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SANCTIONS

Fines | Penalties | Forteitures | Seizures | Liquidated Damages

Fines

A fine is a monetary assessment imposed for the violation of a specific Customs rule or procedure.  A fine, unlike a penalty, is not generally based on the value of the entry, but rather is based on the underlying law.

Penalties

If an importer engages in conduct which is determined to violate one or more of the laws administered by Customs, Customs can impose a variety of sanctions.  Chief among these are monetary penalties.  A penalty, which is imposed at the conclusion of administrative proceedings, is a monetary assessment to penalize the importer for proscribed conduct.  In a penalty proceeding the conduct of the importer is ultimately characterized as negligence, gross negligence or fraud.  The amount of the penalty is based, in part, on the level of culpability, and in part on the value of the importation or the amount of duty loss.  The prior conduct of the importer and the existence of any mitigatory factors are also relevant in the ultimate amount of any penalty.

A Customs Lawyer can help to eliminate or mitigate penalties both by getting involved prior to importation and by participating in the penalty proceeding.

Forfeitures

Certain actions by importers and foreign exporters which are found to be violative of one or more Customs Laws can make imported goods or other things subject to forfeiture.  A forfeiture occurs when Customs refuses to allow the importer to bring the product into the United States, seizes the product, and where the importer loses all title to the importation and the importation becomes the property of the United States, either voluntarily or at the close of a formal proceeding.  Often the forfeited import is destroyed or sold at auction.  While this most often occurs in the case of the vehicles used to smuggle drugs or other contraband, this can also occur in the commercial setting.

As with penalties, active participation by Customs lawyers can prevent the initiation of seizure proceedings and can result in the remission of some forfeitures.

Seizures

A seizure can occur when Customs detains a product upon entry for violation of a law administered by Customs.  Items which are seized are ultimately subject to forfeiture proceedings.

Liquidated Damages

In certain importations, Customs and the importer enter into a contractual agreement in which the importer agrees to take some particular action.  If the importer does not so act, Customs can impose liquidated damages.  These liquidated damages are considered Acontractual@ in nature and are normally at amounts fixed by the Acontract@.  Liquidated damages are typically assessed in situations such as the late filing of entries.  The assessment of liquidated damages does not preclude the assessment of penalties.