How Serious U.S. Customs and Border Protection (CBP) Penalties Can Be

When it comes to importing goods into the United States, the consequences of making a mistake or being accused of wrongdoing can be severe. U.S. Customs and Border Protection (CBP) enforces a wide range of laws designed to ensure compliance with import regulations, proper payment of duties, and truthful reporting of information.

Whether the violation is based on fraud, gross negligence, or negligence, the financial penalties can be significant enough to disrupt your business operations. Here is a look at the types of claims CBP may bring, along with the potential penalties you could face.

Claim of Negligence

A negligent violation could have one of several penalties. You will be responsible to pay up to either the value of the merchandise, two times the value of the duties, taxes, and fees owed to the U.S., or twenty percent of the dutiable value of the merchandise. Negligence does not require intent, but it does involve a failure to exercise reasonable care when providing CBP with information about imports. Even an oversight such as forgetting to verify a tariff classification can result in a costly penalty.

Claim of Gross Negligence

A grossly negligent violation is punishable by one of several civil penalties. You could be required to pay a penalty up to the value of the merchandise, four times the lawful duties, taxes and fees owed to the U.S., or forty percent of the dutiable value of the merchandise. Gross negligence applies when an importer should have known that their conduct violated the law, but failed to take reasonable steps to prevent it. This might include ignoring compliance warnings, failing to train staff on import requirements, or repeatedly making the same errors.

Claim of Fraud

A fraudulent violation could warrant a civil penalty up to the value of the merchandise

in question. Fraud claims are the most serious, as they imply an intentional act to mislead CBP or avoid paying duties and taxes. This can include falsifying invoices, misclassifying goods to pay a lower duty rate, or hiding the country of origin. Because fraud involves intent, CBP often pursues the maximum penalties available.

The High Stakes of Non-Compliance

CBP penalties can quickly escalate into six or seven-figure liabilities, especially for high-value merchandise or repeat violations. On top of the financial burden, penalties can damage your company’s reputation, lead to shipment delays, and increase the likelihood of future CBP audits.

The best defense is a strong compliance program that includes regular internal reviews, proper recordkeeping, and professional guidance on tariff classification, valuation, and origin requirements. Acting proactively can help you avoid costly enforcement actions and keep your supply chain running smoothly.

In need of assistance? Give our office a call today at (917) 546-6997 or schedule an intake meeting, we would be happy to speak with you.

Ready to Learn More About CBP, OFAC,

BIS, FWS, and FDA?

We have over one hundred videos in our educational library on our YouTube channel related to importing, exporting, US Customs, BIS, OFAC, FWS, FDA, NFTs, and so much more. Subscribe to our channel now to stay up to date on the latest on these topics!

Our law firm helps growing companies who import and export comply with government regulations. We love what we do and we take our oath of confidentiality over your matters very seriously. How much? Watch this video to learn about it. CLICK HERE 

 Wondering "why should you have an attorney on your side?" Click here to watch one of our attorneys, Susan Steinman, break down the critical benefits as to why you want to have one on your side - whether you hire us to help you or another law firm.

Have questions? We are determined to help you.

We listen carefully to clients to ensure our understanding of the legal issues at hand, their factual context, and any limitations that might impact a chosen strategy. Feel free to connect with us using the contact form at the bottom of the Home page or send us an email at contact@clarkespositolaw.com.