Is That Legal?

How Fraud, Negligence, And Reasonable Care Factor Into Customs Law

31 August 2022 by Judd Gibson

Significant numbers of customs enforcement actions arise from government claims of fraud or negligence against importers and exporters. Central to these actions is the idea of reasonable care. Let's look at what a customs lawyer would say reasonable care is and how it might apply to your activities.

Reasonable Care 

Every field of law has at least one legal standard for the government to apply its authority. When it comes to actions against exporters and importers, the standard is that these parties must exercise reasonable care. They must do so by filling out documents, checking containers for prohibited goods, paying duties and other fees, and proving that goods come from the countries listed on the forms.

Notably, the reasonable care standard creates lots of hands-on work for importers and exporters. You have to know what's in the container and the appropriate duties. Similarly, you have to submit the right forms relative to whatever you're doing. In other words, you have to take reasonable care to comply with the rules.

Minor Errors

The reasonable care standard is supposed to allow for minor errors. If you forget the date by a day or two and fill in the wrong one, that shouldn't be grounds for action against you. Notably, it would be if it became part of an unjustifiable pattern.

Where this gets tricky is that the Customs and Border Patrol agents are the ones who make the judgment regarding whether an error is minor or not. If they do judge that you've messed something up they can delay shipments pending compliance, impound goods, or even impose fines and penalties. You will either have to bring your shipments into compliance or pursue legal action with the help of a customs attorney.

Fraud and Negligence

Fraud is the easiest offense to understand. In terms of customs activities, fraud occurs when someone knows the rules and deliberately attempts to skirt them. For example, someone might falsify original documents to avoid tariffs. Understandably, the penalties for fraud tend to be the stiffest.

Negligence happens when you fail to take reasonable care because you either didn't know or forgot to do something important. If the system didn't accept a payment method for a duty and then you forgot to try again with a different solution, the failure would be negligent. This can escalate to gross negligence if you overlooked something that any sensible exporter or importer would have known to handle. Forgetting to attach necessary documents to a shipment of controlled goods, for example, might rise to gross negligence.

Consult with a customs lawyer to learn more. 

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