What Is a Failure to Declare?

Under 19 USC § 1497, any article that a passenger does not include in their customs declaration — and does not mention to CBP officers before the examination of their baggage begins — is subject to forfeiture. The passenger is also liable for a penalty equal to the value of the undeclared article.

People fail to declare merchandise for a variety of reasons. Some genuinely forget about items in their luggage. Others are unaware of the requirement to declare goods above certain value thresholds. And some travelers intentionally avoid declaring merchandise to avoid paying duties on items purchased overseas. Regardless of intent, the consequences are the same — CBP treats all failures to declare as violations subject to seizure and penalty.

What Happens After Merchandise Is Seized?

When CBP determines that a traveler has failed to declare merchandise, the goods are typically seized on the spot at the port of entry. Days or weeks later, the traveler will receive a notice of seizure by U.S. mail. This notice describes the seized merchandise, assigns an appraised value, and outlines the options available for recovering the property.

It is important not to ignore this notice. The deadlines for responding are strict, and failing to act within the required timeframe can result in permanent forfeiture of the merchandise and the loss of any opportunity to reduce the penalty.

How Penalties Are Calculated

The penalty for a failure to declare is separate from — and in addition to — any duties owed on the merchandise. Here is how the financial exposure breaks down:

• Duties owed — The traveler must pay the duties that would have been assessed had the merchandise been properly declared. The duty amount depends on the classification of the goods under the Harmonized Tariff Schedule (HTSUS).
• Penalty — On top of the duties, CBP assesses a penalty based on the value of the undeclared merchandise. The penalty can range from an amount equal to the duties owed up to six times the duty amount or the domestic value of the goods, whichever is less.
• Formal entry — CBP typically requires that a customs declaration and formal entry be filed for the seized merchandise, since this was not done at the time of arrival. This usually must be handled through a licensed customs broker.

To illustrate: if a traveler brings in $15,000 worth of undeclared designer clothing and jewelry, CBP can seize the goods, assess the applicable duties on the full $15,000 value, and then impose an additional penalty that could reach several times the duty amount. The total financial exposure can be substantial.

How to Get Seized Merchandise Back

In most cases, travelers can recover their seized merchandise — but the process requires filing a petition for remission or mitigation with CBP. A well-prepared petition presents the facts and circumstances of the violation, identifies mitigating factors, and argues for the lowest possible penalty.

Mitigating factors that can help reduce the penalty include:

• First-time violation with no prior customs infractions
• Honest mistake or misunderstanding of the declaration requirements
• Full cooperation with CBP officers during the inspection
• The merchandise was for personal use, not for resale
• The traveler voluntarily disclosed additional items before the examination was complete

In many cases, an effective petition can reduce the penalty to an amount equal to the duties owed — a significant reduction from the maximum. In some cases, we have achieved even greater reductions or full elimination of the penalty.

Consequences of Not Paying

Failure-to-declare penalties should not be ignored. If the traveler does not pay the assessed penalty, the government may bring a lawsuit in federal district court to recover the amount as a judgment. Once a judgment is obtained, the government can lien property, garnish bank accounts, and seize assets to satisfy the debt.

How We Can Help

A failure-to-declare case requires proper classification of the seized merchandise on the tariff schedule to accurately determine the duties owed, a thorough petition that presents all mitigating factors in the strongest possible light, and careful handling of any aggravating factors that CBP may use to justify a higher penalty.

Great Lakes Customs Law has a strong track record of reducing and sometimes eliminating failure-to-declare penalties at airports and border crossings nationwide. We handle every aspect of the petition process — from reviewing the seizure notice and classifying the merchandise to preparing and filing the petition and negotiating with the FP&F office on your behalf.