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.
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.
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.
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).
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.
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