I do not trust Post-Entry Amendments or, in ACE lingo, Post-Summary Corrections (PEAs and PSCs), and my attitude seems to set me apart from some lawyers in other firms. But I'm right. Lawyers are obligated to defend their clients zealously within the bounds of the law. We are paid to take the side of our clients and yes, surprise, surprise, there are always sides in legal matters. We work within an adversarial system of justice and our professional, ethical obligations to our clients are built around that framework. Discharging our duties to our clients does not require us to be impolite, shrill, or condescending (those characteristics are self-defeating), but we cannot let our guard down before adversaries, potential or real. Through the Miranda Warning, the US Supreme Court requires the police to warn people whom they arrest that their statements can and will be used against them in a court of law. The logic is unassailable. Enforcement officials are built to enforce and like the carpenter wielding a hammer, everything looks like a nail. When you hire me and my law firm, our goal is to prevent you from being bopped in the head.
Prior disclosures are a safer alternative to PEAs/PSCs when reporting errors to CBP. Almost all federal agencies have a similar procedure for reporting errors. CBP cannot penalize an importer if the importer files a truthful prior disclosure before CBP starts an investigation. PEAs and PSCs do not have that protection. The danger is not hypothetical. CBP has been known to penalize importers after they file PEAs or PSCs. CBP may disown the connection or attribute it to coincidence, but, again, a lawyer's duty to anticipate and avoid minefields. I do not suggest that importers never file PEAs and PSCs. That would be impractical, but the filing of PEAs or PSCs should not be unthinking or automatic. Importers would careful weigh the risks and should always ask whether a prior disclosure is a wiser alternative.
Which brings us to statute of limitations waivers. CBP often asks importers to sign statute of limitations waivers (usually for a period of two years) in penalty and liquidated damages cases or when importers file prior disclosures. Without a signed waiver, CBP loses its right to sue an importer before the statute of limitations runs out.
Should importers sign these waivers?
As with PEAs and PSCs, I am wary of statute of limitations waivers, and for the same reasons, plus more.
CBP does not need nor has done anything to deserve more than five years, the statute of limitations, to sue. How accommodating would the agency be if you asked CBP for a two year extension on any of your deadlines? What if conditioned your continued cooperation on CBP giving you the extension you seek or need? Why give anyone more rope to hang you with? Do you really want to be in litigation with CBP ten or fifteen years from now, a common occurrence for those signing statute of limitations waivers?
There are real dangers if you do not sign a statute of limitations waiver, however. CBP can shorten the time you have to respond to any pre-penalty or penalty notice and deny your ability to file a supplemental petition.
What CBP cannot do is refuse to mitigate a penalty because you didn't signed a waiver. CBP sometimes will use the old "signing will demonstrate that you are willing to cooperate with us." This is an empty ploy. If CBP wanted to play nice, it would not have issued a penalty. Moreover, there is a reason that the agency will not reduce its barely veiled threats to writing. The courts will not tolerate them. The US Court of International Trade in US v. Jean Roberts (2006) issued the following warning, “The demand by Customs that defendant waive the applicable statute of limitations for a two-year period in return for any consideration of these two claims for relief was neither justified under the applicable statute and regulations nor consistent with principles of equity and fairness”.
Statute of limitations waivers are a game of poker. You must decide whether to call the Government’s bluff. It might help to remember that the U.S. Department of Justice, not CBP, sues to collect a penalty. How inviting is your case to overworked DOJ attorneys who are either trying to make names for themselves or who have bigger fish to fry?