A prior disclosure lets you tell CBP about a violation before CBP finds it. Under 19 USC 1592(c)(4), a valid disclosure can cut a negligence penalty down to interest only, which is often the difference between a survivable mistake and a business-ending bill.
The rule that rewards coming forward
Section 592 of the Tariff Act, 19 USC 1592, sets the penalties for entering goods by means of a false statement or omission. The penalty depends on the level of fault: negligence, gross negligence, or fraud. Negligence can cost twice the lost duties or 20 percent of the value of the merchandise, whichever is less. Gross negligence is four times the lost duties or 40 percent of value. Fraud is the full domestic value of the goods.
Buried in the same statute is a different deal. Under 19 USC 1592(c)(4) and the regulation at 19 CFR 162.74, an importer who discloses the circumstances of a violation before CBP starts a formal investigation, or before CBP knows of the violation, can have the penalty reduced. For a negligence violation, a valid prior disclosure cuts the penalty to interest on the lost duties only. The duties themselves are still owed. The penalty, which is usually the number that ruins a company, is not.
That is the whole point of the provision. CBP would rather have importers find and report their own mistakes than spend its resources finding them. The statute pays for honesty with a penalty reduction that is large enough to matter.
What counts as a disclosure
A prior disclosure is not a phone call saying something might be wrong. The regulation requires the importer to disclose the circumstances of the violation, identify the entries involved, and provide the information CBP needs to calculate the loss of duties. A vague letter that a mistake happened, without saying what it was or what it cost, is not a valid disclosure, and CBP has rejected disclosures for exactly that reason.
Timing is the hard limit. The disclosure has to come before a formal investigation begins, and before CBP has knowledge of the violation. If CBP has already sent a request for information about the entries, or has started an audit that covers them, the window is closed. That is why the disclosure decision cannot wait for the next quarterly review. The moment someone inside the company finds the error, the clock is running, whether or not CBP knows about it yet.
The disclosure also has to be complete for the violation it covers. Disclosing a valuation error does not protect a classification error in the same entries. Importers who find one problem should look for the others before they write the letter, because a partial disclosure leaves the undisclosed part fully exposed.
The DOJ line that changed in October
There is a limit importers need to understand, and it got sharper this year. A prior disclosure to CBP does not count as a voluntary self-disclosure to the Department of Justice. DOJ issued Directive 26-12 on October 1, 2026, making trade fraud an enforcement priority, and it runs its own disclosure program with its own standards. A CBP disclosure is not a DOJ disclosure.
The Trade Fraud Task Force has now passed $1 billion in recoveries, a milestone it reached in July 2026, and it is bringing cases that used to be handled as customs penalties. That matters when the conduct behind the error could be criminal, which is the case when a false statement was made knowingly. An importer who discloses to CBP without considering the DOJ exposure can end up having told one agency about conduct another agency is prosecuting.
The practical rule is simple. If the error looks like a mistake, a prior disclosure to CBP is usually the right move, and it should be made quickly. If the error looks like something someone did on purpose, get counsel involved before anyone writes anything to any agency. The penalty reduction is worth having, but it is not worth buying with a criminal admission.
How to make the disclosure stick
A good disclosure reads like a short, complete story: what the violation was, which entries it touched, how it happened, what the correct treatment is, and how much duty was lost. It includes a calculation, not a guess, and it tenders the lost duties and interest with the disclosure. CBP is more likely to accept a disclosure that arrives with the money than one that arrives with a promise to pay later.
Work with the broker on the entries. The broker's records will show what was filed and when, and the broker can usually produce the entry documents faster than the importer can. But the disclosure is the importer's, not the broker's. The importer of record is the party CBP holds responsible, and the disclosure should come from the importer, through counsel if the exposure is large.
After the disclosure is accepted, fix the process that caused the error. A disclosure that is followed by the same error on the next shipment is not a disclosure that shows a company learned anything. CBP remembers importers who disclose and then repeat, and the second disclosure does not get the same reception as the first.
Keep reading
Related guides on this site: how a protest works inside the 180-day window claiming back 99 percent of duties on re-exported goods fixing a filed entry with a post-entry amendment More from Tariff changes caught before they hit your margins.
Frequently asked questions
Can I file a prior disclosure after CBP starts an audit?
No. A prior disclosure has to be made before CBP starts a formal investigation or examination of the issue. If CBP has already begun looking at the entries in question, the disclosure is too late and does not get the penalty reduction.
Does a prior disclosure to CBP protect me from the Justice Department?
A prior disclosure does not count as a voluntary self-disclosure to the Department of Justice. DOJ issued Directive 26-12 on October 1, 2026, making trade fraud an enforcement priority, and a CBP disclosure does not satisfy the DOJ standard. If the conduct could be criminal, talk to counsel before disclosing to anyone.
Does one disclosure cover every error in the entries?
Yes. Prior disclosure covers the entries you identify and the violations you describe. If you disclose a valuation error on one product and CBP later finds a classification error on another product in the same entries, the second error is not covered.
What do I need to include in the disclosure?
You need the facts of the violation, the entries involved, and a calculation of the lost duties and interest. A disclosure that says a mistake happened but does not say what it was or what it cost is not a valid prior disclosure under 19 CFR 162.74.
Do I still pay anything after a valid prior disclosure?
Usually, yes, at a much lower level. A valid disclosure reduces a negligence penalty to interest on the lost duties. Without a disclosure, the same negligence can cost twice the lost duties or 20 percent of the merchandise value, whichever is less.