When FDA Problems Become Customs Claims

Wondering what liquidated damages actually are? They’re a predetermined sum written into your customs bond that CBP can assess when a bond condition isn’t met, with no need to prove actual harm.

Here’s the twist for FDA-regulated importers: you may have already thought you dealt with the FDA problem, and the bill can still show up. Your shipment was refused, exported, or destroyed, and you moved on. Then an envelope arrives from U.S. Customs and Border Protection (CBP), and this one has a dollar figure on it.

How an FDA Problem Becomes a Customs Claim

FDA-regulated goods are often released under a customs bond. Among other things, the bond obligates you to return the merchandise to CBP on demand and to meet any conditions imposed to bring the product into compliance with FDA requirements. Miss one, and CBP may treat it as a breach and assess liquidated damages.

The good news: the amount demanded is not necessarily the amount owed. Under 21 C.F.R. § 1.97, CBP may cancel liability in full, accept a lesser amount, or grant relief on other appropriate terms once you apply for it. For an FDA-related bond, however, CBP cannot act without the agreement of the FDA division director. That makes two agencies to persuade—twice the audience and half the applause!

Prevention Beats Petitioning

The best mitigation starts before the shipment reaches the border. It is important to treat FDA and customs compliance as one function, not two silos that only talk when something goes wrong. In practice, that means:

• Review admissibility before you ship, not after a detention notice arrives.
• Hold the goods when FDA asks for a sample. FDA regulations direct the owner or consignee not to distribute the article until further notice about the examination.
• Respond quickly whenever FDA or CBP restricts distribution or demands corrective action.
• Consider whether the product can be fixed. FDA regulations allow you to apply for authorization to relabel or recondition an inadmissible import, which can be a better outcome than export or destruction.

It also pays to have a written escalation plan for detained or refused merchandise. This includes deciding in advance who receives FDA and CBP notices, who talks to your customs broker and surety, who has the authority to stop distribution, and who keeps the proof of exportation, destruction, or redelivery. As we like to say, if it’s not in writing, it doesn’t exist.

If the Claim Has Already Arrived

CBP issues Form 5955A, and you generally have 60 calendar days from issuance to petition for relief. Start by reconstructing what FDA and CBP required, how and when you responded, what happened to the goods, what records prove it, why the breach occurred, and what controls now prevent a repeat.

Section 1.97 turns on what is appropriate “in view of the circumstances,” and along with CBP’s mitigation guidelines, demonstrate that the facts are critical for the bases of the petition. A strong petition advocates to reduce or cancel the claim, and is not a plea for leniency.

The Takeaway

An FDA import problem and a CBP liquidated damages claim are related, but they are not the same problem. A business can prevent the first with disciplined import controls, and answer the second with a disciplined factual and legal record. If a claim does arrive, don’t assume the face amount is final.

Garg Law helps importers evaluate FDA-related liquidated damages claims, construct the underlying import and regulatory record, develop mitigation arguments, and prepare petitions for relief. Our goal is simple: understand what happened, address the government’s concerns, and make the strongest supportable case for reducing or eliminating the claim. For assistance with liquidated damage cases or for questions on FDA compliance or enforcement, please email info@garg-law.com.