New task force and order target duty evasion
On August 29, 2025, the DOJ and DHS launched the Trade Fraud Task Force (TFTF) to aggressively pursue criminal and civil enforcement against tariff evasion, misclassification, and smuggling schemes. Additionally, Executive Order 14326 (effective August 2025) introduces a strict 40% additional ad valorem rate of duty on any article CBP determines was transshipped to evade duties. Crucially, there is no option for mitigation or remission of these penalties.
The Executive Order did not define “transshipment”, but it did direct CBP and the Department of Commerce to publish a bi-annual list of “countries and specific facilities used in circumvention schemes” and noted that the list should be utilized in “commercial due diligence.” As of early 2026, this list is still pending.
Enforcement is already ramping up. In the first half of 2025, CBP uncovered more than $400 million in unpaid trade duties through Enforce and Protect Act (EAPA) investigations — a key tool to stop illegal transshipment and other schemes designed to cheat the system.
Defining the challenge: legal vs illicit transshipment
Transshipment is legal when the product is “substantially transformed” in the third country to earn a new country of origin designation.
In contrast, illicit transshipment is intentionally misrepresenting the origin of a shipment by routing it through a third country, and we are witnessing a rise in these efforts to “origin wash” goods. Whether the goal is to avoid anti-dumping duties or tariffs, or to skirt sanctions, the result is ultimately the same: it puts the importer at significant legal and financial risk.
Detection is difficult because legitimate and fraudulent shipments often use the same physical transit points like Malaysia or Korea. So detection requires trade compliance specialists and sourcing managers to employ sophisticated monitoring of commercial relationships and risks that do not appear on a standard bill of lading.
>> Discover how bifurcated supply chains can enable illicit transshipment <<
Moving beyond supplier affidavits to protect against illicit transshipment
Importers following historical practices — such as relying on supplier statements without thorough documentation — may now face severe penalties, especially if they are sourcing from countries with known transshipment risk, including Vietnam, Malaysia, Cambodia, Thailand, and Indonesia.
Organizations need to move beyond surface-level customs declarations to best comply with this new enforcement environment. Importers need look no further than Uyghur Forced Labor Prevention Act (UFLPA) enforcement to know that CBP expects specific, product-level data extending deep into the supply chain. Having as complete as possible a mapping and understanding of supply chains, from raw materials to finished product, is critical.
In addition, legislative proposals in the U.S. and EU are moving beyond traditional substantial transformation rules to include “ownership-based” rules. These are typically driven by national security or tax concerns targeting “foreign adversaries,” but these rules are increasingly vital for import and tariff compliance.
>> Learn more about using corporate attributes to enhance supply chain visibility <<
Proactive steps to ensure transshipment compliance
Monitor the forthcoming Commerce/CBP circumvention list. Be prepared to go beyond basic, name-only screening against entities on the list. Similar to UFLPA screening, organizations must also identify high-risk owners, subsidiaries, and related parties of listed entities to combat illicit transshipment. Entities owned by, operated by, or collocated with those on the new list will pose an equal risk and must be screened.
How Sayari helps: Sayari delivers advanced entity screening support, providing maximum searchability across dozens of potential fields, including both name and address. Screening includes identifying entity risk (e.g., sanctions list matches), network risk through adjacency or shared “possibly same as” components, and further risk propagation through active relationships.
Supplement supplier-provided affidavits with external data to support audits. External data like global trade records and corporate ownership records are what regulators like CBP and the DOJ use themselves to connect the dots and uncover schemes involving shell companies, counterparty risks, and inconsistent product capabilities. Customs is focused on whether a supplier in a neutral country is a shell or subsidiary controlled by a parent in a high-tariff country like China.
How Sayari helps: Sayari’s data offers corporate and trade insights that exceed what a supplier may disclose, going beyond the scope of standard affidavits or ERP/trade system information. Sayari can help confirm an upstream supplier’s capacity for substantial transformation, which is central to qualifying for a new country of origin. This external corporate and trade data can help prove a factory is a legitimate manufacturing site.
Sayari’s network visualizations map corporate hierarchies and can identify “shadow” owners holding dual positions in the exporting country and a raw material supplier in a sanctioned or high-risk country.
For more best practices on avoiding illicit transshipment risk in your organization, watch our webinar Beyond the Bill of Lading: Operationalizing Import Transshipment Detection for Proactive Compliance.
