What a CBP Penalty Notice Actually Means for Your Business
U.S. Customs and Border Protection does not send penalty notices as a formality. When a CF-28 (Request for Information) or CF-29 (Notice of Action) lands in your inbox or your customs broker's system, CBP is either gathering evidence or has already made a decision that will cost you money.
Ignoring either form is one of the most expensive mistakes an importer can make. A CF-29 that goes uncontested can result in penalties ranging from $5,000 for a negligent violation up to the full dutiable value of the merchandise for fraudulent conduct — and CBP can go back five years under the statute of limitations defined in 19 U.S.C. § 1621.
This guide walks you through exactly what each form means, your legal deadlines, and how to build a dispute that actually works.
CF-28 vs. CF-29: Know the Difference Before You Act
The CF-28: Request for Information
A CF-28 is not a penalty — yet. It is CBP's formal request for documentation to support the information you declared on your entry. Common triggers include:
- Declared value that CBP believes is understated
- HTS classification that doesn't match the commodity description
- Country of origin claims CBP wants to verify
- First-time imports of a product category CBP is auditing
You have 30 days to respond to a CF-28 from the date it is issued. Missing that window tells CBP you have no defense, and a CF-29 penalty notice typically follows within weeks.
Treat a CF-28 like a deposition. Every document you submit becomes part of the official record. Do not send anything that contradicts your entry without a written explanation attached.
The CF-29: Notice of Action
A CF-29 is a formal notification that CBP has taken — or intends to take — a specific action against your entry. That action could be:
- A rate advance (they're reclassifying your goods to a higher duty rate)
- A value advance (they're increasing the declared value)
- A penalty assessment under 19 U.S.C. § 1592 for misrepresentation or negligence
- Liquidation at a higher duty rate than your entry claimed
At this stage, CBP has already done its analysis. Your job is to challenge it with evidence, not explanations.
The Legal Framework: 19 U.S.C. § 1592
Most CF-29 penalty notices involving commercial importers are issued under 19 U.S.C. § 1592, which covers violations involving false or misleading statements on entry documents. The penalty structure breaks down into three tiers:
- Fraud: Up to the domestic value of the merchandise (the most severe; requires proof of intentional wrongdoing)
- Gross negligence: Up to four times the unpaid duties, or 40% of the dutiable value if no duties were unpaid
- Negligence: Up to two times the unpaid duties, or 20% of the dutiable value
CBP typically starts at the maximum penalty amount and works down through mitigation. If you import a $200,000 shipment and CBP alleges gross negligence on a misclassification, your initial penalty notice could show $800,000. That number is negotiable — but only if you respond correctly and on time.
Step 1: Read the CF-29 in Full Before Doing Anything
This sounds obvious. Most importers still skip it.
The CF-29 will specify:
- The entry number(s) affected
- The specific violation alleged (misclassification, undervaluation, country of origin fraud, etc.)
- The penalty amount and the tier (negligence, gross negligence, or fraud)
- The response deadline — typically 30 days from the date of the notice
- The Fines, Penalties & Forfeitures (FP&F) office handling the case
Note the issuing FP&F office location. Your response must go to that specific office, not CBP headquarters. Each port has its own FP&F team and their own workload and culture when it comes to mitigation.
Step 2: Pull Every Document Related to the Entry
Before you write a single word of your response, gather:
- The commercial invoice and packing list from the shipment in question
- Your customs entry summary (CBP Form 7501)
- The bill of lading or airway bill
- Any ruling letters from CBP's CROSS database you relied on for classification
- Supplier contracts, price lists, or purchase orders that support your declared value
- Any prior disclosure filings you've made on related entries
- Correspondence with your customs broker about the entry
If you used a licensed customs broker, pull their classification worksheet and any written advice they gave you. If they made the error, that is a mitigating factor — you can argue reasonable reliance on a licensed third party, which is recognized in CBP's Penalty Guidelines (19 CFR Part 171, Appendix B).
Step 3: Decide Whether to File a Petition for Mitigation or Relief
You have two primary options when responding to a CF-29 penalty:
Option A: Petition for Mitigation
Under 19 CFR § 171.11, you can file a petition for relief asking CBP to reduce or cancel the penalty. This is the most common route. Your petition must:
- Acknowledge or deny each specific allegation in the CF-29
- Provide documentary evidence to support your position
- Cite mitigating factors that justify a reduction in penalty amount
Strong mitigating factors CBP recognizes include:
- No prior violations in your import history
- Voluntary self-disclosure before CBP discovered the issue (this can reduce penalties by up to 75%)
- Reliance on a licensed customs broker's written advice
- Prompt payment of any unpaid duties
- Evidence the violation was clerical rather than systematic
Aggravating factors that will hurt you: a history of the same violation, failure to respond to prior CF-28s, and evidence of deliberate misrepresentation.
Option B: Prior Disclosure
If you discover the violation yourself before CBP has initiated a formal inquiry, prior disclosure under 19 U.S.C. § 1592(c)(4) caps your penalty at the unpaid duties plus interest — no additional penalty. This is the single most powerful tool in import compliance, but it only works if you file before CBP contacts you.
If you've already received a CF-29, the prior disclosure window is closed for that entry. But it may still be open for related entries CBP hasn't flagged yet. File prior disclosures on those entries immediately.
Step 4: Write the Petition Correctly
Your petition is a legal document. Write it like one.
Structure it as follows:
- Header: Entry number, importer of record name and EIN, CF-29 issue date, FP&F office name and address
- Introduction: One paragraph stating who you are, what the penalty alleges, and that you are filing a petition for mitigation under 19 CFR § 171.11
- Statement of Facts: A chronological account of the importation — what you ordered, from whom, at what price, under what HTS number, and why
- Legal Argument: Address each allegation directly. If CBP says your HTS classification was wrong, cite the HTSUS chapter notes, the Explanatory Notes to the Harmonized System, and any CBP binding ruling that supports your original position
- Mitigating Factors: List them explicitly, with supporting documents attached as numbered exhibits
- Requested Relief: State clearly what you want — cancellation of the penalty, or reduction to a specific dollar amount
Do not:
- Admit to fraud if CBP alleged negligence (you can inadvertently escalate the tier)
- Submit documents that contradict your original entry without explaining the discrepancy
- Miss the 30-day deadline — you can request a 30-day extension in writing, but you must do this before the deadline expires
Step 5: Escalate If the Initial Petition Is Denied
If CBP's FP&F office denies your petition or offers a mitigation amount you believe is still too high, you have two additional options:
Supplemental Petition
Under 19 CFR § 171.61, you can file a supplemental petition with the same FP&F office within 60 days of their decision. Include any new evidence you didn't have available for the original petition. This is not just a repeat — it needs new arguments or new documentation.
Referral to the Office of Regulations and Rulings (OR&R)
For penalties above $50,000, the case may be automatically reviewed by CBP's Office of Regulations and Rulings in Washington, D.C. You can also request this review. OR&R reviewers tend to focus more heavily on legal precedent and less on the specific port's interpretation of events — which can work in your favor if the FP&F office was overly aggressive.
Step 6: Know When to Bring in a Customs Attorney
If the penalty is above $25,000, you are in fraud-tier territory, or CBP has alleged systematic violations across multiple entries, bring in a licensed customs attorney — not just a broker. Attorneys who practice before CBP understand the negotiation culture at specific FP&F offices and can draft petitions that speak directly to the legal standards CBP's reviewers are trained to apply.
A good customs attorney will typically charge $3,000–$10,000 to handle a petition through resolution. On a $200,000 penalty, that fee pays for itself many times over.
What Happens After You File
CBP's FP&F office is required to issue a decision within 30 days of receiving your petition, though in practice it often takes 60–90 days, especially at high-volume ports like Los Angeles, New York, and Chicago. During this time, the penalty is not yet collectible — CBP cannot seize funds while a timely petition is pending.
If CBP ultimately determines you owe duties and penalties, you have the right to protest the liquidation under 19 U.S.C. § 1514 within 180 days of liquidation, and to escalate to the Court of International Trade if the protest is denied.
The One Thing That Prevents Most of This
A written import compliance program — reviewed annually, tied to your specific HTS classifications, and shared with your customs broker — eliminates most of the conditions that trigger CF-28s and CF-29s in the first place. CBP's own guidelines give significant mitigation credit to importers who have documented compliance programs in place at the time of violation.
Don't wait for the letter to arrive. The time to build your defense is before you need it.
If you've received a CF-28 or CF-29 and need help structuring your response, or want to build an import compliance program that reduces your exposure before CBP comes knocking, get started with Regenerate Trade today.