Mod Act

Did the Mod Act "reasonable care" standard really change importer's obligation to Customs, or did somebody just tell you that to get you to pay attention to Customs Requirements?

The adoption in the 1993 Mod Act of the "reasonable care" standard is often touted by Customs attorneys and consultants as a fundamental shift of responsibility from Customs to the importer.  The Mod Act, however, did not create or heighten the obligation to exercise reasonable care.  Long before there was any idea of a Mod Act, importers were subject to Customs penalties for negligently failing to declare the correct Customs requirements on their import transactions (e.g., misclassifying or undervaluing their imports).  Negligence was then (and still is) defined as the failure to exercise reasonable care.   So before and after the Mod Act, importers made themselves vulnerable to penalties by their inadvertent errors, in other words, by failing to exercise reasonable care.  

So the next time you are offered an expensive Customs reasonable care program, treat it as a simple reminder of the fact that you, as the importer, are responsible (as always) for declaring imports in accordance with Customs requirements.  For most importers, this is a matter of simply having processes in place to: