CF-28 and CF-29 Responses: What to Do When CBP Questions Your Import Values
- Jeff Chang
- 2 days ago
- 15 min read
A CF-28 arrives before anyone at the company knows there is a problem. What you send back decides how the next five years go.
If a CBP Form 28 or Form 29 has landed on your desk, the useful thing to know first is this. A CF-28 is a request for information about specific entries. A CF-29 is a decision. Neither is a penalty notice. But your response to a CF-28 becomes part of the record CBP uses if it later decides to pursue one, and the deadline is short. If your company buys from a related supplier, the questions being asked are rarely about a single shipment. They are about a pricing practice that runs across every entry you have filed on the same terms. Answer the narrow question well and the matter often closes. Answer it carelessly, or expansively, and you have handed CBP the outline of a case.
Which Situation Are You In
The two kinds of inquiry look identical on the page and lead to completely different places. Work out which one you have before you do anything else.
The inquiry is probably narrow if:
It concerns one entry, or a handful filed close together
It asks about tariff classification, or requests a sample or product specification
Your supplier is unrelated to you and deals with you at arm's length
Nothing in the request touches how the price was arrived at
The inquiry is probably structural if:
Your supplier is affiliated with your company, or you and the supplier share an owner
It asks how the price was determined, not just what the price was
It lists entries spanning more than a few months
It asks about payments, credits, or offsets outside the commercial invoice
It asks about tooling, molds, materials, or design work your side provided to the factory
It asks whether the buyer and seller are related
If you are in the second list, the form in front of you is the visible part. What CBP is testing is a position your company has been filing consistently, possibly for years. The rest of this article is written for that situation.
We have written elsewhere about the underlying exposure in customs, tax, and personal liability penalties, about the compliance questions that arise when an offshore parent owns a US subsidiary, and about the structuring patterns that determine what your exposure looks like years later.
What CBP Means by Entry, Liquidation, and Assist
Customs law uses ordinary words in ways that don't match their everyday meaning. Four of them carry most of the meaning in the rest of this article, and each one means something other than what it sounds like.
Entry is not the shipment. It is the filing your broker makes with CBP declaring what the goods are, what they are worth, and where they came from. Exposure is measured across the entries affected, which is why a pricing practice used for three years produces a much larger number than most people expect.
Liquidation has nothing to do with selling off assets. It is the moment CBP finalizes the duty calculation on an entry. Before liquidation you have options. After liquidation most of them close, and the clock on the remaining one starts running.
Appraisement is CBP determining the value of your goods for duty purposes. That figure is not automatically the invoice price, and the gap between the two is what most CF-28s are about.
Assist is not help. It is something of value your side provided to the factory free or below cost, outside the purchase price, such as a mold, tooling, materials, or design work. Its value generally has to be added to the declared value of the goods. This is the single most commonly missed item in cross-border groups, and it is covered in detail below.
What These Two Forms Are
A CF-28 means CBP has a question. A CF-29 means CBP has made up its mind. Everything that matters follows from that difference.
CBP Form 28, Request for Information, is how CBP asks whether what you declared can be substantiated. CBP's authority to determine the value and classification of imported goods comes from 19 USC 1500 and 1401a, and CBP identifies 19 CFR 151.11 as the provision for the form. It goes out when the invoice and entry paperwork do not give the reviewing officer enough to work with.
CBP Form 29, Notice of Action, is what CBP issues once it has reached a conclusion. It comes in two versions, and which one you have decides what options remain.
CF-28 | CF-29, proposed | CF-29, taken | |
Means | CBP has a question | CBP has decided what it intends to do | CBP has acted |
Your window | Usually 30 days | 20 days to respond in writing | Protest within 180 days of liquidation |
If you do nothing | CBP decides without you | Liquidation proceeds in 20 days | Liquidation stands |
Still available | Everything | Written representations | Protest, then the CIT |
Three points about that table matter more than they look.
The protest deadline is fixed by statute and CBP cannot extend it. File late and you cannot bring a subsequent civil action at the Court of International Trade either.
Nothing requires CBP to send a CF-28 first. Nothing in 19 CFR 152.2 or 19 CFR 152.103(m) conditions a Form 29 on a prior Form 28. CBP can decide the issue without ever having asked you anything.
A CF-29 can be followed by a pre-penalty notice. That is the document that opens a penalty case. CBP issues it when it has reasonable cause to believe a violation occurred and decides further proceedings are warranted, and it states the alleged violation, the level of fault being asserted, and the proposed amount (19 USC 1592(b)(1)).
CBP sends these forms to importers, exporters, producers, or their agents. In a group where the affiliated factory abroad handles its own paperwork, the request can land there rather than with the US entity, and the US side may not learn of it until a response has already gone out.
Personal Liability and the Five-Year Look-Back
Two facts drive everything else in this article. Customs penalties can attach to a person, not only to the company. And they are calculated on every affected entry going back five years. Together those turn one form into a number that gets people's attention.
The statute says "no person" may enter or introduce goods into US commerce by means of a material false statement or omission, whether through fraud, gross negligence, or negligence (19 USC 1592(a)(1)). It does not say "no importer of record."
The Federal Circuit tested that language in United States v. Trek Leather, Inc., 767 F.3d 1288 (Fed. Cir. 2014), sitting en banc, and held the president and sole shareholder of an importing company personally liable for gross negligence. The court's reasoning turned on the word "introduce," which it read to cover conduct that brings goods to the threshold of entry rather than only the technical act of filing the paperwork. Because it decided the case on that basis, it never needed to reach aiding and abetting or to pierce the corporate veil.
What the officer did wrong was leave something out. He had supplied fabric to the foreign manufacturer free of charge or at reduced cost, and the entry paperwork omitted the value of that fabric. Not a scheme. An omission nobody in the business experienced as a decision.
For negligence or gross negligence, the government has five years from the date of the violation to bring an action. For fraud, five years from the date it discovers the fraud (19 USC 1621). Exposure is measured across the entries affected, so a company importing on consistent related-supplier terms has been filing the same position on every entry across that entire window.
So the exposure is the position multiplied by the entries, and it can reach the person who directed the paperwork as well as the company. That is why one CF-28 deserves a serious response.
Why Related-Supplier Importers Get These More Often
If you buy from a company that shares an owner with yours, CBP does not automatically accept your invoice price as the value of the goods. It accepts it only if the price passes a test. That is a rule about valuation, not a suspicion about you, and it is why these inquiries cluster around family and founder-controlled groups.
CBP values imported goods using a defined order of methods, starting with the price you actually paid (19 CFR 152.101(b)). But where the buyer and seller are related, that price is usable only if it is acceptable, and it is acceptable only if either the circumstances of the sale show the relationship did not influence the price, or the price closely approximates one of several specified comparison values (19 CFR 152.103(j)).
"Related" is defined more broadly than most operators expect. Among others, it covers family members including siblings, spouses, ancestors, and descendants. It covers an officer or director and his own organization, and it reaches interlocking officers and directors of two organizations. It covers partners, and employer and employee. It covers anyone who directly or indirectly owns, controls, or holds the power to vote five percent or more of a company's outstanding voting stock. And it covers two or more persons under common control (19 CFR 152.102(g)).
That last category is the one that catches closely held groups. If one owner controls both the factory and the US importing entity, the parties are related whether or not anyone in the business has ever thought of it that way.
CBP is not permitted to reject your price just because the parties are related (19 CFR 152.103(l)(1)). What it examines instead is whether the two sides deal with each other as if they were unrelated, whether the price was set consistently with normal pricing practice in your industry, and whether the price recovers all costs plus a profit comparable to what the company earns overall on similar goods.
Those are the questions a valuation CF-28 is really asking. They are questions about records you either kept at the time or did not.
This article is about value. If your group has shifted production to a third country, questions about where the goods actually originate usually arrive alongside the valuation questions, and origin follows a different set of rules.
Tooling, Molds, and Design Work Count Toward Value
Here is the trap that catches cross-border groups repeatedly. You can answer the CF-28 completely honestly, with accurate invoices, and still have declared the wrong value. That happens because the declared value is supposed to include things that never appear on an invoice.
The pattern is easiest to see in a concrete case. A US company sells industrial fasteners, and its founder also owns the factory abroad that makes them. Three years ago the US side paid about $180,000 for custom dies so the factory could produce a new product line, and it sent the dies over. No invoice, no charge to the factory, nothing on any commercial document. Since then every shipment has been declared at the invoice price the factory charges.
Nobody hid anything. But the dies are an assist, and their value has to be apportioned and added to the declared value of the goods produced with them. There is more than one accepted way to do that apportionment, and the method matters. What is not optional is that the value goes in somewhere, and here it never did. The CF-28 asking about the invoice price will get a truthful answer that does not surface any of this.
The rule behind that is straightforward once you see it. The value CBP wants is the total payment made to or for the benefit of the seller, direct or indirect (19 CFR 152.102(f)). "Indirect" includes things like paying off a debt the seller owed someone else. On top of that, certain items must be added to the price: packing costs you paid, selling commissions you paid, the value of any assist, royalties or license fees you had to pay as a condition of the sale, and any share of your resale proceeds that goes back to the seller (19 CFR 152.103(b)(1)).
Assists are the ones that get missed. The category covers tooling, dies, and molds you supplied free or below cost, and it also covers engineering, development, artwork, design work, and plans done outside the United States and necessary to produce the goods (19 CFR 152.102(a)). Groups where the US entity funds equipment at the affiliated factory, or where design work moves between the two sides without an invoice, frequently have assists nobody ever declared.
What Your CF-28 Response Becomes
Treat the CF-28 response as a filing, not as correspondence. It is signed, it becomes part of the permanent record for those entries, and it will be read back to you later if the matter escalates.
Knowingly and willfully making a materially false statement to a federal agency is a crime (18 USC 1001), and the importer of record is separately required to use reasonable care in making entry, including the declared value, classification, and rate of duty (19 USC 1484(a)(1)).
The practical risk, though, is rarely dishonesty. It is volume. An importer who attaches everything in the file, on the theory that transparency is protective, frequently hands CBP the intercompany agreements, the price adjustment memos, and the payment records that turn a one-entry question into a five-year inquiry. The response should answer what was asked, completely and accurately, without volunteering the map.
Where that line falls on your facts is not an administrative judgment.
Whether Prior Disclosure Is Still Available to You
If you find a problem, telling CBP before it opens a formal investigation cuts the penalty dramatically. The catch is that you cannot see whether an investigation has already started, and a CF-28 does not tell you either way. That is the single most consequential piece of timing in this whole area.
Disclose before, or without knowledge of, the start of a formal investigation, and for negligence or gross negligence the maximum penalty drops to interest on the unpaid duties, computed from the date of liquidation at the prevailing federal rate, provided you tender the unpaid amount at the time of disclosure or within 30 days after CBP tells you its number. For fraud the cap becomes 100 percent of the unpaid duties on the same condition, or 10 percent of the dutiable value if no duty was lost. The goods also will not be seized in connection with the disclosed violation (19 USC 1592(c)(4)).
Compare that with the exposure if you do nothing and CBP finds it. For negligence the ceiling is twice the unpaid duties or the domestic value of the goods, whichever is lower. For gross negligence, four times the duties or domestic value, whichever is lower. For fraud, the full domestic value. Where the error did not change what you owed at all, the measure shifts instead to a percentage of the dutiable value, 20 percent for negligence and 40 percent for gross negligence (19 USC 1592(c)(1) to (3)).
The "whichever is lower" matters more than it sounds. Where duty rates are high, as they are on goods subject to antidumping or countervailing duties, four times the duties can exceed what the goods are worth, and the value of the goods becomes the ceiling. Either way, the gap between interest and a multiple of the duties is usually the gap between a manageable problem and an existential one.
Whether that reduction is available to you turns on a date you cannot see. An investigation is treated as having begun on the date CBP internally recorded that it had reason to believe a violation might exist (19 CFR 162.74(g)). That date is in CBP's files. You cannot see it, and CBP will not tell you.
The regulation does list six events that create a presumption you knew an investigation had started. They include CBP telling you about the suspected violation, an inquiry or records request from a Customs Special Agent, a pre-penalty or penalty notice, and seizure of the goods. A CF-28 is not on the list (19 CFR 162.74(i)(1)).
Read those two provisions together and the position is uncomfortable. Receiving a CF-28 does not by itself mean an investigation has begun or that you knew about one. But it gives you no assurance the window is open either. And if it comes to a dispute, the burden of proving you did not know falls on you.
Problems you leave out of the disclosure, which CBP then finds while checking the disclosure, get no protection at all (19 CFR 162.74(h)). A disclosure drafted too narrowly can leave the larger problem exposed while pointing CBP straight at it.
A valid disclosure also has mandatory content requirements and a tender obligation (19 CFR 162.74(b) and (c)). Meeting them is mechanical. Deciding how broadly to scope the disclosure is not, and scope is where its entire value is won or lost. This is close to irreversible once filed.
What to Do When One Arrives
Not a checklist. These are the decisions that have to be made, in order, and most of them are not administrative.
Calendar the deadline the day it arrives, and calendar it from the date on the form. If the window is not workable, ask for an extension before it lapses, not after.
Work out what CBP is actually asking. A request for one commercial invoice and a request for your intercompany pricing methodology are different inquiries wearing the same cover sheet.
Find out whether the answer is the same across your other entries. If the practice at issue is the practice you have always used, this is not about one shipment.
Assess whether there is a violation before you decide what to send. This is the sequencing point that matters most. The prior disclosure analysis has to happen before the response goes out, because the response can change the landscape it depends on.
Do not send documents nobody asked for.
Get counsel involved before anything is filed. Not after the response goes out. Not after the CF-29 arrives.
If a CF-28 or CF-29 is sitting on your desk and the entries involve a related supplier, the question is not how to fill out the form. It is what your records will support if CBP looks at five years of entries filed on the same basis. That assessment should happen before you respond, and it should not be made by the person who signed the entries.
Frequently Asked Questions
Is a CF-28 a penalty notice?
No. It is a request for information about specific entries, issued while the entry is still under review. It is not an accusation and it does not assert that a violation occurred. What it does is create a record. The response becomes part of the entry record and is used by CBP in deciding whether to act further, which may include a Notice of Action on Form 29 or, if CBP has reasonable cause to believe a violation occurred, a pre-penalty notice under 19 USC 1592(b)(1).
How long do I have to respond, and can I get more time?
The operative period is the one stated on the face of the CBP Form 28, commonly 30 days from the date of the request, and the form directs the recipient to contact the issuing officer if a reply cannot be made within that period. CBP officers sometimes specify a shorter window, so read the form rather than assuming 30 days. Because the deadline comes from the form and CBP practice rather than from a statutory limitations period, extensions can be requested. Ask before the period lapses, explain what you are gathering, and propose a date.
Does receiving a CF-28 mean I can no longer file a prior disclosure?
Not necessarily, and that uncertainty is the problem. Prior disclosure treatment under 19 USC 1592(c)(4) is available where the disclosure is made before, or without knowledge of, the commencement of a formal investigation. Under 19 CFR 162.74(g), commencement is fixed by a date CBP records internally, which you cannot see. 19 CFR 162.74(i)(1) lists six circumstances creating a presumption of knowledge, and a CF-28 is not among them. So a CF-28 does not by itself close the window, but it provides no assurance the window is open. The disclosing party bears the burden of proving lack of knowledge. This is an issue to work through with counsel before responding, not after.
My parent company sets the price. Is that a problem on its own?
No. CBP is not permitted to disregard transaction value solely because the buyer and seller are related, under 19 CFR 152.103(l)(1). The question is whether the relationship influenced the price, or whether the declared value closely approximates one of the test values in 19 CFR 152.103(j)(2). The interpretative notes at 19 CFR 152.103(l) describe what CBP examines, including whether the price was settled consistently with normal industry pricing practice and whether it recovers all costs plus a profit equivalent to the firm's overall profit on merchandise of the same class or kind. What determines the outcome is whether contemporaneous records support the answer, not whether the price was reasonable in the abstract.
We provided tooling to the factory at no charge. Does that affect the declared value?
It may. Under 19 CFR 152.102(a), tools, dies, molds, and similar items used in production and supplied by the buyer free of charge or at reduced cost are assists, as are engineering, development, design work, and plans undertaken outside the United States and necessary for production. 19 CFR 152.103(b)(1)(iii) requires the apportioned value of an assist to be added to the price actually paid or payable. This is a common gap in founder-controlled groups where equipment and design work move between the two sides without invoicing. Whether a particular arrangement created a declarable assist, and how it should be apportioned, depends on the facts.
The CF-29 says action has been taken. What are my options?
Once CBP has taken action, the entry moves toward liquidation on CBP's terms. The remaining administrative route is a protest under 19 USC 1514(c)(3), which must be filed within 180 days after, but not before, the date of liquidation or reliquidation. The statute fixes that period and CBP has no authority to extend it, and an untimely protest cannot support a subsequent civil action. If a protest is denied in whole or in part, the denial can be contested by filing a civil action in the US Court of International Trade. The practical consequence is that the liquidation date, not the date on the Form 29, starts the clock.
Can CBP come after me personally?
In specific circumstances, yes. 19 USC 1592(a)(1) prohibits the conduct by "no person," language not limited to the importer of record. In United States v. Trek Leather, Inc., 767 F.3d 1288 (Fed. Cir. 2014) (en banc), the Federal Circuit held a corporate president personally liable for gross negligence under section 1592 where entry documentation omitted the value of fabric assists he had supplied to the foreign manufacturer. The court read the statutory word "introduce" to reach conduct that brings goods to the threshold of entry, and so did not need to reach aiding and abetting or pierce the corporate veil. For an operating officer who directs the documentation, the corporate form does not resolve the question.
About Chang Law Group
Chang Law Group works with US importers, joint venture partners, and US subsidiaries of foreign parents on various business matters, including customs valuation and related-party pricing, responses to CBP information requests and notices of action, prior disclosure analysis, and litigation before the US Court of International Trade. If a CF-28 or CF-29 has arrived and the entries involve a related supplier, the assessment is worth doing before you respond.
Contact:
Phone: (617) 307-1238
Email: info@jchanglaw.com
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Chang Law Group LLC: One Marina Park Drive, Suite 1410, Boston, MA 02210
Disclaimer: This article provides general information about US customs procedure and enforcement and is not legal advice. It does not create an attorney-client relationship. The scenario described is a composite illustration and does not depict any actual client or matter. Customs statutes, regulations, and CBP practice change, and they apply differently to different facts. If you have questions about your specific situation, contact Chang Law Group to discuss how we can help.
