Forfeiture

Forfeiture is the final transfer of ownership of seized merchandise to the U.S. government. It is the ultimate consequence of an unsuccessful seizure case and extinguishes any property interest the importer or other claimant had in the goods.

Two main pathways to forfeiture:

1. Administrative forfeiture under 19 U.S.C. § 1607 — Used for merchandise valued at $500,000 or less, and for most monetary instruments and conveyances regardless of value. CBP publishes a Notice of Seizure and intent to forfeit; if no claim or petition is timely filed, the merchandise is administratively forfeited.

2. Judicial forfeiture under 18 U.S.C. § 983 and 19 U.S.C. § 1610 — Required for merchandise valued over $500,000 (other than monetary instruments and conveyances) or when a claimant timely files a Claim and Cost Bond. The matter is referred to the U.S. Attorney's Office and litigated in U.S. District Court.

Filing a Claim (19 U.S.C. § 1608): A claimant who wants judicial proceedings must:

• File a Claim within 30 days of the Notice of Seizure
• Post a cost bond of $5,000 or 10% of the value (whichever is lower; minimum $250)
• The matter is then referred to DOJ within 90 days for a civil forfeiture complaint

Innocent Owner Defense (18 U.S.C. § 983(d)): A claimant in a civil forfeiture proceeding may defeat forfeiture by proving:

• They did not know of the conduct giving rise to forfeiture, OR
• They did all that reasonably could be expected under the circumstances to terminate such conduct

Petition for Remission (19 CFR Part 171): Even after forfeiture is declared, the former owner can petition for remission or mitigation of forfeiture — return of the merchandise (remission) or return of net proceeds after disposition (mitigation). Common grounds: innocent owner status, reasonable care, cooperation, and significant economic hardship.

Disposition of forfeited property:

• Sold at public auction (most commercial merchandise)
• Destroyed (counterfeit, illegal, or hazardous goods)
• Donated to government agencies or qualifying nonprofits (some agricultural and humanitarian goods)
• Retained for official use (vehicles, monetary instruments, technology)

Consequences beyond the loss of goods:

• Public record (forfeiture decisions are often published)
• Potential Section 1592 penalty action against the importer based on the same conduct
• Heightened CBP scrutiny on future shipments — including possible Importer Bond increases, examination rate increases, and Importer-Specific Detention orders
• Potential criminal referral for the underlying conduct (smuggling, AD/CVD evasion, UFLPA sourcing, IP infringement)