Reasonable Care Archives | Customs & International Trade Law Blog

Understanding HTSUS Classification: Why Getting It Wrong Is Expensive

Summary: HTSUS classification determines the duty rate, applicability of tariffs such as Section 301 and Section 232, trade program eligibility, and helps determine whether any AD/CVD duties apply to every imported product. Misclassification often goes undetected for months or years, and since importers tend to reuse the same code for every entry of the same product, a single error can compound into significant back duties, penalties, and prior disclosure obligations. This article breaks down how classification errors happen, what reasonable care looks like, and how a documented classification process can prevent a small mistake from becoming a costly one.

Every product entering the United States must be assigned a classification code under the Harmonized Tariff Schedule of the United States (HTSUS), and that ten-digit number determines far more than most importers realize. It sets the duty rate and tariffs owed on a shipment, flags whether a product needs additional agency review, and establishes whether it qualifies for preferential trade programs. A misclassification, even an unintentional one, can trigger back duties, penalties, and a prior disclosure process that could have been avoided entirely with the right classification from the start.

What HTSUS Classification Actually Determines

The Harmonized Tariff Schedule of the United States is the United States’ implementation of the international Harmonized System, a standardized numerical method of classifying traded products used by customs authorities around the world. Every entry filed with U.S. Customs and Border Protection (CBP) requires an HTSUS code, and […]

By Jennifer Diaz|2026-07-10T11:00:19-04:00July 10, 2026|Import, Reasonable Care, U.S. Customs and Border Protection (CBP)|Comments Off

ICYMI: Patio Furniture Company Agrees to Pay $4.9 Million to Resolve Duty Evasion Allegations

On July 24, 2025, the Department of Justice (DoJ) announced that Grosfillex, Inc., a Pennsylvania furniture company, agreed to pay $4.9 million to resolve allegations it evaded antidumping and countervailing duties (AD/CVD).

Grosfillex submitted false forms to Customs and Border Protection (CBP) claiming that furniture parts made of extruded aluminum from China were not subject to AD/CVD. The company attempted to hide the aluminum extrusions by falsely packing them as sham “furniture kits.” Additionally, for a different subset of extrusions, the company failed to correct customs forms it had submitted previously, even after learning that the forms contained false information.

The investigation arose from a whistleblower lawsuit filed under the False Claims Act by a former employee of Grosfillex. Under the False Claims Act, private citizens can sue on behalf of the government and share in any recovery. In this case, the whistleblower will receive $962,662.74.

Duty Evasion is on the Rise

This case is just one example of the growing incentive to cheat that comes with higher tariffs. Whether it’s through misclassifying goods, undervaluing imports, or using deceptive transshipment routes, some companies think they are being creative, but, instead, are participating in outright illegal strategies to reduce their tariff liability.

Higher tariffs have even contributed to the emergence of a cottage industry of “tariff reduction” companies that suggest ways to cut import costs. However, many of these so-called strategies amount to evasion, […]

By Jennifer Diaz|2025-08-01T10:52:13-04:00August 1, 2025|AD/CVD, Enforcement, Import, International Trade, Penalty, Reasonable Care, U.S. Customs and Border Protection (CBP), U.S. Department of Justice (DOJ)|Comments Off

CIT Hands Down $3.4M Penalty for Duty Evasion

On July 18, 2025, the Court of International Trade (CIT) granted the government’s motion for default judgment against importer Rayson Global and its owner, Doris Cheng, for negligently failing to pay duties.

The Case

The government’s case was filed in 2023, alleging that the importers had falsely declared that Chinese-origin goods as Thai origin to evade duties. The government asserted this false declaration avoided payment of ordinary 6% duties, Section 301 duties ranging from 10% to 25%, and 234.51% antidumping duties.

The government asked the court to impose a penalty for negligence. The penalty amount is twice the loss of revenue or the domestic value, whichever is lower. After the importer failed to answer the complaint (a huge mistake), the U.S. moved for summary judgment.

The CIT granted the government’s motion and ordered the importer to pay a nearly $3.4 million penalty as well as all unpaid duties, taxes, and cash deposits on the unliquidated entries in question.

Duty Evasion is on the Rise

This case is just one example of the growing incentive to cheat that comes with higher tariffs. Whether it’s through misclassifying goods, undervaluing imports, or using deceptive transshipment routes, some companies are turning to creative or outright illegal strategies to reduce their tariff liability.

These incentives have even contributed to the emergence of a cottage industry of “tariff reduction” companies that suggest ways to cut import costs. However, many of these so-called strategies amount […]

By Jennifer Diaz|2025-07-25T10:16:56-04:00July 25, 2025|Enforcement, Import, International Trade, Penalty, Reasonable Care, U.S. Customs and Border Protection (CBP), U.S. Department of Justice (DOJ)|Comments Off

FDA Issues Proposed Rule on Front-of-Package Nutrition Labeling

The U.S. Food and Drug Administration (FDA) issued a proposed rule that would require a front-of-package (FOP) nutrition label on most packaged foods.

Rule Details

The label, referred to as the “Nutrition Info Box,” must contain the amounts (per serving) of three nutrients:

Saturated fat
Sodium
Added sugar

The label must also list whether the amount of these ingredients per serving is “Low,” “Med,” or “High.”

The FDA is proposing a compliance date of three years after the final rule’s effective date for businesses with $10 million or more in annual food sales. Businesses with less than $10 million in annual food sales would have four years to comply.

FDA Intent

The FDA stated that the Nutrition Info Box would complement the Nutrition Facts label that is already required on most packaged food. While the Nutrition Facts label is helpful to many consumers, the FDA found that some segments of the population do not regularly read the label.

Therefore, this rule is intended to provide accessible, at-a-glance information to help consumers quickly and easily identify how foods can be part of a healthy diet.

The agency conducted a literature review that included focus group testing and a peer-reviewed experimental study to explore consumer reactions and responses to various FOP nutrition labels.

The results indicated that interpretive FOP nutrition information is helpful for consumers and easy to understand.

Input on the Rule

The FDA is currently seeking public input on the proposed rule. The deadline to submit comments is May 16, 2025. If you will be impacted by the new requirements, […]

By Jennifer Diaz|2025-01-17T16:00:51-05:00January 17, 2025|CBD, China Trade War, Customs Expert, Enforcement, Food, ICE, Reasonable Care, Supply Chain, U.S. Federal Trade Commission (FTC), U.S. Food and Drug Administration (FDA)|Comments Off

FDA Issues New Rules on Use of the Term “Healthy” on Food Labeling

On December 19, 2024, the FDA announced a final rule to update the criteria that food must meet to qualify for use of the claim “healthy”.

New Requirements

To meet the updated criteria, a food product needs to:

Contain a certain amount of food from at least one of the food groups or subgroups (such as fruit, vegetables, grains, fat-free and low-fat dairy and protein foods) recommended by the Dietary Guidelines for Americans, and
Meet specific limits for added sugars, saturated fat and sodium.

The criteria vary for individual food products.

Under the new rule, nutrient-dense foods that are encouraged by the Dietary Guidelines with no added ingredients automatically qualify for the “healthy” claim. These include:

Vegetables
Fruits
Whole grains
Fat-free and low-fat dairy
Lean game meat
Seafood
Eggs
Beans
Peas
Lentils
Nuts
Seeds

Products that do not qualify for the healthy label under the updated rule include:

Fortified white bread
Highly sweetened yogurt
Highly sweetened cereal

These changes reflect current nutrition science and dietary guidance in the Dietary Guidelines for Americans.

What Food Manufacturers Should Do

The rule is effective February 25, 2025, and the compliance date of the rule is February 25, 2028. In preparation for the compliance date, food manufacturers should review their products to ensure that any product that uses a “healthy” label meets the new criteria. Diaz Trade Law has subject matter FDA expertise and can help you with a proactive compliance plan that meets the new requirements.

From Chaos to Compliance: A Guide for Importers

Many mistake the ease of importing to mean there is no liability or obligation on the part of the importer. Whether your company is new to importing, or has been in the business for years, CBP expects importers to use “reasonable care” to ensure compliance with relevant rules and regulations. Importers are at risk of being subject to enforcement actions by CBP if they do not comply with the reasonable care standard when importing goods into the U.S. This article provides an overview of CBP’s expectations of an importer and practical advice on what you must have in your import compliance plan.

How Did We Get Here?

December 8th, 1993, the Dow Jones reached a record high of 3734.53, Janet Jackson’s “Again” remained number one on the charts, and President Bill Clinton signed the Customs Modernization Act (Mod Act). The Mod Act altered the import compliance landscape by making it the responsibility of the importer to classify items, determine their value, etc. The law also imposed a legal obligation to use “reasonable care” in doing so, or else Customs could (and would) impose penalties.

What Exactly is “Reasonable Care”?

Reasonable care requires importers to conduct themselves as a reasonable importer would under the circumstance with respect to importing goods into the United States.

Reasonable care requires importers to:

Meet the standard to enter, classify and determine the value of imported goods
Provide other information necessary to aid CBP in properly assessing duties and collecting accurate statistics
Determine whether other applicable legal standards and […]

By Jennifer Diaz|2024-04-19T16:11:26-04:00April 19, 2024|Import, Pre-compliance, Reasonable Care, U.S. Customs and Border Protection (CBP)|Comments Off

Summary of CBP’s March 2023 Forced Labor Technical Expo

Summary of CBP’s March 2023 Forced Labor Technical Expo

CBP held a Forced Labor Technical Expo from March 14-15, comprised of experts and service providers highlighting tools to utilize for supply chain transparency to comply with The Uyghur Forced Labor Prevention Act (UFLPA) and the general “reasonable care” obligations of U.S. importers. UFLPA was signed into law December 31, 2021, and seeks to prohibit imports of certain goods from China’s Xinjiang Uyghur Autonomous Region, where it has been reported that the Chinese government is using forced labor of Uyghur Muslims and other ethnic and religious minorities in detention camps and factories. For more information about the UFLPA, please see our previous blog articles here and here.

CBP Data Dashboard

CBP launched a UFLPA data dashboard where the trade community can now monitor forced labor enforcement by origin, commodity, CBP Center of Excellence and Expertise, and more. See the screenshot of the new dashboard below and note that the countries of export most targeted are NOT China, contrary to popular belief. This is partly due to the fact that most UFLPA enforcement to date has been on solar panels, which may include Chinese-origin raw materials but are generally further manufactured outside of China. Notably, CBP is actively tracking many different types of products across many different industries with raw materials that originate in China and that are further manufactured in other countries for forced labor enforcement. […]

By Jennifer Diaz|2023-03-29T12:06:53-04:00March 29, 2023|China, Forced Labor, International Trade, Reasonable Care, Supply Chain, U.S. Customs and Border Protection (CBP)|Comments Off

Customs and Trade Weekly Snapshot

Here is a recap of the latest customs and international trade law news:

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UFLPA DHS Guidance – What Importers Need to Know

On June 17, 2022, DHS published its long-awaited strategy guidance document which shed light on how UFLPA will be implemented, and what evidence may be provided to rebut the presumption that the goods were made with forced labor. This article provides an overview of the type of evidence importers should have readily available when importing goods into the United States. For general guidance on preventing the importation of goods produced with forced labor and how importers should audit their supply chain to ensure non-use of forced labor, please refer to our Bloomberg Law article, “U.S. Customs Targets Use of Forced Labor”.

UFLPA

The Uyghur Forced Labor Prevention Act (UFLPA) establishes a rebuttable presumption that goods mined, produced, or manufactured wholly or in part in the Xinjiang Province of China or by an entity on the UFLPA Entity List are prohibited from importation into the United States under 19 U.S.C. § 1307. However, if an Importer of Record can demonstrate by clear and convincing evidence that the goods in question were not produced wholly or in part by forced labor, fully respond to all CBP requests for information about goods under CBP review and demonstrate that it has fully complied with the guidance outlined in this strategy, the Commissioner of CBP may grant an exception to the presumption.

Clear and convincing evidence is a higher standard of proof than a preponderance of the evidence, and generally means that a claim or contention […]

By Jennifer Diaz|2022-06-28T12:22:23-04:00June 28, 2022|China, Customs Broker, Customs Expert, Enforcement, Forced Labor, Import, International Trade, Labor Rights, Pre-compliance, Reasonable Care, Seizures, U.S. Customs and Border Protection (CBP), U.S. Department of Homeland Security (DHS)|1 Comment

International Trade Today: CBP Policy Change Makes Extensions for Prior Disclosures More Difficult

Diaz Trade Law’s President, Jennifer Diaz is enthusiastic to announce International Trade Today featured her perspective in their recent article, “CBP Policy Change Makes Extensions for Prior Disclosures More Difficult, Lawyer Says“! Below is the article reproduced for your reading pleasure. You can read the article here (where you’ll have the ability to access the link to the CBP guidance).

A previous article written by Jen and Sharath focuses on how to successfully submit a prior disclosure (PD) to Customs and Border Protection, along with details known of CBP’s new timing requirements, which had not been circulated publicly (prior to our FOIA request). We truly feel CBP’s new deadlines place a burden on importers that must be considered PRIOR to filing a PD. If you are considering filing a Prior Disclosure – PLEASE communicate with counsel first.

Please note you cannot click on the hyperlink below. We’d love to hear your feedback!

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