It’s quite easy to start importing. An importer hires a customs broker to file entries and assist with getting a customs bond in place and may falsely believe they are ready to import without further educating themselves on the huge liabilities and responsibilities involved when importing. Every importer should have a robust compliance plan in place to ensure they are following all US laws and regulations. However, things don’t always go according to plan even for the most diligent companies.
If you receive a Request for Information (Form 28) or a Notice of Action (Form 29), the steps you take next can be critical for your business.
Why & When CBP Sends Form 28/29
As an importer of record, you have a responsibility to use “reasonable care” when declaring the classification, valuation, country of origin, and use of duty preference programs for merchandise imported into the US.
Customs often verifies that an importer is declaring merchandise entered into the US properly by sending an importer a Request for Information. If US Customs is not satisfied with an importer’s response to a Form 28 request, they will then send a Notice of Action, Form 29. A Form 29 signifies CBP’s decision to either (1) propose an action, or (2) to take action on a single entry, or a group of entries.
The Enforce and Protect Act of 2015 (EAPA), allows CBP to investigate whether an importer has evaded anti-dumping and countervailing (AD/CVD) duties.
When an importer receives a Form 28, it can actually be the beginning of an EAPA investigation—unbeknownst to the importer. AD/CVD liability alone can be as high as 1,731.75%. CBP also has the ability to impose penalties should you not enter goods as subject to AD/CVD upon entry.
It is critical to take CBP Forms 28 and 29 seriously and engage counsel to assist in responding to the notices once received as there may be a lot more at stake than the form lets on. How you respond directly impacts the next steps that Customs will take. Follow the checklist below to ensure that you respond promptly and properly.
Form 28 Checklist
If you receive a Form 28, the most important thing to do is not panic and ensure you have the right team in place to respond. These forms should certainly be taken seriously. Next, follow these steps:
- Contact an experienced attorney that can help you promptly and thoroughly answer CBP’s questions and determine the best and most expedient path forward.
- It is critical that you respond promptly. If you cannot respond within the 30-day time limit, ensure you timely ask CBP for an extension.
- Read the entire form and ensure you understand all of the information CBP is requesting and work to ascertain what the real underlying issues are—HTSUS, value, origin, FTA eligibility, etc. CBP doesn’t always spell this out—but, based upon the question asked, you can typically tell the direction CBP is going, and you also have the ability to reach out to the CBP Import Specialist to discuss the 28 or 29 prior to fully responding.
- Determine whether you have taken adequate steps to meet your “reasonable care” responsibility by asking:
- Have you provided or established reliable procedures to ensure you provide a complete and accurate description of your merchandise to US Customs and Border Protection in accordance with 19 U.S.C. § 1481?
- Have you provided or established reliable procedures to ensure you provide a correct tariff classification of your merchandise to US Customs and Border Protection in accordance with 19 U.S.C. § 1484?
- Have you obtained a Customs “ruling” regarding the description of the merchandise or its tariff classification and if so, have you established reliable procedures to ensure that you have followed the ruling and brought it to US Customs and Border Protection’s attention? See 19 C.F.R. Part 177
- Where merchandise description or tariff classification information is not immediately available, have you established a reliable procedure for providing that information, and is the procedure being followed?
- Have you participated in a Customs pre-classification of your merchandise relating to proper merchandise description and classification?
- Have you consulted the tariff schedules, Customs informed compliance publications, court cases and/or Customs rulings to assist you in describing and classifying the merchandise?
- Have you consulted with a Customs “expert”—e.g., lawyer, Customs broker, accountant, or Customs consultant—to assist in the description and/or classification of the merchandise?
- If you are claiming a conditionally free or special tariff classification/provision for your merchandise—e.g., GSP, HTS Item 9802, etc.—how have you verified that the merchandise qualifies for such status?
- Have you obtained or developed reliable procedures to obtain any required or necessary documentation to support the claim?
- Is the nature of your merchandise such that a laboratory analysis or other specialized procedure is suggested to assist in proper description and classification?
- Have you developed a reliable program or procedure to maintain and produce any required Customs entry documentation and supporting information?
- Identify confidential or proprietary content.
Filing a Prior Disclosure
Upon receipt of a Form 28, if an importer determines an inadvertent error took place, and an investigation by Customs has not yet commenced, filing a Prior Disclosure (PD) may assist in drastically reducing potential penalties. A PD proactively informs Customs that you may have violated customs laws—doing so may allow you to benefit from mitigated penalties.
While the decision whether to submit a PD is an important one, it should be made without undue delay in consultation with your customs counsel. Delaying the submission could result in Customs notifying you that it is commencing a formal investigation, thereby preventing you from filing a PD.
Responding to Form 29
If Customs is not satisfied with an importer’s response to a Form 28, they will then send a Notice of Action, also known as Customs Form 29.
Customs Form 29 comes in two varieties:
- Proposed Action. Customs is proposing to take action against you and you have 20 days to respond. If you fail to respond, Customs will proceed with the proposed action.
- Notice That Action Has Been Taken. This means that Customs has already made their decision and your only administrative recourse in this instance is to file a formal protest —within 180 days of the entry’s liquidation.
If you receive a CBP Form 29 proposing action, follow the same checklist for Form 28. Information uncovered through this process can assist you in quickly responding to the form.
If you receive a Form 29 notice stating action has been taken, it is critical that you consult with a customs expert to determine whether you should accept the action or file a protest. When you file a protest, it is critical to remember to request an Application for Further Review (AFR). If AFR is requested correctly and approved, CBP HQ will review the protest—meaning you will get a second set of eyes, typically a Customs Attorney, to review the protest from scratch.
Copyright 2023 Bloomberg Industry Group, Inc. (800-372-1033) Reproduced with permission. Responding to CBP Form 28 or 29.