Trade Agreements Act Fraud: When the Factory Moves but the Certification Stays

A Trade Agreements Act fraud whistleblower can expose a contractor selling government supplies under false country-of-origin certifications. The product may stay on the contract after production moves to a country the contract does not permit. If you work in manufacturing, purchasing or government sales, you may know exactly when that happened and who kept selling it. The factory changed. The origin claim did not.

What Is a False Certification?

A false certification misrepresents a fact the government relies on, such as where a product was made. In a Trade Agreements Act case, the contractor represents that its goods meet the contract’s origin requirements while supplying goods that do not. The government pays for a product on the strength of a promise about its origin.

The False Claims Act reaches knowingly false claims and false statements that matter to payment. We connect the origin representation to the product sold, the government order and what people inside the company knew. A supplier’s false statement can also reach the government through a reseller’s later claim for payment.

A whistleblower case under the False Claims Act can pay 15% to 30% of what the government recovers.

What the Trade Agreements Act Requires of a Product’s Origin

For covered government purchases, Trade Agreements Act compliance turns on whether goods qualify as U.S.-made or designated-country products. China and Malaysia were non-designated countries in the medical-device allegations discussed below. Which purchases are covered depends on the contract.

Substantial transformation asks whether processing creates a new article with a distinct name, character or use. That puts the manufacturing work at the center of the origin question. The Trade Agreements clause separately defines U.S.-made products to include goods manufactured in the United States or substantially transformed here.

We compare the origin certification and the contract’s delivery requirements with the product that actually reached the buyer.

Is the Buy American Component Cost Test Different From TAA Substantial Transformation?

Yes. The Buy American component cost test is different from TAA substantial transformation. For ordinary manufactured end products, Buy American combines U.S. manufacture with a required domestic share of component costs. That share measures component costs, rather than the finished product’s selling price. Under the Trade Agreements Act, substantial transformation asks what the processing made out of the materials.

The U.S.-made definition under the Trade Agreements clause does not use Buy American’s component percentage. For commercially available off-the-shelf goods, the Buy American rules generally waive the component-cost test. These distinctions matter to a product assembled from parts sourced in different countries: purchasing costs and the work done at the factory answer different questions.

Contracts set aside for small businesses fall outside the federal trade-agreement purchasing rules.

The Supplier Letter and the Shipment Can Tell Different Stories

A U.S. distributor’s address establishes neither where a product was manufactured nor its domestic component content. A manufacturer, supplier and reseller can each carry a different part of the origin story. The supplier letter can reach the government-facing sales team while the shipment follows a different route.

LED Lighting Solutions illustrates that gap. In its May 2025 settlement announcement, the Justice Department alleged that the company used a supplier letter and annual certifications to sell Chinese end products under its General Services Administration schedule. The announcement identified that agency, the State Department and the Department of Agriculture as customers, and described a shipment directly from China to an agency.

The supplier assurance and the shipment described the same business from different directions. For someone in sourcing or logistics, that is a concrete comparison: what did the company tell its government customer, and where did the goods actually come from?

What Manufacturing Records Prove a False Substantial Transformation Claim?

Manufacturing records can show where the work occurred and what that work changed. For a false substantial transformation claim, we connect that production history to the origin certification, the particular product and the government purchase. The substantial-transformation question concerns the work that made the article. The certification records what the seller claimed about it.

When a GSA product’s country of origin changes after manufacturing moves, the product history and the government listing need to be read together. The same comparison reaches a supplier letter that no longer describes production, or a removal notice followed by more sales. We connect when production changed with what the sales team knew.

In Transparency, Accountability, and Integrity of Public Procurement Systems, Transparency International’s 2024 review raises a possibility from Bangladesh: after procurement went electronic, corrupt practices may have shifted to contract implementation, which remained largely on paper.

For an origin case, the practical question follows the goods beyond the award. We need the manufacturing and sales history behind the certification. The person who knows what changed after the contract was signed may explain what the listing alone cannot.

Coloplast Reported Leaving Products on a Veterans Affairs Contract After Manufacturing Moved

When a device maker moves manufacturing for Veterans Affairs products to a non-designated country, does the contract certification still match production? Coloplast’s medical-product case shows that problem. The manufacturer self-reported that it had misapplied the Trade Agreements Act substantial transformation standard. According to the Justice Department’s announcement, Coloplast disclosed incorrect country-of-origin reporting and products left on the contract after manufacturing moved to non-designated countries.

In December 2022, Coloplast agreed to a $14,547,347 settlement covering both the origin allegations and failures to give the Department of Veterans Affairs required discounts. The company also self-reported missed discounts and overbilling for medical and pharmaceutical products.

The origin issue was a change inside the business that the contract did not reflect. A manufacturing employee could know where production moved. A government sales employee could see that the product remained available. Those are connected parts of the same account, and the dates linking them matter.

Medtronic Allegedly Sold Devices Made in China and Malaysia as Compliant

Medtronic allegedly certified medical products as made in the United States or designated countries while selling products manufactured in China and Malaysia. The Justice Department’s account identifies sales to the Department of Veterans Affairs and names the products: anchoring sleeves used to secure cardiac leads, instruments and devices used in spine surgery, and a handheld patient assistant used with a wireless cardiac device.

The origin claim attached to particular products. That detail matters in a medical-device business with different products and manufacturing locations. We connect the product named on the certification to its own production history and the orders for it.

The case began with three whistleblowers and ended in a settlement announced in April 2015.

OMNI Allegedly Kept Selling Toner After a Removal Notice

A government contractor that continues selling noncompliant toner after a removal notice leaves a direct comparison between what it was told and what it sold afterward. That was the allegation against OMNI Business Systems.

The Justice Department’s June 2023 announcement described more than a dozen HP toner products that OMNI allegedly misrepresented as Trade Agreements Act compliant on a General Services Administration Multiple Award Schedule contract. The government alleged that the products remained available and sales continued through GSA after OMNI had been told to remove the noncompliant items.

The case began with an OMNI competitor, showing that knowledge of the product and the competing listing can come from outside the seller’s own staff.

The government allegedly told OMNI to take the products off the schedule, yet sales continued. In that alleged scheme, honest suppliers compete against an origin promise the seller did not keep, while taxpayers pay for goods that fail the contract’s requirements. We examine who received the instruction and which products the company sold afterward.

Chinese Products Reboxed Before Sale as Government Supplies

A Chinese product reboxed before sale as TAA compliant government supply can leave a trail in the warehouse as well as the certification. ICP Medical’s case shows why the handling of packaging and labels can matter to a government buyer’s understanding of the goods.

In the GSA inspector general’s account of the settlement, the government alleged that ICP removed Chinese-origin designations, reboxed medical products and used U.S. flag stickers on some goods. The products included body bags, gowns and scrubs supplied to the Department of Veterans Affairs. The settlement also addressed allegedly false commercial-discount disclosures and inflated prices.

A former employee brought the case. The alleged warehouse activity would have hidden the products’ origin from the government buyer: the Chinese labels were gone, and some packages carried U.S. flags.

University Loft’s Malaysian Furniture and the GSA Origin Promise

J Squared Inc., doing business as University Loft Company, agreed to pay $400,000 to resolve allegations that it knowingly sold Malaysian-made furniture under General Services Administration contracts requiring Trade Agreements Act compliance. The Justice Department announced the settlement in June 2009. The contracts allowed the Indiana-based company to sell to military and other government purchasers.

The seller’s American location did not establish the furniture’s manufacturing origin. The government alleged that the goods failed the country-of-origin promise attached to those sales. For someone familiar with the factory or supplier, that distinction connects production records to the item the government bought.

Furniture by Thurston, a competing furniture business, and an individual co-whistleblower brought the lawsuit. The announcement said they would receive a collective $66,000 share of the recovery. Their role shows that knowledge of a product’s source can come from elsewhere in the same market.

Can a Contractor Be a Whistleblower?

Yes. A competing contractor can bring a whistleblower case over false origin claims. OMNI’s competitor-originated case is one example. University Loft Company is another: the company faced allegations that it sold Malaysian-made furniture under General Services Administration contracts requiring Trade Agreements Act compliance, and a furniture competitor was among the whistleblowers behind the case.

The Justice Department’s University Loft announcement concerned furniture sold to government purchasers through those contracts. A rival in the same market can recognize the product and question the origin story attached to it.

Inside the supply chain, purchasing, manufacturing, warehouse and sales staff may each see a different part of that story. We work with you to connect the product, the origin promise and the government sale. If your questions concern confidentiality or your own role in the transactions, our whistleblower experts work through those with you too.

You Know Where the Product Was Made

If you know the factory, supplier or product history contradicts what the government was sold, speak with our whistleblower experts about the origin claim. We build the case with you and bring in government procurement whistleblower lawyers who understand product-origin disputes. We stay on your side throughout, turning what you know about the product into the strongest case we can build together.