Late one Friday afternoon while speaking with a client who was about to leave on vacation, I heard the following question: “Do you know what a CF-28 Request for Information means?” Like many small- to medium-sized businesses struggling to understand the finer points of customs compliance, this client ran up against what is likely to be the first, of potentially many, requests from U.S. Customs and Border Protection (CBP) to understand what they import from foreign suppliers.
After reviewing the CF-28, it became obvious that CBP not only wanted to know what the product was, but whether or not “assists” were involved, and if the valuation of the import entry was correct. For this blog’s purpose, let’s look at what is required of the Importer of Record (IOR) when a CF-28 document is received.
What is a CF-28 Request for Information?
The issuance of a CF-28 means CBP is reviewing your entry information and may suspect greater issues with your import practices. Like many companies, you may have been importing the same products for years without receiving any inquiries from CBP. However, it’s important to understand that U.S. Customs is focusing greater resources today in an effort to review entries, ask questions and find information. The Center of Excellence Inspectors/Analysts are much more informed about the products being imported into the United States, and they’re asking many more questions about the classification of the items, their countries of origin, their appraised values at time of entry, and whether there are related-party issues.
As the Importer of Record, how should we respond to the CF-28?
First and foremost, do not ignore this request! As the importer, this is your chance to state your case – so respond in a timely manner, and do it well. You’ll be able to justify the Harmonized Tariff Number (HTSUS) code you have assigned your product, why a Free Trade Agreement Certificate of Origin was used during the admittance process, and why you feel the relevant information provided during the entry process was correct. Failure to provide the requested information here may lead to a CF-29 Notice of Action. This could put you (as the importer) in a position of losing favorable duty rates that have been claimed over a period of time. It could also mean possible penalties and fines for the “false” entries you provided to Customs.
Next, review with your supply chain what is being ordered on the import in question. Is this item really a widget that’s covered by a different HTS code? Could the item be determined to be a machined assembly that could move the HTS code from one category to another? Can your supply chain verify the country of origin of the product being ordered? (For example: Did your supplier move the country of manufacture from Malaysia to India without notifying the compliance team?) Did your Supply Chain or Sales department decide that any assists must be provided to the supplier to support the manufacturing process (again without compliance knowing)? What about Free Trade Agreements? Were any involved in this transaction? How were the requirements verified? Or are the two companies considered “related parties” and there are intercompany valuation concerns?
These questions are examples of all the different topics that should be explored. Any of these could lead the IOR to discovering potential issues with their import entries. If problems are found, then a Prior Disclosure must be submitted to either a CBP Center of Excellence or the Fines, Penalties, and Forfeiture Officer at the port where the entry was made.
The CF-28 document will state that the importer has 30 days from the issuance date of the Request for Information to respond. While 30 days may seem like enough time to gather all the necessary information requested, in reality, this is not always the case. If you believe you cannot meet the specified timeframe, then contact the CBP officer listed on your CF-28 and request an extension. Document this conversation and provide a written notice back to the Customs official of the verbal approval given for the extension.
Your response should be direct and concise, but should also address the areas of concern. Do not provide more information than being requested unless it has specific ties to the entry in question. If you discover, while going through this process, what you believe to be a material weakness with how the company imports are valued or classified, then you should speak with your Customs Broker, legal counsel and the management team as this may lead to a Prior Disclosure submission with CBP. These disclosures might help mitigate any potential fines or penalties.
Next steps to improve import compliance
Finally, now may be the perfect opportunity to review the company’s import compliance processes and manual. Are there corrective actions that you can implement as a result of this? What needs to change for your import compliance program? (Does your company even have an import program? If not, now may be a good time to develop one!) Documented improvements to a compliance program are a favorable way of demonstrating to Customs that your company exercises “Reasonable Care” to meet its requirements.
If you need expert advice and assistance to respond to a CF-28, or your company needs other help with Customs Compliance issues, please schedule a no-charge consultation today. Our team of experts has worked with many importers to resolve these issues.
Beverly Demma is a Sr. Consultant for Export Solutions -- a full-service consulting firm specializing in U.S. import and export regulations.