4410-014 Referral of Section 1592 Penalty Cases to the Department of Justice

Published CBP guidance; operative status and applicability must be assessed from the retained publisher edition.

CUSTOMS DIRECTIVE
ORIGINATING OFFICE: CO:R:P:P DISTRIBUTION: See signature page
CUSTOMS DIRECTIVE NO. 4410-014
OLD NUMBER: 4400-14
DATE: JUNE 14, 1990
REVIEW DATE: JUNE 2004
SUBJECT: REFERRAL OF SECTION 1592 PENALTY CASES TO THE
DEPARTMENT OF JUSTICE
1. REFERENCES
Title 19, United States Code, Sections 1592 and 1621,

Title 19, Code of Federal Regulations, Part 171 and Appendix B of Part 171,

Fines, Penalties & Forfeitures Handbook, Chapter FRD

2. PURPOSE
The purpose of this document is to assure that Title 19, United States Code,
section 1592 penalty cases are timely referred to the Department of Justice for
the institution of collection proceedings when the alleged violator fails to pay the
penalty claim or mitigated penalty amount in the speci fied time.
3. BACKGROUND
The Department of Justice has expressed its serious concern over the past
several years regarding untimely referrals by Customs of certain section 1592
penalty cases to the Commercial Litigation Branch, Civil Division of the
Department of Justice. These concerns have merit. (In all cases involving
seizures, due process also requires prompt processing.)
Under 19 USC section 1621, Customs ability to recover a penalty or forfeiture of
property under section 1592 may be forever barred UNLESS the section 1592
judicial complaint is filed with the Court of International Trade within 5 Years:
A. From the date of DISCOVERY of the alleged violation if the violation
resulted from FRAUD or
B. from the date the alleged violation was COMMITTED (which is usually the
date of the entry) i f the violation resulted from GROSS NEGLIGENCE or
NEGLIGENCE or
C. unless the alleged violator is ABSENT from the United States. (The statute
will then be suspended during the period of absence from the jurisdicti on
of the U.S. courts.)

In light of the seriousness of the problem of untimely referrals, the Department of
Justice has insisted that Customs refer section 1592 penalty cases to that
agency no later than six (6) months before the expiration of the statute of
limitations. In order to implement and therefore, accomplish this directive, it is
the policy of the Customs Service that a section 1592 penalty case be presented
to the Fines, Penalties & Forfeitures office, the Office of Regulations & Rulings,
and the Regional/Distr ict Counsel's Office in sufficient time to assure a prompt
referral to the Department of Justice at least six (6) months before expiration of
the statute of limitations as noted above.
RULE OF THUMB
For statute of limitations purposes only, assume that the Government can
establish ONLY gross negligence or negligence. By following this procedure,
Customs will be far less likely to lose a case to a statute of limitations defense -
particularly in those cases where we are unable to establish fraud. In the vast
majority of cases, this means that you look at the date of the OLDEST entry
involved in the case for s tatute of limitations purposes because that date
ordinarily is the first date of the commission of the violation. Then you add five
years to this date to determine whether there is a statute of limitations problem
AND whether a WAIVER of the statute of limitations should be solici ted.
WAIVERS OF THE STATUTE OF LIMITATIONS
Absent compelling circumstances, Customs will not as a matter of policy,
favorably entertain waivers of the statute of limitations for a period of time less
than TWO (2) YEARS. All waivers should be forwarded to Headquarters and
may be accepted only by the Director, Regulatory Procedures and Penalties
Divi si on. The proper format of a waiver was published in the Federal
Register as T.D. 90-11 on February 2, 1990 (55 FR 3683), and is attached hereto
as Appendix A. It is noted that a corporate resolution authorizing execution of
the waiver of the statute of limitations should be submitted with the waiver or
shortly after the waiver is filed
REMEMBER
The issuance of a prepenalty or penalty notice will not toll, i.e., suspend the
statute of limitations. The statute will continue to run until a Complaint is filed
in the Court of International Trade. (However, a violator's absence from the
United States will toll the statute.)
4. ACTION
A. In order to comply with the requirement of the Department of Justice that a
section 1592 penalty case be referred to that Office no later than SIX (6)

MONTHS before the expiration of the statute of limitations (or the waiver
period), it is essential that in the absence of a recently discovered violation
or another unusual extenuating circumstance, all cases must be referred
to the appropriate Regional/Distr ict Counsel's Office no later than NINE (9)
MONTHS before the expiration of the statute of limitations or the waiver
period. In the event that these time constraints cannot be met, the
appropriate Regional/Distr ict Counsel Office shall be notified immediately.
1) It is the responsibility of the first Customs official who has
reasonable cause to believe that there may be a section 1592
violation to immediately communicate with the local
Regional/Distr ict Counsel Office, and Fines, Penalties & Forfeitures
Office anytime there is any possibility of a statute of limitations
problem.
2) There is a problem if less than TWO (2) YEARS remain before the
expiration of the statute of limitations (based upon the rule of thumb
discussed above) AND the case has not been referred to the Fines,
Penalties and Forfeitures office to initiate penalty proceedings
against the alleged violator. In these cases, it is the responsibility
of the Customs officer under whose jurisdicti on the case falls at that
time (1) t o communicate with the Fines, Penalties & Forfeitures
Office to ascertain the appropriate procedures for requesting a
waiver of the statute of Limitations and (2) to coordinate with the
Fines, Penalties & Forfeitures Office to make the request for a
waiver from the alleged violator. In the event that the alleged
violator does not provide a waiver in a timely manner, it is the
responsibility of that Customs officer to communicate that fact
to the Fines, Penalties & Forfeitures Office to determine the
appropriate action to be taken. It is also the responsibility of the
Customs officer to immediately communicate with the local
Regional/Distr ict Counsel Office to alert that Office about the status
of the case.
3) If, after the case has been referred to the Fines, Penalties and
Forfeitures Office to initiate penalty proceedings against the
alleged violator, there is less than TWO (2) YEARS remaining
before the expiration of the statute of limitations, it is the
responsibility of that office to determine whether it is necessary to
request a waiver of the statute of limitations from the alleged
violator if not previously provided, or an extension of a previous
waiver if necessary. If it is so necessary, the Fines, Penalties &
Forfeitures Office will request a waiver or an extension from the
alleged violator. It is the responsibility of the Fines, Penalties and
Forfeitures Office to communicate with the local Regional/Distr ict
Counsel Office to alert that office about the status of the case.

4) If, during the petitioning/mitigation proceedings, it becomes
necessary to obtain a waiver of the statute of limitations, it is
the responsibility of the Office of Regulations and Rulings, or the
Fines, Penalties & Forfeitures Office, as appropriate, to request a
waiver or an extension from the alleged violator.
B. If the alleged violator declines to provide a waiver, it is Customs policy that
the investigation and processing of that section 1592 case be given the
highest priority in order for Customs to address the concerns of the
Department of Justice (in the absence of a recently discovered violation or
other unusual extenuating circumstance).
C. It should be remembered that waivers of the statute of limitations are not
the solution to all problems. Waivers should not be requested merely
to delay the processing of a case. Even with a waiver, it is the
responsibility of the various Customs officers to process the case in a
timely manner. The longer a case takes to process, the less likely a full
recovery will be made. This is so because entries are lost, and witnesses
die, become unavailable, or cannot be located.
5. RESPONSIBILITIES
Special Agents in Charge and District/Area Directors will be responsible for
ensuring that there is compliance with the policy statements and time
constraints discussed above for s ection 1592 penalty cases within their
respective jurisdicti ons. In the pursuit of a criminal case, an agent should not
overlook the importance of determining whether there is a statute of limitations
problem relating to the civil case, and notifying the Assistant United States
Attorney if the request for a waiver is necessary.
Guidance concerning the applica tion of this Directive may be requested from the
Chief, Penalties Branch (ORR) ( FTS) 566-8317, the local Regional/Distr ict
Counsel, or the local Fines, Penalties & Forfeitures Office.
District/Area Directors, Special Agents in Charge, Fines, Penalties & Forfeiture
officers, Regional/Distr ict Counsels, and OR&R officers may release copies of
this document to the public upon request without a Freedom of Information Act
request.
The statements made herein are not intended to create or confer any rights,
privileges or benefits for any private person, but are intended merely for i nternal
guidance.

Commissioner of Customs
Distr ibution:
R-01 Regional Commissioners
R-02 Regional/Distr ict Counsels
F-01 District/Area Directors
F-02 Port Directors
F-10 District FP&F Officers
G-03 All SACS/RACS
G-07 All Entry Personnel