October 2024 — Question 12

Sam Sly's customs broker license was revoked by operation of law for failure to file a triennial status report and pay the fee. Sam thought that his employer ABC Brokerage (ABC) filed his report and paid the fee on his behalf, so he ignored the warning letter from CBP. In addition to his work at ABC, Sam completes freelance jobs classifying merchandise and filling out entry documents, but not filing them with CBP, for clients he obtains from a website that brings service providers together with businesses who buy freelance services. CBP discovers Sam's side business, determines that Sam is advertising publicly that he is a licensed customs broker, and discovers that he has conducted customs business for five importers of commercial goods after his license was revoked. CBP sends a penalty notice to Sam for conducting customs business without a license for $10,000.00. This is Sam's first penalty, and he has the ability to pay the fine, but he has requested mitigation claiming that he did not know his license was revoked. Based upon the guidelines in Appendix C to 19 CFR Part 171, will CBP mitigate and, if so, to what amount?

• AYes, CBP will mitigate to $250.00.
• BYes, CBP will mitigate to $1,000.00.
• CNo, CBP will not mitigate the penalty.✓ CBP's answer
• DNo, CBP will not mitigate and will raise the penalty to $30,000.00 because there were five violations.