CBP audited a medical device importer in 2024 and found three years of entries where the company had classified products under a heading their own engineer had flagged as incorrect in an internal email. The penalty notice came in at $340,000. The importer's defence was essentially "our broker handled it." CBP didn't care. The importer of record is responsible. Full stop.
That's what reasonable care under 19 U.S.C. 1484 actually means in practice. Not "hire a broker and hope for the best." It means you, as the importer of record, are legally required to use reasonable care in determining classification, valuation, country of origin, and admissibility of your goods. CBP will hold you to that standard whether or not you've ever read the statute.
If you're shipping goods into the United States regularly, this is the legal foundation everything else sits on. Get it wrong, and the consequences range from penalty notices to seizure to debarment from importing. Get it right, and you have a defensible position if CBP ever comes knocking.
What 19 U.S.C. 1484 Actually Says
The statute is straightforward. The importer of record is responsible for using reasonable care to enter, classify, and value imported merchandise, and to provide any other information necessary to enable CBP to properly assess duties, collect accurate trade statistics, and determine admissibility.
That last part matters more than most importers realize. It's not just about paying the right duty rate. It's about giving CBP everything they need to do their job. If your entry is missing information about antidumping order scope, or you haven't disclosed a related-party transaction that affects valuation, that's a reasonable care failure even if your HTS code is correct.
CBP formalized their expectations in the Customs Modernization Act of 1993, which amended the Tariff Act of 1930 and introduced the reasonable care standard alongside informed compliance. The idea was a trade: CBP would publish more guidance, and importers would be expected to actually use it. Thirty-plus years later, CBP publishes an enormous amount of guidance. Most importers don't read it.
What CBP Actually Expects You to Do
CBP published "Reasonable Care: A Checklist for Compliance" as part of their informed compliance publications. It's not a short document. But the practical expectations break down into a few clear categories.
Classification
You're expected to know what you're importing and have a defensible basis for the HTS number you declare. "My broker picked it" is not a defensible basis. Your broker is your agent. You're responsible for what they file on your behalf.
A defensible basis means one or more of the following: you reviewed the HTSUS chapter notes and section notes, you looked at CBP's published rulings in the CROSS database, you obtained a binding ruling before importing, or you got a written classification opinion from a licensed customs broker or trade attorney and kept it on file.
For complex products, especially anything involving General Rule of Interpretation 3 (goods classifiable under two or more headings) or the Additional U.S. Rules of Interpretation, you really should have documentation. If CBP reclassifies your product and you can show a paper trail of how you arrived at your classification, you're in a much better position than if you shrug and say it seemed right at the time.
Check the CBP rulings database before you import a new product. It takes twenty minutes. It can save you years of headaches.
Valuation
Transaction value is the primary method, but it's not automatic. CBP expects you to know whether your transaction value is acceptable. That means understanding whether you and your seller are related parties, whether there are any royalties or assists that need to be added to the price, and whether the price was influenced by the relationship.
Related-party transactions are a common audit trigger. If you're buying from your parent company, your subsidiary, or a company where you share directors or ownership, you need to be able to demonstrate that the price reflects arm's-length conditions. CBP has found importers paying below-market prices from related suppliers and then paying duties on the understated value. The penalties on those cases are not small.
Country of Origin
With Section 301 tariffs on Chinese goods still running at significant rates as of September 2026, and antidumping and countervailing duty orders covering hundreds of product categories, getting country of origin wrong is expensive. Not just in duties owed, but in penalties for misrepresentation.
CBP expects you to know where your goods were substantially transformed. If your supplier is in Vietnam but the components come from China, you need to understand whether the Vietnamese operations constitute substantial transformation under U.S. origin rules. "My supplier told me it's made in Vietnam" is not reasonable care. You need documentation: bills of materials, manufacturing process descriptions, supplier certifications you've actually verified.
We've seen importers get caught on this badly. A consumer electronics importer we worked with had a supplier in Malaysia who was doing final assembly on Chinese-made components. The value added in Malaysia was about 8%. CBP called it Chinese origin, applied Section 301 tariffs retroactively across three years of entries, and the additional duty bill was over $2.1 million before penalties.
Origin scrutiny has only intensified in 2026. The CBSA launched new dumping and subsidizing investigations this fall into truck and bus tires from China and paperboard cups and containers from China. That's a Canadian proceeding, not a U.S. one, but it signals the broader enforcement climate. When regulators on both sides of the border are actively investigating Chinese goods in the same product categories, the risk of getting origin wrong goes up on both sides of the line.
Admissibility and Partner Government Agency Requirements
Reasonable care extends to admissibility. If your product requires an FDA registration, an FCC declaration, an EPA certification, or any other partner government agency clearance, CBP expects you to know that before the shipment arrives at the port. Not after it's sitting in a warehouse accruing storage fees.
ACE, the Automated Commercial Environment, routes entry data to partner government agencies automatically. If your product triggers an FDA hold and you haven't done the pre-market work, your shipment doesn't move. That's a supply chain problem that reasonable care up front would have prevented.
The AD/CVD and Section 301 Problem
Here's where reasonable care gets expensive fast. Antidumping and countervailing duty orders, Section 301 tariffs, and Section 232 tariffs all layer on top of regular duties. CBP expects importers to know whether their goods are covered.
AD/CVD orders are published in the Federal Register and maintained by the Department of Commerce. There are hundreds of active orders. If you're importing steel, aluminum, solar panels, furniture, seafood, chemicals, or dozens of other product categories, there's a real chance an order applies to you. The duty rates on some orders exceed 200%. And unlike regular duties, AD/CVD can be retroactively adjusted through administrative reviews, meaning you might owe more than you deposited at entry.
Reasonable care on AD/CVD means checking the scope of active orders against your product before you import. It means knowing your supplier's country of origin and whether that country has an active order. It means understanding that "made in a third country" doesn't automatically get you out of scope if the goods were transshipped through that country to evade duties.
CBP and the Department of Commerce take evasion seriously. The Enforce and Protect Act (EAPA) gives CBP authority to investigate allegations of AD/CVD evasion, and the process moves quickly once an allegation is filed. Competitors file these complaints. If you're buying Chinese goods through a third country and your pricing is suspiciously low, someone in your industry may notice.
Binding Rulings: The Best Tool Most Importers Don't Use
If you want certainty on classification, valuation, or origin, you can get a binding ruling from CBP before you import. File a request through the CROSS system, provide a complete description of your product and how it's made, and CBP will give you a written ruling that binds them on future entries of that product.
Most importers don't bother. The process takes time, usually 30 days but sometimes longer for complex products. And importers are often in a hurry to get product moving.
Here's the math though. If you import $5 million worth of product per year and you're wrong on classification by two duty rate percentage points, that's $100,000 in underpaid duties annually. Add a 20% penalty for negligence and three years of exposure, and you're looking at a $360,000 problem. A binding ruling costs you a few hours of preparation and some patience. The choice seems obvious when you put it that way.
Explore how advance rulings work in the CROSS database if you haven't filed one before.
Recordkeeping Is Part of Reasonable Care
You're required to keep entry records for five years from the date of entry. That includes the commercial invoice, packing list, bill of lading, any classification analysis, supplier certifications, and anything else that supports what you declared on the entry.
CBP can audit you through a CF-28 (Request for Information) or a CF-29 (Notice of Action) at any point within that five-year window. If you can't produce records to support your entry, CBP will draw adverse inferences. That's not a position you want to be in.
Keep your records organized. Keep your classification rationale documented. If you change suppliers or products, document the review you did before the first shipment. A folder with a two-page memo explaining why you classified a product under a particular HTS heading, with references to the chapter notes and any relevant rulings, is worth its weight in gold during an audit.
For Canadian importers who also ship into the U.S., note that the recordkeeping obligations are separate from what CBSA requires on the Canadian side. Two sets of records, two sets of retention rules. Don't mix them up.
Penalties: What Non-Compliance Actually Costs
CBP penalizes under 19 U.S.C. 1592. The penalty scale depends on whether the violation was fraudulent, grossly negligent, or negligent.
- Fraud: up to the domestic value of the merchandise
- 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
Negligence is the baseline. CBP doesn't need to prove you intended to cheat. They just need to show you didn't use reasonable care. And the standard for what constitutes reasonable care has gotten stricter as CBP has published more guidance. The argument that "I didn't know about that ruling" is harder to make when the ruling has been in the CROSS database for six years.
Prior disclosure is available if you catch a problem before CBP does. If you self-disclose a violation before CBP initiates a formal inquiry, the penalty drops significantly, often to just the unpaid duties plus interest. If you find an error in your entries, talk to a trade attorney before you do anything else. The timing and framing of a prior disclosure matters.
What a Reasonable Care Program Actually Looks Like
You don't need a 200-page compliance manual. Honestly, most importers who have those don't follow them anyway. What you need is a practical process that you actually use.
At minimum, a reasonable care program for a mid-size importer should include:
- A product classification review for every new product before the first shipment, documented in writing
- A supplier onboarding process that collects country of origin documentation, manufacturing process descriptions, and certifications
- A periodic review of active AD/CVD orders against your product categories, at least annually
- A check of Section 301 and Section 232 applicability for any new supplier country or product category
- A recordkeeping system that retains entry documents for five years, organized by entry number
- A process for flagging unusual pricing from related-party suppliers and documenting the arm's-length analysis
If you're a smaller importer, even a simple spreadsheet tracking your HTS codes, the basis for each classification, and when you last reviewed them is better than nothing. Pair that with a broker you actually talk to, not just one who files entries without your input, and you're ahead of most importers CBP audits.
For HTS classification questions, working through the HTSUS General Rules of Interpretation systematically is where every classification analysis should start.
Frequently Asked Questions
Can I rely on my customs broker to satisfy reasonable care?
No. Your broker is your agent. When they file an entry on your behalf, they're acting for you. If they get the classification wrong, CBP holds you responsible, not the broker. You can have a claim against your broker separately, but that doesn't get you out of the penalty. Work with your broker, give them accurate and complete product information, and ask them to explain their classification rationale. Don't just hand them a packing list and walk away.
How does CBP define "reasonable care" for a small importer versus a large one?
CBP applies a sliding scale based on your resources and sophistication. A large company with a dedicated trade compliance team is held to a higher standard than a small business importing for the first time. But "small" doesn't mean "exempt." Even a small importer is expected to consult available resources, ask questions, and not ignore obvious red flags. If your supplier is offering you a price that's 40% below market and claiming it's not subject to antidumping duties, that's a red flag you're expected to investigate.
What's the difference between a CF-28 and a CF-29?
A CF-28 is a Request for Information. CBP is asking you to explain or document something about an entry. It's not a penalty notice, but it's not something to ignore either. Respond completely and on time. A CF-29 is a Notice of Action, meaning CBP has made a decision to reliquidate an entry or take some other action. You have a right to protest a CF-29, but you need to do it within 180 days of the liquidation date. Miss that window and you've waived your protest rights.
Do I need a binding ruling before every new product I import?
Not necessarily, but you should seriously consider it for any product where the classification is genuinely unclear, the duty rate difference between possible headings is significant, or there's an active AD/CVD order that might apply. For straightforward products where the classification is obvious and well-supported by published rulings, a documented internal review may be sufficient. When in doubt, file for the ruling. The cost of certainty is almost always lower than the cost of being wrong.
What happens if I find a classification error in old entries?
Stop and get legal advice before you do anything. You may have prior disclosure options that significantly reduce your penalty exposure, but the timing matters. If CBP has already initiated an inquiry into your entries, the prior disclosure window is closed. If they haven't, a well-structured prior disclosure can limit your liability to unpaid duties and interest. Don't try to quietly fix it going forward without addressing the past entries. CBP will find the pattern when they audit.
How do Section 301 tariffs affect my reasonable care obligations?
The same way any other duty obligation does. You're expected to know whether your goods are subject to Section 301 tariffs, which list applies, and what the rate is. You're also expected to know whether any exclusions apply to your product and whether those exclusions are still in effect. Section 301 exclusions have been granted, expired, and reinstated multiple times since 2018. Checking the current status of any exclusion you're relying on before each shipment is part of reasonable care. Relying on an exclusion that expired six months ago is not.