CCS Fines, Penalties, and Forfeitures 3 — Questions and Answers
Question 1: Under the Customs Modernization Act, the 'reasonable care' standard places primary compliance responsibility on:
- CBP officers
- The importer of record (Correct answer)
- The customs broker exclusively
- The foreign exporter
Correct answer: The importer of record
The Mod Act shifted compliance responsibility to the importer of record, who must exercise reasonable care in all entry submissions.
Question 2: A penalty notice issued under 19 USC 1592 for a negligence violation where no duties were unpaid would be based on:
- The domestic value of the merchandise
- 20% of the dutiable value of the merchandise (Correct answer)
- The entered value of the merchandise
- The appraised value minus any duties paid
Correct answer: 20% of the dutiable value of the merchandise
For negligence violations with no revenue loss, the penalty is based on 20% of the dutiable value of the merchandise.
Question 3: Under 19 USC 1595a(c), merchandise may be seized and forfeited if it was imported contrary to law. Which of the following is an example?
- Merchandise entered under an incorrect HTS code by mistake
- Counterfeit trademarked goods imported in violation of 15 USC 1124 (Correct answer)
- Merchandise with minor mislabeling corrected at entry
- Goods admitted under a bond that was later satisfied
Correct answer: Counterfeit trademarked goods imported in violation of 15 USC 1124
Counterfeit goods violating trademark law under 15 USC 1124 are subject to seizure and forfeiture under 19 USC 1595a(c).
Question 4: The statute of limitations for CBP to issue a penalty under 19 USC 1592 is generally:
- 2 years from discovery
- 3 years from the date of the violation
- 5 years from the date of the violation (Correct answer)
- 7 years from entry liquidation
Correct answer: 5 years from the date of the violation
CBP generally has 5 years from the date of the violation to issue a penalty notice under 19 USC 1592.
Question 5: In a forfeiture proceeding, a 'cost bond' is required from a claimant primarily to:
- Guarantee payment of any assessed penalty
- Cover CBP's costs if the claimant loses the court case (Correct answer)
- Secure re-exportation of the merchandise
- Ensure timely filing of a petition for relief
Correct answer: Cover CBP's costs if the claimant loses the court case
The cost bond ensures the claimant will pay the government's costs if the forfeiture is ultimately upheld by the court.
Question 6: Which section of the Tariff Act governs penalties for importation of merchandise by means of false statements (entry fraud)?
- 19 USC 1484
- 19 USC 1592 (Correct answer)
- 19 USC 1583
- 19 USC 1609
Correct answer: 19 USC 1592
19 USC 1592 is the primary statute covering penalties for material false statements, omissions, or fraud in connection with the entry of merchandise.
Question 7: An importer who files a Prior Disclosure for a negligence violation and tenders unpaid duties would generally face a maximum penalty of:
- No penalty (Correct answer)
- Interest on unpaid duties only
- 25% of the normal negligence penalty
- 50% of the unpaid duties
Correct answer: No penalty
Under 19 USC 1592(c)(4), a valid Prior Disclosure for a negligence violation results in no penalty beyond payment of unpaid duties and interest.
CCS Fines, Penalties, and Forfeitures 3
Under the Customs Modernization Act, the 'reasonable care' standard places primary compliance responsibility on: