CounterfeitsCurrency SeizureInternational LawInternational TradeIPR, Trademarks and LogosSeizuresU.S. Customs and Border Protection (CBP)

CBP Sued Over Mandatory Hold Harmless Release Agreement

posted by Jennifer Diaz May 18, 2018 2 Comments

jkhkjhDid you know that when Customs and Border Protection (CBP) decides to release goods that were seized by CBP, it requires that you sign a Hold Harmless Release Agreement, as a prerequisite to receiving goods, which prevents you from filing suit against the government (for example for wrongfully detaining your goods)? Well this is a common practice among CBP and now a class action lawsuit is being brought against CBP for this practice.

How Did This Lawsuit Come About?

Back in October 2017, a registered nurse from Houston, Texas was travelling to Nigeria to provide care to underprivileged women and children, when CBP “seized several years of savings she was carrying”, which totaled about $41,000 and now the U.S. government is refusing to return the money unless she agrees to sign the Hold Harmless Release Agreement absolving the U.S. government from any liability. “The U.S. Attorney’s office declined to pursue civil forfeiture of the money and let the 90-day deadline to file a forfeiture complaint pass without action.” Under the Hold Harmless Release Agreement, the nurse will now have to waive her right to interest in the property and her 1st Amendment right to sue the government over the related seizure.  Now with the help of the Institute for Justice, a class action lawsuit has been brought against the U.S. government for this practice.

Why Is This Important?

Unbeknownst to most U.S. travelers, there is a federal law that requires when entering or leaving the United States, “to report negotiable monetary instruments (i.e. currency or endorsed checks) valued more than $10,000 on a ‘Report of International Transportation of Currency or Monetary Instruments’ (FinCEN Form 105)”. To obtain a Fin CEN Form 105 it can either be downloaded at www.fincen.gov or you can request one from a CBP officer. If you fail to declare the currency, then CBP can (and will) seize the currency.

When the currency is seized, you are provided a seizure notice with numerous options. My favorite option is filing a Petition to CBP. You may ask why? Well, it’s because you have three bites out of the apple. Should you not succeed, you can then file a Supplemental Petition, and worst case, if you don’t succeed, you can still file a “claim” and request that the case be sent to court.

In the case at hand, a claim was filed requesting that the case be sent to federal court. Once this happens, if CBP does not file for judicial forfeiture of the currency, under the Civil Asset Forfeiture Reform Act (CAFRA), it is required that the government promptly release the seized property and that the government not to take any further action to effect the civil forfeiture of the seized property (see 18 U.S.C. § 983(a)(3)(B)(ii)). Instead of just returning the funds, CBP sent a decision letter stating that you will get your funds back, WHEN CBP receives a signed Hold Harmless Release Agreement absolving the government of any wrongdoing, preventing you from filing a suit against the government. CBP also requires that you sign and send back the agreement within 30 days, and if not, procedures to forfeit the currency will be instituted (despite the statute stating that the government should promptly return your funds).

DTL’s Prediction

Unfortunately, the reporting process is not clear enough, especially for outbound passengers. The lawsuit made it very clear that the current process is painful at best, brutal and confusing at worst. I very much hope this suit brings clarity that this needs to change, there needs to be an easy to find location (at each airport) to declare currency prior to leaving the U.S., easily accessible reporting forms, outreach to the trade community, and more public awareness (CBP has a great social media platform – this is a great way to use it). I do believe that aspect will occur. Whereas I do not believe that the Hold Harmless agreement will go away. In this instance, there was clearly a violation (the declaration form was not filed when it should have been, despite the lack of clarity of the rules and how to follow them). We have assisted MANY companies in getting seized goods returned (and many times the seizure NEVER should have occurred in the first place). Do I think it’s fair that the government can’t be sued for lost sales, profits, customers, loss of revenue, etc.? No. Do I think it will change? No. Do I think there are MANY instances where CBP is not following its own regulations to the t? Yes. Do I think that will change? No.

Conclusion

Bottom line, if you plan to travel into or outside the United States with $10,000 more in cash remember to always report the amount of money through the FinCEN Form 105 and if you want help understanding how to go about it, and/or have had your money seized by CBP, then please contact info@diaztradelaw.com to let us help you. See past blogs on this same topic here.

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2 Comments

Rachel Heil January 16, 2019 at 7:00 pm

Customs did that to me. My husband who is deployed in Syria with the United States Army had all his earnings held in customs. Therefore my husband couldn’t leave and return home from his deployment. That’s been 2 weeks ago. A courier company is handling negotiations at the time of this writing. The money has been checked and verified. I guess I have to wait until they are damn good and ready to do

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Victoria Woods May 14, 2021 at 4:58 pm

I think it is some bullshit if customs is not working with the arm services. Especially, when whatever has been award to the soldiers why would they make it hard for the soldiers to send their rewards home to their family members.

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