Navigating Customs Compliance: Proactive Strategies to Avoid Violations

A recent publication by foley & Lardner highlights the importance for importers to proactively inform U.S. Customs and Border Protection about any tariff underpayments. Greg Husisian, a partner at the firm, emphasizes that the stakes have never been higher for U.S. importers regarding tariff compliance.

Husisian points out several factors contributing to this heightened risk. For starters,in an surroundings with elevated tariffs,it’s all too easy for businesses to unintentionally underpay and face penalties as a result. Additionally, Customs now has remarkable access to import data that enables them to conduct detailed analyses and identify potential discrepancies in payments. The focus from the Trump Administration on uncovering these underpayments further intensifies scrutiny, while the Department of Justice has made tackling tariff violations its second most critical enforcement priority after addressing waste and fraud.

“When you consider all these elements,” Husisian notes, “the risk profile for importing goods is substantially increased.”

Given this landscape,he strongly advises importers to come forward with any instances of underpayment before they are flagged by customs during an investigation.By doing so, they will need to settle thier outstanding tariffs along with any interest accrued but can avoid severe penalties—ranging from 20% or more for negligence up to full value of goods in cases of fraud—if they opt for prior disclosure instead.

underpayments can stem from various compliance failures such as incorrectly declaring a product’s country of origin or misclassifying items within the Harmonized Tariff System. Other issues include failing to report additional payments related to goods or improperly utilizing free trade agreements.

Despite the complexities involved in navigating shifting tariff regulations, Husisian insists that self-disclosure offers notable advantages: “The benefits far outweigh the costs when you take proactive steps.”