Companies who import into the United States as importers of record should pay careful attention to requests for information from US Customs and Border Protection (CBP). Importers may occasionally receive a "Request for Information" form (CF 28), which is used by CBP to request details about transactions. Many times, these forms point out a potential error or omission that can often be corrected without penalty by completing a timely "prior disclosure."

Recently, certain ports have stated that the issuance of a CF 28 or Notice of Action (CF 29) constitutes the beginning of a formal "investigation" for customs enforcement purposes, which is contrary to long-standing CBP policy. CBP officials have stated that CBP intends to issue a statement on the policy related as to the CF 28, and expects CBP to publish the new policy soon. A change in policy could have serious implications for the ability of importers to self-disclosure violations of US customs law.

Importers that do not disclose other violations going back five years, run the risk of having Customs commence an investigation on the non-disclosed items (and not having the benefit of prior disclosure protection).

What is the issue?

The theory beyond the prior disclosure provisions has been to encourage importers to disclose violations in instances when they have not exercised “reasonable care” in their transactions, as required under US customs law.

Recent actions by the ports, however, may have the effect of discouraging voluntary disclosures. Historically, a CF 28 – by itself – has not been generally considered to constitute a formal investigation that would preclude the importer from filing a prior disclosure. However, recently, in certain instances, CBP may deem it an investigation by stating so in the CF 28. For example, some CBP ports of entry have stated on some forms: “Due to the fact that this office is already reviewing your invalid claims, you are no longer eligible for the provisions set forth under 19 CFR 162.74” (i.e. filing a prior disclosure).

These actions seem to go against CBP’s historical policy that CF 28s are used simply as requests for information, and that formal investigations are commenced through formal written notice to the importer of the investigation.

CF 28s are CBP requests for information. Import specialists at local CBP ports routinely use this form for soliciting additional information about a shipment after it has been allowed entry into the US. The additional information is used to verify if the goods were properly classified, valued or otherwise met US import regulations. The CF 28 can also be used to request a sample for evaluation or verify duty free status under a free trade agreement (e.g., NAFTA). Failure to respond to a CF 28 may lead to reclassification, revaluation of the imports or to a denial of duty free treatment – which may lead to additional duties being charged.

CF 29s are used to communicate that CBP has assessed additional duties and begun the liquidation process (in response to a CF 28, for example). It can also be used to notify an importer that CBP is proposing to assess additional duties. These are also issued when an import specialist believes he or she has enough information to make a change to an entry.

What should an importer do?

If you receive a CF 28, you should take the matter seriously and consider whether filing a prior disclosure to mitigate potential penalties would be advisable. Further, an importer who is considering a disclosure should carefully review any CF 28 that have been issued concerning the matter to determine whether the forms contain a statement that they cannot file a prior disclosure. This step is especially critical when an importer directs customs paperwork to its broker. We are aware of several instances where the customs broker received the CF 28 form and did not communicate the contents to the importer or overlooked the form altogether.

The decision to self-disclose should be considered carefully. Where available, and depending on the situation, it can be a powerful tool to mitigate potential penalties.