revised framework abandons the requirement to calculate the value of steel or aluminum content and instead adopts a classification-based methodology that applies Section 232 duties to the full entered value of the imported product, with the applicable tariff rate determined by the product’s HTS classification and relevant Section 232 tariff category.

The shift reflects a policy judgment that a simpler and more uniform framework, even if less precise in targeting the actual metal content of a product, will prove more administrable. The revised approach, however, often imposes significantly higher tariffs, as detailed below.

How Section 232 Duties Now Will Be Calculated

The revised structure was established through the April 2, 2026, Presidential Proclamation and its associated annexes. Effective for goods entered or withdrawn from warehouse for consumption on or after 12:01 a.m. EDT on April 6, 2026, Section 232 duties apply to the full customs value of covered steel, aluminum, copper, and derivative articles, regardless of the actual value of the embedded metal content. The revised Section 232 framework replaces the former complex content-based valuation exercise with a more standardized, classification-driven tariff methodology. Rather than requiring importers to isolate, calculate, and substantiate the value of steel or aluminum inputs embedded within imported merchandise, the revised system generally applies Section 232 duties to the full entered value of the imported product. The applicable tariff rate is then determined based on the product’s HTS classification, which effectively serves as a proxy for the extent to which the product is composed of steel, aluminum, or copper.

In practical terms, the government has shifted away from attempting to measure the actual value of embedded metal content and instead adopted a tariff structure that ties duty exposure directly to tariff classification. Products classified in HTS provisions associated with primary metal goods or products consisting predominantly of steel, aluminum, or copper are subject to higher Section 232 rates. By contrast, downstream derivative products that merely incorporate covered metals as one component among many generally receive lower rates. The result is a tiered tariff framework in which HTS classification now plays the central role in determining Section 232 liability.

The new Section 232 metals tariffs framework generally operates as follows:

• 50% Duty on Full Customs Value – Annex I-A. Annex I-A applies a 50% Section 232 duty to the full customs value of covered aluminum and steel articles, most copper articles, and certain steel and aluminum derivative products. This category generally includes products made entirely or almost entirely of the covered metal, including many Chapter 72 steel products, certain Chapter 73 steel articles, Chapter 76 aluminum products, and Chapter 74 copper products.
• 25% Duty on Full Customs Value – Annex I-B. Annex I-B applies a 25% Section 232 duty to certain copper articles and derivative steel and aluminum products that remain within the Section 232 derivative regime but are not treated as predominantly metal articles. These products typically incorporate covered metals as one component within a broader manufactured good.
• Temporary 15% Treatment – Annex III. Certain steel and aluminum derivative products identified in Annex III receive temporary reduced treatment through December 31, 2027, meaning that the Section 232 duty is reduced so the combined ordinary Column 1 duty rate plus the Section 232 duty equals 15%. If the applicable Column 1 duty rate is already 15% or greater, no additional Section 232 duty applies under this temporary framework.
• 10% Rate for Qualifying U.S.-Origin Metal Inputs. Covered products manufactured abroad using qualifying U.S.-origin metal inputs may qualify for a reduced 10% Section 232 rate. For steel products, this generally requires that the steel be U.S. melted and poured. For aluminum and copper products, the applicable standard generally requires U.S. smelted-and-cast metal.
• Special Reduced Rates for Certain U.K. Products. Certain qualifying U.K.-origin steel and aluminum products receive reduced Section 232 rates pursuant to the applicable U.S.-U.K. arrangements. Products otherwise subject to the 50% Annex I-A rate may qualify for a reduced 25% rate, while products otherwise subject to the 25% Annex I-B rate may qualify for a reduced 15% rate, provided the applicable U.K. melt-and-pour or smelt-and-cast requirements are satisfied.
• Low Metal Content Exception. Products listed in the annexes, other than goods classified in HTSUS Chapters 72, 73, 74, or 76, are generally excluded from the revised Section 232 duties if they contain less than 15% aggregate weight of the applicable covered metal or metals. CBP has also confirmed that products listed in the annexes but containing no steel, aluminum, or copper are not subject to the duties.
• No “Metals-on-Metals” Stacking. Where a product qualifies as an article or derivative of more than one covered metal, only one Section 232 metals duty applies. CBP has expressly confirmed that Section 232 duties do not stack where products contain combinations of aluminum and steel, aluminum and copper, steel and copper, or all three metals.

Although the revised framework eliminates the need to calculate the value of embedded metal content, product composition remains highly relevant in several important respects. Most notably, the low-metal-content exception continues to require importers to substantiate the percentage by weight of steel, aluminum, or copper contained in covered products. Accordingly, companies claiming eligibility for these exceptions should expect to maintain supporting engineering data, bills of materials, technical specifications, supplier certifications, testing data, or other records sufficient to substantiate the composition and weight of their products.

From an operational standpoint, the revised framework significantly changes where compliance risks arise. Under the prior regime, enforcement disputes frequently centered on how importers calculated the value of steel or aluminum inputs. Under the new system, CBP scrutiny is likely to focus far more heavily on HTS classification decisions, particularly where multiple classifications may reasonably apply or where classification outcomes materially affect Section 232 duty exposure. Importers should also expect increased attention to documentation supporting exceptions and reduced-rate claims, including evidence relating to product composition, weight percentages, and qualifying U.S.-origin metal inputs.

What Importer Should Be Doing Now

Importers should treat the April 2026 revisions as a trigger for a fresh and comprehensive Section 232 review. The revised framework simplifies one important aspect of compliance because companies no longer need to calculate the value of embedded steel or aluminum content. At the same time, however, the revisions fundamentally change the duty base, alter the applicable tariff rates, and place significantly greater emphasis on HTS classification, product composition, sourcing, origin substantiation, and documentation controls.

In light of these changes, importers should consider the following steps:

• Map all imported products against the new annexes. Companies should confirm whether imported products fall within Annex I-A, I-B, II, III, or IV and should not assume that prior Section 232 treatment remains unchanged. CBP guidance states that the revised duties apply to the full customs value of covered steel, aluminum, copper articles, and derivative products effective April 6, 2026.
• Reconfirm HTS classifications. Because the revised framework uses HTS classification to determine the applicable Section 232 rate, classification decisions now directly determine whether a product is subject to 50%, 25%, 15%, 10%, or no Section 232 duty. Companies should pay particular attention to products where multiple classifications may plausibly apply or where classification outcomes materially affect duty exposure.
• Implement heightened classification governance controls. Importers should consider enhanced internal review procedures for high-risk classifications, including escalation protocols for borderline classifications, periodic audits of classification decisions, and greater coordination among engineering, procurement, legal, and trade compliance teams. The revised framework significantly increases the commercial importance of classification accuracy.
• Model the new landed-cost impact. For many derivative products, Section 232 duties now apply to the full customs value of the imported merchandise rather than only the value of the embedded metal content. This change may materially increase tariff exposure for high-value finished goods containing relatively modest amounts of steel, aluminum, or copper.
• Reevaluate sourcing and supply-chain strategies. Becausethe revised framework substantially changes Section 232 duty exposure, companies should reassess sourcing arrangements, supplier locations, manufacturing footprints, and product-design decisions that may have been developed under the prior content-based methodology. In some cases, the revised framework may alter the relative cost advantages associated with particular sourcing strategies or manufacturing locations.
• Identify products that may qualify for the low-metal-content exception. Products listed in the annexes, other than goods classified in Chapters 72, 73, 74, or 76, may fall outside the Section 232 metals tariffs if they contain less than 15% aggregate weight of the applicable covered metal or metals. Companies should gather bills of materials, engineering specifications, testing data, supplier certifications, and weight calculations necessary to support any claimed exception.
• Confirm whether reduced rates are available. Products manufactured using qualifying U.S.-origin or U.K.-origin metal inputs may qualify for reduced Section 232 rates. Importers should confirm whether they can substantiate the applicable melt-and-pour or smelt-and-cast requirements through supplier certifications and supporting origin documentation.
• Review supplier-data collection processes. Although importers no longer need to calculate the value of embedded metal content, companies may still need supplier certifications, composition data, engineering specifications, and origin records to support reduced-rate claims, low-metal-content exceptions, and other Section 232 positions. Importers should confirm that suppliers can consistently provide the required information and that internal systems can capture and maintain it.
• Update HTS classification indexes, ERP systems, and broker instructions. Importers should ensure that brokers are using the correct HTS numbers, Chapter 99 provisions, product flags, origin indicators, and exception claims. Companies should also review whether ERP systems, tariff databases, landed-cost models, and reporting systems accurately reflect the revised Section 232 framework.
• Check for mixed-metal products. CBP has confirmed that products listed as articles or derivatives of more than one covered metal are subject to only one applicable Section 232 metals duty rate, even where the product contains steel, aluminum, and copper together. Companies should review mixed-metal products carefully to ensure the correct treatment is being applied.
• Review transition-period entries and contracts. Importers should examine entries made around the April 6, 2026, effective date, including warehouse withdrawals and in-transit merchandise, to confirm that the revised tariff framework was correctly applied. Companies should also assess whether existing purchase agreements, transfer-pricing structures, or customer contracts negotiated under the prior methodology require adjustment.
• Review FTZ and drawback treatment. Covered products admitted into foreign trade zones after the effective date generally must be entered in privileged foreign status, which may limit the ability to benefit from subsequent tariff reductions or classification changes. Companies should also evaluate whether drawback remains available for affected products and whether revised Section 232 treatment alters existing FTZ or drawback strategies.
• Establish post-entry review and correction procedures. Because HTS classification and exception claims now directly drive Section 232 exposure, importers should implement procedures to identify and correct potential entry errors through post-summary corrections (PSCs), protests, or other available mechanisms where appropriate.
• Assess enforcement exposure. The revised framework is likely to increase CBP scrutiny of HTS classification decisions, reduced-rate claims, low-metal-content exceptions, and origin documentation. Importers should expect increased use of CF-28 requests, audits, investigations, and potential penalty exposure in cases involving unsupported classifications or exception claims. Given the magnitude of the applicable duty rates, the revised framework may also increase False Claims Act and whistleblower risk.
• Build a comprehensive audit file. Even though the revised methodology is operationally simpler in certain respects, importers should maintain robust documentation supporting classification decisions, product composition analyses, origin determinations, claimed exceptions, supplier certifications, broker instructions, and reasonable-care analyses. Companies should assume that CBP may later request documentation supporting the basis for Section 232 treatment.

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The revised Section 232 framework for steel, aluminum, copper, and derivative products trades one form of complexity for another. The new system eliminates the difficult and often highly subjective exercise of calculating embedded metal-content value but replaces it with a framework in which HTS classification, product composition, origin substantiation, and supporting documentation now play the central role in determining duty exposure. For some importers, the revised approach will welcome administrative clarity and greater predictability. For others, particularly companies importing high-value finished goods that incorporate steel, aluminum, or copper as only one component among many, the application of Section 232 duties to the full entered value of the product may significantly increase tariff liability.

The revised framework also reflects a broader shift in how Section 232 compliance risk is likely to be enforced going forward. Under the prior regime, disputes frequently focused on how companies calculated and documented the value of embedded metal content. Under the new framework, CBP scrutiny is likely to focus far more heavily on HTS classification decisions, reduced-rate claims, origin documentation, low-metal-content exceptions, and the sufficiency of importer reasonable-care processes. In many respects, the revised methodology transforms Section 232 compliance from primarily a valuation exercise into a broader classification, sourcing, and supply-chain governance issue.

Companies therefore should not view the April 2026 revisions as merely another tariff-rate adjustment. The administration has effectively introduced a new operating model for Section 232 compliance. Importers that respond proactively, including by reassessing classifications, reviewing sourcing strategies, strengthening documentation controls, updating broker instructions and ERP systems, and reevaluating landed-cost assumptions, will be best positioned to manage both the commercial and enforcement risks associated with the revised framework.

As an accompaniment to our biweekly series on What Every Multinational Should Know About various international trade, enforcement, and compliance topics, below find an update to our “Five Compliance Best Practices” series, which provides quick-hit advice on how organizations (particularly multinational companies) can implement compliance best practices to enhance their compliance programs and internal controls.

Customs recordkeeping requirements are encoded in the Customs regulations and are mandatory for importers. To conduct a quick check on the adequacy of your Customs recordkeeping, consider conducting the following Five Things:

• Ensure You Have a Written Customs Recordkeeping Policy, Whether as Part of Your Customs Manual or Within the Destruction Schedule of Your Records Information Management Policy. Customs recordkeeping is not just a good idea; it is explicitly mandated by the Customs regulations. If you have not recently reviewed your recordkeeping policy, a quick review to ensure that you have one and that it is consistently followed is a good idea.
• Ensure Your Policy Covers All Required Customs Recordkeeping Requirements. Customs regulations that you maintain full information supporting the full payment of the tariff, the valuation of the goods, the country of origin, and duty/tax payments. Relevant documents include copies of such import/export documents as commercial invoices, packing lists, bills of lading, air waybills, and other data supporting the information declared on your Form 7501 Entry Summary. Among other requirements, these documents should accurately describe the goods being imported or exported, their value, quantity, origin, and other relevant details. Other documents relevant to the transaction can include records related to the transportation of goods, such as shipping contracts, freight invoices, transportation receipts, and delivery confirmations. Even emails that help set up the terms of sale may be relevant. Ensure all required elements are covered in your written recordkeeping requirements by comparing them to the Customs regulations and Customs guidance.
• Evaluate Whether You Are Maintaining Required Origination Information and Licenses/Permits. Many free trade agreements, including the U.S.-Mexico-Canada Agreement require that importers have certificates of origin on hand at the time of importation for goods benefiting from free trade preferences. You should have procedures in place to ensure that your company is maintaining copies of certificates of origin and other supporting documentation that verify the origin of imported goods. These documents may be required to qualify for preferential tariff treatment under free trade agreements or other trade programs or to respond to Customs inquiries about the same.
  
  You also should confirm that your company maintains all required importation licenses and permits. If your import patterns include goods where there are licensing or permitting requirements to allow for importation, or certificates required for the importation or exportation of specific goods, such as controlled substances, hazardous materials, or restricted items, then you should check that these documents are regularly archived and kept for the minimum required period.
• Check Whether Your Company Maintains All Required Financial Records. Customs regulations require that importers maintain certain financial transactions related to international trade, including invoices, receipts, payment records, and bank statements. These records should demonstrate the payment of duties, taxes, and other fees associated with customs clearance.
• Check that Your Company Maintains Correspondence and Communications with Customs and Other Third Parties. Your company should maintain records of all correspondence and communications with customs authorities, suppliers, freight forwarders, customs brokers, and other parties involved in international trade transactions. This includes emails, letters, faxes, and other forms of communication.

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Part 3: Counterparty Reality in the DRC — Third Parties, De Facto Control, and Why DOJ Cares

This post is the third in our series examining legal, compliance, and operational risk in the Democratic Republic of Congo (DRC). While earlier pieces addressed the broader investment and enforcement landscape, many of the most consequential failures arise from a common operational problem: counterparties.

DRC opportunities frequently involve local partners, agents, subcontractors, logistics providers, security-adjacent vendors, state-owned enterprises (SOEs), and intermediaries sitting between the company and operational reality on the ground. The most common failure mode is a mistaken assumption about who actually controls the counterparty and how business is conducted in practice.

Why DOJ Treats Third Parties as a Core FCPA Risk

The Department of Justice (DOJ) and the Securities and Exchange Commission (SEC) have been consistent on this point. These U.S. enforcement authorities describe third parties as a central risk vector and make clear that enforcement often turns on how companies select, compensate, and supervise agents and business partners.

The cautionary cases tend to follow the same pattern: a company faces pressure to move quickly in a difficult operating environment, engages a local intermediary to handle government touchpoints, and later discovers that the intermediary’s value proposition was influence, not capability. Two Africa-based enforcement matters illustrate the dynamic.

In the Ericsson matter (which included Africa-specific conduct in a much broader, alleged global corruption scheme), the DOJ alleged a bribery scheme executed through sham consulting contracts and fake invoices, compounded by a due diligence report that failed to disclose a spousal relationship between the consultant’s owner and a senior government official. The problem was a fundamental misreading of the counterparty’s proximity to power.

In the Och-Ziff matter, the SEC’s administrative order describes a firm that conducted due diligence into its DRC partner’s ownership of assets while failing to investigate how those assets had been acquired or whether bribery was involved. The partner was an Israeli businessman with close ties to senior DRC government officials whose entire competitive advantage in the market derived from those relationships. Senior Och-Ziff employees were aware of this from first contact.

Regulators do not expect omniscience. They do expect a risk-based process proportionate to the environment, sensitive to red flags, and capable of producing credible answers about who the company is actually dealing with. Effective counterparty screening is now the norm across various U.S. government agency regulators, and the inability to demonstrate adequate screening and monitoring procedures on the back end may have severe consequences.

Third Party Sanctions Exposure

The DOJ and SEC are not the only U.S. government agencies that seek to compel increased third-party due diligence through enforcement. The Department of Treasury’s Office of Foreign Assets Control (OFAC) has recently issued new sanctions targeting persons and entities contributing to the conflict in the DRC. For instance, on April 30, 2026, OFAC sanctioned former President of the DRC Joseph Kabange Kabila for his role in supporting groups contributing to armed conflict. This was preceded almost two months earlier by similar sanctions imposed on the Rwanda Defence Force (RDF) and four of its senior officials for supporting and fighting alongside the March 23 Movement (M23), a sanctioned armed group responsible for human rights abuses and a displacement crisis in the DRC. These actions underscore an increasingly complex environment to maneuver that demands a comprehensive compliance plan to move forward.

Why Standard Diligence Often Falls Short

In many jurisdictions, registered ownership records, basic database screenings, and a standard questionnaire provide an acceptable diligence starting point. In the DRC, those steps often confirm what is formally true while missing what is operationally decisive.

Three realities drive the problem. Legal ownership can be a poor proxy for control, which may sit with informal controllers, silent partners, political patrons, or security-linked actors. Value may reside in relationships rather than capability or assets, particularly in businesses that depend on permits, licenses, concessions, customs clearance, protection arrangements, or access to state-linked infrastructure. And critical risk often sits one or two steps removed from the named counterparty, concentrated in the subcontractor, the consultant, the transport intermediary, or the security sub-provider.

This is where counterparty diligence can become either an enforcement asset or an enforcement vulnerability.

A Framework for DRC-Grade Counterparty Diligence

Effective diligence in the DRC is an exercise in partner reality and control intelligence: jurisdiction-specific work designed to answer questions that databases and corporate registries rarely resolve. Seven analytical disciplines are particularly relevant.

1. De Facto Control Analysis

The core diligence question is control, not ownership. Who makes the key decisions? Who can block performance? Who ultimately benefits economically? Who can deliver permits, access, protection, or operational clearance? That analysis should extend to governance rights, side agreements, and informal influence, including practical veto power that never appears in any formal document. At a minimum, the U.S. government will expect some level of beneficial ownership identification to appreciate risks hidden behind complex and opaque structures.

2. Chokepoint Mapping

In the DRC, de facto control can reside with the person who can stop operations: customs officials, port or rail gatekeepers, employees acting under the leadership of unions, local activists, non-governmental organizations (NGOs) — which, behind ostensibly legitimate objectives, may in fact pursue less transparent agendas, and exacerbate tensions on the ground — power providers, provincial authorities, or militia groups. Effective diligence maps whether the counterparty controls those chokepoints through relationships rather than contracts. That form of control is rarely visible in ownership documents but is frequently decisive in practice.

3. Political and Patronage Exposure

Elite-family and patronage exposure is common in high-discretion environments. The analytical questions are: does the counterparty’s competitive advantage derive from political proximity? Are family members or close associates embedded as owners, consultants, or sponsors? Would that association survive public scrutiny if disclosed? The Ericsson fact pattern illustrates how relationship data can become determinative when it is missed at the outset.

4. Sanctions Adjacency and China Entanglement

In the DRC, restricted party and China-linked exposure can be indirect, embedded in infrastructure, finance, logistics, or trading layers rather than in the named counterparty. Diligence should map dependencies on sanctioned entities, Chinese SOEs or state-linked firms, financing and insurance pathways, and operational chokepoints where substitution would be difficult or impossible. Where material dependency on restricted parties or China adjacency exists, it should receive early board-level attention, particularly where deal structures constrain exit options.

5. Security-Force and State-Adjacent Affiliations

Counterparties may be operationally entangled with security services, SOEs, or state-adjacent actors in ways that create overlapping corruption, sanctions, and human rights exposure. This should be assessed explicitly, particularly for logistics, infrastructure, and security-adjacent roles.

6. Prior History with Foreign Investors and Dispute Behavior

Past patterns are often more predictive than formal dispute-resolution clauses. How has the counterparty handled conflict with foreign investors, lenders, or joint-venture partners? Have disputes been resolved through courts, arbitration, renegotiation, political intervention, or asset pressure? Prior dispute behavior tends to reveal how a counterparty will act when leverage shifts.

7. Subcontracting and Last-Mile Delegation

High-risk activity in the DRC can migrate into the subcontractor layer: customs agents, transport brokers, security providers, or consultants engaged late in the process. Diligence that stops at the primary counterparty often misses where the risk actually concentrates. Effective approaches require visibility into who will perform sensitive functions and should reserve approval rights over material substitutions.

Signals That Standard Reports Miss

In the DRC, some of the most consequential counterparty information does not appear in database searches or corporate filings but instead in reputation among local legal and commercial professionals, patterns of pressure tactics, informal fees, unexplained competitive advantages, and opaque subcontracting arrangements. High-quality diligence uses structured methods to surface and validate these signals across multiple local constituencies, including commercial, legal, civil society, and international operators. Consistent signals across communities are often more probative than any single allegation or endorsement.

Diligence as Narrative Risk Management

Where the company will make public claims about responsible sourcing, ethical engagement, or supply-chain integrity, diligence must explicitly test whether those claims would remain defensible if the counterparty relationship later becomes public. A useful discipline is to ask, at the outset, whether the diligence record would support a clear explanation to regulators, auditors, or journalists if the relationship were scrutinized later. In the DRC context, the question is whether management can demonstrate that it understood who it was dealing with and why it concluded the risk was manageable.

Conclusion

The recurring lesson from Africa enforcement actions, failed investments, and reputational crises is that problems typically arise because the company misunderstood who it was dealing with, who controlled the counterparty, what leverage it relied on, and how it operated in the local environment.

The DOJ’s emphasis on third parties under the Foreign Corrupt Practices Act reflects this reality. In high-discretion markets like the DRC, business partners, intermediaries, and subcontractors are frequently the mechanism through which risk materializes. Diligence that confirms formal ownership and documented credentials may satisfy a process requirement while leaving the real risk untouched.

Effective counterparty diligence allows a company to form a defensible view of partner reality: where control sits, how influence is exercised, and whether the relationship can withstand scrutiny if conditions change or facts become public. It also forces early clarity about whether a proposed opportunity rests on execution capability or on access and influence that cannot ultimately be controlled.ow they get things done, is where board-defensible judgment is made or lost.

On April 28, 2026, the U.S. Department of Justice (DOJ) the seizure of more than $2 million from Expert Wound Care PC, a Pasadena-based wound care clinic accused of defrauding Medicare by billing for skin graft procedures never performed. The clinic allegedly submitted over $46.6 million in false claims within approximately seven months. The case underscores the DOJ’s growing reliance on statistical benchmarking and data analytics to identify aberrant billing patterns — a strategy increasingly targeting wound care providers in particular.

DOJ’s Data-Driven Enforcement Methods

According to the affidavit supporting the seizure warrant, the government flagged Expert Wound Care based on several statistical red flags:

• Per-claim averages. From July 2025 to March 2026, the clinic averaged approximately $37,449 per claim for skin substitute grafts — more than double the national average of $16,837.
• Billing trajectory. Medicare billing escalated from $4,975 in July 2025 to approximately $33 million in December 2025, an extraordinary spike easily detectable through automated monitoring.
• Utilization rates. The clinic’s rate of beneficiaries receiving skin substitute grafts was 38.5% — over six times the national average of 6%. Its share of total claims for these procedures was 63%, roughly nine times the national average.
• Payment concentration. One beneficiary alone accounted for approximately $6.2 million in payments, with an average paid amount per beneficiary of approximately $299,639.

These metrics reflect the DOJ’s institutionalized outlier-detection methodology. The Health Care Fraud Unit’s dedicated Data Analytics Team monitors billing trends, identifies aberrant providers, and helps prosecutors detect emerging schemes. DOJ leadership has stated publicly that “cutting-edge data analytics jumpstarted” investigations in the wound care space, including a separate $900 million amniotic wound care fraud scheme.

This data-driven approach accelerated in 2025 and 2026. In June 2025, the DOJ announced its largest-ever National Health Care Fraud Takedown, charging 324 defendants in connection with over $14.6 billion in alleged fraud — including seven defendants charged with approximately $1 billion in fraudulent claims for performing medically unnecessary skin grafts on dying patients. In December 2025, owners of Arizona wound graft companies were sentenced to over 14 years in prison for a $1.2 billion wound graft fraud scheme, with $126 million in assets seized. In November 2025, one of the nation’s largest wound care providers agreed to pay $45 million to resolve False Claims Act allegations that it programmed billing software to ensure Medicare was always billed for higher-reimbursed procedures.

The DOJ has further committed to data-driven enforcement by announcing a Health Care Fraud Data Fusion Center, bringing together data specialists from the DOJ, Department of Health and Human Services Office of Inspector General, and the FBI to leverage cloud computing, artificial intelligence, and advanced analytics. The newly launched West Coast Health Care Fraud Strike Force — covering Arizona, Nevada, and Northern California — was formed explicitly because “data analytics show” a migration of fraud schemes to these regions. See Â鶹´«Ă˝â€™s recent blog on the West Coast Health Care Fraud Strike Force.

Key Takeaways and Risk Considerations

This enforcement action, viewed alongside broader DOJ prosecutions in the wound care sector, carries several important implications:

Wound care remains a top enforcement priority. The concentration of major prosecutions — from the $1.2 billion Arizona case to the $45 million False Claims Act settlement to the Expert Wound Care seizure — reflects the DOJ’s sustained focus on what it views as a high-risk category prone to upcoding, services-not-rendered fraud, and medically unnecessary utilization.

Whistleblowers are no longer the primary trigger. Proactive data analytics allow the DOJ and the Centers for Medicare & Medicaid Services to identify aberrant providers before any complaint or subpoena is issued. Providers whose billing patterns deviate significantly from benchmarks should expect scrutiny — regardless of whether a qui tam relator has come forward.

Statistical outlier status supports civil and criminal enforcement. The government uses data not just to flag potential fraud, but as substantive evidence, particularly to show that a provider “knew or should have known” about improper billing. Rapid billing growth, per-claim averages far exceeding norms, and concentrated beneficiary payments can all support inferences of knowledge and intent.

Asset seizure is an aggressive early-stage tool. The government moved to seize funds before any indictment, using the civil forfeiture process to deprive the clinic of its proceeds while the investigation continues. Providers should understand that the DOJ may act swiftly to freeze assets, creating immediate financial disruption.

We will continue to monitor developments in this area. This alert is the first in a series that will explore the full spectrum of legal and compliance challenges facing wound care providers today — including the clinical and reimbursement context driving enforcement activity since 2019, the contractor audit and overpayment landscape, administrative law judge appeal strategies, common government liability theories, defense approaches to extrapolated recoupments and parallel proceedings, and proactive compliance frameworks. Future installments will offer in-depth guidance on each of these topics.

Please do not hesitate to reach out to your Â鶹´«Ă˝ relationship partner or to our Government Enforcement Defense & Investigations and Health Care teams with any questions about how these enforcement trends may affect your organization.

The Verdict Is In

The Department of Justice (DOJ) is serious about criminal enforcement for customs fraud. In March 2025, we warned that customs and tariff fraud had become a criminal enforcement priority for the DOJ, not just an administrative customs matter. In June 2025, we noted that the DOJ had made it official, explicitly naming trade and customs fraud among its top ten white-collar enforcement priorities. A recent federal guilty plea confirms that the government is prepared to use its enforcement tools aggressively — and against targets that may surprise companies accustomed to thinking of customs risk as someone else’s problem.

On April 27, 2026, Boise Cascade Company guilty in the Southern District of Florida and agreed to pay more than $6.3 million after admitting it purchased Chinese-origin plywood that had been illegally transshipped to evade antidumping and countervailing duties. The scheme originated with Boise Cascade supplier Horizon Plywood, whose principals were previously sentenced for evading more than $42 million in duties. But Boise Cascade was not Horizon’s co-conspirator in any traditional sense. It was the customer.

That is the point. Boise Cascade was prosecuted not as an importer of record, not as a falsifier of customs documents, but as a knowing purchaser of goods it had reason to believe were fraudulently imported. For general counsel (GCs) and compliance officers, that distinction matters enormously.

Key takeaway: A U.S. company and its executives can face federal criminal liability for customs evasion without ever filing a customs entry, without acting as the importer of record, and without generating a single false document. Continued purchasing from a supplier you know is cheating on duties may be enough.

Why This Case Is Different

Historically, customs enforcement focused on the importer of record, the company whose name appears on the entry documents and who is responsible for accurately reporting classifications, valuations, country-of-origin declarations, and all other entry elements to Customs and Border Protection (CBP). In the few prior cases where downstream purchasers were pursued, they typically had a direct hand in generating the false paperwork.

Boise Cascade had no such role. The government’s theory was simpler and, in many respects, more alarming: the company knew its supplier was cheating, and it kept buying anyway.

The facts laid out in the plea agreement make clear why the government felt it had a strong case:

• Horizon provided a certification claiming the plywood came from a Malaysian mill. That mill told Boise Cascade directly that it did not produce the product.
• An internal Boise email allegedly responded to that news with the question: “So Horizon lied again?”
• Boise Cascade knew Horizon was the subject of a federal search warrant and an ongoing investigation.
• After learning of that investigation, Boise Cascade placed at least 10 new orders with Horizon in the two weeks following the search warrant .
• The pricing Boise Cascade received from Horizon was unavailable from any other supplier, which itself is a red flag when significant duties should be affecting landed cost.

Taken together, these facts gave the government what it needed to argue not negligence but actual knowledge or willful blindness, followed by deliberate continuation of the purchasing relationship. That was enough for the DOJ to charge Boise Cascade with knowingly purchasing goods that had been imported unlawfully. In this case, the DOJ charged a violation of the Lacey Act (16 U.S.C. § 3372(a)(1) and § 3373(d)(1)(B)), which applies to illegally imported plants (including plywood). But the DOJ premised the unlawful importation on Horizon’s tariff evasion. The federal smuggling statute, 18 U.S.C. § 545, separately criminalizes the receipt, purchase, or sale of merchandise after importation by anyone who knows the goods were imported contrary to law — and applies broadly across product categories. Consequently, the DOJ’s targeting of a purchaser on this theory can extend to a broad range of goods.

The Broader Enforcement Environment

The Boise Cascade case does not exist in isolation. It is one data point in a pattern of escalating enforcement that GCs and compliance officers should have squarely on their radar.

The DOJ has committed to this as a priority. In May 2025, former Criminal Division Chief Matthew Galeotti announced ten high-impact white-collar enforcement priorities. Customs and trade fraud, including tariff evasion, made the list alongside health care fraud, corporate recidivism, and national-security-linked corruption. As Galeotti framed it, trade fraudsters undermine the administration’s efforts to create jobs and ensure that American businesses compete on a level playing field.

Chinese-origin transshipment is a particular focus. CBP and the DOJ are paying close attention to goods allegedly manufactured in third countries that are actually of Chinese origin, rerouted to avoid antidumping, countervailing, or Section 301 duties. The Boise Cascade facts follow a classic transshipment pattern: Chinese plywood certified as Malaysian, priced suspiciously below market, purchased by a U.S. company that had mounting reason for doubt.

Undervaluation is a related and growing concern. Press coverage from earlier this year reported a notable divergence between the declared per-container values of imports arriving in the United States and the values of Chinese exports to the rest of the world. That gap may reflect widespread undervaluation at U.S. entry.

CBP has limited leverage over foreign actors. Foreign freight forwarders, brokers, and manufacturers who participate in these schemes can dissolve, reorganize, and reopen under new names. That dynamic shifts enforcement pressure toward the U.S. party that actually received the goods and benefited economically from the fraud.

DDP is no longer a safe harbor. The Boise Cascade enforcement action is a stark reminder that purchasing goods on DDP Incoterms (Delivered Duty Paid) does not shield U.S. purchasers from CBP and tariff liability. Over the past year especially, many companies have shifted to DDP arrangements in which a foreign manufacturer or supplier serves as the importer of record, believing that this structure insulates the U.S. purchaser from the increasingly complex tariff regime and related CBP compliance obligations. Boise Cascade demonstrates that the DOJ is willing to look beyond the formal importer of record where the surrounding facts suggest tariff evasion. In particular, where a U.S. purchaser knows or should know that it is receiving “sweetheart” pricing that is inconsistent with the actual value of the goods and the tariffs that should apply, the DOJ may argue — as it did in Boise Cascade — that the purchaser is criminally responsible for evading duties.

What GCs and Compliance Officers Should Do Now

The legal and enforcement landscape that produced the Boise Cascade prosecution is not going to relax. Here is a practical framework for assessing and reducing your company’s exposure.

1. Stop assuming that “not the importer” means “not at risk”

If your company purchases imported goods from third parties, particularly in high-duty product categories or from suppliers sourcing from China, you have customs-related exposure, regardless of who is listed as importer of record. The question is not whether your name appears on a CBP entry form. The question is what you knew, what you should have known, and what you did after you found out.

2. Government enforcement involving a trade partner puts your business on “notice” of possible criminal activity

Prosecutors will focus on what your business knows from public sources, communications, and warnings. If your business knows that your trade partner is in trouble with a government agency or had their business searched pursuant to a search warrant, that can put your business on notice that the goods are not being imported with the appropriate descriptions and duties paid.

3. Treat suspicious pricing as a red flag, not a windfall

When antidumping, countervailing, Section 301, Section 232, or other significant duties apply to a product, those duties affect landed cost. A supplier offering pricing that seems to ignore that math deserves scrutiny

4. Scrutinize country-of-origin and transshipment representations

Do not accept certifications at face value when red flags exist. Request documentation sufficient to support a credible origin determination: mill certifications, manufacturer affidavits, bills of lading, and packing lists. Where a supplier’s claimed country of origin does not align with other evidence, investigate before continuing to purchase.

5. Understand your DDP and broker-controlled import arrangements

When a foreign seller or broker handles importation on your behalf, you may have limited visibility into what is actually being declared to CBP. That lack of visibility is a risk factor, not a shield. Review the terms under which you buy goods and understand who controls the customs entry process and what documentation underlies it.

6. Build meaningful escalation procedures for customs red flags

The Boise Cascade facts include an internal email that essentially acknowledged the supplier had lied again, followed by continued purchasing. That sequence is what made the case. Companies need procedures that ensure when employees learn of suspicious pricing, inconsistent documentation, a supplier investigation, or contradictory origin representations, those facts trigger review and, if warranted, a suspension of purchasing. Document the process.

7. Include customs diligence in M&A and major sourcing arrangements

Acquisitions, significant distributor relationships, and major new sourcing arrangements should include meaningful customs due diligence: who is the importer of record, what are the duty obligations, how does the supplier’s pricing compare to those obligations, and can the entry documentation be reviewed and verified? These are not exotic questions. They are the kind of questions that can prevent a criminal investigation down the road.

8. Consider voluntary disclosure where violations are identified

If your review uncovers prior underpayments or potential violations, the path forward depends heavily on the facts. Voluntary disclosure to CBP is an option that can reduce penalties and, in some circumstances, affect the calculus around criminal referral.

Related Â鶹´«Ă˝ Publications This alert builds on two earlier client alerts from our International Trade and Government Enforcement Defense & Investigations teams: “Criminal Enforcement of Trade, Import, and Tariff Rules: A Growing Risk for Businesses” (March 2025), which warned that DOJ was expanding criminal enforcement to customs and tariff fraud and identified the key charging theories available to prosecutors. “Customs Fraud Makes the Big Leagues: DOJ’s New White-Collar Priorities Confirm Heightened Risk” (June 2025), which reported DOJ’s formal announcement of customs and trade fraud as a top-ten white-collar enforcement priority and outlined a practical compliance framework for in-house counsel. Further articles may also be of interest: “False Claims Act Enforcement in 2026” (March 2026)“What Every Multinational Company Should Know About … Customs Enforcement and False Claims Act Risks (Part I)” (April 2025); “What Every Multinational Company Should Know About … Customs Enforcement and False Claims Act Risks (Part II)”; (April 2025)“What Every Multinational Company Should Know About … Customs Enforcement and False Claims Act Risks (Part III)” (May 2025)

Bottom Line

Boise Cascade is a warning shot aimed squarely at U.S. companies that are not importers of record but benefit economically from improperly imported goods. The government’s theory in this case, that knowing continued purchasing from a suspected duty evader makes you part of the scheme, is consistent with the DOJ’s stated enforcement priorities.

The environment that produced this case is not an outlier. It reflects deliberate policy: more criminal enforcement of trade and customs laws, closer scrutiny of Chinese-origin imports, and a willingness to pursue U.S. parties that sit downstream from the actual fraud. CBP’s difficulty in pursuing foreign brokers and freight forwarders only increases the incentive to focus on the U.S. company at the end of the transaction.

Companies should not wait for a subpoena, a search warrant, or a whistleblower allegation to examine their supply chains. If your business purchases imported products from third parties, relies on foreign suppliers operating on DDP terms, or sources from high-duty product categories with Chinese supply chain exposure, now is the time to conduct that review.

For more information, please contact the authors or your Â鶹´«Ă˝ relationship partner.

Okay, so we recognize that the historic record for Jim Croce actually singing about tariff refunds is a bit sparse, but bear with us here.

We have received numerous requests for guidance on Phase 1 of the CAPE system. CAPE is the platform that U.S. Customs and Border Protection (CBP) is beginning to use to process refunds of the IEEPA tariffs that the Supreme Court has ruled unlawful. Unlike standard tariff refunds, which generally are pursued through post-summary corrections or protests, refunds for entries that fall in Phase 1 must be sought through CAPE.

As importers prepare for the roll-out of the CAPE functionality within ACE, the online import and export processing system, scheduled to become available on April 20, 2026, there are two key points to keep in mind:

• First, Phase 1 is intentionally limited to the cleanest set of entries — those that do not present meaningful appeal or procedural complications. CBP has deliberately excluded categories in which liquidation may legitimately need to be delayed, such as entries under protest, entries under reconciliation, and entries subject to antidumping or countervailing duty orders.
• Second, refunds will not be issued automatically. Unless importers carefully follow the exact instructions put out by CBP, they will not receive refunds. If a submission contains even a single error, CBP will return the entire matter to the importer and require a corrected spreadsheet. In other words, the system is set up to require careful and accurate input. It accordingly is essential for importers to carefully work through CBP’s new guidance, including its new and .

Although CBP has now issued guidance, we anticipate that additional issues and unforeseen glitches may emerge once the system is implemented. Based on what we know now, we recommend the following steps:

1. Prepare to file through the ACE Portal using the CAPE system

Importers of record or authorized brokers will submit CAPE Declarations identifying the affected entries. Each declaration may include up to 9,999 entries, and companies may submit multiple declarations if necessary. Importers should therefore familiarize themselves with the process by reviewing the materials linked above and take certain steps, including the following:

• ensure that the importer of record or its broker has active ACE Portal access;
• determine who will be responsible for filing CAPE declarations; and
• coordinate with customs brokers regarding roles, timing, and data submission responsibilities.

2. Compile the entry data needed for CAPE filings

CAPE declarations require a list of entry numbers and related entry summary information for the affected imports. ACE will validate both the declaration file itself and the individual entries before processing refunds. Errors or inconsistencies in entry data may delay or prevent refunds, as they will result in the entire submission being kicked back for error correction.

Some practical steps here include:

• preparing to extract and reconcile all entry numbers where IEEPA duties were paid;
• confirming that those entries contain the relevant Chapter 99 IEEPA tariff codes; and
• working with brokers to ensure that internal entry data matches the information reflected in ACE.

3. Confirm refund payment setup (ACH enrollment)

CBP will issue refunds electronically through the Automated Clearinghouse (ACH) system. Refund payments will generally be issued to the importer of record or the designated party enrolled in ACH. Because electronic refunds are required for Phase 1 entries, you should confirm that your electronic payment information is complete and accurate. If your ACH enrollment information is incomplete or outdated, refund payments may be delayed — or may not be processed at all.

4. Monitor entry liquidation status

Eligibility for Phase 1 processing depends heavily on the liquidation status of the entries. Phase 1 is focused on unliquidated entries or entries within the 90-day voluntary reliquidation window. Entries outside those categories may require different procedures or may ultimately require judicial resolution.

Thus, importers should identify which entries fall into the following categories:

• unliquidated entries;
• recently liquidated entries within the 90-day reliquidation period;
• entries currently under suspension or review; and
• entries that are not eligible for Phase 1 because they require future manual review or completion (reconciliation entries, AD/CVD entries, entries under protest, etc.).

Importers should track liquidation timelines carefully to determine which entries can be included in CAPE declarations.

5. Review whether existing protests should be withdrawn

For entries where a protest was filed solely to challenge IEEPA duties, CBP has indicated that those protests may be withdrawn so the entry can be processed through CAPE. Importers should accordingly identify entries where IEEPA-related protests are currently pending and determine whether withdrawing the protest and proceeding through CAPE would allow faster refund processing.

6. Plan for consolidated refunds rather than entry-by-entry payments

CAPE is designed to allow CBP to aggregate refunds across multiple entries. Refunds therefore may be issued as consolidated payments covering numerous entries, rather than separate payments for each entry.

Because refund payments will arrive as large, consolidated amounts rather than entry-level checks, it will be necessary to coordinate with internal finance and accounting teams to reconcile refund payments against the underlying entry lists.

Against this background, here are the most common questions that we are getting:

CAPE FAQ #1: Should we use CAPE even if we filed a CIT protective action?

Response: Yes, wherever possible. CAPE is the fastest administrative path to actually receiving refunds for entries that are unliquidated or still within the ninety-day voluntary reliquidation period. The purpose of a protective CIT filing is not to bypass the administrative process where it works. Rather, it is to ensure that companies preserve their rights in situations where the administrative process may not provide complete relief. As noted above, Phase 1 of CAPE is intentionally limited to a subset of entries, and we do expect litigation on other items. But for now, CBP estimates that around 63% of all entries fall into Phase 1. Which means that importers should grab the two-thirds of a loaf CBP is offering while the mechanism to receive the slices of bread in the final third are still being considered.

CBP’s current guidance indicates that entries under protest are not eligible for Phase 1 CAPE processing. As a result, companies that have filed protests covering IEEPA duties will need to decide whether to maintain those protests or withdraw them in order to allow the entries to move through CAPE.

CAPE FAQ #2: What should we do if we have protested certain entries that otherwise would fall into Phase 1?

Response: For entries where the protest was filed solely to preserve IEEPA refund rights, CBP has indicated that companies may wish to consider withdrawing the protest so that the entries can be processed through CAPE. In some cases, protests may currently be suspended, in which case the importer may first need to request that the suspension be lifted before the protest can be withdrawn.

From a practical standpoint, the decision often comes down to what the protest is actually protecting:

• If the protest was filed only to preserve the IEEPA refund issue, withdrawing the protest and proceeding through CAPE may allow the refund to be processed more quickly.
• If the protest covers other issues beyond IEEPA duties (for example, classification, valuation, or other duty issues), companies should carefully evaluate whether withdrawing the protest would inadvertently waive those claims.

CAPE FAQ #3: Who should file the CAPE declaration — the importer or the customs broker?

Many importers are asking whether the CAPE declaration should be submitted by the importer of record or by the broker that filed the entries. In practice, either may file, but companies should coordinate carefully to ensure that filings are complete and not duplicative. Please note that attorneys are notallowed to file.

CAPE FAQ #4: What happens if our CAPE declaration contains errors?

ACE will validate entries, and errors may result in rejections or delays. Importers should reconcile entry lists carefully with brokers before submitting declarations.

CAPE FAQ #5: How long will it take to receive refunds after filing CAPE declarations?

CBP has suggested a rough processing timeframe, but actual timing will depend on entry validation, liquidation status, and refund processing capacity. The key step — how long it will take CBP to validate all uploaded spreadsheets — is the key unknown, which makes the timing representations put out by CBP not particularly meaningful.

CAPE FAQ #6: Will CBP offset refunds against other duties or debts?

Possibly. Under CBP’s normal procedures, the agency has authority to offset refunds against other duties, taxes, or fees that it determines are owed. In other words, if CBP identifies an underpayment on an entry or another obligation owed by the importer, it may apply a refund to that obligation rather than issuing the full refund amount.

CBP’s CAPE guidance goes a step further. As a condition of submitting a CAPE declaration, CBP requires the filer to agree that any resulting refunds may be subject to such offsets. In effect, companies using CAPE must acknowledge that CBP may apply refunds to other outstanding liabilities.

From a legal standpoint, this requirement raises some questions. The IEEPA duties at issue were collected without lawful authority, and it is therefore debatable whether those funds should be treated as available for debt-collection offsets against unrelated obligations. Put differently, an unlawfully collected tariff arguably should not function as a general debt recovery mechanism.

That said, as a practical matter, companies that wish to use CAPE to obtain refunds for Phase 1 entries may have little realistic choice but to accept this condition. The CAPE declaration requires agreement to the offset provision, and refusing to agree would effectively prevent the importer from using the system.

Accordingly, importers should assume that refunds processed through CAPE may be subject to offsets and should plan accordingly when estimating the timing and amount of expected refund payments.

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That’s where things currently stand. Beginning April 20, 2026, CBP appears poised to begin collecting the information necessary to initiate the refund process for the “cleanest” entries. Still, we can’t help but return to how Jim Croce might have finished his song if he were in fact writing it today:

Uptown’s got importers,
The docks have their brokers and bums.
And down at CBP they’ve got ol’ CAPE running,
For the refundin’ sons of a gun.

Yeah, it’s big and complex as a system can come,
And it’s stronger than a country hoss.
And when the trade folks all get together at night,
You know they all call CAPE “Boss,” just because.

Now they say:
You don’t tug on CBP’s CAPE,
Trust refunds to CBP’s whims.
You don’t protest your Phase 1 entries,
Or your refunds will be slim.

Well, outta the trade bar came a country lawyer,
He said, “I’m lookin’ for refunds from CBP.
I’m a tariff-fightin’ guy, middle name’s 1581(i),
And my clients said get what’s owed to me.”

“Yeah, I’m lookin’ for that guy whose nickname is Big ACE,
I hear he’s the king of the refund track.
Last year ACE took my client’s money,
And it may sound funny, but I came to get that money back.”

And everybody said, “Jack, uh, don’t you know…
You don’t tug on CBP’s CAPE,
Trust refunds to CBP’s whims.
You don’t protest your Phase 1 entries,
Or your refunds will be slim.

Well, a hush fell over the trade bar,
When ACE came strollin’ in off the street.
And when the filings were done,
The only thing that wasn’t messy was the soles of the big man’s feet.

The entries were sliced in a hundred places,
And ACE kicked a few back for review.
And you better believe offsettin’ told a different story,
When the refunds they came through.

And don’t you know:
You don’t tug on CBP’s CAPE,
Submit your spreadsheet, make your case.
You don’t protest your Phase 1 entries,
And you don’t mess around with ACE.

Part 2: Entry Readiness in the DRC — The Governance and Compliance Risks Washington Will Judge

In Part 1, we described why the Democratic Republic of the Congo (DRC) is becoming more investable for U.S. companies that engage selectively and with discipline. That shift carries a corresponding responsibility for executive management: ensuring that any decision to pursue a DRC-linked opportunity is defensible at the board level, not merely executable at the business level. It also carries an enforcement risk dimension. The same policy developments that are opening the DRC to U.S. companies — DFC financing, infrastructure commitments, the bilateral strategic partnership — are also likely to increase regulatory attention. More U.S. companies entering a frontier market means more enforcement exposure to manage, not less.

As opportunities mature, governance attention will focus on decision quality and defensibility. Directors, regulators, and investors focus on whether management understood and identified the relevant risks, evaluated them coherently, and exercised judgment consistent with compliance, disclosure, and investor expectations.

From “Country Risk” to Opportunity-Specific Judgment

Sophisticated companies are moving away from generic “Africa risk” characterizations or jurisdiction-level heat maps. Those tools are too blunt to support a defensible go/no-go decision and provide little insight into how risk actually manifests in a specific transaction.

The focus instead should be on opportunity-specific clearance, assessed against three practical questions:

1. What exactly is the company proposing to do? An infrastructure provider, logistics intermediary, offtake counterparty, financier, technology enabler, and asset owner each occupy materially different risk postures. The analysis must begin with role definition.
2. Where does the company sit in the value chain, and how much control does it have? Control determines not only exposure, but also the company’s ability to mitigate risk through design, contracting, and operational choices. Beyond risk containment, value‑chain control also underpins revenue resilience: a secured, mission‑critical position in the value chain reduces vulnerability to revenue disruption and volatility, particularly in times of geopolitical or macroeconomic stress.
3. Which risks are structural, and which are manageable through design and/or controls? This distinction drives whether a project is viable, conditionally viable, or should be declined altogether.

The output of this exercise is a clear go/conditional go/no-go judgment, with reasons that can be explained to the board, mitigated if necessary, and defended later.

Counterparty Reality, Not Paper Ownership

The analysis of counterparty risk in the DRC cannot stop at formal beneficial ownership. Adjacency risk matters significantly, particularly involving politically exposed persons, downstream sanctioned entities, Chinese state-owned enterprises, state-linked traders, logistics providers, financiers, and infrastructure operators.

The relevant inquiries are:

• Who actually controls critical infrastructure, logistics, or chokepoints?
• What dependencies are embedded in rail, port, power, or transport arrangements?
• How difficult would it be to substitute a counterparty if geopolitical conditions shift?

For many DRC-linked opportunities, China exposure in particular is layered, indirect, and operational rather than binary. That makes a project more complex to structure, not necessarily nonviable. But it must be understood, stress-tested, and documented at the outset.

This counterparty analysis sets the stage for the four governance and compliance risk pillars that most frequently determine defensibility.

The Core Four Governance Risks

1. Corruption and Political Exposure

Corruption risk remains a defining feature of the DRC operating environment. For U.S. companies, exposure typically arises from structural interactions with political authority, regulatory discretion, and informal influence networks rather than isolated misconduct.

The governance question concerns dependency. Opportunities that rely on political access, protection, or preferential treatment present a materially different risk profile than those that operate through repeatable, process-driven mechanisms.

U.S. enforcement authorities, particularly the U.S. Department of Justice, expect compliance programs to reflect how corruption risk manifests in practice. This includes realistic assessment of intermediaries, payment flows, government touchpoints, true beneficial ownership and control, and whether counterparties derive competitive advantage from influence rather than operational capability.

Practical corruption mitigation and governance measures

• Elevate counterparty selection to a governance decision
• Conduct enhanced, boots-on-the-ground counterparty due diligence
• Avoid counterparties whose value proposition centers on political access or, in other words, is opaque or difficult to articulate on its own merits
• Structure roles to reduce discretionary government interaction
• Maintain a record of counterparties evaluated and declined
• Treat downstream controls as secondary safeguards, not primary solutions

2. Sanctions, Export Controls, and China Adjacency

Sanctions and export-control considerations are critical gating issues, particularly where China-linked entities are embedded in the value chain. In the DRC context, exposure frequently appears through logistics corridors, rail and port operations, power infrastructure, trading relationships, or financing arrangements. DRC sanctions regulations maintained by the U.S. complicate the picture even further and must be considered in any risk-based analysis.

Regulators assess sanctions compliance with attention to indirect exposure, facilitation risk, and resilience to foreseeable policy change. Where China-linked SOEs, state-backed actors, or entities susceptible to targeted sanctions are involved, scrutiny intensifies.

Practical sanctions mitigation and governance measures

• Conduct sanctions and export-control stress testing to include screening all third parties against relevant restricted lists
• Map indirect dependencies across logistics, infrastructure, insurance, and finance
• Preserve contractual and operational flexibility to pause or unwind activity
• Escalate material China adjacency to the board early
• Avoid deal structures that constrain exit options

3. Conflict Minerals, Traceability, and Supply-Chain Integrity

Conflict-minerals risk remains central to DRC-linked activity, with supply-chain expectations extending to copper, cobalt, and battery-related inputs. Formal disclosure obligations under Dodd-Frank Section 1502 (currently subject to regulatory uncertainty) sit alongside investor, counterparty, and lender expectations around responsible sourcing that remain intact and in some sectors are intensifying.

The U.S. Securities and Exchange Commission and DOJ emphasize disclosure accuracy and internal controls. Regulators focus on whether companies understand the limits of their knowledge and align public statements accordingly.

Practical mitigation and governance measures

• Conduct early traceability risk assessments
• Use independent verification where reliance interests are high
• Align sourcing practices with public disclosures
• Assign clear internal ownership for traceability data
• Treat certifications as inputs rather than conclusions

4. Human Rights and Labor Risk

Human rights risk, including child and forced labor, has become a core compliance and governance concern, particularly where operations intersect with artisanal mining, security services, transport corridors, or large-scale labor forces.

Regulators and stakeholders expect proactive assessment of labor risk in high-risk geographies like the DRC. Inability to demonstrate reasonable assessment can trigger enforcement, customs action, or investor scrutiny. Perhaps more importantly, the reputational risk associated with using or benefitting from child or forced labor is enormous.

Practical human rights mitigation and governance measures

• Identify labor-intensive touchpoints early
• Engage with reliable local partners to monitor labor practices of partners and suppliers
• Avoid operational roles requiring labor oversight beyond capacity
• Embed labor standards into procurement and contracting
• Design escalation and disengagement pathways in advance
• Ensure rapid escalation of red flags to legal and compliance leadership

DRC Risk Amplifiers That Compound Exposure

Several factors consistently magnify exposure across the Core Four risk areas:

• Security and security-adjacent services
• State-owned and quasi-state counterparties
• Disclosure and internal controls
• Data integrity and traceability systems

These elements rarely create risk independently, but they intensify existing exposure.

Defensibility Is the Standard

Certainty is unattainable in frontier environments. What DOJ, SEC, directors, and investors assess is whether management exercised structured, reasonable judgment under uncertainty and created appropriate controls to mitigate risk.

An opportunity-specific, counterparty-realistic entry-readiness process demonstrates that management understood where risk resides and made deliberate choices about engagement. That record supports clearer internal decisions, stronger governance dialogue, and outcomes that remain defensible when scrutinized.

When a DRC-linked opportunity is scrutinized, the question will be whether management organized its analysis around concrete risk domains and translated that analysis into a clear, documented recommendation.

At a minimum, a defensible entry decision requires management to address the following:

First, a clear articulation of the company’s proposed role and control position. Decision-makers at every level — and enforcement authorities after the fact — should be able to understand where the company sits in the value chain, what functions it will perform, and what degree of operational and contractual control it will have. This framing determines both risk exposure and mitigation capacity.

Second, a grounded assessment of the four principal governance risks. Management should be prepared to address, in a disciplined and fact-specific way:

• Corruption and political exposure, including reliance on discretionary government interaction
• Sanctions and export-control risk, with particular attention to China-related adjacency, DRC sanctions regulations, and exit optionality
• Conflict-minerals and traceability risk, calibrated to copper and cobalt expectations and disclosure obligations
• Human-rights and labor risk, including child and forced-labor exposure in relevant segments of the value chain

No regulator, director, or investor expects total risk elimination. What they look for is evidence that these risks were understood, weighed, and prioritized appropriately.

Third, identification of structural risk amplifiers. Management should surface any factors that materially increase exposure across the four core risks — such as security providers, state-owned counterparties, disclosure sensitivities, or data integrity limitations — rather than allowing them to emerge later as surprises.

Fourth, a set of realistic mitigation pathways. Where risks are not structural deal-breakers, the record should reflect concrete options: role redesign, counterparty substitution, contractual controls, phased engagement, or enhanced monitoring. Where risks are structural, management should be explicit about that conclusion.

In Part 3, we turn to the issue that most frequently determines whether a DRC-linked opportunity is viable in practice: counterparties. Local partners, agents, subcontractors, logistics providers, and intermediaries are where governance frameworks meet operational reality. Understanding who actually controls them, and how they get things done, is where board-defensible judgment is made or lost.

For many years, corporate human rights litigation in U.S. courts centered on a single statute: the Alien Tort Statute (ATS). Plaintiffs seeking to hold companies liable for alleged violations of international law frequently relied on the ATS as the primary jurisdictional vehicle for bringing those claims.

Beginning in 2013, however, a series of U.S. Supreme Court decisions significantly narrowed the statute’s reach, particularly in cases involving foreign conduct or foreign corporate defendants. Those decisions led many observers to conclude that large-scale corporate human rights litigation in U.S. courts would decline sharply.

Recent developments suggest a more complicated reality. In particular, two recent jury verdicts, In re Chiquita Brands Int’l, Inc. Alien Tort Statute & Shareholder Derivative Litig., No. 08-MD-01916 (S.D. Fla.) (2024 jury verdict) and Kashef v. BNP Paribas S.A., No. 16-cv-3228 (GBD) (S.D.N.Y.) (2025 jury verdict), illustrate how plaintiffs are developing new pathways for pursuing corporate liability tied to international human rights harms. In both cases, sanctions-related conduct played a central role in establishing civil liability, even though U.S. sanctions laws themselves do not provide a private right of action.

These decisions matter for multinational companies for a simple reason: supply chain integrity and economic sanctions compliance failures may now carry risks that extend far beyond traditional regulatory enforcement. In certain circumstances, they may serve as the evidentiary foundation for large-scale civil litigation tied to supply-chain integrity, terrorism financing, or human rights abuses.

This article examines the implications of this emerging litigation trend. First, it explains why economic sanctions violations — even though they do not create private causes of action — can still play a central role in civil liability claims. Second, it reviews the recent Chiquita and BNP Paribas verdicts, which illustrate how plaintiffs are using economic sanctions-related conduct to support human rights claims in U.S. courts. Finally, it discusses the broader compliance implications for multinational companies, particularly the growing importance of integrating economic sanctions compliance into supply-chain integrity and human rights risk management frameworks.

Economic Sanctions Violations and Civil Liability

As a general matter, U.S. sanctions laws do not allow private parties to sue for damages. Economic sanctions regimes administered by the Office of Foreign Assets Control (OFAC), including those authorized under the International Emergency Economic Powers Act (IEEPA), are enforced by the U.S. government through civil penalties and criminal prosecutions. Courts have consistently held that these statutes do not create a private right of action for victims seeking damages.

The absence of a statutory cause of action, however, does not eliminate civil exposure. Instead, plaintiffs may pursue claims under other legal theories, including negligence or foreign tort law, while using sanctions violations as evidence that the defendant’s conduct created a foreseeable risk of harm. The Chiquita and BNP Paribas cases demonstrate how that strategy can succeed.

The Chiquita Verdict

The Chiquita litigation arose from payments made by Chiquita Brands International to the Autodefensas Unidas de Colombia (AUC), a paramilitary organization operating in Colombia. Between 1997 and 2004, Chiquita, through its Colombian subsidiary Banadex, paid the group more than $1.7 million. In 2001, the AUC was designated by the United States as both a Foreign Terrorist Organization and a Specially Designated Global Terrorist entity. Payments nevertheless continued for several years.

In 2007, Chiquita pleaded guilty to criminal charges related to the payments and paid a $25 million fine. Families of individuals murdered by the AUC later brought civil claims in U.S. court. After several legal theories were dismissed, the case ultimately proceeded under Colombian tort law. In June 2024, a federal jury in the Southern District of Florida found Chiquita liable for wrongful deaths connected to the paramilitary violence and awarded approximately $38 million in damages. The case is currently on appeal.

Importantly, the sanctions violation itself did not create a civil claim. Instead, the payments to the designated terrorist organization served as critical evidence that the company knowingly contributed to a foreseeable risk of harm.

The BNP Paribas Verdict

A second major case arose from litigation involving the French financial institution BNP Paribas. In 2014, the U.S. Department of Justice concluded a major sanctions enforcement action involving the bank’s processing of transactions linked to Sudan and other sanctioned jurisdictions. BNP Paribas pleaded guilty and agreed to pay more than $8.9 billion in penalties.

Sudanese refugees subsequently filed civil claims alleging that the bank’s conduct helped enable atrocities committed during the Darfur conflict. After several procedural disputes, including issues involving timeliness and the act-of-state doctrine, the case proceeded to trial in the Southern District of New York.

In October 2025, a jury awarded approximately $20.75 million to three bellwether plaintiffs. The broader litigation involves a certified class of more than 20,000 Sudanese refugees and asylum seekers, meaning the ultimate exposure could be far larger if the verdict survives appeal.

Why These Cases Matter

Although both verdicts remain subject to appellate review, they highlight several developments that multinational companies should consider when assessing sanctions compliance and supply-chain integrity risks.

• Civil Liability May Be Based on Foreign Law. In both cases, the operative legal claims arose under foreign law rather than U.S. statutes. The Chiquita claims proceeded under Colombian tort law, while the BNP Paribas litigation applied Swiss law. U.S. courts applied those legal regimes through traditional conflict-of-law principles. This dynamic creates a potentially powerful litigation pathway. Even when U.S. statutory claims are unavailable, plaintiffs may rely on the law of the place where the harm occurred or where key conduct took place. As a result, multinational companies may face liability in U.S. courts based on foreign legal standards tied to overseas operations.
• Economic Sanctions Violations Can Establish Foreseeability. In both cases, sanctions violations played a central evidentiary role. In Chiquita, the payments to a designated terrorist organization supported the conclusion that the resulting violence was a foreseeable consequence of the company’s conduct. In BNP Paribas, the bank’s admitted knowledge of sanctions targeting Sudan reinforced the argument that the risks associated with its transactions were foreseeable. In this way, sanctions compliance failures can significantly strengthen civil claims, even when they do not independently create liability.
• Foreign Companies Are Not Necessarily Shielded. The BNP Paribas litigation also illustrates that foreign corporations are not necessarily insulated from these claims. Although the Supreme Court has limited the ability to bring ATS claims against foreign companies, plaintiffs may rely on alternative legal theories. Where U.S. courts have personal jurisdiction, foreign companies with meaningful U.S. contacts may still face civil litigation tied to overseas human rights harms.
• Enforcement Resolutions Can Shape Civil Litigation. Finally, the BNP Paribas case underscores the potential downstream consequences of sanctions enforcement resolutions. The court prevented the bank from contradicting factual admissions contained in its prior criminal plea agreement with the U.S. Department of Justice. As a result, key facts established during the enforcement action carried significant weight in the subsequent civil litigation. This dynamic means that statements made in criminal resolutions or regulatory settlements may later become powerful evidence in private civil proceedings.

What Companies Should Be Doing Now

The broader lesson from these cases is that sanctions compliance failures may create risks that extend well beyond traditional regulatory enforcement. Companies should therefore treat sanctions compliance as a core component of supply-chain integrity and human rights risk management.

In practical terms, multinational companies should consider the following six steps:

1. Strengthen Counterparty Due Diligence in High-Risk Jurisdictions. Transactions involving politically exposed entities, armed groups, state-controlled enterprises, or actors operating in conflict zones present heightened legal and reputational risks. Companies should ensure that counterparty due diligence is not limited to list-based screening but instead incorporates a more robust, multi-layered assessment of the broader risk environment in which the counterparty operates.

That assessment should include, among other things:

• beneficial ownership and control structures, including indirect links to sanctioned actors, armed groups, or state security apparatuses;
• operational context, including whether the counterparty operates in regions associated with terrorism financing, militia activity, armed conflict, or systemic human rights abuses; and
• revenue flow and end-use risk, particularly where payments, goods, or services could be diverted to sanctioned or violent actors.

From a litigation perspective, the key question will not simply be whether screening occurred but whether the company identified and evaluated reasonably foreseeable risks. Due diligence frameworks should therefore be calibrated to demonstrate that the company took meaningful steps to identify and mitigate those risks before transactions occurred.

2. Integrate Sanctions Compliance with Broader Human Rights and Conflict-Risk Assessments. In many cases, litigation exposure arises not simply from the sanctioned activity itself but from the broader context in which it occurs. Compliance programs should therefore move beyond a siloed sanctions analysis and incorporate conflict-risk indicators and human rights considerations into their broader risk management processes. This may include:

• developing jurisdiction- and sector-specific risk matrices for regions or industries where sanctions, conflict, and human rights concerns intersect;
• identifying red flags associated with conflict-affected or politically unstable areas, including unusual payment arrangements, the use of intermediaries, or dealings with quasi-governmental actors; and
• implementing trigger-based escalation protocols requiring enhanced review where specified contextual risks are present.

A well-integrated framework allows companies to demonstrate that they actively assessed and responded to the surrounding risk environment rather than treating sanctions compliance as a technical screening exercise divorced from real-world conditions on the ground.

3. Ensure That Escalation and Decision-Making Protocols Function Effectively. Several recent cases involved situations where companies continued high-risk transactions despite internal warnings. Companies should therefore review escalation frameworks to ensure that transactions involving sanctioned actors or conflict-affected regions receive appropriate legal and compliance review at a sufficiently senior level. In particular, companies should assess whether their escalation protocols:

• route high-risk matters to decision-makers with sufficient authority to pause or terminate the transaction;
• require documented analysis of legal, reputational, operational, and human rights-related risks; and
• incorporate clear stop/go criteria, rather than leaving decisions entirely to ad hoc business judgment.

The critical issue is not merely whether an issue was escalated but what happened after escalation occurred. Decision-making processes should be structured, disciplined, and reviewable, with the expectation that they may later need to be explained to regulators, counterparties, or a court.

4. Maintain Clear Documentation of Risk-Based Compliance Decisions. In civil litigation, the evidentiary record often becomes central. Companies should maintain documentation demonstrating that sanctions screening, diligence, and risk assessments were conducted in a structured and good-faith manner and that identified risks were considered through an appropriate internal process. That documentation should ideally reflect:

• the diligence performed and the sources reviewed;
• the specific risks identified and how those risks were evaluated;
• the personnel involved in the review and decision-making process; and
• the mitigation measures adopted, such as contractual protections, enhanced monitoring, restructuring of the transaction, or a decision not to proceed.

Importantly, documentation should reflect contemporaneous reasoning rather than post hoc justification. Companies should also assume that compliance records, internal communications, and materials developed during regulatory inquiries may later become important evidence in civil litigation.

5. Carefully Evaluate the Long-Term Implications of Sanctions Enforcement Resolutions. Statements made in criminal plea agreements, settlement documents, or regulatory resolutions may later become powerful evidence in civil litigation. Companies should therefore consider potential downstream litigation exposure when negotiating sanctions-related enforcement outcomes. This should include evaluating:

• whether factual admissions could later be used to establish knowledge, intent, or foreseeability;
• whether those admissions may restrict the company’s ability to contest key facts in later proceedings; and
• how the overall narrative of the resolution may be framed by private plaintiffs in follow-up civil litigation.

In this respect, enforcement resolutions should not be viewed as the end of the matter. They should also be assessed as part of a broader litigation strategy, particularly where the underlying facts may later be invoked in negligence, foreign-law tort, or other civil claims.

6. Reassess Supply-Chain Oversight in Conflict-Affected or High-Risk Regions. Companies operating in areas associated with armed conflict, terrorism financing, or systemic human rights abuses should periodically review supplier controls, monitoring systems, and governance frameworks to ensure that risks are identified and addressed early. That review should include consideration of whether the company has:

• sufficient supply-chain mapping and traceability to understand not only direct suppliers but also relevant sub-suppliers, intermediaries, and financial channels;
• risk-based monitoring mechanisms, such as audits, transaction testing, compliance certifications, or third-party verification processes; and
• contractual controls, including audit rights, termination provisions, and representations relating to sanctions, sourcing, and compliance practices.

Where full visibility is not feasible, companies should be able to demonstrate that they adopted reasonable, risk-based measures to identify and mitigate exposure. From a litigation standpoint, the question will often be whether the company exercised appropriate oversight given the known risk profile of its operations and sourcing model.

Taken together, these steps can help companies strengthen supply-chain integrity while reducing the potential for economic sanctions compliance failures to become the foundation for civil litigation exposure.

The Bottom Line

The significance of the Chiquita and BNP Paribas verdicts extends beyond the specific facts of those cases. They reflect a broader shift in how courts, regulators, and policymakers are approaching supply-chain integrity and corporate accountability for overseas conduct.

Around the world, governments are increasingly adopting legal frameworks designed to force greater transparency into global supply chains. In the United States alone, measures such as the Uyghur Forced Labor Prevention Act (UFLPA), Customs and Border Protection forced labor Withhold Release Orders (WROs), and state-level supply-chain transparency laws already require companies to understand where their products come from and how they are produced. Similar initiatives are emerging in Europe and other jurisdictions.

Taken together, these developments send a consistent message: companies that source, manufacture, or transact internationally are expected to understand their supply chains in meaningful detail. That expectation increasingly extends beyond direct suppliers to include sub-suppliers, intermediaries, and financial channels that support commercial activity.

The recent sanctions-related litigation described above should therefore be viewed as part of this broader trend. Alongside forced labor enforcement, supply-chain transparency laws, and expanding due diligence obligations, civil litigation may become another mechanism through which companies are held accountable for failures to understand and manage risks within their global operations.

For multinational companies, the implication is clear. Effective compliance today requires more than just conducting economic sanctions screening. It increasingly requires robust supply-chain mapping, traceability, and risk-based oversight that reaches deep into the supplier network. Companies that invest in those capabilities will be far better positioned to navigate a regulatory and enforcement environment that is steadily moving toward greater transparency and accountability across global supply chains.