Member News

U.S. Customs and Border Protection Reviewing Liquidated Damages Cases Issued for Late and Non-Payment of Duty

During discussions with U.S. Customs and Border Protection, officials noted that recent liquidated damages cases assessed for late or non-payment of duty may have been issued in error.

According to CBP, a technical error arose in the agency’s internal computer system during the recent migration to the Automated Commercial Environment. This error caused CBP’s internal software to reflect inaccurate release dates that in some cases generated erroneous dates of entry and affected the duty payment deadline. Liquidated damages cases were issued automatically based upon these incorrect deadlines and, in some cases, the liquidated damages assessment was doubled when the broker petitioned for relief.

CBP has formed a working group to oversee this matter and correct the computer glitch. CBP has also directed field offices to cancel outstanding liquidated damages cases where appropriate and, if necessary, refund the amounts that were paid in connection with improperly issued claims. These cases will then be stricken from the importer’s history so as not to create a record of non-compliance. Going forward, field offices have been directed to carefully review suspected instances of late or non-payment of duties prior to issuing liquidated damages.

While Customs stated that it will try to remedy those cases it can identify, we encourage brokers and importers to be proactive in reviewing recent liquidated damages cases rather than relying on CBP’s own internal review of this matter. Open liquidated damages should be resolved as soon as possible to avoid further complications with sureties and future CBP enforcement action.

Please feel free to contact Richard M. Wortman at (213) 452-0860 or Patrick J. Caulfield at (212) 973-7785 with any questions or comments.

Compliments of GDLSK – a member of the EACCNY