Civil Customs Penalties under Section 592 of the Tariff Act: Current Practice and the Need for Further Reform

Civil Customs penalties imposed under Section 592 of the Tariff Act are among the harshest allowed by federal law. Multi-million-dollar penalty claims and settlements are not uncommon. Since the early 1970s, Section 592 has emerged as the Customs Service's (Customs) most powerful weapon in its war against allegedly negligent and fraudulent import practices. For years, many commentators had criticized Section 592 as being an unduly harsh remedy that often imposed unintended hard-ships on importers.

Much of this criticism subsided when Congress adopted the Customs Procedural Reform and Simplification Act of 1978, which importers hailed as a major victory. Many believed that the "reformed" Section 592 would result in less drastic penalty claims, greater procedural rights for penalized importers, and improved judicial review of penalty assessments. Years after the adoption of the 1978 reforms, however, those promises seem largely unfulfilled. Huge initial penalty claims continue to be the rule rather than the exception, while relatively few importers have obtained complete judicial review of penalty assessments.

This article analyzes civil Customs penalty claims and procedures under the "reformed" Section 592, evaluates the efficacy of the 1978 reforms, and recommends additional changes to make Section 592 a fairer, more realistic remedial provision.