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U.S. Customs and Border Protection (CBP) regulates most commercial imports and has very detailed guidelines on how to correctly catalog and declare cargo. These guidelines may become very complex depending on the type of cargo, entry, bonds and permits that apply to a shipment during its clearance process.
CBP may hold or seize a shipment for a variety of reasons. These reasons include but are not limited to:
Improper harmonized tariff schedule classifications
Incomplete or inaccurate documentation
Suspicions of counterfeit goods
Suspicion of goods that do not meet U.S. regulatory standards
Absence of a broker or receiving party
CBP may hold a shipment for up to 30 days before deciding whether to seize the shipment or release it. If CBP decides to seize a shipment it will send a notice to the importer. CBP will either request more information to cure a deficiency or documents to argue against a claim that CBP has brought against the cargo, such as counterfeit goods or suspicious origins.
Along with the potential of having goods seized then destroyed or refused entry, CBP also issues a wide array of fines and penalties. Many fines and penalties are in response to administrative deficiencies, but can compound quickly once a seizure investigation has been initiated. The monetary amount for fines and penalties depends upon both how CBP conducts their investigation as well as how the importer may respond to notices and questions from the agency.
There are various classes of violations with corresponding penalties. Penalties that are considered lesser offenses, have pre-penalty notices and may be avoided in some cases are:
Commercial Fraud and Negligence
Drawback Penalties
Customs Broker Penalties
Record-keeping Penalties
Falsity or Lack of Manifest
Equipment and Vessel Repairs
Penalties that CBP does not issue pre-penalty notices for include:
Penalties for Aiding Unlawful Importation
Drug Related Manifest Penalties
Counterfeit Trademark Penalties
Conveyance Arrival, Reporting, Entry and Clearance Violations
Coastwise Trade (Jones Act) Violations
With these various types of penalties and violations, any notice or investigation from CBP can quickly become an overwhelming ordeal. Simple issues may often turn into much more complex ordeals due to importers misunderstanding the notice that has been received or by incorrectly responding to the issue at hand. Additionally, CBP often offers much more leniency to importers that make a continuous and active effort to mitigate any violations or potential scenarios for penalties.
Are you still curious about what CBP considers mitigating factors? Are you having trouble structuring your CBP compliance program? Contact our office today.
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