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Penalties & Liquidated Damages

The U.S. Customs Service assesses civil penalties against importers for goods that are imported into the United States in violation of law.  Customs may also assess penalties on exports from the U.S. for false or negligent drawback claims and false NAFTA certificates of origin. 

Civil penalties range from two to four times the loss of revenue for negligence or gross negligence cases, and up to the domestic value of the goods in cases where fraud is alleged.  Penalties for non-revenue loss violations can range from 20 to 40 percent of the value of the merchandise for negligence or gross negligence cases, and up to the domestic value of the goods in cases where fraud is alleged.

The failure to pay an administrative penalty can result in the initiation of a collection action by the Government in the Court of International Trade.

Most import penalties arise because the classification, valuation, or country of origin of the imported goods was improperly determined.  Penalties can also be assessed for the importation for goods that are not invoiced or declared. 

Where penalties are imposed, the assessments are noted by Customs in its compliance database.  This record reflects the importer's risk designation, and, thus, the importer may find itself subjected to more frequent Customs inspections and longer processing times

Customs may also assess liquidated damages if the proper import procedures are not followed, or if the goods are released and subsequently found to be inadmissible and not redelivered to Customs' custody within the time allowed.

A substantial reduction in penalty amounts can often be achieved through Customs administration mitigation process.  We prepare legal arguments applying case law and pertinent administrative laws and regulations, and assist companies to navigate through the complex administrative adjudicative process.

Additional information on Customs penalties and liquidated damages can be found by clicking on any of the following topics:

Further Reading:

 

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