Reasonable care is the standard at the top of 19 USC 1484: the importer of record must use reasonable care to file entry and entry-summary data so CBP can correctly assess duties and enforce the law. It comes from the 1993 Customs Modernization Act, which set up informed compliance and shared responsibility: CBP publishes the rules, and the importer is responsible for following them. The standard is the yardstick CBP uses to decide whether an error was innocent or negligent, and the penalty tiers under 19 USC 1592 scale with culpability. Negligence carries up to two times the lost duties, or 20 percent of dutiable value if duties were not affected. Gross negligence carries up to four times, or 40 percent. Fraud carries up to the full domestic value of the merchandise, and CBP may also seek forfeiture.
What reasonable care actually requires
Reasonable care means conducting yourself as a reasonable importer would under the circumstances, and CBP has published an Informed Compliance checklist that walks importers through the questions to ask about classification, valuation, and marking before each entry. The standard touches everything: meeting the standard to enter, classify, and determine the value of imported goods, providing the information CBP needs to assess duties and collect accurate statistics, and determining whether other legal requirements have been met. It is a measurable legal standard, not a feeling, and the evidence for it is the file the importer kept.
The recordkeeping rule is part of the standard. Under 19 USC 1508 and 1509 and 19 CFR Part 163, importers must keep entry records for five years from the date of entry, including the classification reasoning, the valuation support, and the communications with the broker. A willful failure to maintain, store, or retrieve those records can cost 75 percent of the value of the import or $100,000, whichever is less, under 19 CFR 163.6. The importer who cannot produce the file cannot prove reasonable care, and the importer who kept the file can show exactly what was checked, when, and by whom.
Related reading on this site: TariffWatch HQ and CBP Form 29 in Practice: The Notice of Action That Changes Your Rate cover the neighbouring problems in more depth.
The three penalty tiers, and the burden that decides between them
Under 19 USC 1592, penalties scale with culpability, not just with the duty loss. Negligence is a failure to exercise reasonable care, and it carries up to two times the unpaid duties, or 20 percent of the dutiable value when revenue was not involved. Gross negligence is a violation done with actual knowledge of, or wanton disregard for, the relevant facts and the law, and it carries up to four times the unpaid duties, or 40 percent of the dutiable value. Fraud is an intentional act or omission, and it carries up to the full domestic value of the merchandise, plus forfeiture, and it can also trigger criminal prosecution under 18 USC 542, which carries a fine and up to two years of imprisonment.
The burden of proof is the part that decides cases. For negligence, the importer must prove the act was not negligent, under 19 USC 1592(e)(4). For gross negligence, CBP must establish actual knowledge or wanton disregard. The maximum penalty doubles from two times the loss of duties to four times, so the tier conceded sets the exposure, and the fight that decides whether a case is negligence or gross negligence is not about whether the entry was wrong. It is about what records prove the importer exercised reasonable care, and most importers cannot reconstruct those records after the notice arrives. CBP issued roughly 1,400 trade enforcement penalties in the first half of 2025 alone, on pace to exceed each of the prior five years, and the Department of Justice stood up a cross-agency Trade Fraud Task Force in 2025 to feed both civil and criminal cases.
Prior disclosure is the way out, if it comes first
The fastest way to limit exposure is a prior disclosure. If an importer finds a violation and reports it before CBP opens an investigation, the penalty is typically capped, often to interest on the duty loss. A valid prior disclosure under 19 USC 1592(c)(4) caps the penalty, and for fraud with prior disclosure the penalty cannot exceed 100 percent of the unpaid duties, taxes, and fees, provided the importer tenders the unpaid amount at the time of disclosure or within 30 days of CBP's calculation. Under 19 CFR 162.74, the disclosure is a written notification of the circumstances of the violation, including a tender of the actual loss of duties, taxes, and fees, or a deposit of estimated duties.
The timing is everything, and it is unforgiving. A prior disclosure made after CBP has formally commenced an investigation is not a prior disclosure, and the cap does not apply. That is why the importers who survive penalty cases are the ones with a compliance program that finds errors internally: a classification review, a valuation check, a record of what was verified and when. The program does not need to be elaborate. It needs to exist, it needs to be followed, and it needs to produce a file that shows reasonable care, because that file is the difference between a negligence penalty and a gross negligence penalty, and between a penalty and a prosecution.
Frequently asked questions
What is the reasonable care standard?
It is the requirement in 19 USC 1484 that the importer of record use reasonable care to file entry and entry-summary data so CBP can correctly assess duties and enforce the law. It comes from the 1993 Customs Modernization Act, which set up informed compliance and shared responsibility.
What are the penalty tiers under 19 USC 1592?
Negligence carries up to two times the lost duties, or 20 percent of dutiable value. Gross negligence carries up to four times, or 40 percent. Fraud carries up to the full domestic value of the merchandise, plus possible forfeiture and criminal prosecution under 18 USC 542.
How long must I keep customs entry records?
Five years from the date of entry, under 19 USC 1508 and 1509 and 19 CFR Part 163. A willful failure to maintain, store, or retrieve records can cost 75 percent of the value of the import or $100,000, whichever is less.
What is a prior disclosure, and why does timing matter?
It is a written report of a customs violation to CBP before the agency formally opens an investigation, with a tender of the unpaid duties. It caps the penalty, often to interest on the duty loss. A disclosure made after an investigation starts is not a prior disclosure, and the cap does not apply.