How to Never Pay an Incorrect U.S. Customs Import Fine or Penalty
Learn this Winning Strategy in International Trade
Products and merchandise enter U.S. territory on a daily basis and importers must be aware of their legal rights to ensure maximum profit.
The U.S. is the largest economy in the world, and about $2.5 trillion dollars worth of goods are imported into the country every year. Generally all goods imported into the U.S. must be cleared or entered through the U.S. Customs and Border Protection (CBP). Not abiding by the rules of the CBP can lead to a costly penalty. The CBP is a powerful U.S. governmental entity because it has the authority to let products enter the U.S., as well as block products from entering the country. If an importer does not agree with a CBP decision, importers have both legal rights and options to pursue such as protesting the CBP’s decision.
I. What is a U.S. Customs Protest?
A protest is a legal process where importers challenge decisions made by the Customs and Border Protection that importers do not agree with. This protest is officially known as an administrative protest. If importers do not file a protest within 180 days after liquidation, then the CBP’s decision becomes final. A protest is also important because it is normally required to hear a case in the Court of International Trade.
Failure to take action can have imported goods rotting and spoiling at the border.
II. What are the Types of U.S. Customs Decisions that Importers can Protest?
Importers have a wide range of legal issues to protest if they suspect the Customs and Border Protection is not correct in their decision on their products. The three most common CBP decisions that are protested and appealed pertain to the:
Appraised valuation of the goods as this often determines the duty rate that is paid;
Tariff classifications, duty rates, and the exact duty amounts that need to paid; and
Country of Origin marking duties to determine if the item can enter the U.S., or qualify for under a Free Trade Agreement or Trade Preference.
Once an importer has determined the proper legal issues the importer will protest, the importer can now take actionable steps to file and win the protest
III. How to File a Customs Protest?
The first step to successfully protest a U.S. Customs and Border Protection decision is complete the Customs Form 19. This is an official U.S. Customs and Protection legal document.
Download the Official Customs Form 19.
Since the Customs Form 19 is a legal document, it is important to state the legal arguments that support the facts of why the importer is right and the CBP was wrong in their decision. This legal analysis is critical for a winning protest. In addition, a Memorandum of Support of Protest is often attached to further explain the legal analysis.
The path to justice does not end at the protest level and importers can appeal to the Court of International Trade
IV. Can an Importer Appeal a Denied U.S. Customs Protest?
If an importer is unsuccessful with the U.S. Customs protest and does not win, the importer still has legal options and can appeal to the Court of International Trade.
The advantage of an appeal being heard by the Court of International Trade is the appeal will be heard by an actual judge who is not employed by the U.S. Customs and Border Protection. The judge will be independent and also have more international trade legal knowledge. However, a potential negative is that all duties, taxes, and fees (plus any interest) have to be paid to the CBP before the appeal can be heard by a judge in the Court of International Trade.
V. Conclusion
Most items that are in the average American’s home are imported from all over the world. In the process of importing merchandise and goods into the U.S., the U.S. Customs and Border Protection will likely be involved in the importation process. The U.S. Customs and Border Protection has tremendous authority and often delivers unfair and incorrect decisions on the goods.
It is important for importers to understand they have the legal right to protest unfair Customs and Border Protection actions. This is done starting with CBP Form 19 and a thorough legal analysis. The law is a great resource for importers to use to ensure profitability and avoid unnecessary fines and penalties.
If you need help protesting your legal claim, Geremy Johnson, Esq. is a trade lawyer that offers various trade and customs related legal services. Please contact him with your trade and legal needs.