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Tougher Federal Charging and Sentencing Policy Could Affect Trade Violations

Penalties imposed in some trade-related cases could increase under a tougher federal charging and sentencing policy announced recently by U.S. Attorney General Jeff Sessions. The policy directs federal prosecutors to charge and pursue the most serious, readily provable offenses, which are defined as those that carry the most substantial sentences under federal guidelines. Any deviation from this “core principle” would have to be justified by unusual facts and approved by senior leadership. Prosecutors are also directed to seek reasonable sentences, which in most cases will mean recommending a sentence within the advisory guideline range.

Most violations of trade and related laws are remedied through civil penalties but some are met with criminal penalties as well. These include price fixing, foreign bribery, illegal exports and economic sanctions violations. Criminal penalties have also been assessed for duty evasion prosecuted under the False Claims Act. The new policy could yield higher penalties in these cases.

However, the policy could have a broader effect as well. The Trump administration has moved quickly to increase enforcement in a number of areas, including trade. For example, CBP officials have emphasised their intent to implement the tougher provisions of the Trade Facilitation and Trade Enforcement Act enacted two years ago. If this initiative results in more criminal cases against trade violations, the new charging and sentencing policy could yield bigger fines and longer prison terms for those found liable.

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