CCS - Certified Customs Specialist Fines, Penalties, and Forfeitures Questions and Answers 1

Question 1

An importer mistakenly undervalues a shipment due to a clerical error that is part of a pattern of such errors, resulting in a $25,000 loss of revenue to CBP. CBP determines the violation was due to negligence. What is the maximum statutory penalty CBP can assess before considering any mitigating factors?

Accepted Answer

$50,000.

Answer

Under 19 U.S.C. 1592(c)(3), the maximum penalty for a violation resulting from negligence where there is a loss of revenue is the lesser of the domestic value of the merchandise or two times the loss of revenue. In this scenario, two times the $25,000 loss of revenue is $50,000.

Question 2

Which of the following is a key element CBP must prove to establish a claim for a civil penalty under 19 U.S.C. 1592 for fraud?

Accepted Answer

The violation was committed knowingly and intentionally.

Answer

To establish fraud under 19 U.S.C. 1592, CBP must prove that the material false statement or omission was made knowingly and intentionally. Failure to exercise reasonable care is the standard for negligence, while wanton disregard is associated with gross negligence.

Question 3

An importer receives a Pre-Penalty Notice from CBP alleging a violation of 19 U.S.C. 1592. The notice proposes a substantial penalty for gross negligence. What is the importer's primary administrative recourse at this stage of the process?

Accepted Answer

Submit a written response to the issuing Fines, Penalties, and Forfeitures (FP&F) office to present arguments against the proposed penalty.

Answer

Upon receiving a Pre-Penalty Notice, the importer has a right to respond within a set timeframe (typically 30 days) to the issuing CBP office. This response is the opportunity to present evidence and arguments as to why a penalty should not be issued or should be mitigated. Filing a lawsuit is premature as administrative remedies have not been exhausted, and it is too late to file a Prior Disclosure once CBP has commenced a formal investigation.

Question 4

A shipment of merchandise prohibited from importation under a health and safety statute is discovered at the port. Under 19 U.S.C. 1595a(b), in addition to seizing the goods, what action can CBP take against a person who knowingly assisted in the unlawful importation?

Accepted Answer

Assess a monetary penalty equal to the domestic value of the merchandise.

Answer

19 U.S.C. 1595a(b) specifically provides that any person who directs, assists, or is otherwise concerned in the unlawful importation of merchandise is liable for a monetary penalty equal to the value of the article(s). This penalty is separate from the seizure and forfeiture of the goods themselves and is not based on a loss of revenue calculation.

Question 5

Generally, what is the statute of limitations for CBP to initiate a penalty action for a violation of 19 U.S.C. 1592 that is based on negligence or gross negligence?

Accepted Answer

Five years from the date of the alleged violation.

Answer

According to 19 U.S.C. 1621, for violations of 19 U.S.C. 1592 arising from negligence or gross negligence, a suit or action may not be instituted unless it is commenced within five years from the date of the alleged violation, which is typically the date of entry. The 'date of discovery' standard applies to violations arising out of fraud.

(CCS) Certified Customs Specialist Practice Test

(CCS) Certified Customs Specialist Practice Test

CCS - Certified Customs Specialist Fines, Penalties, and Forfeitures Questions and Answers 1