1. Review CBP Contacts and Preserve the Relevant Records
Record when the company discovered the issue and what communications it received from U.S. Customs and Border Protection. Federal customs law governs this review nationwide.
Check What the Company Knew about an Investigation
Prior disclosure treatment generally requires disclosure before, or without knowledge of, the commencement of a formal investigation of the particular violation. An importer claiming lack of knowledge must establish it.
Collect CBP Forms 28 and 29, audit correspondence, agent inquiries, and penalty notices. Their content and connection to the disclosed violation matter. A CBP communication alone does not establish whether prior disclosure remains available.
Preserve the Documents Behind the Error
Keep entry data, invoices, emails, broker instructions, and earlier classification or valuation analyses. Record who discovered the discrepancy, how it arose, and which shipments may be affected.
Retain originals alongside corrected versions. A customs law review should distinguish the reporting issue from whether the proposed disclosure qualifies.
2. Map the Error Across Products and Entries
Use the first affected shipment to investigate whether the same reporting practice reached other products, suppliers, brokers, or ports.
Follow the Cause Across Transactions
A mistaken tariff code may follow a product across several suppliers. An omitted payment may affect transactions under one contract. An unsupported origin claim may extend to goods sharing a manufacturing process.
List the importer of record, entry number, date, port, product, suspected error, and liquidation status. Liquidation is CBP’s final calculation of duties for an entry. Set the review period using the facts and applicable limitations rules rather than assuming one lookback period fits every issue.
Explain the Proposed Scope
Identify the merchandise, transactions, and error types covered. Document why similar entries are included or excluded.
Additional violations outside that scope that CBP discovers through investigation or verification do not receive prior disclosure treatment merely because the importer disclosed another issue.
3. Compare Entry Data with the Underlying Transactions
ACE reports show what was reported to CBP. Business records help establish what should have been reported and explain the discrepancy.
Connect Each Correction to Supporting Evidence
Create a schedule linking each affected entry to the disputed information, supporting document, and proposed correction.
| Suspected Issue | Records to Compare | Question to Resolve |
|---|---|---|
| Classification | Entry summary, specifications, product literature | Does the tariff provision fit the goods? |
| Value | Invoice, contract, payments, tooling agreements | Were payments or required additions omitted? |
| Origin | Supplier declarations, production and sourcing records | Does manufacturing evidence support the declared origin? |
| Preferential treatment | Certifications and qualification records | Did the goods meet the agreement’s rules? |
Classification
- Records to CompareEntry summary, specifications, product literature
- Question to ResolveDoes the tariff provision fit the goods?
Value
- Records to CompareInvoice, contract, payments, tooling agreements
- Question to ResolveWere payments or required additions omitted?
Origin
- Records to CompareSupplier declarations, production and sourcing records
- Question to ResolveDoes manufacturing evidence support the declared origin?
Preferential treatment
- Records to CompareCertifications and qualification records
- Question to ResolveDid the goods meet the agreement’s rules?
For a customs valuation issue, an invoice may leave unanswered questions about tooling, royalties, or other payments.
Identify Gaps without Guessing
Mark corrections as verified, provisional, or awaiting documents. Identify who holds missing records and when they can be obtained.
Do not substitute unsupported estimates for evidence. Statistical sampling may be available for a large review, but the method and its use must satisfy regulatory requirements and CBP approval.
4. Define the Disclosure and Plan Any Missing Information
Under 19 C.F.R. § 162.74, the submission must identify the merchandise and transactions, explain material errors and how and when they occurred, and provide the accurate information that should have been reported.
Prepare a Substantive Initial Submission
A complex review may require an initial disclosure followed by additional information. A vague statement that errors may exist should not be treated as sufficient.
The regulation generally requires previously unknown information within 30 days of the initial disclosure. Extensions may be requested from the responsible Fines, Penalties, and Forfeitures Officer; approval is not automatic.
Assess timing while gathering records. Counsel can evaluate whether the available facts support an initial submission before the review is complete.
Track the Payment Deadline Separately
The importer must also tender actual lost duties, taxes, and fees. Payment may accompany disclosure or generally follow within 30 days after CBP gives written notice of its loss calculation. The officer may extend that period for good cause.
Track information and payment deadlines separately. Confirm the receiving CBP office and retain proof of submission and receipt.
5. Assess the Penalty Limits and Remaining Exposure
Section 1592 covers material false statements or omissions involving fraud, gross negligence, or negligence. An inaccurate entry does not automatically establish fraud. Clerical errors or mistakes of fact are excluded unless they form part of a pattern of negligent conduct.
Separate Unpaid Duties from Penalties
For qualifying negligent or grossly negligent violations, prior disclosure caps the penalty at statutory interest on affected duties, taxes, and fees, subject to the required tender. The unpaid amounts remain payable.
For fraud, the ceiling generally equals the affected duties, taxes, and fees, or 10 percent of dutiable value where the violation did not affect duty assessment. Describing prior disclosure simply as “duties plus interest” overlooks this distinction.
Review Potential Liability Beyond Section 1592
Prior disclosure does not provide blanket immunity from other federal claims. DOJ’s 2020 Linde announcement described a customs-related False Claims Act settlement following a partial disclosure to CBP. The settlement resolved allegations without determining liability.
If records suggest deliberate misstatements or overlapping agency inquiries, seek legal review before submission. Bring the entry schedule, CBP correspondence, supporting records, calculations, and unresolved questions for an assessment of disclosure eligibility, scope, and remaining customs compliance and enforcement concerns.
27 Oct, 2026
