What Is the Standard for Reasonable Care?

What Is the Standard for Reasonable Care? - US Customs
Join us in our latest video as we explore the fundamentals of Reasonable Care introduced under The Customs Modernization Act of 1993.

“What is the standard for reasonable care?” is a common question we get asked all the time. While there’s no one-size-fits-all checklist for Reasonable Care, U.S. Customs has provided valuable guidance over the years. Todd Owen, Board Advisor, explains the key elements that Customs looks for when determining if an importer or broker has exercised Reasonable Care.

Watch the video below to gain valuable insights into the fundamentals of Reasonable Care.

Video Transcript – What Is the Standard for Reasonable Care?

So, under The Customs Modernization Act going way back to 1993, U.S. Customs introduced the concept of Reasonable Care. Though they’ve never provided a reasonable care checklist, as to the activities which must be performed to demonstrate the exercise of reasonable care, they have provided clear guidance over the years as to elements of what a reasonable care approach looks like. The reason they’ve never provided a clear checklist is because every import transaction is different. There are so many different variables; it’s very difficult to come up with a concrete checklist that if you do these five things you have demonstrated reasonable care, but in the guidance that CBP has put out, and you can find this on their website, they do call attention to different aspects of what they look for to determine if an importer or a broker has applied reasonable care. 

The first element that they’re looking for is the reliance or the understanding on the resources that are available. The harmonized tariff schedule, the explanatory notes, the general rules of interpretation, previous Customs rulings, Customs bulletins, these types of resource documents that the agency has made readily available, they will look to see if the importers are using those resources. The second item that they tend to look for will be the use of an expert or advisors who can clearly point the companies in the right direction. People that are knowledgeable with the import regulations, would provide that expert guidance. They also look for a customs compliance program to make sure within the company there is a structured compliance program to ensure the proper steps have been implemented to provide the proper importation information to U.S. Customs. And the fourth item that they’re often looking for is, because reasonable care is a cooperative relationship between the importing community and the government, they expect a two-way information flow. When the importations, when the importer determines that his identical products are being treated differently at different Ports of Entry, the government expects the company to come to CBP and engage in that discussion. So, although reasonable care has never been clearly defined through a checklist, there is clear guidance. And relying on experts, relying on the tools that can provide greater clarification into how to achieve HTS Classification; all of these can be elements to help establish to the government that the importer or the broker has exercised reasonable care.


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