Home Discussion Fines Penalties and Forfeitures Maximum penalty for negligent entry record production by importer

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    April 2015 exam Q. 66

    66) For each release of merchandise, what is the maximum penalty that may be assessed against an importer who is negligent in producing entry records at the request of an Import Specialist?

    A)40% of the appraised value of the merchandise
    B)75% of the appraised value of the merchandise
    C) $10,000
    D) $100,000
    E) 75,000

    CBP answer C

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    The question asks what is the maximum penalty that can be assessed against an importer who is negligent in producing entry records.

    There are three points worth noting here. The first point is that this involves negligence. The second point is that you are required to identify the maximum penalty that can be imposed. The third point is that the maximum penalty is the lower of the two possible amounts.

    Where negligence is involved, 19 CFR 163.6(b)(ii) applies which states that the maximum penalty shall not exceed $10,000, or an amount equal to 40 percent of the appraised value of the merchandise, whichever amount is less.

    So if the merchandise was worth even a billion dollars, the maximum penalty would still be limited to the maximum amount of $10,000.
    On the other hand, if the merchandise was worth only $100, the maximum penalty would be the lower of $10,000 or 40% of $100 which is $40 only.

    Because the upper limit of $10,000 is the maximum penalty that can be imposed, irrespective of merchandise value, the correct answer is $10,000 for cases involving negligence. That is answer choice C which is the correct answer.

    However, this question could have been written better by providing the merchandise value. Also note that choice E is missing the $ sign and states 75,000. It is unclear whether this is $75,000 or 75,000 pieces or something else. Perhaps these are potential grounds for appeal.

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