Customs

Torres Trade Law routinely provides advice on classification, valuation, country of origin, marking and labeling, qualification for NAFTA or other free trade programs, import bonds, and foreign trade zone issues. We represent clients before local port officials and at agency headquarters in Washington, D.C.

We prepare Customs Compliance Programs that are tailored to the size and operations of our clients’ companies. We have experience assessing the effectiveness of internal controls, drafting compliance manuals and providing on-site training to employees. In addition, we have experience conducting internal investigations as well as compliance audits for our clients. In the event a client becomes the subject of an agency investigation, we provide advice at all stages of the investigation. We frequently submit “prior disclosures” to Customs, negotiate for the reduction of penalties and petition for the remission of forfeited merchandise. 

We also assist clients with U.S. Customs notices of action and enforcement, conduct internal compliance reviews, and pursue Customs rulings and advisory opinions.

We can assist you in the following areas:

• Internal reviews and compliance audits
• Importer Self-Assessment (ISA) Program applications, guidance and compliance
• Customs training
• C-TPAT
• Duty Reduction programs
• HTS Classifications
• Customs rulings
• Legal opinions and related Customs law guidance

Our EU network advices in key areas of EU customs practice: classification, valuation, preferential tariff regimes, rules of origin, post-clearance recovery of duties, self-disclosure procedures, compliance programs and third-country valuation and other customs practices.

Customs FAQs

1. Who administers and enforces U.S. Customs regulations?

U.S. customs regulations are administered and enforced primarily by U.S. Customs and Border Protection (CBP), an agency within the Department of Homeland Security (DHS). CBP is responsible for overseeing the importation and exportation of goods, collecting duties, preventing smuggling, and ensuring compliance with trade laws. Additionally, U.S. Immigration and Customs Enforcement (ICE), also under DHS, investigates customs violations, including trade fraud and smuggling. Other federal agencies, such as the Department of Commerce, Food and Drug Administration (FDA), and Department of Agriculture (USDA), also play roles in regulating specific imports and enforcing trade laws.

2. What is the legal authority for U.S. Customs and Border Protection activities?

While the customs function of the U.S. government is nearly as old as the country itself, the Homeland Security Act of 2002 established U.S. Customs and Border Protection (CBP) as the component within the Department of Homeland Security (DHS) responsible for is customs activities. Title 19 of the United States Code (19 U.S.C.) establishes the legal foundation for customs laws through the collection of duties, enforcement of trade laws, addressing penalties, and providing general authority to issue regulations, while Title 19 of the Code of Federal Regulations (19 C.F.R.) provides detailed rules and procedures for enforcing these laws, covering aspects such as tariff classifications, customs brokers, penalties, and duty exemptions. Together, these authorities establish the primary legal framework for customs operations in the United States.

3. What is 19 U.S.C. § 1592?

Section 1592 of Title 19 of the United States Code (19 U.S.C. § 1592) prohibits the importation or attempt to import merchandise by means of (1) false and material documents or electronic data or (2) material omissions.  It also prohibits any person from aiding or abetting any other individual to violate the statute.  Importantly, § 1592 is violated even when the government does not lose any duties or other revenue. The statute gives CBP authority to impose penalties for customs law violations and provides three levels of culpability with respect to the penalties that may be imposed: fraud, gross negligence, and negligence. The levels of liability refer to the varying degrees of responsibility and potential consequences for violations of U.S. customs laws, depending on the nature and intent of the violation. For more information about 19 U.S.C. § 1592 and levels of culpability for administrative Customs violations, see our article, Import Violations: What You Need to Know about 19 USC 1592.

4. What is a CF 28?

CBP Form 28 (CF 28) is a CBP Request for Information. The issuance of a CF 28 is a standard procedure used by CBP to gain more information about imported merchandise. According to CBP, a CF 28 is issued when there is “insufficient information in the entry summary package to determine admissibility, appraised value, or classification of the imported merchandise.” CBP frequently uses CF 28s to request samples of a product, valuation and classification information, or support for a claim of free trade agreement qualification, among other requests. After receiving a CF 28, the importer has 30 days to provide a response to CBP. A CF 28 is not a voluntary request. If an importer fails to provide the requested information within the time frame, CBP can issue a CF 29 Notice of Action, which involves finalizing a decision about the imported goods without further input from the importer. (For further information regarding CF 28s, see our previous article, Give CF 28s the Proper Respect.)

5. What is a CF 29?

CBP Form 29 (CF 29) is a Notice of Action issued by CBP to (1) notify a party that CBP is taking action regarding a subject entry (such as assessing additional duties owed), or (2) provide a proposed action allowing the recipient party 20 days to respond or dispute the proposal. The action or proposed action could include decisions on the classification, value, or admissibility of imported goods. In cases of violations of Customs law, a CF 29 may cut off the importer’s ability to mitigate penalties through the submission of a prior disclosure.

6. What should I do if I receive a CF 28 or CF 29?

Take it seriously. CF 28s/29s can be indicators of compliance issues, or they can be simply a means of clarifying a simple issue, but the only way to know for sure is to investigate the underlying issue. If you receive a CF 28 or CF 29 from CBP, you should first carefully review the document to understand what is being requested or the decision being made. For a CF 28, gather and submit the requested information, such as invoices, product samples, or supporting documentation, within the 30-day response window. It is important to ensure your response is complete and accurate to avoid further issues. If you receive a CF 28 or CF 29, it may be helpful to consult with a trade law attorney or customs expert to assess the potential impact. See our article BIS, DDTC, OFAC, and CBP Subpoenas and Requests for Information – Tips to Comply.

7. What is a Prior Disclosure?

A Prior Disclosure refers to a voluntary, proactive disclosure made by an importer to CBP when they realize they have made a mistake or violation related to Customs laws, such as misclassifying goods, underreporting their value, or failing to pay proper duties. By submitting a Prior Disclosure, the importer provides detailed information about the error or violation before CBP detects it through an audit or investigation. This process can help reduce or eliminate penalties. However, the disclosure must be made before CBP initiates any enforcement action, and it must be full, accurate, and complete to be considered for penalty mitigation. For a Prior Disclosure to be accepted by CBP as complete, the importer must pay all owed duties disclosed under the Prior Disclosure. The goal is to encourage compliance and transparency, allowing importers to correct mistakes and mitigate potential consequences. See our article Should I File a Customs Prior Disclosure?

8. My product has been seized by CBP. What are my options?

Merchandise may be seized by CBP during either import or export. If your product has been seized by CBP, you have several options depending on the circumstances of the seizure. If you believe the seizure was unjustified you may file a Petition for Relief to challenge the forfeiture and attempt to recover the seized goods. Additionally, you can submit an “Offer in Compromise” with CBP to avoid further penalties or pursue an agreement for the return of the goods. You may also elect to abandon the property. In some cases, you may be able to file a Prior Disclosure to voluntarily correct any violations and potentially mitigate fines. See our article What to Know about CBP Export Seizures.

9. I have been selected for a CBP audit. What should I expect?

If you’ve been selected for a CBP audit you should expect a thorough review of your customs records, including import documentation, classification of merchandise, valuation, and compliance with U.S. trade laws. CBP typically audits importers to ensure they are following the correct procedures and paying the proper duties. The audit process can be extensive, lasting months, and may involve interviews with company personnel and requests for additional documentation. You should prepare by ensuring all your records are organized and accurate. If discrepancies are found, you may have the option to submit a Prior Disclosure to voluntarily correct any mistakes, pay owed duties, and potentially reduce penalties. See our article Customs Audits 101.

10. What is a protest? When can I file one?

A customs protest is a formal request filed by an importer to dispute a decision made by CBP regarding the classification, valuation, or admissibility of imported goods, or other customs-related issues. A protest is typically filed when an importer disagrees with CBP’s assessment, such as a decision on the amount of duty owed, the classification of merchandise, or the application of trade regulations. A protest can be filed within 180 days from the date of the decision or action being contested, such as the date of liquidation of the entry or the issuance of a CF 29 (Notice of Action). The protest allows the importer to present their case to CBP and request a review of the decision. If the protest is not accepted, it can be appealed to the U.S. Court of International Trade.

11. What are anti-dumping and countervailing duties?

“Dumping” occurs when foreign manufacturers sell goods in a country for less than fair value, resulting in injury to the industry for those goods in the country in which the foreign product is being dumped. The U.S. calculates anti-dumping duties to bridge the gap between the unfair price of the dumped goods and the goods’ fair market value. Anti-dumping duty cases are company specific. On the other hand, countervailing duties are established when a foreign government provides assistance and subsidies to manufacturers so that the foreign manufacturers are able to sell goods cheaper than domestic manufacturers. Countervailing duty cases are country specific; duties are calculated to “duplicate the value of the subsidy.” For more information, see our article Are My Products Subject to Anti-Dumping/Countervailing Duties?

12. What is duty evasion?

Duty evasion refers to the illegal practice of deliberately avoiding or underpaying customs duties and taxes on imported goods. These tactics involve misclassifying goods to benefit from lower duty rates, underreporting their value, falsifying country of origin to avoid tariffs, or failing to declare certain merchandise altogether. Other forms of duty evasion include submitting false or altered documentation to mislead Customs authorities. Duty evasion is a serious violation of U.S. Customs laws, and if detected, it can result in substantial penalties, including fines, seizure of goods, and even criminal charges. CBP actively works to detect and prevent such activities through audits, investigations, and enforcement actions. Duty evasion often occurs in the context of antidumping/countervailing duties.

13. I received a pre-penalty notice from CBP. What now?

Receiving a pre-penalty notice from CBP can be alarming. If you receive a pre-penalty notice from CBP, it means that CBP has identified a potential violation of customs laws and is notifying you of the penalties that could be imposed. This is an opportunity for you to respond before the penalties are finalized. You should carefully review the notice to understand the specific violation(s) being cited, such as misclassification, undervaluation, or failure to declare goods properly. At this point, you can take several actions:

• Respond to the pre-penalty notice in writing, either by disputing the violation or presenting evidence or arguments that could reduce the penalty.
• Submit an Offer in Compromise to resolve the case.
• Request a hearing if you believe the penalty is unjustified.

Depending on the specific circumstances, there may be other options to explore for resolution. It is critical to act quickly, as you typically have 30 days from the date of the notice to respond. Consulting with a trade attorney or customs expert is highly advisable to navigate the process, address the issue appropriately, and potentially mitigate or avoid penalties.