A prior disclosure is a voluntary report made to customs authorities when an importer, exporter, or broker discovers a possible violation before the government finds it independently. In U.S. customs compliance, prior disclosure can help reduce penalties if the company reports the issue honestly, explains what happened, and pays any owed duties, taxes, or fees. It is often used for mistakes involving tariff classification, valuation, country of origin, marking, duty payments, or import documentation.
- Must be submitted before CBP has initiated a formal investigation
- Requires payment of unpaid duties plus interest
- Civil penalty reduced to the unpaid duties amount rather than the higher statutory rate
- Does not protect against criminal liability for fraud
If an internal compliance review uncovers entry errors or duty underpayments, consult a customs attorney immediately to evaluate the option of making a prior disclosure.
Related terms: Compliance Assessment, Customs Entry, Customs Clearance.
