CCS Fines, Penalties, and Forfeitures 2 — Questions and Answers
Question 1: Under 19 USC 1592, which mens rea standard carries the highest penalty for a non-fraud customs violation?
- Negligence
- Gross negligence (Correct answer)
- Fraud
- Willful blindness
Correct answer: Gross negligence
Gross negligence is the highest non-fraud standard under 19 USC 1592, carrying penalties up to 4 times the unpaid duties.
Question 2: A Prior Disclosure under 19 USC 1592(c)(4) must be filed before CBP has:
- Issued a formal warning letter
- Commenced a formal investigation (Correct answer)
- Assessed a penalty
- Referred the case to DOJ
Correct answer: Commenced a formal investigation
Prior Disclosure is only effective if filed before CBP has formally commenced a formal investigation of the violation.
Question 3: Which CBP form is used to petition for relief from a penalty or forfeiture?
- CBP Form 28
- CBP Form 29
- CBP Form 4647 (Correct answer)
- CBP Form 19
Correct answer: CBP Form 4647
CBP Form 4647 (Notice to Mark and/or Notice to Redeliver) is not the petition form — CBP Form 19 is not correct either; petitions are submitted via a written petition but CBP Form 4647 is used for specific notices; the petition for relief is a written request under 19 CFR Part 171.
Question 4: Under 19 USC 1593a, penalties for false drawback claims may reach what maximum for fraudulent violations?
- 3 times the amount of claimed drawback (Correct answer)
- 4 times the amount of claimed drawback
- The full value of the merchandise
- 2 times the unpaid duties
Correct answer: 3 times the amount of claimed drawback
Under 19 USC 1593a, fraudulent drawback violations carry penalties up to 3 times the amount of drawback claimed.
Question 5: A customs broker who fails to exercise responsible supervision of their employees may face penalties under:
- 19 USC 1592
- 19 USC 1641 (Correct answer)
- 19 USC 1595a
- 19 USC 1583
Correct answer: 19 USC 1641
19 USC 1641 governs customs broker licensing and penalties, including failure to supervise employees conducting customs business.
Question 6: When merchandise is seized as subject to forfeiture, the importer may file a claim to contest the seizure within how many days?
- 20 days
- 30 days (Correct answer)
- 45 days
- 60 days
Correct answer: 30 days
Under 19 USC 1608, a claimant has 30 days from the date of the seizure notice to file a claim and cost bond to contest the forfeiture.
Question 7: Which of the following best describes 'mitigation' in the context of CBP penalty proceedings?
- Elimination of a penalty due to lack of evidence
- Reduction of a penalty below the statutory maximum based on mitigating factors (Correct answer)
- Automatic penalty reduction for first-time violations
- Transfer of penalty liability to a third party
Correct answer: Reduction of a penalty below the statutory maximum based on mitigating factors
Mitigation is CBP's discretionary reduction of an assessed penalty based on factors like cooperation, prior record, and ability to pay.
CCS Fines, Penalties, and Forfeitures 2
Under 19 USC 1592, which mens rea standard carries the highest penalty for a non-fraud customs violation?