Wood Packaging Material Violations: What to Do When CBP Issues an EAN 

This article explains what an importer should do in the first 24 hours after CBP issues an Emergency Action Notification (EAN) for non-compliant wood packaging material (WPM), how CBP calculates and mitigates the penalties that follow, and how the new APHIS-approved shredder-hammermill treatment can save the underlying cargo. It matters because a WPM penalty is assessed at the full domestic value of the merchandise, requires no pre-penalty notice, and can be issued even when the importer fully complies with the EAN. The decisions made before the cargo leaves the port determine how much of that exposure survives. 

KEY TAKEAWAYS 

• An Emergency Action Notification (EAN) for non-compliant wood packaging material is not the end of the matter. It is the start of a penalty file. Call counsel the day it arrives, not the day the penalty notice arrives. 
• CBP penalties for WPM violations are assessed at the domestic value of the merchandise under 19 U.S.C. § 1595a(b), with no pre-penalty notice required. A single violation is enough. The old five-violation threshold was eliminated in 2017. 
• Mitigation is real but shrinks fast: 1 to 10 percent of the penalty on a first violation, 10 to 25 percent on a second, and a 25 percent floor on the third. Documented immediate remediation and cooperation are what move you toward the low end. 
• Shredder-hammermilling is now an APHIS-approved treatment for non-compliant WPM. Where an approved facility exists at the port, it can allow the cargo to stay in the U.S. while only the packaging is destroyed, but it is granted case by case based on pest risk. 
• Contractual recourse matters. CBP itself recommends importers pursue their own claims against suppliers who ship non-compliant WPM. 

One Pallet Can Cost You the Value of the Whole Shipment 

Under 7 C.F.R. § 319.40-3, all regulated wood packaging material entering the United States, including pallets, crates, dunnage, and blocking, must be treated (heat treatment or methyl bromide fumigation) and marked with the ISPM 15 stamp. The mark must be permanent, legible, on at least two opposite sides, and include the IPPC logo, the two-letter country code, the producer or treatment provider code, and the treatment code. Two details tripped up multiple attendees at the August 25, 2026 WPM compliance webinar we attended with APHIS and CBP: the hyphen between the country code and the producer number is now required, so a stamp reading “US123” rather than “US-123” is non-compliant, and a stamp applied to a plastic or non-permanent label is likewise non-compliant even if the wood underneath was properly treated. 

When CBP Agriculture Specialists find WPM that is unmarked, improperly marked, or infested with a live pest, the response is an EAN directing the bonded party to export, destroy, or otherwise remediate the material within a fixed window, typically with the entire shipment held. Three consequences then run on separate tracks, and importers routinely confuse them. 

• Remediation cost. Re-export or destruction of the WPM, and often the cargo on it, at the importer’s expense. 
• Liquidated damages. If the party whose bond is obligated fails to complete the action the EAN requires, CBP may issue a liquidated damages claim for breach of the bond. 
• Penalty. Separately, CBP may assess a penalty under 19 U.S.C. § 1595a(b) against any party that attempted to import the non-compliant WPM, measured at the domestic value of the merchandise. The penalty may be issued even where the EAN was fully complied with, and no pre-penalty notice is required. 

Since November 1, 2017, CBP no longer waits for five violations before penalizing, and it no longer resets the violation count each fiscal year. A first-time, single-pallet violation is a penalty case. 

For the regulatory background, see our earlier post, CBP Now Issuing Penalties for Wood Packaging Material Violations. 

Why You Need to Call Counsel the Day the EAN Arrives 

The most consequential point from the webinar panel was procedural, not technical. Asked whether WPM violations automatically result in penalties, the USDA and CBP panelists confirmed that non-compliance is a violation, but that the decision to recommend a penalty is made case by case, and that two factors weigh heavily: whether the importer followed the EAN’s directions immediately, and whether the importer raised the problem with the government proactively, before USDA discovered it. An importer who identifies a defective stamp and contacts APHIS before inspection is in a materially different posture from one who is caught. 

That window closes quickly. The EAN deadline is short, the cargo is accruing demurrage, and the instinct is to sign whatever the broker puts in front of you and get the container moving. Every one of those choices becomes evidence in the penalty file that CBP opens afterward. This is why the EAN, not the penalty notice, is the moment to involve counsel. Specifically, Diaz Trade Law works with importers at the EAN stage to: 

• Evaluate whether the EAN can be satisfied without destroying or re-exporting the underlying cargo, including whether an APHIS-approved shredder-hammermill facility is available at the port (discussed below). 
• Ensure the remediation is completed within the EAN deadline and documented in a way that CBP will later recognize as immediate remedial action, the single most valuable mitigating factor. 
• Build the mitigation record from day one: treatment certificates, supplier correspondence, photographs, pest identification, and evidence of a corrective action program at origin. Note that CBP will not release its own inspection photographs without a FOIA request, and frequently not even then, so the importer’s own documentation is what will exist. 
• Address the ACE and re-export transmission issues that arise when only the WPM is rejected while the cargo is released, where guidance varies port to port. 
• Preserve and pursue contractual recourse against the foreign supplier. CBP’s own recommendation at the webinar was that importers assert their own claims against suppliers who ship non-compliant WPM. That claim is only as good as the purchase order terms and the evidence collected at the port. 

An importer who waits for the penalty notice has already lost the ability to shape most of these facts. 

Penalty Mitigation Under CBP’s WPM Guidelines 

CBP’s Mitigation Guidelines for Wood Packaging Material Violations (October 2019) set the framework. The penalty is assessed at the value of the articles introduced or attempted to be introduced, which includes both the goods and the WPM. Mitigation is then available on petition, within ranges that escalate with each violation: 

• First violation: mitigated to 1 to 10 percent of the assessed penalty. 
• Second violation: mitigated to 10 to 25 percent. 
• Third or subsequent violation: mitigated to no less than 25 percent, and mitigation is generally denied where there is a continuing documented pattern of WPM violations. 

Where an importer lands within those ranges depends on the mitigating and aggravating factors in the record. Mitigating factors recognized by CBP include immediate remedial action, an established compliance record, exceptional cooperation with CBP and APHIS, few violations relative to transaction volume, WPM that was properly treated but unmarked or incorrectly marked, a small percentage of the shipment being non-compliant, an illegible rather than absent mark, importer inexperience, and self-disclosure of the non-compliance. Aggravating factors include non-cooperation, false marking or documentation, attempts at concealment, and failure to implement remedial measures after a prior violation. 

Liquidated damages for failure to comply with an EAN follow a separate track. CBP will generally cancel the claim in full where the required action was eventually taken or circumstances beyond the party’s control prevented compliance, and will cancel to an amount between $500 and $5,000 where the action was taken after the deadline. 

Two practical observations. First, the phrase “immediate remedial action” appears in the guidelines, and the panel confirmed it is what CBP looks at first. Remediation that is complete, documented, and inside the EAN deadline is the difference between a 1 percent and a 10 percent outcome on a first violation, which on a $400,000 shipment is the difference between $4,000 and $40,000. Second, because CBP no longer resets the violation count, a company’s second violation may come years after the first and still be treated as a repeat offense. Importers with any prior WPM history should assume they are already in the 10 to 25 percent band and plan the petition accordingly. 

Beyond the individual petition, the importer should be able to show a trace-back program: treatment logs reviewed, pest management practices at origin confirmed, and marking and handling gaps identified and closed. The panel was explicit that strong trace-back programs are essential, and they are the foundation of any argument that the violation was an isolated failure rather than a pattern. 

The Shredder-Hammermill Option: Saving the Cargo 

Historically, an EAN for non-compliant WPM meant the cargo left with the pallets. Segregating the goods from the wood was rarely permitted because separating the two risks releasing any pest into the port environment. That has changed. 

In July 2025, APHIS authorized shredder-hammermilling as a treatment for non-compliant WPM and dunnage (CBP Trade Information Notice 65868207). The process uses a wood shredder followed by a hammermill grinder, run sequentially as a single combined treatment, to mechanically destroy the wood and any pest it harbors. The requirements are set out in the APHIS Treatment Manual. Two conditions apply: an APHIS-approved shredder-hammermill facility must exist at the port of entry, and an approved APHIS compliance agreement must be in place covering the secure disposal equipment. 

The practical significance is that, where the facility exists, the importer can ask USDA to permit destruction of the WPM only and release of the goods. At the webinar, APHIS confirmed that segregation and importation of the goods will be considered where a certified shredder-hammermill is available and the operation is conducted under CBP compliance, and that the decision turns on the pest risk presented by the specific shipment. This is a discretionary determination, not an entitlement, and it has to be requested and supported quickly, within the EAN window. 

Two limitations should be understood. Availability is port-specific, and APHIS has not committed to publishing a port-by-port list of approved facilities, so an importer’s first question on receiving an EAN should be whether one exists at that port. And use of the shredder-hammermill resolves the remediation obligation; it does not by itself resolve the penalty. It does, however, generate exactly the kind of immediate, documented remedial action that drives the mitigation analysis toward the low end of the range. 

What a Well-Handled EAN Looks Like 

Handled properly, a WPM violation on a first-time importer with clean history, compliant treatment but a defective mark, immediate remediation through an approved facility, and a documented corrective action program at origin should resolve with the cargo released, the liquidated damages claim cancelled, and the penalty mitigated to the bottom of the 1 to 10 percent band. Handled poorly, the same violation ends with the cargo re-exported, a liquidated damages claim for a missed deadline, and a penalty petition arguing from a record the importer never built. 

The variable is not the pallet. It is what the importer did in the first day after the EAN. 

Contact Diaz Trade Law 

If you have received an Emergency Action Notification, a liquidated damages claim, or a penalty notice relating to wood packaging material, contact Diaz Trade Law immediately at 305-456-3830 or [email protected]. We represent importers, brokers, and carriers before CBP and APHIS at every stage, from the EAN through the mitigation petition, and we assist companies in building the ISPM 15 trace-back and supplier compliance programs that keep the next shipment out of the penalty file. [email protected] | 305-456-3830 

Learn more: