Every U.S. importer must be aware of the U.S. Customs Border Protection (CBP) different penalties. Non-compliance with regulations can be extremely costly and even have disastrous consequences.
What are CBP import penalties?
The U.S. Customs and Border Protection (CBP) penalizes U.S. importers with fines and legal action if importing goods violate the law. The CBP is also clear that it won’t tolerate unsafe, unfair, or illicit trade in U.S. supply chains.
The CBP has a Penalty Program designed to discourage non-compliant importers. The program, which is available on the CBP’s website, also aims to make it simpler for importers to meet compliance requirements and avoid penalties. The program covers 326 ports of entry and 42 field offices.
What are common penalties?
Most penalties result from inaccurate classification, valuation, country of origin, late filing of documents, or goods not declared or invoiced. The violator receiving the penalty can be the importer of record, employees, institutions, companies, consignees, or other parties involved in the import. There is also personal liability for certain types of penalties.
How are penalties enforced?
When deciding whether to penalize an importer for non-compliance, the CBP considers whether the import caused it to lose revenue. If it has lost revenue, the importer is classified in three ways according to the degree of the loss:
• Negligence
• Gross negligence
• Fraud violation
It is important to remember that the CBP notes this in their compliance database when an importer is penalized. Thus, the record reflects on the importer who may face more regular Customs inspections and longer processing times with future imports.
Besides the CBP penalties, many other government departments and agencies have import compliance regulations. When the CBP finds an infringement of these laws, they could make a referral for criminal prosecution. Also, the CBP can decide on a personal penalty against the suspected perpetrator.
Do you get a warning?
Before the CBP issues penalties, it first issues the company or individual importer with a pre-penalty notice. The notice provides a deadline (usually 30 days) for involved parties to respond with arguments as to why they should not be penalized. This response is called a petition for relief. The CBP can decide against the penalty, but this is rare. Non-payment can result in the Court of International Trade initiating a collection action.
Online processes
The CBP encourages importers to pay all import-related fees via its ACH (automated clearing house) electronic payment system. ACH quickens the clearance process, removes the risk of being fined for late clearance, and saves importers money.
It isn’t enough to rely on others in the industry for advice on avoiding penalties. Also, even if you generally stay updated on regulations, it is best practice to review current trade processes constantly.
Becoming a self-filer with eezyimport’s online platform can help you avoid making mistakes and missing deadlines. In addition, by cutting out the middleman, such as a broker or brokerage company, you save time and money and gain transparency and more control over the customs import process.
The best advice is to use your common sense. If something about a transaction feels wrong, stop and investigate!