## Facts

- Ford Motor Company imported automotive tooling dies under arrangements in which prices could increase after entry due to engineering changes and related adjustments.
- At entry, Ford declared values that omitted certain engineering-change costs and did not advise Customs that the declared prices were provisional or subject to later adjustment.
- U.S. Customs examined Ford’s import practices around 1990–1991, including internal investigative steps and a document summons in June 1991.
- In August 1991, Ford submitted a letter to Customs describing the valuation issue, identifying affected merchandise, and providing corrected values, asserting it was a “prior disclosure” under 19 U.S.C. § 1592(c)(4).
- The United States sued in the Court of International Trade seeking unpaid duties and civil penalties under 19 U.S.C. § 1592 for entries spanning 1987–1992, alleging false statements and omissions as to value.
- Ford argued its August 1991 submission qualified as a statutory prior disclosure, limiting any penalty to the reduced amounts available under § 1592(c)(4).

## Issues

1. Whether Ford’s August 1991 submission qualified as a “prior disclosure” under 19 U.S.C. § 1592(c)(4).
2. Whether Customs’ preexisting investigative activity concerning the same conduct barred Ford from obtaining prior-disclosure penalty mitigation.
3. Whether Ford’s submission satisfied statutory and regulatory requirements for a prior disclosure, including sufficient specificity, full reporting, and tender (or reliable estimation) of lost duties.

## Decision

- The Court of International Trade held Ford was not entitled to the penalty limitation associated with § 1592(c)(4) prior disclosure for the violations at issue.
- The court concluded Ford’s submission was made after Customs had begun investigating the same general conduct, defeating the timing requirement for a “prior” disclosure.
- The court further found Ford’s disclosure and related duty tenders were materially incomplete and did not meet the strict content requirements for prior-disclosure treatment.
- Because prior-disclosure mitigation was unavailable, the government could pursue ordinary § 1592 penalties, subject to proving the applicable level of culpability.

## Legal Principles

- Prior-disclosure mitigation under 19 U.S.C. § 1592(c)(4) is conditioned on strict compliance with timing and content requirements.
- A disclosure is not “prior” if made with knowledge of the commencement of a formal Customs investigation into the same violations.
- A valid prior disclosure must identify the merchandise and violations with sufficient specificity, provide the true and accurate information that should have been reported, and include a tender (or reliable estimate) of the resulting loss of duties.
- Partial, qualified, or materially incomplete disclosures do not trigger the statutory penalty limitation and do not prevent the government from seeking penalties under the standard § 1592 framework.

## Conclusion

The court denied Ford the reduced-penalty treatment available for qualifying prior disclosures because Customs had already commenced an investigation and Ford’s submission did not fully and accurately account for the violations and duty loss, allowing the United States to proceed under the ordinary § 1592 penalty regime.


United States v. Ford Motor Co., 29 Ct. Int’l Trade 793 (2005)