A U.S. tractor distributor came to us with what seemed like a straightforward question: was their product valuation correct under customs regulations? With Section 232 tariffs raising the stakes on getting valuation right, their parent company overseas wanted to be sure nothing was being overvalued or undervalued. 

Before we could even touch the valuation work, we discovered the client needed a prior disclosure, and the clock was already ticking. Here's how it unfolded and what it means for other importers watching their own numbers closely. 

The Challenge 

The client is a U.S.-based distributor of tractors manufactured by its parent company overseas. They became a Star USA client early in 2026, and one of their first requests was to help review how their products were being valued for customs purposes. 

The urgency traced back to Section 232 tariffs. Product valuation directly determines how much is owed in tariffs, and the parent company wanted assurance that the U.S. team wasn't paying more than necessary or exposing the business to risk by paying too little. 

When we started reviewing the client's ACE data, a pattern emerged. Certain entries were filed under an HTS code that should have triggered Section 232 duties, but those duties hadn't been applied. The client already knew something was off; they had received ten CBP Form 29 notices, each one flagging roughly $15,000 in duties owed up front. 

What made the situation more serious was that the root problem wasn't really about missing 232 payments. The main issue was that the wrong HTS code had been used in the first place. Had the correct classification been applied from the start, the 232 issue would never have come up. Now the client faced paying duties up front for entries going back years, then waiting on customs, often for a long stretch, to return money owed once the correction was made. 

Unfortunately, the client's broker wasn't forthcoming with information and hadn't communicated how serious the CBP Form 29 notices actually were. Left unaddressed, the misclassification could have exposed the client to millions of dollars in duties and penalties, on top of an ongoing cycle of front-loaded payments and slow refunds. 

The Solution 

Rather than jumping straight into the valuation review the client originally asked for, we recommended a prior disclosure. A prior disclosure lets an importer proactively tell CBP that errors have occurred, typically covering a five-year lookback period, and commit to investigating and correcting them. In exchange, CBP holds off on assessing penalties for the period covered. 

For this client, the prior disclosure became the umbrella under which everything else would get addressed. That meant the misclassification that triggered the CBP 29 notices and the valuation questions that brought them to us in the first place. It also meant confirming they properly qualified for applicable free trade agreements and verifying that the country of origin was being reported correctly. 

Once the prior disclosure process concludes, we'll also hand the client a practical guide for handling entries going forward. That includes what needs to appear on commercial invoices and how documentation should be passed to the broker. It also spells out which free trade agreements they truly qualify for, and the certificates needed to support those claims. We're also building out our own standard operating procedure for prior disclosures, since every one looks a little different depending on the client. 

The Approach 

Once we identified the need for a prior disclosure, we moved quickly to begin the audit, digging into the client's ACE data and entry history to scope out the full extent of the misclassification and related issues. 

On the client side, this work has largely fallen to one person. It isn't officially their job, but with no one else on the team positioned to handle it, they’re the one carrying it. We've worked to lift as much of that burden off their plate as possible. Instead of routing every document request through them, for example, we go directly to the broker and copy them on the correspondence, so they stay informed without having to chase down paperwork themselves. 

We meet with them every other week. Prior disclosures involve a steady stream of findings and next steps, so we've been intentional about giving them enough information to stay current without overwhelming. That education piece matters just as much for their broker, who wasn't equipped to explain the severity of the CBP 29 notices when they first arrived. 

The Impact 

The prior disclosure work is still underway, so the full financial picture is still coming into focus. Even so, our team has already identified at least 60 entries carrying the same underlying problem, which means at least 60 additional instances of penalties avoided simply by getting ahead of the issue. 

The impact isn't only financial, although that was the most pressing issue. The client's compliance lead had been frustrated with a broker who was slow to respond and thin on information. Since our team stepped in, they’ve said more than once how relieved they are to be working with people who know what they're doing and can get the job done. Meeting with them regularly has also given them language they can bring back to leadership, so they can explain what's happening and why in terms that resonate with the C suite. 

Lessons for the Industry 

This case offers a few takeaways that apply well beyond tractors and Section 232 tariffs. 

First, a prior disclosure isn't a bad thing. Telling CBP about errors before they find them shows you're paying attention and taking compliance seriously rather than hoping the problem stays hidden. Customs views that proactive step favorably. 

It's a heavy lift, but you don't have to carry it alone. A thorough prior disclosure can take months of work. Partnering with a team that can share that burden makes a real difference for whoever ends up responsible for it internally. 

Second, the benefit outlasts the project. The systems and knowledge built during a prior disclosure don't just help the company today. They stay with the person who worked through it, wherever their career takes them next. 

If you're managing your compliance program well, a prior disclosure shouldn't be necessary. Stay aware of what's happening on your entries and audit your broker regularly. Keep up with changes in the customs compliance world, too. 

Section 232 tariffs have made valuation and classification more consequential than ever, and the entries that look fine on the surface aren't always fine underneath. If you want a second set of eyes on your compliance program, or you're already sitting on a problem you suspect is bigger than it looks, don't hesitate to reach out. We've done this work before, and we're ready to help you work through it. Get started here!