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ADMINISTRATIVE PROCEDURES

Penalty Procedures | Liquidated Damages | Rulings | Protests

Penalty Procedures

Penalties are imposed by the CBP at the conclusion of a formal penalty proceeding.  Normally, the proceeding consists of a pre-penalty notice issued by Customs which sets forth the basis for the proposed penalty, the level of culpability and the proposed amount of the penalty.  The importer can file a pre-penalty petition at this point addressing the claims or wait until a penalty notice is issued.  Customs, after reviewing the pre-penalty petition (or upon expiration of time if no pre-penalty petition is filed) will either terminate the penalty action or issue a penalty notice.  The importer may then either pay the penalty or file a formal written petition.  After the decision on the petition, the importer can comply with the decision and file a supplemental petition, or refuse and be subject to court action for collection in the U.S. Court of International Trade.  The importer can also, at any step in the proceedings make an offer in compromise, which if successful, ends the proceeding.

Liquidated Damages

Liquidated Damages are assessed after an administrative process similar to that for penalties.

Rulings

An importer can request a binding ruling from CBP.  This ruling binds both the importer and Customs to a certain outcome if specific facts are present.  To obtain a binding ruling, the importer must provide to CBP all relevant facts about a prospective transaction. It is best if the request also provides legal argument and a proposed outcome.  CBP, after reviewing this information will issue a ruling.

Protests

If the CBP makes a final decision with which an importer does not agree, the importer may initiate an administrative procedure called a protest to challenge it. The filing and denial of a protest is a prerequisite to the bringing of a court action.  A protest sets forth the entry number and dates of entry and liquidation of the challenged action, and the facts and law supporting the importer's contention that Customs acted improperly.  Such protests can be acted upon by the local office, but are often sent to Customs Headquarters for further review.