Responding to U.S. Customs Forms CF 28 (Request for Information) and CF 29 (Notice of Action)  

Customs Forms CF 28 and CF 29 are trigger events for potentially adverse legal issues for importers.
 

The Customs Form CF 28 (Request for Information)

The CF 28 is used by U.S. Customs to solicit factual information from the importer. This information directly relates to material compliance issues and does not represent idle curiosity.  The importer should take this form request seriously.

The information requested may impact any of a wide number of compliance issues, such as:

1. tariff classification,

2. valuation,

3. FTA or preference program eligibility,

4. Country of Origin,

5. ADCVD coverage, and etc.

If an importer responds ineffectually, Customs may next take action via a Customs Form CF 29 (Notice of Action). That action may include a rate advance, or other adverse action, including (in some instances) a preclusion of the importer’s ability to file a prior disclosure. Importers should appreciate that this may be a serious and time-sensitive issue.

How to Respond to a CF 28

When responding to the CF 28, the first steps involve (1) gaining an understanding as to why the agency is asking these questions, and then (2) evaluating how the facts and law come to bear to answer that question. The CF 28 questions are always targeted to zero in on a material issue (i.e., a potential liabilty). Even though Customs may be asking the question as it regards one entry, the determination may also potentially impact future entries, and past entries (typically for 5 years).

Therefore, we suggest:

1. Assess the situation to determine the potential liability

2. Quantify the size of the potential liability

3. Strategize on how to address these legal issues

Each of these steps should be undertake together with experience customs counsel before responding to the CF 28. If an extension of time is necessary, then the importer may either contact the import specialist, or have its attorney do so.

How to prepare for your discussion with an attorney:

If you receive a CF 28, we suggest that you organize, as follows:

1. Obtain the “entry package(s)” from your records or from your broker. The entry package is a set of documents provided by the customs brokerage. It may include the Entry (CF 3461), the Entry Summary (CF 7501), the commercial invoice, the packing line, the bill of lading, and any additional certifications/declarations required for processing the entry.

2. Organize the materials Customs is requesting from the company (as stated on the CF 28).

3. If you believe you already understand the issue that Customs is targeting, then organize materials surrounding that issue. This might include for example include a short narrative that explains the problem.

4. If you already expect a rate advance, then attempt to quantify the magnitude of the historical liability.

5. Contact an experienced Customs attorney.

Should I respond to Customs without contacting an Attorney?

To answer this question, Importers should take a moment to understand their legal obligations to U.S. Customs under the concept of “reasonable care.” This should include a review of the penalties that can be applied by Customs under the negligence statute, 19 U.S.C. 1592.

Sophisticated importers understand that missteps in customs’ matters can result in liabilities that may stretch across 5 years of prior imports (or in some instances for even longer). Highly-informed and compliant importers usually call us immediately to ensure the matter is handled properly.

Could the CF 28 also relate to other Legal Problems?

Yes, CF 28s can also hint at other serious legal issues lurking behind the scenes:

• A CF 28 may relate to Customs early reaction to an ADCVD circumvention proceeding under the EAPA.

• A CF 28 may relate to False Claims Act investigations coordinated behind the scenes with the Department of Justice (DOJ).

• A CF 28 may relate to various other federal investigations, such as those relating to counterfeit products, stolen artwork/misappropriated cultural property, and various other areas of law.

The Customs Form CF 29 (Notice of Action)

The CF 29 represents Customs decision to either (1) proposed action, or (2) to actually take action on a single entry, or a group of entries.   

The most common types of actions that we see taken by U.S. Customs are:

1. A rate advance due to a change in the tariff classification of a product,

2. A determination that the goods fall under the scope of an AD/CVD Order of the Department of Commerce (this would also result in a tariff assessment).

3. A change in the Country of Origin (this may result in an additional tariff assessment for example under the USTR section 301 tariff on goods from the PRC, or under the scope of an ADCVD Order).

4. A denial of the importer's eligibility for duty-free benefits under a FTA or preference program.

5. A rate advance due to undeclared additions to values (e.g. assists, royalties, etc.)

The importer should assess the implications and consequences of the CF 29 with counsel and if necessary evaluate whether immediate actions, such as, (a) corrections to the importer's current declartions, (b) the filing of administrative protests and/or a request for a binding tariff ruling, and (c) whether the filing of a prior disclosure may be appropriate.  

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