Meaning
Voluntary submission made by an importer to customs authorities allows for the reporting of errors in previous entries before an investigation begins. A prior disclosure filing can reduce the penalties associated with mistakes in valuation, classification or country of origin. This process demonstrates a commitment to compliance and transparency.
It applies to any errors that resulted in the underpayment of duties or the violation of trade regulations.
Penalty Mitigation
Financial consequences for mistakes are capped when a report is made voluntarily. Without a prior disclosure filing, a firm could face fines equal to the full value of the goods.
Error Correction
Documentation submitted must describe the circumstances of the mistake and provide the correct information for each affected entry. The prior disclosure filing must also include a check for the unpaid duties if any are owed. This thoroughness helps the agency close the case without a lengthy and confrontational investigation.
Agency Review
Authorities evaluate the submission to determine if it is complete and accurate. A successful prior disclosure filing leads to a formal settlement that protects the company from further civil action on those specific entries. It allows a business to clean up its records and move forward with a better compliance strategy.
This mechanism is an essential part of risk management for any international corporation. Voluntary reporting preserves the relationship between the trader and the state.
