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Source-reviewed study unitAbout 29 minutes

Section 592 Culpability and Maximum Penalties

Ability objective

Separate fraud, gross negligence, and negligence, determine whether the violation caused a loss of revenue, and calculate the correct statutory maximum.

Answer first

Core rule

Section 592 prohibits materially false statements, acts, or omissions in import transactions through fraud, gross negligence, or negligence. Without prior disclosure, a revenue-loss case has different maximums: fraud up to domestic value, gross negligence up to the lesser of domestic value or four times the lawful duty loss, and negligence up to the lesser of domestic value or twice the lawful duty loss. If the violation causes no duty loss, the alternative ceilings are domestic value for fraud, the lesser of domestic value or 40% of dutiable value for gross negligence, and the lesser of domestic value or 20% of dutiable value for negligence. These are ceilings, not automatic assessed amounts.

Authority and lookup route

Locate the rule before returning to the facts. Links point to government or official publications.

19 U.S.C. § 1592(a)–(c)

Read the prohibited conduct, materiality and culpability structure, burdens, and revenue-loss versus non-revenue-loss maximums together.

Current law reviewed 2026-08-18; for the October 2026 CBLE, answer from CBP's designated 2025 CFR edition when its text differs

19 CFR §§ 162.71–162.73

Use regulatory definitions of actual and potential loss and the maximum-penalty table; do not substitute mitigation guidelines for the statute.

Current law reviewed 2026-08-18; for the October 2026 CBLE, answer from CBP's designated 2025 CFR edition when its text differs

19 CFR §§ 162.77–162.79

Trace prepenalty notice, response, penalty notice, and demand rather than treating an allegation as a final penalty.

Current law reviewed 2026-08-18; for the October 2026 CBLE, answer from CBP's designated 2025 CFR edition when its text differs

Reference lookup task

Build a six-cell matrix: three culpability levels crossed with revenue-loss and non-revenue-loss cases. Fill each statutory ceiling from § 1592(c), then add who bears which burden under § 1592(e).

Route: § 1592(a) conduct → § 1592(c) maximum → § 1592(e) burden → §§ 162.77–162.79 procedure

Worked example

A material omission causes a $10,000 duty loss on merchandise with a $100,000 domestic value. There is no prior disclosure. What are the statutory maximums if the proven level is negligence, gross negligence, or fraud?

  1. 1Negligence: lesser of $100,000 or 2 × $10,000 = $20,000.
  2. 2Gross negligence: lesser of $100,000 or 4 × $10,000 = $40,000.
  3. 3Fraud: domestic value ceiling of $100,000.

Conclusion: The respective statutory ceilings are $20,000, $40,000, and $100,000. The actual claim still depends on proof, procedure, and any mitigation; the lost $10,000 duties may also be recovered separately under § 1592(d).

Common traps

  • Treating every entry error as material negligence without testing materiality and reasonable care.
  • Using the revenue-loss multiplier in a no-loss-of-revenue case.
  • Calling a statutory maximum the automatic penalty amount.
  • Combining duty restoration under § 1592(d) with the civil penalty as though they were the same claim.