Individuals Can be Held Liable for Company Imports

Recently, a president of a company transferred ownership of merchandise while it was being imported into the United States to another company, which he chose to be the importer of record. He also misrepresented the value of the imported merchandise in an effort to lower the duties and taxes. The U.S. Court of Appeals for the Federal Circuit ruled that “corporate officers, import managers, and other persons involved in import operations of an importing company can be held individually liable for customs penalties if one is responsible for the “introduction” into the United States of under-valued merchandise imported by the company”. The president of this company was found to be personally responsible for his negligent actions.

The Customs penalty statute, 19 U.S.C. 1592(a)(1), prohibits any person by fraud, gross negligence or negligence from entering, introducing or attempting to enter or introduce merchandise into the United State by means of a materially false statement or omission. All U.S. importers should accurately identify the importer of record and declare the good’s true value on commercial invoices for shipments entering into the commerce of the United States. The decision, US v. Trek Leather, Inc. sets a precedent that persons involved in the import operations of the importing company can be held personally responsible for negligence or any misrepresentations. “Customs has the authority to initiate penalty cases against individuals within the company who were directly involved in the import process as well as the corporate importer of record.”

US v. Trek Leather, Inc.