19 USC 1592 (section 592 of the Tariff Act of 1930) is the civil penalty statute behind most US customs enforcement. It lets US Customs and Border Protection (CBP) penalise anyone who enters goods using a material false statement or omission through negligence, gross negligence or fraud, whether or not any duty was lost. The same statute contains its own escape route: a prior disclosure under 19 CFR 162.74. Tell CBP about the error before, or without knowledge of, a formal investigation, pay the duty owed, and a negligent mistake typically costs interest at most, or no penalty at all on entries that have not yet liquidated. This guide covers the penalty levels, what makes a disclosure "prior", what it must contain, and how it differs from the routine fixes in our guide to customs post-entry amendments.
What 19 USC 1592 prohibits
The statute bars entering, or attempting to enter, merchandise by means of a document, electronic data, statement or act that is material and false, or by a material omission. Aiding or abetting someone else's violation is covered too, which matters for brokers, forwarders and suppliers who provide the data an importer files. Three points trip people up:
- No duty loss is required. A wrong country of origin or a description that hides an admissibility issue can be a violation even at a zero duty rate. CBP penalises these "non-duty loss" violations as a percentage of dutiable value. Our guide to country of origin marking shows how easily origin goes wrong.
- Materiality is broad. CBP's penalty guidelines (Appendix B to 19 CFR Part 171) treat a statement as material if it has "the natural tendency to influence" a CBP decision on classification, value, admissibility, origin, marking, anti-dumping duty or even trade statistics.
- Clerical errors are excused, within limits. Clerical errors and mistakes of fact are not violations unless they form a pattern of negligent conduct, and the guidelines warn that repeating one across many entries can itself show a lack of reasonable care.
The underlying standard is reasonable care: under 19 USC 1484 the importer of record must use reasonable care to classify, value and describe its goods. Appendix B gives examples of falling short, such as ignoring a binding ruling you hold or an unreasonable classification (its example is snow skis entered as water skis).
Negligence, gross negligence and fraud
Appendix B defines the three levels. Negligence is a failure to use the reasonable care and competence expected of someone in the same circumstances. Gross negligence is acting with actual knowledge of, or wanton disregard for, the facts and indifference to the legal obligations. Fraud is a material false statement, omission or act done knowingly, established by clear and convincing evidence. The statutory maximums in 1592(c), and the reduced amounts for a valid prior disclosure in 1592(c)(4), are:
| Culpability | Maximum, duty loss case | Maximum, no duty loss | With a valid prior disclosure |
|---|---|---|---|
| Negligence | Lesser of domestic value or 2 times the lost duties, taxes and fees | 20% of dutiable value | Interest on the lost duty from liquidation to tender |
| Gross negligence | Lesser of domestic value or 4 times the lost duties, taxes and fees | 40% of dutiable value | Interest on the lost duty from liquidation to tender |
| Fraud | Domestic value of the merchandise | Domestic value of the merchandise | 100% of the lost duty, or 10% of dutiable value if none was lost |
Two rules sit on top. Under 1592(d), CBP must require lost duties, taxes and fees to be restored whether or not it assesses a penalty, so the duty itself is never forgiven. And under 19 USC 1621, the limitations period is five years from the violation, or five years from discovery where fraud is alleged.
What the ranges look like in practice
The statutory figures are ceilings; Appendix B sets the ranges CBP normally works within. As an illustration only, take a shipment with a dutiable value of $500,000, a domestic value of $800,000 and $50,000 of underpaid duty:
| Scenario | Appendix B range | Illustrative penalty |
|---|---|---|
| Negligence, no disclosure | 0.5 to 2 times the total duty loss | $25,000 to $100,000 |
| Gross negligence, no disclosure | 2.5 to 4 times the total duty loss | $125,000 to $200,000 |
| Fraud, no disclosure | 5 to 8 times the total duty loss, capped at domestic value | $250,000 to $400,000 |
| Non-fraud, prior disclosure, entries liquidated | Interest on the actual loss | Interest on $50,000 |
| Non-fraud, prior disclosure, entries unliquidated | No monetary penalty | $0 |
| Fraud, prior disclosure | 100% of the total duty loss, no mitigation | $50,000 |
The $50,000 of duty is payable on top in every row. That gap widens as duty rates rise: with Section 301 and other additional duties on many goods in 2026 (see our guide to US tariffs after the IEEPA ruling), one wrong origin or code now carries a far larger duty loss than it did a few years ago.
When a disclosure counts as "prior"
The disclosure must come "before, or without knowledge of, the commencement of a formal investigation". Under 19 CFR 162.74(g), an investigation starts on the date CBP records in writing as the date it found facts suggesting a possible violation. That writing can exist without your knowledge, which is why a disclosure made in ignorance of it still qualifies. The burden of proving lack of knowledge is on you.
Section 162.74(i) presumes you knew if, once an investigation had started, any of these happened:
- CBP told you about the type or circumstances of the violation;
- a CBP Special Agent, properly identified, asked you about it or requested specific records relating to it;
- CBP issued you a prepenalty or penalty notice about it;
- the merchandise was seized; or
- for goods inspected at entry, you were told of a finding of a violation.
The presumption can be rebutted. CBP's informed compliance publication Prior Disclosure (revised August 2017) adds two useful points: a routine request for samples or product literature does not by itself start a formal investigation, and if Regulatory Audit has announced an audit, CBP recommends reviewing your entries before the team arrives, because a full disclosure made first can still qualify. Our guide to customs audit readiness covers the records that review needs.
You also set the scope. Violations CBP finds while checking your disclosure that you left out get no prior disclosure benefit (162.74(h)). Conversely, an investigation into one issue does not block you from disclosing a different violation on the same shipments.
What a valid prior disclosure must contain
Section 162.74(b) sets four elements, and CBP calls an incomplete disclosure "a common error". The statement must:
- identify the class or kind of merchandise;
- identify the entries, by entry number or by each port of entry and the approximate dates;
- specify the material false statements, omissions or acts, explaining how and when they occurred; and
- set out the true and accurate information that should have been filed, undertaking to supply anything still unknown within 30 days. The Fines, Penalties and Forfeitures Officer (FPFO) can extend that period.
On mechanics: an oral disclosure must be confirmed in writing to the FPFO within 10 days, and CBP recommends writing every time. A written disclosure should be addressed to the Commissioner of CBP, marked "prior disclosure" on the envelope, and presented at the port where the violation occurred; CBP's publication says the relevant Center of Excellence and Expertise also accepts them, and multi-port cases should list every port. Sent by registered or certified mail with return receipt, a disclosure counts as made on the date of mailing; otherwise on receipt. Where checking every transaction is impractical, 162.74(j) allows a statistical sample meeting 19 CFR 163.11(c)(3).
Tendering the lost duty
No tender, no prior disclosure. Under 162.74(c) you pay the actual loss of duties, taxes and fees either with the disclosure or within 30 days after CBP notifies you in writing of its calculation (extendable for good cause). Failing to pay CBP's final figure means the disclosure is denied. A narrow Headquarters review of CBP's calculation exists where the loss exceeds $100,000 and is deposited and more than a year remains on the limitations period, but its decision is final and requesting it waives any later challenge to the amount.
"Actual loss" means duty on liquidated entries. For unliquidated entries, CBP's publication says the extra duty is collected by a rate advance at liquidation and, in non-fraud cases, no penalty is assessed. Speed pays: the same error disclosed before liquidation typically costs only the duty.
Prior disclosure versus post-summary corrections
A post-summary correction (PSC) is the ACE transaction for fixing an entry summary before liquidation. According to CBP's PSC page (last modified 6 August 2026) and the PSC test notice CBP republished in the Federal Register in July 2026, a PSC must be filed within 300 days of entry or up to 15 days before scheduled liquidation, whichever is earlier, with limited exceptions for extended or suspended liquidations. It cannot be filed on an entry summary under CBP review.
A common misconception is that a PSC is a prior disclosure. It is not the same instrument. A PSC corrects data; 162.74 requires disclosing the circumstances of the violation (how and when it happened) to a CBP officer, plus a tender. CBP's 2011 notice that launched the PSC test told filers wanting prior disclosure treatment for an amended entry to follow 162.74, and CBP's PSC page treats prior disclosure as a separate route once an entry has liquidated. Where an error is more than a one-off clerical slip, importers commonly file PSCs for open entries and a written prior disclosure covering both open and liquidated ones. Our guide to whether you need a customs broker explains who files what.
The False Claims Act trend in customs
Section 1592 is no longer the only exposure. The Department of Justice increasingly uses the False Claims Act (31 USC 3729) against importers through its "reverse false claims" clause, which covers knowingly using a false record material to an obligation to pay the government, or knowingly avoiding that obligation. The Act allows three times the government's damages plus an inflation-adjusted penalty per claim, and "knowingly" includes reckless disregard, not only intent. Whistleblowers can sue under its qui tam provisions and share in the recovery. DOJ's own press releases show the direction:
- 29 August 2025: DOJ and the Department of Homeland Security announced a cross-agency Trade Fraud Task Force to pursue duty evasion through Tariff Act actions, False Claims Act suits and, where appropriate, criminal prosecution. It encourages qui tam filings and urges importers to "voluntarily self-disclose and remediate".
- 18 December 2025: Ceratizit USA LLC agreed to pay $54.4 million to resolve allegations of routing Chinese tungsten carbide through Taiwan to avoid Section 301 duties, misclassification and unpaid marking duties. DOJ stated these were allegations only, with no determination of liability.
- 12 May 2026: Perfectus Aluminum and related companies agreed to pay $549.5 million to resolve allegations of evading anti-dumping and countervailing duties on Chinese aluminum extrusions declared as pallets, a matter coordinated through the Task Force.
A prior disclosure caps the 1592 penalty, but it does not by its own terms resolve False Claims Act liability, which DOJ pursues under a different statute. The Act has its own reduced-damages clause (no less than double damages) for a violator who reports within 30 days of first learning the facts, cooperates fully and comes forward before any action is started or known. Where the facts point to knowing conduct rather than a mistake, involve customs counsel before filing anything. For the duties most often at stake, see our guide to anti-dumping and countervailing duties.
UK and EU equivalents, briefly
- United Kingdom. HMRC guidance (updated 13 August 2026) lets importers report underpaid customs duty or import VAT through a voluntary clearance amendment (form C2001), after which HMRC issues a C18 post-clearance demand note; interest runs on a C18 paid more than 10 days after issue. HMRC generally has three years from when the debt arose to notify it. Whether a penalty also applies, and what credit a disclosure earns, depends on the penalty regime, so confirm with HMRC or an adviser.
- European Union. Article 42 of the Union Customs Code requires each member state to set penalties that are effective, proportionate and dissuasive, but customs penalties are not harmonised, so how far a voluntary correction reduces one is a matter of national law.
What to do next
- Stop the error. Fix the classification, value, origin or data feed for future entries first, so the violation is not still running while you disclose it.
- Scope it. Pull affected entries within the five-year window, split them into liquidated and unliquidated, and calculate the duty loss on each.
- Check for triggers. Compare your correspondence with 162.74(i): Special Agent contact, records requests, prepenalty notices, seizures. If any apply, take advice first.
- File and pay. Submit a written disclosure with all four elements (certified mail if timing is tight), file PSCs for eligible open entries, and tender the duty with the disclosure or within 30 days of CBP's calculation.
If your import programme needs a broker or forwarder with stronger compliance support, more than 29,300 logistics companies are searchable by country and service in the CargoLinked directory. You can also post an upcoming shipment on the public requests board, which lists freight that shippers have posted for forwarders to quote on directly.
This guide is general information as of October 2026, not legal, tax, financial or customs advice. Outcomes depend on the facts of each case, and the rules and guidance cited can change. Confirm current requirements with CBP, HMRC or the relevant customs authority, and consult a licensed customs broker or customs attorney before making a disclosure.
