Importers need to be aware of the many laws and regulations that govern imports, as failing to adhere to these laws can lead to serious consequences. 19 U.S.C. § 1592 permits U.S. Customs and Border Protection (“CBP”) to issue civil penalties against importers for customs law violations. In 2017 alone, more than $253.6 million in penalties were levied on importers for fraud, gross negligence and negligence for antidumping and countervailing duty (“AD/CVD”) violations. 
What Is Prohibited?
19 U.S.C. § 1592 prohibits an individual from entering merchandise into the United States through fraud, gross negligence, or negligence, “by means of any document or electronically transmitted data or information, written or oral statement, or act which is material and false, or any omission which is material.”  Aiding or abetting another person to do the same is also prohibited. 
In order to avoid a 19 U.S.C. § 1592 penalty, an importer should be knowledgeable about, and should ensure compliance with, the applicable laws and regulations. However, if an importer discovers that there might have been a violation of 19 U.S.C. § 1592, submitting a prior disclosure. and paying the applicable duties owed, could allow the importer to avoid or mitigate these harsh penalties. A prior disclosure provides for reduced maximum penalties where an importer discloses the circumstances of a violation prior to, or without knowledge of, CBP's commencement of a formal investigation of such violation. Due to the technical issues involved in submitting a prior disclosure, it is always advised that the importer contact a trade or customs attorney to assist them in such matters.
19 U.S.C. § 1592 Notices and Assessed Penalties
If CBP finds reason to believe that an importer has violated the provisions of 19 U.S.C. § 1592, CBP will issue a pre-penalty notice, typically providing the importer with thirty (30) days to respond and to provide any reasons why they should not be penalized. 
In the event that CBP does assess penalties under 19 U.S.C. § 1592, a penalty notice will be sent to the importer. The maximum penalty assessable will depend upon the level of culpability determined to be present, but the actual penalty assessed against the importer may be able to be mitigated after receipt of the penalty notice.
The maximum penalties, and their respective categories of culpability, are as follows:
- Fraud: Where the transaction was committed (or omitted) “knowingly i.e., was done voluntarily and intentionally,” the maximum penalty is “an amount not to exceed the domestic value of the merchandise.”
- Gross Negligence: Where there was “actual knowledge of or wanton disregard for the relevant facts and… indifference to or disregard for the offender's obligations under the statute,” the maximum penalty is the lesser of “the domestic value of the merchandise, or four times the lawful duties, taxes, and fees.”
- Negligence: Where there was a “failure to exercise the degree of reasonable care and competence expected from a person in the same circumstances,” the maximum penalty is the lesser of “the domestic value of the merchandise, or two times the lawful duties, taxes, and fees.”
If you are an importer and have reason to believe that a 19 U.S.C. § 1592 violation has occurred, or if you have been sent a pre-penalty or penalty notice and need expert legal advice, please contact our office to speak with an experienced customs lawyer.
This article is for informational purposes, is not intended to constitute legal advice, and may be considered advertising under applicable state laws.
 U.S. Customs and Border Protection, CBP Trade and Travel Fiscal Year 2017 Report 6 (Feb. 13, 2018), https://www.cbp.gov/sites/default/files/assets/documents/2018-Feb/CBP-FY17-Trade-and-Travel-Report-Final.pdf
 19 U.S.C. § 1592(a)(1).
 See 19 U.S.C. § 1592(b)(1).
 19 C.F.R. Appendix B to Part 171(C)(3).
 19 U.S.C. § 1592(c)(1).
 19 C.F.R. Appendix B to Part 171(C)(2).
19 U.S.C. § 1592(c)(2).
 19 C.F.R. Appendix B to Part 171(C)(1).
 19 U.S.C. § 1592(c)(3).