Why Seizures?
U.S. Customs seizes merchandise that a traveler or importer attempts to import in violation of U.S. law on behalf of over 40 agencies of the United States Government. These include the Food & Drug Administration (FDA), the Departments of Commerce, State, Defense, and Treasury, the Environmental Protection Agency (EPA), the Consumer Product Safety Commission (CPSC), the Drug Enforcement Administration (DEA), and many others, for whom Customs acts as enforcement arm at the U.S. borders, ports of entry, and mail locations.
Some merchandise seized is prohibited (narcotics, hazardous materials), and some is merely restricted (subject to trade embargoes such as those against Iran, North Korea, Cuba, etc.). Some merchandise is seized due to violation of entry requirements (failure to declare, false valuation to reduce duty, etc.). Some is seized to secure payment of a penalty.
What Happens Next? Due Process:
All seizures, forfeitures, mitigation, and property dispositions are strictly governed by laws designed to afford the greatest possible due process.
- Seizure Notice: The importer is provided with a "Notice of Seizure," listing the items seized, the law(s) violated, the violator's options (rights and time to petition, elect judicial or administrative processing, etc.) and the Customs contact location and telephone number. The seizing officers also look for information on other possible claimants to the property. Customs sends identical seizures notices to all other known persons with a valid interest in the property, who have the same rights as the violator.
- Adjudication: The Fines, Penalties & Forfeitures Officer (FPFO) for the Customs service port takes custody of the property, and assigns the case to a specialist. If the importer files a petition for administrative relief, the mitigating facts and circumstances the importer provides, together with the report and findings of the seizing and investigating officers, are evaluated and weighed by the specialist. The specialist makes a recommendation to: forfeit some or all of the property to the Government; remit (give back) some or all of the property to the violator or claimant; remit the property and issue a penalty; release the property for immediate re-exportation; or return some or all of the property upon payment of a sum of money based on the property's value in lieu of forfeiture. In this last type of resolution, the money paid is then forfeited to the Government.
- Forfeiture Notice: Forfeiture proceedings are instituted when the violator/claimant fails to petition or comply with the FPFO decision within the specified time. Forfeiture proceedings consist of public announcement, or advertisement, of Customs intent to forfeit. This provides claimants with additional notice and time in which to make claims on the property. The form used depends on the value of the merchandise. Intent to forfeit low-value merchandise is posted in the Customhouse of the service port area controlling the seizure. Customs advertises forfeiture of higher-value merchandise in a newspaper of general circulation in the appropriate area on three successive occasions, 7 days apart. A previously unknown claimant, or one with new facts, may seek to interrupt the forfeiture proceedings by contacting Customs. If the petition is accepted but fails again, Customs must reinstitute forfeiture proceedings (the advertisement process) from the beginning. On completion, title to the property is transferred to the government.
What Happens to Forfeited Property?
Depending on the character of the forfeited property, it may be destroyed, shared with other government agencies, retained for Customs use, or sold at auction.
The disposition of seized counterfeit merchandise which has been forfeited is governed by 19 U.S.C. 1526. Pursuant to sections 1526(e) and 1526(e)(2), the Secretary of the Treasury shall notify the owner of the trademark and after forfeiture shall obliterate the trademark where feasible and dispose of the seized goods by either delivery to a government agency, donation to a charitable institution, sale at auction, or destruction.
In some instances, the trademark owner may agree to permit the donation of merchandise containing counterfeit markings to charitable institutions. However, when there is a lack of consent by the trademark owner, the prudent disposition is to destroy the merchandise.
Currently, where counterfeit markings on forfeited merchandise can be obliterated without destroying the merchandise in the process, the merchandise may be donated to charitable organizations. However, where the counterfeit marking cannot be obliterated without destroying the merchandise and the trademark holder refuses to allow entry, the merchandise is destroyed.
NOTE: None of the property rights or procedures described pertain to seizures of prohibited substances (Schedule I drugs, etc.), which are forfeited to the government immediately after seizure and destroyed as soon as possible thereafter according to federal and local environmental laws.