CUSTOMS ENFORCEMENT | 2026-09-27

Prior Disclosure to CBP: How to Cut a Customs Penalty Under 19 U.S.C. § 1592(c)(4)

Voluntarily disclosing a customs violation before CBP investigates can slash a penalty from the value of your goods to little more than interest — if you do it correctly and in time.

If your company discovers a customs error, a prior disclosure under 19 U.S.C. § 1592(c)(4) is usually the single most valuable move available: disclosing before, or without knowledge of, a CBP investigation caps the penalty at a fraction of the normal maximum.

When a company finds a customs error, the instinct to “fix it going forward” and hope CBP never notices is usually the wrong one. The right move is often a prior disclosure — a voluntary, formal disclosure that, done correctly, can reduce a penalty from the value of your goods to little more than interest.

What a Prior Disclosure Does to the Penalty

Ordinary § 1592 penalties can reach the domestic value of the merchandise (fraud) or multiples of the lost duties (gross negligence/negligence). A valid prior disclosure changes that dramatically:

  • Negligence or gross negligence: the penalty is generally limited to the interest on the actual loss of duties, taxes, and fees.
  • Fraud: the penalty is generally limited to one times the loss of duties (or a reduced percentage of the dutiable value where no revenue was lost).

The disclosing party must also tender the actual loss of duties owed.

The Two Requirements — Timing and Substance

1. Before an investigation you know about

The disclosure must be made before CBP has commenced a formal investigation, or at least before the disclosing party has knowledge of one. This is why companies that suspect a problem act quickly.

2. A complete disclosure of the circumstances

The disclosure must identify the class of merchandise, the entries involved, the material false statements or omissions, and the true and accurate information — enough for CBP to assess the violation. The procedures are set out in the customs regulations (19 C.F.R. § 162.74).

When a Prior Disclosure Makes Sense

  • You found a recurring classification or valuation error across many entries.
  • An internal audit or a new compliance hire uncovered a problem.
  • A CF-28 or CF-29 signals CBP is looking at an issue you know is a real error — sometimes a prompt disclosure still qualifies if no formal investigation has begun.

Counsel evaluates whether the facts support a disclosure, quantifies the loss of duties, and prepares the submission so it is complete and timely.

Risks of Getting It Wrong

An incomplete or late disclosure may not qualify for the reduced penalty and can hand CBP a roadmap to a larger case. Because the stakes and the timing are unforgiving, prior disclosures are almost always prepared with customs counsel.

Frequently Asked Questions

How much can prior disclosure save?

For negligence/gross negligence it can reduce the penalty to interest on the lost duties, versus multiples of the duties or the value of the goods without it.

Can I still disclose after a CF-28?

Possibly — a disclosure can still qualify if CBP has not commenced a formal investigation you know about. Move fast and get advice.

Do I have to pay the lost duties?

Yes — a valid prior disclosure includes tendering the actual loss of duties.

What law governs it?

19 U.S.C. § 1592(c)(4) and the procedures at 19 C.F.R. § 162.74.

Related Customs & Trade Guides

Talk to a Customs Attorney About Prior Disclosure

If you have found a customs error, the clock on prior disclosure is running against any CBP investigation. Trembach Law Firm prepares and files prior disclosures for California importers. Call (818) 514-7680 with the entries and the issue you found.

Contact Trembach Law Firm at (818) 514-7680 for a confidential consultation.

Trembach Law Firm | 27001 Agoura Road, Suite 350, Calabasas, CA 91301