Customs Penalty Assessment and Mitigation Procedures:

Changes Would Help Both the Government and Importers

GGD-78-5: Published: Mar 13, 1978. Publicly Released: Mar 13, 1978.

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In recent years, U.S. importers have alleged that penalties for violating import laws and regulations are inequitable and do not provide for adequate judicial review. An examination of penalty assessment and mitigation procedures in five U.S. Customs Service districts showed that the laws, regulations, and procedures for handling import violations have not been in the best interest of the government or the importers.

The Customs Service's penalty assessment and mitigation procedures contain four major problem areas: the initial penalty required by law is often unfair, judicial review of violations has been limited to considering whether a violation occurred, Customs does not uniformly apply the mitigation process, and Customs takes considerable time to process penalty cases which slows receipt of revenue by the government. In fiscal year 1975, the government collected penalties of about $15.6 million. With timely processing of penalty cases, it could have received the revenues more promptly.

Recommendation for Executive Action

  1. Status: Closed

    Comments: Please call 202/512-6100 for additional information.

    Recommendation: Where possible, the Secretary of the Treasury should revise Customs regulations to allow Customs to consider the circumstances of the violation when assessing a penalty. The Commissioner of Customs should: give explicit Service-wide guidelines for all types of violations, require the districts to submit exceptions to the guidelines to headquarters, and place greater emphasis on expediting penalty cases. The Commissioner should emphasize quicker processing of penalty cases by: identifying why delays in investigations occur; implementing procedures, including priorities and time frames, to speed up investigations whenever possible; implementing a reporting system to identify exceptional investigations which take longer than the time frames; clarifying Custom's policy of granting extensions for filing petitions; and requiring that cases be promptly referred to the U.S. attorney.

    Agency Affected:


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