Liquidated damages: the claim against your customs bond

A customs bond is a contract, and liquidated damages is what the contract says a breach costs. That is the whole idea behind the name: the sum is liquidated, fixed in advance, so when a condition is broken nobody has to argue about the size of the loss. CBP sends a notice of claim and demands payment.

It is worth separating from the word it is usually confused with. A penalty is assessed for breaking a law. Liquidated damages are claimed for breaking a bond. 19 CFR part 172 covers petitions for relief from both liquidated damages and penalties that a bond secures, and it says plainly that it “does not relate to petitions on unsecured fines or penalties or seizures and forfeitures”.

The amount is a formula, and the formula is in the bond

The basic importation and entry bond is the one every formal entry stands on, and the one a rule proposed on 8 October 2026 would require on every informal entry type too. It sets out its own consequence of default at 19 CFR 113.62(n):

If the principal defaults on agreements in this condition … the obligors agree to pay liquidated damages equal to the value of the merchandise involved in the default, or three times the value of the merchandise involved in the default if the merchandise is restricted or prohibited merchandise or alcoholic beverages.

Two more rates sit beside it. A default that does not involve merchandise is $1,000 for each default. A failure to deposit estimated duties is twice the unpaid duties, taxes and charges, or $1,000, whichever is greater. An Importer Security Filing violation carries its own $5,000 per violation under paragraph (j). Value for these purposes is the value CBP determines under 19 U.S.C. 1401a: the customs value, not the figure on the purchase order.

So the size of the claim is decided by which condition was breached, and the conditions are documents: produce the evidence, complete the entry, redeliver the goods, mark them. The marking case is the clearest, because 19 CFR 134.54(a) names its own measure, an amount equal to the entered value of the articles not properly marked or redelivered, and the J-List is the list most likely to put an importer there.

The clock, and why it is two clocks

Under 19 CFR 172.1(a) the notice goes to the principal and the surety, in writing, at the same time. The principal then has 60 days from the date the notice was mailed to petition the Fines, Penalties and Forfeitures Officer (19 CFR 172.3(b)). Miss it, and CBP demands payment from the surety, which gets 60 days of its own.

There is one short fuse worth knowing about. Where fewer than 180 days remain before the statute of limitations could be raised as a defence, the notice may specify a shorter period for the petition, “not less than 7 working days”, and if nothing is filed the matter goes to the Chief Counsel for referral to the Department of Justice.

What gets a claim cancelled

Facts, filed in time. The officer’s cancellation power under 19 CFR 172.11 is wide, and the petition under 172.2(c) has to set out the date and place of the violation and the facts relied on. The marking rules show what those facts look like when the regulation bothers to specify: relief under 134.54(c) turns on the importer not being in bad faith, having “been diligent in attempting to secure compliance”, and having attempted redelivery “by all reasonable means”.

Diligence is a record or it is nothing. Which document was missing, who was asked for it, on what date, what they said, what was done next: that is the exhibit, and it is assembled either from a mailbox at the time it is needed or from import document checking software that keeps the dated chase as it happens. A desk that can produce the thread in an afternoon petitions inside 60 days. A desk that cannot, pays.