These articles, written expressly for CFA by our member attorneys, provide information about our industry's vulnerable business issues. The current case studies, along with their outcomes, will send a clear "protect yourself" message, and are part of CFA's continuing effort to be of assistance. 
October 2014 | ISSUE No. 5| "PROTECT YOURSELF"

Corporate Officer's Personal Liability for Entry Violations at Risk
The Court of Appeals for the Federal Circuit affirmed a Court of International Trade ruling last month. It held that corporate officers can be personally liable for negligent misinformation on entry documentation.

The Court held that the company president was personally liable under U.S. Customs and Border Protection's penalty statute for sending commercial invoices to its customs broker which undervalued the goods. In particular, the company had neglected to include the value of fabrics assists in the valuation of its garments upon entry.

The customs penalty statute prohibits “any person, by fraud or negligence, to enter, introduce or attempt to enter or introduce merchandise into the commerce of the U.S. by means of any document or electronically transmitted data or information”.  According to the Court, a “flexible understanding” of the “introduce” language means that the statute covers all people involved with the handling of entry documentation and not just the corporate importer of record

The Court’s reasoning can easily be extended to other corporate officers or import managers.  The case suggests that a person acting on behalf of the corporate importer of record, could be individually liable as an “introducer” for negligent entry statements.  Therefore, anyone involved with the import process is at risk and should take proactive measures to protect themselves.  In addition, as result of this decision, a careful review of entry documentation and compliance procedures is warranted.


Special Counsel

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