Appendix A to Part 171 - Guidelines for Disposition of Violations of 19 U.S.C. 1497
19:2.0.1.1.18.9.2.1.5 : Appendix A
Appendix A to Part 171 - Guidelines for Disposition of Violations
of 19 U.S.C. 1497
Liabilities incurred under section 497, Tariff Act of 1930 (19
U.S.C. 1497), shall be mitigated or remitted in accordance with the
following guidelines (see also part 148, Customs Regulations):
I. Violations Involving Dutiable Articles. For violations
involving articles subject to duty and for which there is no
applicable exemption from duty, the following rules apply:
1. Mitigated Penalty for First Offense. For violations
which are the first offense, where there is knowledge of the
declaration requirements, and where the undeclared articles are
discovered by the Customs officers, the liabilities shall be
remitted upon payment of Three Times the Duty (but not less than
$50), or the domestic value, whichever is lower.
2. Mitigating Factors. When one or more of the following
mitigating factors are present, the deciding officer may, within
his discretion, remit the liabilities upon payment of Between One
and One-Half and Three Times the Duty or the domestic value,
whichever is lower:
a. Communications with the violator are impaired because of
language barrier, mental condition, or physical ailment;
b. Violator cooperates with Customs officers after discovery of
the violation by providing additional information which facilitates
conclusion of the case;
c. Violator is an inexperienced traveler;
d. There is contributory Customs error (for example, violator
demonstrates he was given incorrect advice by a Customs
officer).
3. Aggravating Factors. When one or more of the following
aggravating factors are present, the deciding officer may, within
his discretion, remit the liabilities upon payment of Between Three
and Six Times the Duty (but not less than $100), or the domestic
value, whichever is lower:
a. Documentary or other evidence discovered establishes
violator's intent;
b. Informant provides information which tends to establish
violator's intent and leads to discovery of the violation after the
violator has been given an opportunity to properly declare;
c. Violator is an experienced traveler;
d. Undeclared articles are concealed to evade U.S. law;
e. There is behavior, including extreme lack of cooperation,
verbal or physical abuse, or attempted escape, which tends to
demonstrate a lack of respect for law and authority.
4. Commercial Articles. When the undeclared articles are
brought in for commercial purposes, the liabilities shall be
remitted upon the payment of Six Times the Duty (but not less than
$100), or the domestic value, whichever is lower. Mitigating
factors may be used to lower this amount to as little as Three
Times the Duty; aggravating factors may be used to increase this
amount up to Eight Times the Duty.
5. Extraordinary Mitigating Factor.
a. When an individual who has been cleared through Customs
without discovery of any undeclared article returns to the
examination area and declares that article, the deciding officer
may, within his discretion, remit the liabilities upon payment of
One Times the Duty.
b. An individual who declares articles some time later (hours,
days, weeks, etc.) may be treated similarly.
6. Extraordinary Aggravating Factors.
a. When the offense is a second or subsequent violation, the
deciding officer may, within his discretion, remit the liabilities
upon payment of Between Six and Eight Times the Duty (but not less
than $250), or the domestic value, whichever is lower.
b. When the offense is a second or subsequent violation, and
there are aggravating factors present, generally there shall either
be a denial of relief or mitigation to No Less Than Eight Times the
Duty or the domestic value, whichever is lower.
c. When there is evidence of an ongoing scheme to defraud the
revenue involving multiple entries without declaration of articles
subject to declaration, the deciding officer shall act in
accordance with the preceding paragraph.
II. Violations Involving Absolutely or Conditionally Free
Articles. For violations involving articles either entitled to
entry free of duty absolutely (classifiable under a duty-free
provision in Chapters 1-97, Harmonized Tariff Schedule of the
United States (HTSUS); (19 U.S.C. 1202)), or entry free of duty
conditionally (entitled to treatment under the Generalized System
of Preferences (see §§ 10.171-10.178, Customs Regulations) or
Chapter 98, HTSUS), the following rules apply:
1. Mitigated Penalty for First Offense.
a. For violations which are first offense, and involve articles
entitled to the benefit of GSP or Chapter 98, HTSUS, the
liabilities shall be remitted upon payment of One Times the Duty
which would have been due if the articles had not been entitled to
the benefit.
b. For violations which are first offense, and involve
absolutely duty-free articles, the liabilities shall be remitted
upon payment of Between One and Five Percent of the Domestic Value,
but not less than $50 (or the domestic value, whichever is less)
nor more than $1,000.
2. Mitigating Factors. When mitigating factors such as
those outlined above are present, the deciding officer may, in his
discretion, reduce the mitigated amount to a lower figure.
3. Aggravating Factors.
a. When aggravating factors such as those outlined above are
present, the deciding officer may, in his discretion, remit the
liabilities for conditionally free articles upon the payment of
Between One and Two Times the Duty (but not less than $100), or the
domestic value, whichever is lower.
b. For absolutely free articles, the deciding officer may remit
the liabilities upon payment of Between Five and Ten Percent of the
Domestic Value, but not less than $100.
4. Commercial Merchandise.
The fact that undeclared duty-free articles are imported for
commercial purposes may be considered an aggravating factor under
section II.3. of these guidelines.
III. Other Applicable Rules.
1. These guidelines provide a framework and procedure by which
violations of 19 U.S.C. 1497 are to be analyzed. They are not
mandatory in the sense that they must be absolutely applied.
Customs officers varying from these guidelines must provide reasons
for doing so in the case record.
2. Customs officers shall document mitigating and aggravating
factors found in each case in the case file. There must be a basis
shown for mitigated amounts.
3. It is intended that mitigating and aggravating factors shall
be considered together and used to offset each other where
appropriate.
4. The rate of duty to be used in calculating the mitigated
penalty shall be the appropriate rate from Chapters 1-97, HTSUS,
and not the flat rate from Chapter 98, HTSUS.
5. “Duty” means Customs duties and any internal revenue taxes
which would have attached upon importation (see section 101.1(i),
Customs Regulations). Therefore, multiples will also be applied to
internal revenue taxes which would have been due.
6. Customs officers may, within their discretion, consider other
factors not here delineated as aggravating or mitigating and apply
the guidelines accordingly. These additional factors must also be
documented in the case file.
7. These guidelines are not authority for admitting into the
commerce of the United States articles which are conditionally or
absolutely prohibited from entry.
8. The presence of one or more extraordinary aggravating
factors, including but not limited to those set forth in section
I.6. of these guidelines, may within the discretion of the deciding
officer be a basis for denial of relief.
9. If the violator is being prosecuted criminally, the civil (19
U.S.C. 1497) liability generally is administratively settled only
after completion of the prosecution or with the express approval of
the appropriate U.S. attorney. Criminal prosecution of the
violator, however, is insufficient grounds to delay indefinitely
determination of the civil liability. The Fines, Penalties, and
Forfeitures Officer should contact the Chief Counsel representative
in the field to determine the best course of action to follow with
respect to the civil liability. Chief Counsel representative will
consult with the U.S. attorney and the Penalties Branch at Customs
Headquarters. Because of time delay problems, all seizures
involving criminal prosecutions must be promptly coordinated in
this manner, and consideration should be given to immediate
referral of the forfeiture action to the U.S. attorney for the
institution of a judicial proceeding.
[T.D. 83-145, 48 FR 30100, June 30, 1983, as amended by T.D. 89-1,
53 FR 51271, Dec. 21, 1988; T.D. 99-27, 64 FR 13676, Mar. 22, 1999]