Update: The Acceptance of Late Petitions for Liquidated Damage Claims


Effective January 9, 2013, CBP amended the guidelines for the acceptance of untimely petitions and mitigation of claims replacing the previous guidelines. After a liquidated damage claim is issued, an importer/bond principal may file a petition for relief within 60 days of the date of the claim notice to request the claim be cancelled lowered based on mitigating circumstances affecting the claim. CBP has indicated there has been a significant uptick in the number of petitions for relief filed untimely and has determined the current formula for mitigation of late filed petitions is outdated and does not provide sufficient monetary assessments to discourage or deter principals and other petitioners from routinely filing untimely petitions.

Under the previous guidelines, CBP would accept late petitions; however, since the petition was untimely, CBP would require an additional assessment of 0.1% of the base mitigated amount multiplied by the number of days the petition was late, but no less than $400.00. Many late petitions were generally settled for an additional payment of $400.00 on top of the original mitigation. The new guidelines substantially raise, in most cases, the additional amounts acceptable on untimely filed petitions.

It has been one year since the new guidelines have gone into effect, and we have encountered Customs rejecting late petitions, for both principal and sureties for not justifying the late submission. Although the new guidelines permit the late filing of petitions beyond the initial (60) day deadline (but no later than (180) days from the date of the claim notice) CBP will require the petitioner to demonstrate the existence of extraordinary circumstances that prevented the timely filing of a petition or timely seeking an extension in which to file a petition, before a late petition or extension request will be considered.

Therefore, it is imperative for petitioners to communicate the extraordinary circumstances that prevented the timely filing of a petition or timely seek an extension from Customs. Failure to do so may result in the payment of the full liquidated damage claim amount to satisfy the claim.

Given the potential for a dramatic increase in the amounts bond principals will be paying for untimely filed petitions, we have included links at the bottom of the e-mail with a summary of the new guidelines, a copy CBP Decision 13-1 and FAQ for you and to pass along to your clients.