Your customs broker filed it wrong: who pays the duty, who carries the penalty?

Why does the importer owe the duty when the broker made the mistake?

Because the law attaches the duty to the importer, not to whoever typed the entry. 19 CFR 141.1(b)(1) calls the liability for duties "a personal debt due from the importer to the United States", discharged only by payment in full. It adds that payment to a broker does not relieve the importer if the broker does not pay, and that the debt can be enforced even where an erroneous reading of the law let the goods through without the right payment.

The filing duty runs the same way. 19 U.S.C. 1484(a)(1) has the importer of record make entry "using reasonable care", either itself or through an agent authorized in writing. A licensed broker is that agent. The duty of care does not pass to the agent with the paperwork; reasonable care for importers sets out what CBP expects of the importer when it uses a broker.

The one exception is where the broker is itself the importer of record. Then 141.1(b) reads on the broker. That arrangement becomes more common from January 5, 2027, when CBP's interim final rule on foreign importers of record (CBP Dec. 26-19, 91 FR 69977) requires some foreign importers to use a CTPAT-validated broker that acts as importer of record. For a U.S. importer of record using a broker as agent, the duty stays with the importer.

Who owes what? The split in one table

Two readings of that table matter. First, the importer's money exposure is the duty plus interest in every case, and a penalty on top only if its own care fell short. Second, the broker's customs exposure is real but capped and disciplinary; it does not make CBP collect the duty from the broker.

What can CBP do to the broker?

19 U.S.C. 1641(d)(1) lists the grounds on which CBP may impose a monetary penalty or revoke or suspend a license. The ones that fit a filing error are (C), violating any law CBP enforces or a regulation under it, and (D), knowingly aiding or abetting another person's violation. The monetary route under 1641(d)(2)(A) starts with a written notice to show cause and allows 30 days to respond; the penalty may not exceed $30,000 in total, and 19 CFR 111.91(a) repeats that aggregate. The licence route under (d)(2)(B) goes to a hearing before an administrative law judge.

The broker regulations supply the specific duties a filing error usually breaches:

• 19 CFR 111.29(a): due diligence in preparing or helping prepare records for customs business, and in paying the government on time money the broker received for it.
• 19 CFR 111.39(b): due diligence on the correctness of information given to a client, including advice on the proper payment of duty.
• 19 CFR 111.39(c): when the broker knows of a client's error or noncompliance, it must tell the client promptly, advise the correction and keep a record of that communication.

1641(d)(4) gives CBP five years from the violation to start such a proceeding.

What decides the importer's penalty exposure?

The importer's own conduct. 19 U.S.C. 1592(a) applies to any person who enters merchandise by a material false statement or omission through fraud, gross negligence or negligence, and 1592(c) sizes the penalty by that culpability. For negligence, the ceiling is the lesser of the domestic value or two times the lost duty; with a prior disclosure made before CBP opens a formal investigation and a tender of the lost duty, it falls to interest on that duty (1592(c)(4)). How CBP sizes a section 1592 penalty works the ranges through.

One exception matters for broker errors. 19 U.S.C. 1592(a)(2) says clerical errors and mistakes of fact are not violations unless they are part of a pattern of negligent conduct, and that a computer system repeating an initial clerical error without intent is not, by itself, such a pattern. A keying error that a broker's system then repeats may fall there. Whether it does turns on facts, such as whether anyone should have caught it on review, and that is a question for counsel.

"The broker did it" is therefore not a defence on its own. What carries weight is evidence that the importer acted with care: correct product data given to the broker, instructions in writing, a review of what was filed against those instructions, and prompt correction once the error came to light. Whether that evidence is enough in a given case is for trade counsel.

Worked example: one keying error across twelve months

Illustrative figures. An importer gives its broker a product list with the HTS number for a line of pump housings, and the number on the list is right. From September 2025 to August 2026 the broker's system applies a number at 1.5 percent instead of the listed number at 6.0 percent. A line-level audit on November 11, 2026 finds 12 entries, one a month, one affected line each, with an entered value of $50,000 per line.

The duty. $50,000 x (6.0% - 1.5%) = $2,250 per line, $27,000 across the 12 entries. The importer owes all of it.

The route, by entry status.

The interest. For an entry whose estimated duty was due June 15, 2026 and whose $2,250 increase is paid by PSC on November 20, 2026, interest runs from June 15 to November 20 (19 CFR 24.3a(b)(2)(i)(B)): 16 days at 6 percent and 142 days at 7 percent under CBP's quarterly notice (91 FR 60141), roughly $67 as simple interest. CBP bills it at liquidation.

The penalty exposure. If CBP treats this as negligence rather than a repeated clerical error under 1592(a)(2), then without a disclosure the negligence ceiling under 1592(c)(3) is the lesser of domestic value or $54,000. With a timely prior disclosure and tender, it is interest on the lost duty. On the broker's side, CBP may proceed under 1641(d) up to $30,000 in total, whatever the importer does.

The money between the two of you. If the service agreement makes the broker responsible for its own keying errors, the importer may recover the $27,000 and the interest from the broker. Customs law does not decide that; the contract and the law that governs it do.

What should the audit show?

An audit that will be read by counsel, by CBP and possibly by the broker's insurer has to separate the broker's error from the importer's data. For each affected line it should show:

1. What the importer told the broker: the product master or classification instruction in force on the entry date, with its date.
2. What the broker filed: the HTS number, value, origin and duty on the 7501 line, from the broker's entry export.
3. Where the two differ, and whether the difference started on a date that matches a change on the broker's side (a new system, a new template, a new staff member) or on the importer's side.
4. The duty the law required on the entry date, including any Chapter 99 duty, and the gap per line in both directions. The duty calculator gives the stack for a date.
5. The entry's status on the day of the audit, so each line goes to the right route.
6. The 111.39(c) record, if any: when the broker told the importer of the error and what it advised.

TariffSense reads broker entry exports and entry summaries in any layout, compares each line with the product data and the measures in force on its entry date, and flags the line where the filed number differs from the instructed one, with entry date, line number and liquidation status attached. That gives counsel the cause-by-cause table a disclosure needs and gives the importer the evidence of its own care. The post-entry audit page shows what goes in and what comes back. Comparing what the broker billed with what it filed is a separate check, on how to audit a customs broker invoice.

What should you do next?

1. Run the line checks in the post-entry audit pillar on the broker's export for the period the error may cover, and five years back if the cause is older.
2. Split the affected lines by status. Have the broker file PSCs on the open entries now; the window keeps closing.
3. Take the liquidated and late entries, the cause and your instruction records to trade counsel to decide on a prior disclosure. Prior disclosure after you find an underpayment covers the scoping.
4. Ask the broker for its 111.39(c) record and a written account of the cause.
5. Read your service agreement on liability for filing errors before the conversation about who reimburses whom.

Confirm deadlines and filings with a licensed customs broker or trade counsel.