What is a failure to declare?
When a passenger arriving into the United States acquires merchandise abroad (by purchase, gift, otherwise), they must declare it to U.S. Customs upon returning to the United States. If they do not, the merchandise will be subject to forfeiture and the person can receive a penalty. The penalty in this case is usually called a “penalty for failure to declare.”
The law the makes failure to declare a penalty is 19 USC 1497. The law states that “any article which is not included in the passenger’s declaration and is not mentioned [by the passenger] before examination of the baggage begins” then the article “shall be subject to forfeiture and [the] person shall be liable for a penalty . . . equal to the value of the article.” A list of what must be declared and possible exemptions is here.
People fail to declare merchandise to Customs because they either forget about it, or because they don’t want to have to pay duties on what they bought overseas. Here’s a video about the declaration requirements upon entry to the United States.
What are some examples of a failure to declare penalty?
Example A: If you bring in $4,000 worth of merchandise and you do not declare it to Customs at the time of entry, then CBP can seize the merchandise and impose a $4,000 penalty.
Example B: If you bring in $15,000 worth of designer clothes and jewelry and you do not declare it Customs at the time of entry, then CBP can seize the clothes and jewelry that were not declared and impose a $15,000 penalty.
What happens after my stuff is seized for failure to declare?
Once the property is not declared, Customs will generally seize it at the time. Some days or weeks later, you should receive a notice of seizure letter by U.S. mail.
The notice of seizure will describe what was seized, appraise its value, and then also identify and describe some of your options for getting your seized merchandise back.
What are the penalties and how can I reduce them?
Generally, you can get the seized merchandise back after a violation of 19 USC 1497. But, you will first need to file a petition for remission.
After CBP decides the the petition, you will have to pay the duties that are owed and a penalty for the failure to declare. CBP usually also requires the filing of a declaration for the merchandise because it was not done at the time of entry, and must be done in order for CBP to properly collect the duties. This will usually need to be done through a Customs broker who can make a formal entry.
As in the example B above, if the merchandise was valued at $15,000, CBP will require you to pay the duty owing on the $15,000 value (which will vary, depending on what the goods are), and also a penalty of some amount based on some factor of the duty amount, or the domestic value, whichever is lesser.
In many cases, the penalty can be reduced to an amount equal to the duties owing. However, the assessed penalty can be as high as six times the amount of duties owing, or the domestic value (whichever is less).
How can I get help?
A failure to declare is serious, and can get seriously expensive. To get the best possible outcome, you will need to properly determine the duties owed (which involves classifying the products on the tariff schedule [HTSUS] properly) and also argue all the factors in your favor which warrant mitigation, and explain away any aggravating factors that are present that could lead you to a higher penalty.
If the person fails to pay the penalty, the government may bring a lawsuit against them in federal district court to recover the penalty in the form of a judgment, after which point the government can lien property, garnish bank accounts, and seize property.
Great Lakes Customs Law has been very successful in getting these kinds of penalties reduced and, sometimes, even eliminated entirely. You should contact us today to help you file a petition for mitigation, to get your seized merchandise back and to reduce the penalty for failure to declare to the lowest amount possible.
As an expert in customs and trade law, I bring a wealth of knowledge and experience to the table. My expertise extends to the intricate details of U.S. Customs regulations and the legal implications surrounding the failure to declare merchandise. Over the years, I have navigated the complexities of the relevant statutes, such as 19 USC 1497, and have a deep understanding of the procedures involved in dealing with Customs and Border Protection (CBP).
Now, let's delve into the concepts discussed in the article:
Failure to Declare: A failure to declare occurs when a passenger entering the United States does not disclose merchandise acquired abroad to U.S. Customs. This can be due to forgetfulness or an attempt to avoid paying duties on purchased items.
Penalty for Failure to Declare (19 USC 1497): The law, specifically 19 USC 1497, stipulates that any article not included in the passenger's declaration and not mentioned before baggage examination is subject to forfeiture. The person is then liable for a penalty equal to the value of the undeclared article. The penalty serves as a deterrent against failing to declare merchandise.
Declaration Requirements: Passengers must declare items acquired abroad to CBP upon entering the United States. Failure to do so can result in the seizure of the merchandise and the imposition of penalties. Exemptions may apply, and it's crucial to be aware of what must be declared.
Examples of Failure to Declare Penalties: Example A and Example B illustrate scenarios where passengers bring in merchandise without declaring it. CBP can seize the undeclared items and impose penalties equal to the value of the merchandise.
Seizure Process: If merchandise is not declared, Customs will seize it at the time of entry. Subsequently, a notice of seizure letter is sent to the individual, describing the seized items, appraising their value, and outlining options for reclaiming the merchandise.
Petition for Remission: To retrieve seized merchandise, a petition for remission must be filed. After CBP's decision on the petition, the individual must pay owed duties and a penalty for failure to declare. This process may involve filing a declaration for the merchandise through a Customs broker.
Penalty Reduction: Penalties can often be reduced to the amount of duties owed. However, penalties may be as high as six times the duty amount or the domestic value, whichever is less. Properly determining duties and presenting factors in favor of mitigation can lead to a reduction in penalties.
Legal Consequences: Failure to pay the penalty may result in a lawsuit brought by the government in federal district court. This can lead to judgments, property liens, bank account garnishments, and property seizures.
Legal Assistance: Seeking legal help is crucial for the best possible outcome. Professionals, such as those at Great Lakes Customs Law, can assist in filing petitions for mitigation, recovering seized merchandise, and reducing failure-to-declare penalties to the lowest possible amount.
In summary, understanding the legal implications of failure to declare, the seizure process, and the steps involved in penalty reduction is essential for individuals facing such situations when entering the United States.
