A prior disclosure tells CBP, before it finds out itself, that entries contained a material error. In exchange the penalty exposure shrinks dramatically. This post explains the timing rule that makes the disclosure valid, what a complete disclosure contains, and the decision importers postpone at their own cost.
US customs law allows an importer who has made a material false statement or omission in its entries to disclose it voluntarily. A valid prior disclosure under 19 USC 1592(c)(4) caps the penalty consequence at a fraction of the negligence or gross negligence exposure, and for clerical or non fraudulent errors the practical outcome is usually paying the lost duty with interest rather than penalties at all.
The condition is in the name: prior. The disclosure has to be made before, or without knowledge of, the commencement of a formal investigation into the same conduct. Once CBP is already investigating, the door the statute opened is closed, and the same facts are read in a much colder light.
Errors that change money or admissibility across a population of entries: a wrong classification used for two years, a value element such as assists or royalties left out systematically, an origin claim the supply chain does not support. A single typo corrected on one entry is a correction, not a disclosure. The question that separates them is whether the error was a method, repeated, rather than an accident, isolated.
Importers also discover errors in the other direction and ask whether overpayments need disclosing. They do not carry the same risk, and they have their own recovery routes. Disclosure is about telling the government where it was underpaid or misinformed before it works that out alone.
A clear statement of what was wrong, the entries and period affected, the correct treatment, and the duty loss calculated, followed by tender of the amount owed. CBP can ask for more, and disclosures are often supplemented as the entry population is perfected, but the first filing should be honest and specific rather than minimal and hopeful. A vague disclosure that understates the population protects nothing outside what it actually described.
Most disclosures of any size are prepared with a customs lawyer, and the privilege and strategy questions are real ones. What is not a strategy is continuing to file new entries the same wrong way while deciding. Stop the method first. Every clean entry filed after discovery is evidence the discovery was taken seriously.
The pattern in penalty cases is drearily consistent: the error was found internally, discussed, and left while business continued, until an audit, a Form 28 that widened, or a whistleblower made the timing decision for the importer. The disclosure that would have capped the exposure was available the whole time. It just needed a date on it earlier than the investigation date, and that is a race the importer does not get to schedule.
Keep reading: How do customs broker errors happen, and who pays when an entry is wrong?, Record keeping for export screening: how long to keep proof, and Licence checks for dual use goods: a pre shipment routine cover the nearby cases in this series.
A voluntary written disclosure that entries contained a material error, made before CBP commences a formal investigation into it. A valid disclosure substantially limits penalty exposure, typically leaving the importer to pay the lost duties with interest.
A Form 28 request for information is not itself a formal investigation, so disclosure may still be available, but the interaction between an open inquiry and a disclosure needs legal advice on timing and scope. Do not assume the option survives indefinitely once CBP is asking questions.
Generally across the affected entry population within the five year record and liability horizon that customs works to. The disclosure should identify the entries and period honestly; understating the population undermines the protection for anything left outside it.
No. Correct the method on new entries as soon as the error is understood. Continuing a known error after discovery damages the good faith the disclosure depends on and adds fresh exposure with every filing.