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Recordkeeping Under the Mod Act

The Customs Modernization Act (Mod Act), part of the North American Free Trade Agreement Act of 1993, amended sections of the Tariff Act of 1930 dealing with recordkeeping requirements for importers, brokers, and others.

Q: Who must keep records?
A: Rules require owners, importers, consignees, importers of record, declaration filers, entry filers, or other parties (or their agents) to maintain records if they
  • import merchandise into the Customs territory of the United States;
  • file a drawback claim;
  • transport or store merchandise carried or held under bond; or
  • knowingly cause the import, transport, or storage of merchandise carried or held under bond into or from the Customs territory of the United States.

Q: What records must be kept?
A: Businesses must keep records (referred to as the "(a)(1)(A) list") that they have to prepare for the entry of merchandise. This list is in Treasury Directive 96-1. Others required are those business, financial, and accounting records ordinarily maintained for normal business transactions.

Q: How long must records be kept?
A: Unless otherwise stated, recordkeepers must hold them for
  • five years from date of entry, or
  • five years from the date of the activity which required the maintenance of the records

Q: Are there penalties?
A: Yes. Here is an overview:
  • Failure to maintain or produce "(a)(1)(A) list" records:
    Willful: not to exceed $100,000 per release or 75% of the appraised value, whichever is lower.
    Negligence: not to exceed $10,000 per release or 40% of the appraised value, whichever is lower.
  • In addition, if these records relate to goods eligible for reduced or free duty rates, the merchandise shall be liquidated at the full column one rate. If the goods are already liquidated, they shall be reliquidated (up to two years from the demand date) at the full column one rate.