Customs Penalties and Fines and 5 Ways to Avoid Them
Importing is a privilege that Customs can revoke. It can be revoked for repeated violations, penalties or fines (and sometimes for just a single violation of a major offense) of any of three levels of offenses. Those levels are negligence (the failure to use reasonable care), gross negligence (with actual knowledge or wanton disregard), and fraud (voluntary and intentional actions). Customs penalties and fines can be substantial and in some cases of fraud can even result in the offender going to jail.
There are 5 simple steps you can take to help you avoid Customs Penalties and Fines.
First of all, be honest and up front throughout the complete cycle of your transaction. Cheating is a losing game. Customs has representatives all over the world, people who specifically look at goods imported into the United States. These people are always receiving tips from unhappy employees, competitors or suppliers.
Next, use Reasonable Care in all of your import shipments. See C J’s CrossDock article about Reasonable Care for a complete explanation.
In addition, be accurate. Details are important to Customs. As noted above, failure to exercise reasonable care is part of the definition of negligence.
Also, study Informed Compliance publications that relate to your product or business. As part of the Customs Modernization Act in 1993, Customs started the Informed Compliance program. Customs issues Informed Compliance Publications explaining what they expect the importing community to know about Customs procedures, regulations and requirements regarding an importer’s goods.
Finally, if you discover a mistake tell your Customs broker or Customs immediately. It is important that you make a proper and complete prior disclosure before Customs finds the mistake on its own. Your Customs broker can help you make a prior disclosure and discuss possible mitigating circumstances. There are a number of ways to deal with penalties and fines, from petitioning for relief to offers in compromise, so communication with your Customs broker is critical.
Please also note C J has a knowledgeable person dedicated to compliance and special projects. She is Samya (Sam) Murray. Please make use of her expertise in these areas. There is no cost to any questions to Sam, unless the answer requires significant research and time. As always, if you prefer, you can ask your usual C J representative.
For additional, specific information from Customs, you can find an Informed Compliance manual titled “What Every Member of the Trade Community Should Know About: Customs Administrative Enforcement Process: Fines, Penalties, Forfeitures and Liquidated Damages.”