Whenever Customs issues a claim for liquidated damages, U.S. law gives the importer the right to petition for mitigation or cancellation of the damages amount. It is becoming increasingly difficult to persuade the government to mitigate or cancel these cases, because frankly, the government is a little short on cash. However, even in this rough fiscal climate, FDAImports.com recently was able to obtain mitigations valued up to $28,000 for two different clients.
During the import process, importers must file a basic importation bond with Customs, which serves as a protective contract between the importer and Customs. In exchange for having possession of the imported cargo while agencies like FDA are determining admissibility, the importer agrees to pay liquidated damages if it fails to fulfill any of the obligations required by the bond. So, for instance, if the importer fails to redeliver (export or destroy) merchandise that FDA refuses admission to, then Customs will issue a liquidated damages claim. Generally, these damages claims are three times of the invoice value of the non-redelivered merchandise, up to the value of the bond.
Importers must be aware of and comply with all applicable laws and regulations, but should also be aware of their rights in the import process. Importers have the right to petition Customs to seek mitigation of damages in many cases. In these recent cases, FDAImports.com took into account all the facts of each case, the application of law and regulations, the validity of the claims, and the viability of petitioning Customs. In the end, we successfully challenged the claims and helped our clients to avoid considerable loss.
There are four key takeaway points and lessons here:
1. Make sure your products are compliant prior to entering the United States.
2. If your products are refused, make sure FDA is right before you re-export or destroy them correctly.
3. If FDA is wrong, challenge the refusal.
4. If you receive a notice of liquidated damages from Customs, make sure you exercise your right to petition – you may be eligible to mitigate the damages.
Don’t learn this lesson the hard way and tolerate exorbitant fines which could be avoided with our assistance. FDAImports may be able to help you obtain mitigation – or even cancellation – of the liquidated damages. Contact us today to avoid unnecessary fines and penalities.
