Investigation Archives - Customs & International Trade Law Firm

New OFAC Advisory: Signs of Sham Transactions and Sanctions Evasion
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New OFAC Advisory: Signs of Sham Transactions and Sanctions Evasion
Enforcement, International Law, International Trade, Investigation, U.S. Office of Foreign Assets Control (OFAC)

New OFAC Advisory: Signs of Sham Transactions and Sanctions Evasion

On March 31, 2026, the U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) released an important advisory addressing the growing use of sham transactions to evade U.S. sanctions. The guidance highlights how sanctioned individuals and entities often attempt to disguise their continuing interest in property through opaque legal structures, proxies, and other intermediaries. OFAC’s message is clear: transactions that merely appear to transfer ownership but do not genuinely extinguish a blocked person’s interest remain prohibited.

What OFAC Defines as a “Sham Transaction”

Sham transactions occur when blocked persons “give up their property on paper only,” while continuing to benefit from or control the asset. These arrangements often involve:

Proxies, straw owners, or front companies acting on behalf of sanctioned individuals.
Opaque legal structures, including multi‑layered LLCs, partnerships, or trusts.
Transfers to family members or close associates who may serve as facilitators.
Commercially unreasonable transfers, such as those lacking adequate consideration.
Continued use or control of the asset by the blocked person after the purported transfer.

Pro Tip: Look beyond legal formalities and identify the economic realities of the transaction.

Red Flags Identified by OFAC

The advisory outlines several indicators that a transaction may be a sham designed to evade sanctions. These include:

By Jennifer Diaz|2026-04-07T16:53:01-04:00April 3, 2026|Enforcement, International Law, International Trade, Investigation, U.S. Office of Foreign Assets Control (OFAC)|0 Comments

BIS Initiates 232 Investigations of Pharmaceuticals and Semiconductors
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BIS Initiates 232 Investigations of Pharmaceuticals and Semiconductors
Investigation, tariffs, U.S. Department of Commerce

BIS Initiates 232 Investigations of Pharmaceuticals and Semiconductors

The U.S. Department of Commerce Bureau of Industry and Security (BIS) announced the initiation of investigations into the effects on U.S. national security of imports of pharmaceuticals and pharmaceutical ingredients and imports of semiconductors and semiconductor manufacturing equipment.

The basis of the investigations is Section 232 of the Trade Expansion Act of 1962. Under Section 232, the president can restrict imports of products that are found to threaten to impair national security.

On April 16, BIS published two federal register notices (pharmaceuticals, semiconductors) seeking public comment. Comments are due May 7, 2025.

Pharmaceuticals and Pharmaceutical Ingredients

The scope of the pharmaceutical investigation covers pharmaceuticals and pharmaceutical ingredients, including:

Finished drug products
Medical countermeasures
Critical inputs such as active pharmaceutical ingredients
Key starting materials, and derivative products of those items

Among other information, BIS is particularly interested in comments that address:

Demand for pharmaceuticals and pharmaceutical ingredients in the United States
The extent to which domestic production of pharmaceuticals and pharmaceutical ingredients can meet domestic demand
The role of foreign supply chains, particularly of major exporters, in meeting United States demand for pharmaceuticals and pharmaceutical ingredients
The impact of foreign government subsidies and predatory trade practices on United States pharmaceuticals industry competitiveness
Whether additional measures, including tariffs or quotas, are necessary to protect national security

Interested parties may submit a comment in this proceeding on or before May 7, 2025 at Regulations.gov using ID BIS-2025-0022.

Semiconductors and Semiconductor Manufacturing Equipment

The scope of the semiconductor investigation covers semiconductors, semiconductor manufacturing equipment, and their derivative products, […]

By Jennifer Diaz|2025-04-17T16:35:06-04:00April 17, 2025|Investigation, tariffs, U.S. Department of Commerce|0 Comments

Breaking Trade News: New AD and CVD Petition Filed on 2,4-Dichlorophenoxyacetic Acid from China and India

On March 14, 2024, Corteva Agriscience LLC filed a petition for the imposition of antidumping and countervailing duties on imports of 2, 4-Dichlorophenoxyacetic (2, 4-D) acid from China and India.

2, 4-D is the active ingredient in many products used in the United States and throughout the world as an herbicide to kill weeds on land and in water.

Identified importers include:

Helena Industries LLC (China)
Nufarm Americas Inc. (China)
PBI-Gordon Corporation (China)
Gharda Chemicals (India)
Atul USA, Inc. (India)

The full list of identified exporters and producers can be viewed here.

The alleged dumping margins are:

China: 143.73%
India: 62.66%

The proposed scope language includes the 2, 4-D component of any derivative products of 2, 4-D including amine salt and ester forms.

The Commerce Department will determine whether to initiate the investigations within 20 days. The United States International Trade Court (USITC) will reach a preliminary determination of material injury or threat of material injury within 45 days. Final determinations will likely occur late 2024.

As with any proceeding, participation is very important to protect your rights. We urge anyone that imports 2, 4-D to pay close attention to this case to ensure that all appropriate steps are taken to mitigate any damage.

Diaz Trade Law will continue to monitor this case and share updates. For more information or questions get in touch with us at 305-456-3830 or info@diaztradelaw.com.

By Jennifer Diaz|2024-03-18T09:40:32-04:00March 18, 2024|AD/CVD, China, Import, Investigation, U.S. Department of Commerce (DOC)|0 Comments

ICYMI: U.S. & Chinese Companies Fined $2.5 Million for Underpaying Customs Duties, Whistleblowers to Receive $500,000

Earlier this month, the U.S. Attorney for the Northern District of Texas announced that a Dallas-based importer, two individuals, and two Chinese companies agreed to pay $2.5 million to resolve allegations that they failed to pay customs duties on imports.

Underpaying Through Duplicate Invoices

ADCO, a Dallas-based importer of industrial products, the company owner Raymond E. Davis, customs broker Calvin Chang, and Chinese companies Xiamen Atlantis MFC Co., Ltd. and Xiamen Taft Medical Co., Ltd conspired to underreport the value of goods they were importing.

The scheme involved falsifying invoices with low values for goods ADCO was importing from China. The company used a separate set of invoices that contained the correct value of goods to ensure that ADCO paid its suppliers the actual value of the goods.

In investigating the scheme, the U.S. Attorney’s Office and CBP’s Consumer Products and Mass Merchandising Center of Excellence and Expertise reviewed over 1,000 import entry lines.

Qui Tam Lawsuit

The settlement with the government resolved a “qui tam” lawsuit filed under the False Claims Act (FCA). A qui tam lawsuit is one that is brought by a private citizen or company against a defendant or defendants that owe money to the government.

When a qui tam lawsuit is successful, the party that initiated the case—called a “relator”—is entitled to a substantial monetary reward, ranging between 15% and 30% of the amount recovered for the government. A qui tam lawsuit also engages the U.S. Department of Justice (“DOJ”) in the case, and typically results in the opening of […]

By Jennifer Diaz|2023-12-29T11:12:53-05:00December 27, 2023|Import, Investigation, penalty, U.S. Department of Justice (DOJ)|0 Comments

Breaking Trade News: American Producers of Aluminum Extrusions File Trade Petitions Alleging Unfair Dumping and Subsidies from 15 Countries

The U.S. Aluminum Extruders Coalition and the United Steelworkers (USW) union filed petitions claiming unfair trading imports of aluminum extrusions from China, Colombia, the Dominican Republic, Ecuador, India, Indonesia, Italy, Malaysia, Mexico, South Korea, Taiwan, Thailand, Turkey, the United Arab Emirates, and Vietnam.

Full list of exporters here, full list of U.S. importers here.

The filing is in response to increasing volumes of allegedly unfairly priced imports of aluminum extrusions that have been growing since 2019, notwithstanding that Aluminum Extrusions made in the U.S. face significantly higher costs due to restrictions on the importation of primary aluminum.

The petitions aim to demonstrate that aluminum extrusion producers in these countries are selling extrusions in the U.S. at less than fair value and that such sales are harming the U.S. Aluminum Extrusion industry. The petitions note dumped rates up to 256%.

The petitions also claims that producers in China, Indonesia, Mexico, and Turkey unfairly benefit from countervailable subsidies, such as tax breaks and discounted land.

The President of the Aluminum Extruders Council, Jeff Henderson, stated: “For years, American extruders and workers have lost huge amounts of sales to unfairly traded, dumped and subsidized imports of aluminum extrusions. It’s time to take a stand for American manufacturing and take on these illegally traded products.”

The Commerce Department will determine whether to initiate the investigations within 20 days. The USITC will reach a preliminary determination of material injury or threat of material injury within 45 days. The deposit of duties will likely be required by the late fall […]

By Jennifer Diaz|2023-10-06T13:59:01-04:00October 6, 2023|Import, Investigation|0 Comments

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