A CF-28 looks harmless. It is a one-page form from Customs and Border Protection asking for an invoice, a product description, a sample, or an explanation of how a value was calculated. Importers answer dozens of them without incident. The ones that matter are the ones that are really the first step in an investigation, and the importer rarely knows which kind it has received until much later.
The three forms, in order
CBP Form 28, Request for Information. An import specialist at the Center of Excellence and Expertise wants something: documents, a sample, a description of the manufacturing process, a breakdown of the transaction value. The form gives 30 days to respond. Everything sent back becomes part of the entry record and can be used in a later penalty case.
CBP Form 29, Notice of Action. CBP has decided something, or proposes to. The form says either that action has been taken, such as a rate advance or a reclassification on the entry in question, or that action is proposed and the importer has 20 days to respond before it is taken. A CF-29 that changes the classification of one entry usually means CBP will apply the same change to every similar entry going forward, and may look backward.
Pre-penalty notice under 19 U.S.C. § 1592(b). If CBP believes a false statement, document or omission was made in connection with entries, and that it was made through fraud, gross negligence or negligence, it issues a pre-penalty notice stating the facts, the level of culpability alleged, the loss of revenue, and the proposed penalty. The importer has 30 days to respond in writing. Then comes the penalty notice itself, and a petition under 19 C.F.R. Part 171.
What a § 1592 penalty can cost
The statute sets maximum penalties by level of culpability.
- Negligence: the lesser of the domestic value of the merchandise or two times the loss of duties, taxes and fees. If there was no revenue loss, 20 percent of the dutiable value.
- Gross negligence: the lesser of the domestic value or four times the loss of revenue. If no loss, 40 percent of the dutiable value.
- Fraud: up to the domestic value of the merchandise.
Those are maximums. CBP’s mitigation guidelines, published as an appendix to Part 171, bring the usual negligence case down to a range measured in multiples of the revenue loss, with reductions for cooperation, for a compliance program that was actually followed, and for inability to pay. The duties themselves are owed regardless of the penalty, and CBP can demand them for entries going back five years.
The statute of limitations is five years from the date of the violation for negligence and gross negligence, and five years from discovery for fraud. A CF-28 asking about entries from four years ago is not a coincidence.
Where the outcome is decided
Three moments decide most of these cases, and all three come before the penalty notice.
The CF-28 response. This is the importer’s chance to show reasonable care under 19 U.S.C. § 1484. A response that explains how the classification was determined, who was consulted, and what rulings were relied on is the difference between a negligence allegation and no allegation. A response that is late, incomplete, or written by someone who does not know what the entry record says will be quoted back in the pre-penalty notice.
The prior disclosure window. Until CBP commences a formal investigation and the importer knows it, the importer can file a prior disclosure under 19 C.F.R. § 162.74, tender the lost duties, and cut the penalty exposure to interest for negligence and gross negligence, and to one times the loss for fraud. A CF-28 does not by itself close that window. A pre-penalty notice does. Whether a specific CF-28 is a sign that an investigation has already begun is a judgment call that should be made with counsel, quickly.
The pre-penalty response. The 30-day written response is where the level of culpability is argued. Moving an allegation from gross negligence to negligence halves the maximum. Showing that the error was the broker’s, that the classification was a reasonable reading of the tariff, or that CBP itself had accepted the same treatment on earlier entries, can end the case at this stage.
The practical rules
Treat every CF-28 as if it were the first page of a penalty file, because it might be. Calendar the 30 days the day it arrives. Pull the entry summaries, the commercial invoices, the broker’s classification notes and any ruling letters before writing a word. If the answer reveals a systemic error, decide about prior disclosure before the response goes in, not after. And never let the response be written by the person whose work is being questioned.
Liang + Mooney prepares CF-28 and CF-29 responses, prior disclosures and § 1592 petitions for importers and for the brokers who serve them. The firm’s founder has held a broker’s license since 1978, which tends to shorten the conversation.