Responding Quickly When CBP Takes Enforcement Action
A customs compliance issue can quickly escalate from a routine request for information to a shipment detention, penalty claim, liquidated damages demand, or seizure. These matters often involve short response periods, mounting storage costs, disrupted customer obligations, and significant financial exposure.
Decisions made immediately after receiving notice from U.S. Customs and Border Protection may determine whether merchandise is released, whether a penalty is reduced, and whether the business preserves its administrative and judicial remedies.
Saluja Law, PLLC assists importers, exporters, customs brokers, carriers, travelers, and international businesses in responding to CBP investigations and enforcement actions. We evaluate the government's position, identify applicable deadlines, preserve available rights, and develop a response based upon the governing law, evidence, and client's commercial objectives.
CBP Investigations and Detentions
A customs investigation may begin with a Request for Information, Notice of Action, audit inquiry, document demand, merchandise examination, or contact from a CBP officer or special agent. The inquiry may involve classification, valuation, country of origin, admissibility, preferential treatment, recordkeeping, intellectual property, forced labor, or antidumping and countervailing duties.
A request that appears routine may be the first stage of a broader enforcement matter. Businesses should respond accurately and completely while avoiding unsupported explanations, inconsistent documents, or admissions made before the facts have been investigated. Any response should address the specific request while maintaining a consistent position across the company's entries, contracts, invoices, and internal records.
CBP may also detain merchandise while examining the shipment, reviewing documentation, or consulting another federal agency. Detentions commonly involve suspected trademark violations, marking deficiencies, inaccurate descriptions, missing approvals, forced-labor concerns, or trade-remedy evasion.
Under 19 U.S.C. § 1499, CBP generally must make a final admissibility determination within 30 days after detained merchandise is presented for examination. If CBP does not act within the applicable period, the merchandise may be treated as excluded for purposes of further review.
Detention is both a legal and commercial problem. Goods held at a port may generate demurrage, storage, and transportation expenses while the importer misses delivery obligations or loses the value of the shipment. We assist clients in identifying why goods are being held, preparing supporting submissions, coordinating with CBP and partner agencies, and challenging improper detentions or exclusions.
Penalties Under 19 U.S.C. § 1592
Section 1592 is one of CBP's principal civil enforcement statutes. It prohibits entering, introducing, or attempting to enter merchandise through a material false document, statement, act, or omission resulting from fraud, gross negligence, or negligence. It also prohibits aiding or abetting such conduct. See 19 U.S.C. § 1592.
Potential violations may involve incorrect classifications, undervaluation, undeclared assists or royalties, false origin declarations, improper trade agreement claims, failure to declare antidumping or countervailing duties, inaccurate product descriptions, transshipment, or failure to maintain required records.
Exposure depends upon the level of culpability, the actual or potential loss of revenue, and the value of the merchandise. Fraud, gross negligence, and negligence carry different statutory maximums.
A Section 1592 matter commonly begins with a pre-penalty notice describing the alleged violation and proposed penalty. The recipient may present factual and legal arguments before CBP issues a formal claim. An effective response may challenge whether a violation occurred, whether the statement was material, the asserted level of culpability, CBP's loss-of-revenue calculation, or the proposed penalty amount.
Prior Disclosures
A business that discovers a potential violation before CBP begins a formal investigation may be able to reduce its penalty exposure through a valid prior disclosure. Under 19 U.S.C. § 1592(c)(4) and 19 C.F.R. § 162.74, the disclosing party generally must identify the circumstances of the violation before, or without knowledge of, the commencement of a formal investigation and tender any actual loss of duties, taxes, and fees as required.
A prior disclosure should not be filed before the business understands the issue. The company should identify the affected entries, determine how the error occurred, evaluate the level of culpability, calculate any duty loss, confirm whether CBP has begun an investigation, and implement corrective measures.
Saluja Law assists clients in conducting internal reviews, identifying affected entries, calculating potential exposure, preparing disclosures, and developing corrective-action plans.
Petitions and Mitigation
A petition for remission or mitigation is a principal administrative method for challenging or reducing a CBP fine, penalty, or forfeiture. The petition is submitted to the Fines, Penalties, and Forfeitures office identified in the notice and should present the relevant facts, legal defenses, mitigating circumstances, supporting documents, and requested relief.
Under 19 C.F.R. Part 171, petitions involving seizures generally must be filed within 30 days after the seizure notice is mailed, while penalty petitions generally must be filed within 60 days after the penalty notice is mailed. The specific notice and governing procedure should always be reviewed because the applicable deadline and response requirements may vary.
A petition may argue that no violation occurred, the alleged statement was not material, CBP used the wrong legal standard, the asserted culpability is unsupported, or the duty calculation is inaccurate. Mitigating circumstances may include reasonable care, cooperation, reliance upon government guidance, isolated conduct, prompt correction, and meaningful remedial measures.
CBP's Section 1592 mitigation guidelines appear in Appendix B to 19 C.F.R. Part 171 and identify factors that may affect the amount of relief.
Liquidated Damages
Liquidated damages arise when CBP alleges a breach of a customs bond condition. Unlike a Section 1592 penalty, the claim is based upon the obligations created by the bond rather than the importer's level of culpability.
Claims may involve failure to redeliver merchandise, violations of temporary importation bonds, warehouse or foreign-trade zone obligations, late filings, missing documents, carrier violations, or failure to export or destroy merchandise.
The procedures governing these claims appear in 19 C.F.R. Part 172. The principal and surety receive written notice, and the bond principal may petition the designated officer for cancellation or other relief. We assist clients in evaluating whether a breach occurred, presenting defenses, documenting compliance, and seeking cancellation or reduction.
Merchandise Seizures and Forfeiture
CBP may seize merchandise alleged to have been imported contrary to law. Under 19 U.S.C. § 1595a, seizure or forfeiture may apply to certain stolen, smuggled, prohibited, restricted, or unlawfully introduced merchandise.
Seizures may involve counterfeit goods, false origin declarations, undeclared merchandise, controlled articles, missing agency approvals, forced-labor concerns, transshipment, trade-remedy evasion, or false documentation. The Notice of Seizure should identify the asserted legal basis and available response options.
Depending upon the matter, a claimant may pursue an administrative petition for remission or mitigation, submit an offer in compromise, request judicial forfeiture proceedings, or follow another procedure identified in the notice. Selecting the appropriate path requires consideration of the admissibility and value of the merchandise, strength of CBP's allegations, storage and litigation costs, need for prompt recovery, and consequences of admissions made during the administrative process.
Customs seizures may proceed under the administrative forfeiture provisions of 19 U.S.C. §§ 1602 through 1619. An administrative petition asks CBP to remit or mitigate the forfeiture on legal, factual, or equitable grounds. A request for judicial proceedings transfers the dispute to federal court, where the government must proceed through the applicable judicial process.
These remedies are materially different. The appropriate choice depends upon the seizure authority, burden of proof, available defenses, and client's objectives. Failure to respond within the required period may result in forfeiture by default.
Settlement and Alternative Resolution
An offer in compromise may resolve a penalty or forfeiture through an agreed payment or other terms. It is distinct from a petition for remission or mitigation and may be appropriate after the legal and factual issues have been evaluated.
In some circumstances, 19 U.S.C. § 1614 permits release of seized property upon payment of its appraised value when the property is not prohibited from entry and the statutory requirements are satisfied. Whether that option is commercially reasonable depends upon the property's value, available remedies, and the client's need for immediate possession.
Saluja Law assists clients in evaluating settlement options without unnecessarily surrendering defenses or procedural rights.
A Prompt and Strategic Response
Customs enforcement matters require immediate attention. A business should preserve relevant records, suspend questionable practices, identify affected entries or shipments, and avoid inconsistent communications with CBP, brokers, suppliers, or other agencies.
Saluja Law assists clients at every stage, from the first government inquiry through administrative petitions, settlement discussions, and judicial proceedings. Our objective is to protect the client's rights, minimize business disruption, and address the underlying compliance issue so operations can continue on a stronger foundation.
Contact Saluja Law, PLLC promptly if you receive a CBP request, detention notice, pre-penalty notice, penalty claim, liquidated damages demand, or Notice of Seizure.