CBP in Chicago is touting a significant revenue increase from duties and penalties collected from international travelers arriving at O’Hare who failed to declare goods brought back from abroad. The numbers are striking — and the penalties CBP is authorized to impose make failure to declare one of the more expensive mistakes a returning traveler can make.
Here is what CBP reported:
Since the beginning of this Fiscal Year, October 1, CBP has collected over $477,000 in duties and $698,431 in mitigated penalties from travelers arriving in Chicago. Officers are also assessing mitigated penalties. These penalties are imposed when a passenger does not declare — or does not accurately declare — new items or merchandise coming into the U.S. This also includes penalties for zero-tolerance drug/narcotics seizures and penalties for low level currency seizures.
“Those that try to avoid paying a tax could be charged a penalty that is three to six times the taxable amount that would have been due.” — LaFonda D. Sutton-Burke, Director, Field Operations, Chicago Field Office
“Failure to declare is covered by 19 USC 1497. Violations can incur serious penalties. I always encourage travelers to simply declare all of their items acquired overseas when returning to the U.S. Otherwise, it can result in the seizure of the items and significant penalties.” — Shane Campbell, Area Port Director, Chicago
What Failure to Declare Actually Means
Under 19 U.S.C. § 1497, any traveler returning to the United States who fails to declare merchandise acquired abroad — or declares it inaccurately — is subject to a penalty and forfeiture of the merchandise. The statute covers items you purchased, received as gifts, or otherwise acquired outside the United States and are bringing back with you. It applies to items in your luggage, worn on your person, and in your carry-on. It applies regardless of whether you intended to deceive CBP or simply forgot about an item.
The penalty structure is what makes this statute so consequential. As Director Sutton-Burke stated directly: the penalty can be three to six times the taxable amount that would have been due. That means if you failed to declare a $2,000 watch and the applicable duty rate would have generated $200 in duties, your penalty exposure is $600 to $1,200 — on top of the duty itself and on top of the potential forfeiture of the watch. On higher-value items the numbers escalate quickly.
The Numbers From Chicago Tell a Larger Story
The Chicago Field Office collected over $477,000 in duties and $698,431 in mitigated penalties from travelers in just the opening weeks of the fiscal year. Two things stand out about those figures. First, the penalty collections exceed the duty collections by nearly $220,000 — meaning CBP is collecting significantly more in punishment than it is in the underlying taxes the travelers were trying to avoid. Second, these are mitigated penalties — reduced from the statutory maximum after CBP applied its internal mitigation guidelines. The unmitigated penalty amounts would have been higher.
That distinction matters enormously. The mitigation process under CBP’s penalty guidelines considers factors including the traveler’s history of violations, the nature and value of the undeclared merchandise, whether the violation appears willful or negligent, and mitigating circumstances the traveler presents. A well-documented, well-argued petition for mitigation can reduce a penalty substantially. An unrepresented traveler who simply pays whatever CBP demands — or ignores the notice entirely — is leaving significant money on the table.
What Happens If You Don’t Pay
Failure to declare penalties do not disappear if you ignore them. If CBP assesses a penalty and the traveler does not respond or pay, the government can bring a lawsuit in federal district court to recover the penalty as a civil judgment. Once a judgment is entered, the government has the full range of collection tools available to any judgment creditor: liens on real property, bank account garnishment, and seizure of assets. A $1,500 penalty that seemed manageable at the airport becomes a federal judgment that follows you. See our post on how CBP can garnish tax refunds to collect customs penalties for a sense of how aggressive the government can get in collection.
What to Do If You Received a Failure to Declare Penalty
The penalty notice you receive from CBP after a failure to declare violation is not a final bill — it is an opening position. You have the right to petition for mitigation, and doing so properly requires correctly calculating the duties actually owed (which involves classifying the merchandise on the HTSUS and applying the correct rate), identifying and documenting every mitigating factor in your favor, and addressing any aggravating factors that could push the penalty higher.
Great Lakes Customs Law has a strong track record in getting failure to declare penalties reduced and, in some cases, eliminated entirely. If you have already paid duties and a penalty, it may also be worth an evaluation to determine whether any portion is recoverable through a protest filing.
Contact Us Today
If CBP at O’Hare or any other port seized your property or assessed a failure to declare penalty, contact us as soon as possible — there are deadlines for petitioning for mitigation and for protesting CBP’s assessments. Call us at (734) 855-4999, send a text message, or reach us on WhatsApp. You can also contact us online.