UNITED STATES FEDERAL CIVIL PENALTIES - AVOIDING CUSTOMS DUTIES Per US Code 19 U.S.C. Section 1592 1. Civil Penalties Under the U.S. customs laws it is unlawful to enter, introduce, attempt to enter or introduce any merchandise into the United States by means of a material false statement or omission, whether by fraud, gross negligence or negligence. It is also unlawful to aid another in doing so. An importer (YOU the Ebay buyer who is AVOIDING PAYING DUTIES) is strictly liable for the accuracy of all information stated on documents filed with Customs or back-up what Customs requires the importer to maintain. Such information includes identification of country of origin, price paid to the seller, value of assists, commissions, tariff classification and eligibility for free entry under the various Free Trade Agreements or other duty exemptions. The importer must also be able to document the accuracy of such information. Failing to do so means exposure to penalties. In classification (duty rate) and valuation errors, these range from the assessment of the duties owing plus and additional 200% for simple negligence, 400% for gross negligence, and 800% for civil fraud. Where Customs believes the fraud extreme, it can also seek criminal penalties. The amounts of penalties imposed depend upon the level of culpability, but can be up to the domestic value of the imported merchandise. If Customs believes that an importer fraudulently evaded duties, it may assess a penalty up to the amount of the U.S. resale value of the merchandise. “Fraudulently” means done voluntarily and intentionally, with an intent to deceive, to mislead, or convey a false impression. If Customs believes that an importer violated Customs laws because of gross negligence, it may impose a penalty of up to four times the loss of Customs duties, or if no duties were involved, up to 40% of the dutiable value of the imported merchandise. “Gross negligence” means that the importer was seriously negligent, acting with actual knowledge or wanton disregard for its legal obligations. If Customs believes that an importer was negligent, it may impose a penalty of up to two times the loss of Customs duties, or if no duties were involved, up to 20% of the dutiable value of the imported merchandise. “Negligence” means a mistake or error that Customs believes an importer exercising reasonable care would not have made. 2. Criminal Penalties Criminal penalties may result from fraud, gross negligence or negligence as well as the failure to maintain the records on the (a)(1)(A) list. Willful fraud carries a maximum penalty of 20 years in prison and a $250,000 fine or 75% of the appraised value may be imposed for each release of merchandise. If Customs deems the failure to be a result of negligent behavior, the fine imposed may reach up to $10,000 or 40% of the appraised value.