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October 2026, question 16

Broker Compliance · Penalties, recordkeeping and prior disclosure

CBP provided XYZ Brokers with a written demand to produce entry records related to the eligibility of unliquidated entries for a column 1 special rate of duty in the Harmonized Tariff Schedule (HTSUS). If XYZ Brokers fails to timely produce the requested records as a result of negligence, which penalty may CBP impose, absent any exceptions?

  1. Liquidate the subject entries at the applicable HTSUS column 1 general rate of duty, in addition to the applicable monetary penalty.
  2. The subject merchandise shall be considered abandoned and may be put up for sale at public auction.
  3. Suspend XYZ Broker’s national permit until XYZ Brokers can produce the requested records, in addition to the applicable monetary penalty.
  4. Impose a monetary penalty of $100,000 or an amount equal to 75 percent of the appraised value of the merchandise, whichever amount is less.
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CBP's answer: A. A: Liquidate the subject entries at the applicable HTSUS column 1 general rate of duty, in addition to the applicable monetary penalty.

When a demanded entry record relates to eligibility for a column 1 special rate, the penalty for negligent failure is up to $10,000 or 40 percent of the appraised value (163.6(b)(1)(ii)), and in addition the unliquidated entry is liquidated at the column 1 general rate (163.6(b)(2)(i)(A)). That is A. The $100,000 and 75 percent figure in D is for willful failure, and abandonment or suspension of a national permit is not a listed result.

If unliquidated, shall be liquidated at the applicable HTSUS column 1 general rate of duty 19 CFR 163.6(b)(2)(i)(A)
not to exceed $10,000, or an amount equal to 40 percent of the appraised value of the merchandise, whichever amount is less 19 CFR 163.6(b)(1)(ii)

Search for: liquidated at the applicable HTSUS column 1 general rate of duty

CBP's key cites: 19 CFR 163.6(b)(1)(ii); 19 CFR 163.6(b)(2)(i)(A)

Question and key from CBP's October 2026 exam and answer key. The walk-through is ours; quotes are from the pinned editions in the reference viewer (HTSUS 2026 Basic, 19 CFR 2025 edition).