Advanced Trade Finance & Special Customs Procedures
Prior Disclosure
Also known as: Voluntary Disclosure
A prior disclosure is a voluntary admission an importer makes to the customs authority, revealing its own past errors or violations — such as misclassification, undervaluation, or unpaid duty — before the agency has begun or discovered an investigation into the matter. By coming forward proactively and tendering any duties owed, the importer can substantially reduce the penalties that would otherwise apply, since the law rewards self-correction. Prior disclosure is a key tool of a mature compliance program, allowing companies that find mistakes through internal review to limit their exposure while demonstrating good faith to the authorities.
The procedure importers hesitate over longest, and most expensively. Tell CBP about a violation before they find it, and penalty exposure drops dramatically — often to interest alone on the underpaid duty. The hesitation is understandable and usually costly: the calculation changes completely the moment an investigation has begun. If you have found a real problem, the question is not whether to disclose but how quickly.
Where it matters for compliance
- Must be made before, or without knowledge of, the commencement of a formal investigation.
- The disclosure must be accompanied by a tender of the unpaid duties, taxes and fees — or that tender must follow within 30 days of CBP's calculation. 19 U.S.C. § 1592(c)(4).
- For negligence and gross negligence the penalty drops to interest on the loss. For fraud it drops to one times the loss — still an enormous reduction, but not interest alone.
- This is a decision to take with counsel. We can identify the exposure; we do not advise on the filing.
Related terms
Reviewed by a licensed customs broker. Definitions are general information, not legal or customs advice for a particular shipment. Duty rates, tariff programs and agency requirements change frequently.