2009

It is common for an importer to receive a CBP Form 28 (Request for Information) and then a CBP Form 29 (Notice of Action) for incorrectly classifying merchandise.  It is also relatively common for an importer to receive a Pre-Penalty Notice from U.S. Customs and Border Protection (Customs) alleging negligence, gross negligence, or fraud, and demanding tens or hundreds of thousands of dollars in monetary penalties and additional duties.  Don’t panic.

When a CBP 28 or CBP 29 is issued by an Import Specialist of Customs to an importer, it may ultimately result in the issuance of a fraud penalty in violation of 19 U.S.C. 1592.  If Customs alleges fraud, then the penalty will be equal to the total invoiced value of the shipments affected.  For example, if a shipment of clothing valued at $100,000 was misdescribed or misdeclared in some way to Customs, and a fraud penalty is issued, the penalty will $100,000.  If the penalty is not paid, the case is referred by Customs to the U.S. Department of Justice to pursue litigation against the importer.  Sometimes, Customs seeks to collect money by personally naming the officers, shareholders, and/or managers of the company as well.  That means joint and several liability, so even if the company is no longer in business or does not have the money to pay, the U.S. Department of Justice will seek the payment of the penalty from the persons involved.

Whenever a CBP 28 or 29 indicates that the importer is under “formal […]

Whenever you cross the border of the United States, you are subject to a border search. Borders include international airports and seaports, in addition to land crossings with Mexico and Canada.  U.S. Customs has authority to search persons and things that cross the border  – your car, your private yacht, your private jet, your luggage, and yes, even your mobile phone, laptop, and iPod.     In an August 27, 2009 press release, United States Department of Homeland Security (DHS) Secretary Janet Napolitano set forth some guidelines to the U.S. Customs and Border Protection (CBP)and to the U.S. Immigration and Customs Enforcement (ICE) about searching electronic media devices.

The new guidelines are considered vital to DHS’s mission in “detecting information that poses a serious harm to the United States, including terrorist plans… or possession of child pornography and trademark or copyright infringement.”  Interestingly, the press release stated: “Between October 1, 2008 and August 11, 2009, CBP encountered more than 221 million travelers at U.S. ports of entry.  Approximately 1,000 laptop searches were performed in these instances – of those, just 46 were in-depth.”  The DHS website provides examples of when the searches of electronic media devices resulted in arrests of individuals transporting the devices.

Civil libertarians have long been concerned about U.S. Customs’ authority to search electronic media, considering it a possible invasion of privacy.  As one commentor publicly said to Secretary Napolitano “You and your government are paranoid!”  Sen. Feingold (D-WI) stated during 2008 Congressional hearings on this issue: “When the Government looks through the contents of your laptop, is that just like […]