What Every Importer Needs to Know About 19 USC 1592

Businesses that are importing goods into the United States need to be aware of the many laws and regulations that govern imports. Indeed, even what may appear to an importer as a minor violation could carry serious penalties. In fact, a review of 19 USC 1592 highlights that penalties can reach into the millions of dollars if a person submits false materials to the United States in relation to the entry of imported goods into the U.S.. Here’s what you need to know:

Prohibitions Under 19 USC 1592

Under 19 USC 1592 section (a)(1),  it is prohibited by any person, via fraud, negligence, or gross negligence to:

  • Introduce products or merchandise into the United States with any information, electronic or written, that is material and false;
  • Introduce products or merchandise with any omission that is material; or
  • For any person to assist another in doing either of the above two items.

Essentially, what this law means is that if you are importing goods into the United States, you need to make sure that all documentation concerning that important is correct. If the information is false, you could face serious legal consequences.  Customs and Border Protection expect importers to use “Reasonable Care” when importing goods into the U.S.

Penalties for a Violation Under 19 USC 1592 Section (a)(1)

If a person is found to have violated 19 USC 1592, the penalty will depend on whether the violation occurred as a result of fraud, gross negligence, or negligence. The difference, and the corresponding penalties, are listed below:

  • Negligence. Negligence refers to the failure to exercise the degree of reasonable care and competence expected from a person in the same circumstances.. If the violation of the statute was caused as a result of negligence, penalties are assessed as follows:
  • The lesser of the domestic value of the merchandise or two times the loss of duties, taxes and fees or
  • (ii) If there is no loss of duties, taxes and fees 20 percent of the dutiable value of the merchandise.
  • Gross negligence. Negligence and gross negligence are very similar, except that rather than lack of care alone, gross negligence demonstrates an act or acts (of commission or omission) done with actual knowledge of or wanton disregard for the relevant facts and with indifference to or disregard for the offender’s obligations.  Penalties are assessed as follows:
  • The lesser of the domestic value of the merchandise or four times the loss of duties, taxes and fees or
  • If there is no loss of duties, taxes and fees 40 percent of the dutiable value of the merchandise
  • Fraud. Fraud involves a situation in which a transaction was committed (or omitted) knowingly, i.e., was done voluntarily and intentionally, as established by clear and convincing evidence.  The penalty assessed will be at the domestic value of the merchandise.

Keep in mind that depending upon the value of the merchandise involved, these penalties can total millions of dollars. Further, keep in mind that with prior disclosure, these penalties differ.

Work with an Experienced Customs Lawyer

If you are importing goods into the United States, taking action to protect yourself by working with an experienced import attorney is highly advised. At the law offices of Paula M. Connelly, our experienced import, exports, and customs attorney is well-versed in the law, and will provide you with the advice and guidance you need to operate within the law. Please contact our law office today by phone, or by sending a message using our online form.

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