Prior Disclosure

Prior disclosure is a voluntary admission to CBP that a violation of 19 USC 1592 has occurred, made before CBP discovers the violation or begins an investigation. A valid prior disclosure must: (1) be made to the appropriate CBP officer; (2) disclose the circumstances of the violation; (3) identify the entries involved; and (4) include a tender or statement of the actual loss of duties.

A valid prior disclosure reduces penalties dramatically: for negligence and gross negligence, the penalty is reduced to the interest on the unpaid duties (plus the duties themselves). For fraud, the penalty is capped at 1 times the duty loss (compared to the domestic value maximum). This makes prior disclosure one of the most powerful tools available to importers and brokers who discover errors after entry.