CBP officers at the Champlain port of entry seized roughly $430,000 worth of counterfeit perfume from a tractor trailer, bearing marks of Gucci, Calvin Klein, Dior, Juicy Couture, Ralph Lauren, and Carolina Herrera. On its own that is a routine intellectual property seizure, one of thousands CBP makes every year.
One detail made it something else. The counterfeit branding had been covered with removable labels reading “Beauty Woman,” sitting on top of the “Miss Dior Cherie” marks underneath.
A sticker is a small thing. Legally it is not. Concealing a counterfeit mark so the goods clear the border, with the intention that the covering come off afterward, moves a case out of the ordinary seizure track and into three additional ones at the same time.
Track One: The Ordinary Counterfeit Seizure
Start with what would have happened without the labels.
Goods bearing a counterfeit version of a federally registered trademark that has been recorded with CBP are seized under 19 U.S.C. § 1526(e), which provides that such merchandise “shall be seized and, in the absence of the written consent of the trademark owner, forfeited for violations of the customs laws.”
Procedurally, CBP ordinarily detains first. Under 19 C.F.R. § 133.21 the importer is notified and given 30 days to establish that the merchandise does not in fact bear a counterfeit mark. CBP may disclose information and samples to the trademark owner to assist in determining whether the goods are genuine. If the importer does not meet that burden, seizure follows.
Then comes the fine. 19 U.S.C. § 1526(f) authorizes a civil fine against any person who directs, assists financially or otherwise, or aids and abets the importation of counterfeit merchandise for sale or public distribution. The measure is specific:
| Provision | Maximum fine |
|---|---|
| First seizure § 1526(f)(2) |
Not more than the value the merchandise would have had if genuine, according to the manufacturer’s suggested retail price |
| Second and after § 1526(f)(3) |
Not more than twice the value the merchandise would have had if genuine |
The number in the press release is the penalty baseline
When CBP announces a counterfeit seizure at a dollar figure, that figure is the manufacturer’s suggested retail price of the genuine articles, not what the importer paid and not the domestic value of the fakes. An importer who paid $20,000 for a container of counterfeit perfume reads a press release valuing it at $430,000 and assumes the number is public relations. It is also the statutory ceiling on the first-offense fine.
Two points that are routinely gotten wrong. The measure is MSRP of the genuine goods, not domestic value and not transaction value. And these are ceilings, not assessments. CBP has published mitigation guidelines for § 1526(f) fines, and a fine can be substantially reduced through a petition for mitigation or remission under 19 U.S.C. § 1618. More on how these seizures proceed is on our page covering counterfeit import seizures and penalties.
Track Two: Concealment Makes It Smuggling
Here is why the labels matter more than the perfume.
19 U.S.C. § 1595a(c)(1)(A) provides that merchandise “shall be seized and forfeited if it is stolen, smuggled, or clandestinely imported or introduced.” That is a separate and independent forfeiture ground, available on the same goods, and it does not depend on the trademark at all. It depends on how the goods were brought in.
This closes the only exit the counterfeit statute leaves open
Section 1526(e) forfeits counterfeit goods “in the absence of the written consent of the trademark owner.” That consent is a real, if uncommon, off-ramp, and it is occasionally obtainable in negotiated resolutions. A forfeiture under § 1595a(c)(1)(A) for smuggled or clandestinely introduced merchandise has no such provision. Once concealment is in the record, the trademark owner’s position stops being able to save the shipment.
The same conduct supports criminal exposure under 18 U.S.C. § 545, which reaches anyone who “knowingly and willfully, with intent to defraud the United States, smuggles, or clandestinely introduces or attempts to smuggle or clandestinely introduce into the United States any merchandise which should have been invoiced.” The maximum term is 20 years. That is a longer maximum than the counterfeit trafficking statute carries for a first offense.
Concealment is also, evidentially, close to self-proving. There is no innocent explanation for a removable label positioned over a trademark. It is not a classification dispute, not a valuation disagreement, and not a case of an importer trusting a supplier’s representations. Someone applied those labels knowing what was underneath, and the physical evidence survives in a CBP photograph for as long as the case lasts. Our page on importations and exportations contrary to law covers the broader § 1595a framework.
Track Three: The Entry Documents
A shipment of counterfeit perfume disguised as “Beauty Woman” was almost certainly accompanied by invoices and entry documents describing goods that do not exist. That is a 19 U.S.C. § 1592 problem, and it runs alongside everything above rather than instead of it.
Section 1592 prohibits entering merchandise by means of a material false statement, act, or omission. The penalty ceiling depends on culpability: domestic value for fraud, the lesser of domestic value or four times the revenue loss for gross negligence, and the lesser of domestic value or two times the revenue loss for negligence. Where the merchandise was described falsely to conceal counterfeits, the government is pleading at the top of that range, and the concealment evidence is what gets it there. Our page on fraud, gross negligence, and negligence penalties under § 1592 sets out the structure.
Note what that means arithmetically. A § 1592 fraud penalty is capped at domestic value, and a § 1526(f) fine is capped at genuine MSRP. They are different measures of different things, assessed under different statutes, and an importer can face both.
Track Four: Criminal Trafficking
18 U.S.C. § 2320 makes it a crime to intentionally traffic in goods knowing them to be counterfeit, and importing is trafficking. For a first offense, an individual faces up to 10 years and a fine up to $2 million; an organization faces up to $5 million. Repeat offenses carry substantially higher maximums.
The knowledge element is the gate, and concealment walks through it. In the Champlain matter, Homeland Security Investigations special agents worked the case alongside CBP officers from the start, which is the ordinary signal that a criminal referral is live rather than theoretical. Our page on counterfeit import seizures and penalties addresses the civil and criminal overlap.
What Concealment Does to Mitigation
Most customs penalties get resolved administratively rather than litigated, and most administrative outcomes turn on mitigating and aggravating factors rather than on liability. That is where concealment does its quietest damage.
An importer arguing for relief ordinarily has something to work with: a clean compliance history, cooperation, immediate remedial action, reliance on a supplier’s representations, the absence of any prior violation. Deliberate concealment is an aggravating factor that sits on top of all of them, and in cases of that kind CBP’s guidelines contemplate that relief may be denied entirely. The practical range of outcomes narrows sharply.
It also removes the argument that would otherwise be the strongest one available. “We bought from a supplier who told us the goods were authorized” is a real and frequently successful position in counterfeit cases. It does not survive the first photograph of a label being peeled back.
One Procedural Point Importers Get Wrong
Counterfeit seizures are not CAFRA seizures.
The Civil Asset Forfeiture Reform Act added protections that many people have read about, including the requirement that the government prove forfeitability by a preponderance of the evidence and the statutory innocent owner defense. Those provisions do not apply here. CAFRA expressly excludes forfeitures under the Tariff Act of 1930 and other provisions codified in title 19, which is what § 1526(e) and § 1595a are.
The consequence is that advice and templates written for currency seizures, which are CAFRA proceedings, do not transfer. The deadlines, the burdens, and the available responses are different. Our page on non-CAFRA customs seizure defense covers how these cases actually proceed, and customs detention of merchandise covers the stage before seizure, which is where the best opportunities usually are.
If You Are the Importer and You Did Not Know
Not everyone whose name is on an entry applied the labels. Importers of record are routinely held responsible for shipments arranged by foreign suppliers, consolidators, or freight forwarders, and in some cases the importer of record is the first to learn that anything was concealed.
- Do not communicate with the supplier about the shipment before getting advice. Those messages are discoverable and they are frequently the government’s best evidence in cases where the importer’s knowledge is genuinely in dispute.
- Preserve everything. Purchase orders, product specifications, supplier correspondence, prior shipments of the same goods, and any due diligence performed. A documented record of what you asked and what you were told is the entire defense.
- Respond to the detention notice, not just the seizure notice. Under 19 C.F.R. § 133.21 the 30-day window to establish that the goods are not counterfeit comes before seizure. Letting it lapse forfeits the cheapest opportunity in the case.
- Consider whether a prior disclosure is available on any other entries of the same merchandise. It is not available for the shipment CBP has already stopped, but an importer who discovers a wider problem may still have the option on entries CBP has not reached.
- Treat a criminal referral as a live possibility where concealment is in the facts, and handle the civil case accordingly. Statements made to resolve the seizure do not stay in the seizure.
More on building the compliance record that makes this defensible is on our import compliance page.
Counterfeit Shipment Detained or Seized?
The detention stage, before seizure, is where these cases are most often won. If a shipment has been detained, seized, or hit with a § 1526(f) fine, contact us for a confidential evaluation. We handle these matters at ports nationwide.
Frequently Asked Questions
How does CBP calculate the value of a counterfeit seizure?
By the manufacturer’s suggested retail price the goods would have carried if they were genuine. That is the figure quoted in CBP press releases, and under 19 U.S.C. § 1526(f)(2) it is also the ceiling on the civil fine for a first seizure. It is not what the importer paid, and it is not the domestic value of the counterfeit goods.
Why does covering up a counterfeit label make the case worse?
Because it adds an independent forfeiture ground and an independent crime. Merchandise that is smuggled or clandestinely introduced is seized and forfeited under 19 U.S.C. § 1595a(c)(1)(A), regardless of the trademark, and 18 U.S.C. § 545 makes clandestine introduction a felony carrying up to 20 years. Concealment also supplies the knowledge element for criminal counterfeit trafficking under 18 U.S.C. § 2320 and effectively eliminates the “we relied on our supplier” defense.
Can the trademark owner consent and let the shipment through?
Under 19 U.S.C. § 1526(e), counterfeit merchandise is forfeited “in the absence of the written consent of the trademark owner,” so consent is at least theoretically available. In practice it is uncommon, and it does not help where the government also has a smuggling forfeiture under § 1595a(c)(1)(A), which contains no equivalent provision.
Do I get CAFRA protections in a counterfeit seizure?
No. The Civil Asset Forfeiture Reform Act excludes forfeitures under the Tariff Act of 1930 and other provisions codified in title 19, which covers § 1526(e) and § 1595a seizures. The government does not bear the CAFRA burden of proof and the CAFRA statutory innocent owner defense does not apply. Guidance written for currency seizures, which are CAFRA proceedings, does not transfer to these cases.
What is the difference between a detention and a seizure?
A detention holds the goods while CBP decides. Under 19 C.F.R. § 133.21 the importer is notified and given 30 days to establish that the merchandise does not bear a counterfeit mark. Seizure follows only if that is not established. The detention window is the cheapest and most effective point to intervene, and it closes quickly.
Can I be fined if I was not the one who imported the goods?
Possibly. Section 1526(f)(1) reaches any person who “directs, assists financially or otherwise, or aids and abets” the importation of counterfeit merchandise for sale or public distribution. That language extends beyond the importer of record to others who financed, arranged, or facilitated the shipment.
Can CBP assess both a § 1526(f) fine and a § 1592 penalty?
They are separate statutes addressing separate conduct, the counterfeit importation on one hand and material false statements on the entry documents on the other, and they are measured differently. Whether both are pursued in a given matter depends on the facts and on how the case is resolved, which is one reason these matters benefit from being handled as a whole rather than one notice at a time.
Legal Disclaimer: This article is provided for general informational purposes only and does not constitute legal advice. Reading it, or contacting Great Lakes Customs Law through this website, does not create an attorney-client relationship. The seizure described here is drawn from a public CBP announcement; no person was identified and nothing here should be read as an assertion that any particular individual or company engaged in wrongdoing. Statutory maximums and procedures are summarized and simplified, and their application depends entirely on the facts of a particular matter. Laws, regulations, and CBP procedures change. You should consult a licensed attorney about your particular situation before taking or refraining from any action.