During a cargo examination of entered goods, a CBP officer discovered that none of the physical merchandise agrees with the invoice submitted with the entry. The CBP officer determines that there was no evidence of any intent to defraud. The original entry must be replaced by a new entry. How will the estimated duties paid on the original entry be treated?
How to get there
19 CFR 152.3: Merchandise found not to correspond with invoice description… If the discrepancy appears conclusively to be the result of a mistake and not of any intent to defraud, no proceedings for forfeiture shall be taken. When the entire shipment does not agree with the invoice and there is no evidence of any intent to defraud, a new entry shall be required and the estimated duty paid on the original entry shall be refunded on liquidation as in the case of a nonimportation.
The facts match the last sentence exactly: none of the goods match the invoice, there's no intent to defraud, and a new entry is required. The original estimated duties are refunded on liquidation as a nonimportation: B.
Why the other choices are wrong
A) Transferred to the new entry by ACH: there's no transfer mechanism. The original entry is treated like a nonimportation and its deposit refunded on liquidation, and the new entry carries its own deposit.
C) Credited on the next periodic monthly statement: not how § 152.3 works. The refund comes on liquidation of the original entry.
D) Kept and applied to forfeiture proceedings: with no intent to defraud, "no proceedings for forfeiture shall be taken."
Tip
§ 152.3 has two scenarios. Part of the goods differs → duty is assessed on what's actually found. The entire shipment differs, with no fraud → a new entry, and the original deposit is refunded like a nonimportation. Fraud changes everything (forfeiture).
Source: 19 CFR 152.3 (eCFR); 19 U.S.C. 1499.
CBP answer key: Answer B · 19 CFR 152.3Source: CBP past exams ↗