Customs Fraud & Negligence Penalties (19 USC 1592)
Customs fraud and negligence penalties under 19 USC 1592 are the primary enforcement tool U.S. Customs & Border Protection uses to ensure compliance with classification, valuation, and other entry laws. A violation carries serious consequences for your business — and in many cases, exposes individuals to personal liability.
What Is 19 USC 1592?
19 USC 1592 is a law that penalizes any person who enters or attempts to enter merchandise into the United States by means of either (1) a material omission or (2) a material and false document, written or oral statement, or act that has the potential to alter the classification, appraisement, or admissibility of merchandise. § 1592(a)(1)(A). It is also a violation to aid or abet anyone in violating this law under § 1592(a)(1)(B).
A 1592 violation does not require the government to have actually lost duties or revenue. The potential to alter classification, appraisement, or admissibility is enough. CBP can — and does — pursue penalties on entries where no duty loss occurred.
Fraud vs. Gross Negligence vs. Negligence
Penalties under 19 USC 1592 can be assessed at three different levels of culpability, with more severe penalties for offenses committed with greater culpability. The level CBP alleges drives both the penalty amount and the burden of proof that CBP must carry.
Negligence
“Failure to exercise reasonable care.”
The default tier when CBP identifies a violation but cannot establish knowing or intentional conduct. Carries the lowest penalty multiple and the strongest mitigation prospects.
Gross Negligence
“Actual knowledge or wanton disregard.”
Applied when CBP believes the importer knew — or should plainly have known — of the violation and proceeded anyway. Higher penalty multiple than negligence; strong mitigation still possible with the right record.
Fraud
“Voluntarily and intentionally.”
The most serious tier — deliberate conduct designed to deceive CBP. Carries the highest penalty multiple and can open the door to criminal referral in addition to civil penalty.
Learn how the penalty amount is calculated under each tier →
How CBP Issues a 1592 Penalty
CBP issues a 1592 penalty against the alleged violator on Form 5955A. The violator can be any person or entity involved — the importer of record, an employee, an agent, a consignee, or others. Before CBP issues the penalty itself, the agency must first issue a pre-penalty notice giving the recipient an opportunity to respond.
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Pre-Penalty Notice Issued
CBP sends a pre-penalty notice under § 1592(b)(1), typically giving the recipient 30 days to respond and explain why no penalty should be imposed.
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Response to Pre-Penalty Notice
The alleged violator — through counsel — submits a written response addressing the factual and legal basis for the alleged violation. Though rare, CBP may decide against penalty at this stage if the response is persuasive.
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Penalty Notice Issued (Form 5955A)
If CBP proceeds, the agency issues the formal penalty notice. The penalty amount is calculated based on the alleged culpability tier and the value of the merchandise involved.
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Response to Penalty Notice
The recipient typically has 60 days to either pay the penalty, make an offer in compromise, or file a petition for remission or mitigation. Ignoring the notice leads to collection action through the U.S. Attorney’s Office.
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Supplemental Petition (If Needed)
After CBP’s first decision on a petition, there is an additional opportunity to file a supplemental petition arguing for a more favorable outcome. Two bites at the mitigation apple, properly used, meaningfully improve most cases.
Personal Liability: You Are Not Shielded by Your Company
Even if a corporation or LLC is the importer of record, individuals involved in the entry process — officers, employees, agents, and consignees — can be personally liable under 19 USC 1592. Ignoring a penalty notice because it’s against the corporate entity is a serious mistake.
A pre-penalty notice to your company does not protect individuals; CBP can later pursue individuals directly, sometimes without issuing a separate pre-penalty notice. There is personal liability for 1592 penalties, and it applies regardless of corporate structure.
I Received a 1592 Notice — What Now?
A 1592 penalty notice or pre-penalty notice must be taken seriously and responded to within the applicable deadline. The amount CBP demands is rarely the amount you end up paying — but only if you take the right steps on the right timeline.
File a Petition
Prepared by customs counsel. Argues against imposition of the penalty or for a reduction in culpability tier. Includes factual and legal analysis of the underlying allegation (classification, valuation, origin, etc.) and a request for oral presentation.
Make an Offer in Compromise
Propose a negotiated settlement amount. Useful where the evidence on culpability is mixed and a negotiated resolution is preferable to litigating the facts through a petition.
Ignore the Notice
The worst option. Collection proceeds through the U.S. Attorney’s Office. The full penalty amount becomes enforceable, and personal liability for individuals involved becomes significantly harder to defend against.
If you have discovered a potential 1592 violation on your own before CBP initiates a formal investigation, a prior disclosure is often the most protective response — typically capping your penalty exposure to interest on the duty loss in most cases, regardless of the underlying culpability tier. The prior disclosure path closes the moment CBP commences a formal investigation, so the window to use it is narrow.
Received a 1592 Pre-Penalty or Penalty Notice?
A 1592 notice has hard deadlines and significant exposure — often including personal liability for officers and employees. Great Lakes Customs Law has represented importers in 1592 matters for more than 15 years. Attorney Jason Wapiennik can evaluate your notice, outline the response options, and build the record that gives you the best chance at a favorable outcome.