On 22 July 2026, a Lyon-based distributor of laboratory equipment receives a settlement proposal from the interregional directorate: a settlement fine of 48,000 euros, for Japanese preferential origin claimed without sufficient proof over a year of imports. The evaded duties, already paid following the notice of assessment (avis de mise en recouvrement, AMR), amount to 61,000 euros. The letter states that the settlement must be signed and returned within two months, failing which it will be deemed refused. The finance director wants to sign: it is less than the duties, and the matter will be closed before the autumn.
He may be right. But he is signing a commitment whose real cost and future effects he does not measure, without knowing what he would have obtained in court. This page describes how customs fines work under the Code in force since 1 May 2026 and the role of the customs settlement (transaction), so that the choice between litigating and settling can be made with full knowledge of the facts.
1. Contravention or délit: the classification governs everything
Every act penalised by the Customs Code is “considered in its most serious criminal sense” (Art. L. 511-1, formerly Art. 439). In practice, the administration adopts the most severe classification the facts allow, and the first battle is often fought on that ground.
Contraventions, treated as fifth-class contraventions for the purposes of the Code of Criminal Procedure (Art. L. 515-1), are now listed in the regulatory part of the Code. The most common in practice are false declarations as to tariff description, value or origin where a duty or tax is thereby evaded or jeopardised, and false declarations as to the actual consignee or consignor, punishable by a fine of 3,700 euros and confiscation of the goods involved in the fraud, subject to the rights of an owner acting in good faith (Art. R. 515-5, restating former Art. 412). Irregularities that evade a duty without constituting smuggling or importation without declaration incur a fine of 3,000 euros or, if higher, twice the duties evaded (Art. R. 515-6, formerly Art. 411). Omissions and inaccuracies with no effect on duties incur a fine of 3,000 euros (Art. R. 515-9, formerly Art. 410).
Délits are of a different nature. Smuggling and importation or exportation without declaration committed intentionally are punishable by five years’ imprisonment and a fine of twice the value of the goods involved (Art. L. 513-4); by three years and twice the value where they concern prohibited goods or tobacco products (Art. L. 513-1); by ten years and ten times the value where committed by an organised gang (Art. L. 513-5).
The gap is considerable. A false declaration of origin on 61,000 euros of duties remains a contravention; if the administration manages to reclassify it as importation without declaration of prohibited goods, arguing for example that the origin document was forged, the fine is calculated on the value of the goods and no longer on the duties. The first question to ask, faced with any official customs report (procès-verbal) or settlement proposal, is therefore this: what classification has been adopted, and is it legally sustainable?
2. Calculating the fine: rules that add up
The final amount depends on three rules that companies often discover too late.
First, cumulation. Where the same proceedings cover several offences, financial penalties are imposed for each of them (Art. L. 511-1, para. 2). An official report covering two hundred and thirty incorrect declarations can therefore ground two hundred and thirty fines, and this is precisely what the administration emphasises to make settlement attractive.
Second, the basis of calculation. Where it is not possible to determine the amount of duties actually payable or the actual value of the goods, the fine is calculated on the basis of the highest rate applicable to the most heavily taxed category of goods of the same kind, according to their average value in customs statistics (Art. L. 511-5). Incomplete stock records therefore cost twice: they weaken the defence and increase the basis of calculation.
Finally, repeat offending. The amount of the fine is doubled where a person who has entered into a settlement or been finally convicted of one of the smuggling or unlawful importation or exportation offences listed in the text commits a further offence from the same list within five years (Art. L. 511-3). The rule does not apply to professionals who carry out customs formalities on behalf of others, save in the case of personal fault (Art. L. 511-4). We return to this below, because it changes the way a settlement should be viewed.
3. Who pays: declarant, principal, representative, holder
The fine is not always aimed at the person one expects. The person who lodged the declaration is liable for the omissions, inaccuracies and irregularities it contains, without prejudice to recourse against the principal; and where the declaration was drafted on the principal’s instructions, the principal incurs the same penalties (Art. L. 522-1, formerly Art. 395).
The customs representative is answerable for the operations it carries out, but incurs prison sentences only in the case of personal fault (Art. L. 522-2, formerly Art. 396). The holder of goods involved in fraud is deemed liable for the fraud; public carriers escape liability if they enable the administration to prosecute the actual offender by accurately identifying their principals (Art. L. 522-3, formerly Art. 392).
These rules give rise to disputes that contracts settle poorly. A customs broker prosecuted for a classification error will turn against the importer who gave it a vague commercial description; the importer will reply that the broker is a professional who should have asked. A settlement offered to one and not the other, or for different amounts, brings this tension to the surface. Before negotiating, one must know whom the administration is pursuing and on what basis.
4. Settlement: who decides, and on what terms
The administration may grant a settlement at the request of the offender (Art. L. 613-1). The text lays down no criteria for granting it. Settlement falls within the administration’s discretion; it is never a right.
The competent authority depends on the amounts. Interregional directors and heads of national services settle offences free of any suspicion of abuse and giving rise only to fines, offences where the duties at stake do not exceed 100,000 euros, and offences with no duties at stake concerning goods with a maximum value of 300,000 euros, a threshold raised to 600,000 euros, based on the value on the genuine market, for counterfeits; the minister settles in all other cases (Art. R. 613-1). Where no judicial proceedings have been brought, a proposal exceeding the competence of interregional directors is submitted for the opinion of the committee on tax, customs and exchange control disputes (Art. L. 613-2, 1°, and L. 613-6). Once proceedings have been commenced, the proposal must receive the agreement in principle of the judicial authority, the public prosecutor or the president of the court as the case may be (Art. L. 613-2, 2°). After a final judgment, the penalties imposed can no longer be settled (Art. L. 613-3), and where the European Public Prosecutor’s Office has jurisdiction, it must accept the principle of settlement (Art. L. 613-4).
The proposal states the nature of the facts and their classification, the penalties incurred, the amount of the settlement fine, the payment terms and what is to happen to the goods (Art. R. 613-4). It is sent by any means providing proof of receipt; an offender who accepts it returns it signed within two months, failing which it is deemed refused (Art. R. 613-5).
Two months, then. That is enough time to check the classification, quantify the litigation risk and, where appropriate, submit a reasoned counter-proposal. It is not enough if one waits until the last week to look at it.
5. What you are signing: the effects and pitfalls of settlement
Settlement extinguishes the public prosecution, as Article 6 of the Code of Criminal Procedure allows where the law expressly so provides, and it ends proceedings for the application of tax penalties. There will be no trial, no entry on the criminal record and no publicity. That is its main advantage, and it is real for a company that bids for public contracts or applies for Authorised Economic Operator (AEO) status.
It has three counterparts that the administration’s letter does not highlight.
Settlement does not settle the debt. The evaded duties and taxes remain payable and are recovered separately; the settlement fine is added to them. In the Lyon example, the real cost is not 48,000 euros but 109,000.
It amounts in practice to an admission. Nothing then prevents the administration from relying on the settled facts to inspect subsequent years, and a later challenge to the debt itself becomes difficult to sustain once the company has acknowledged the offence by settling.
It counts for repeat offending. This is the least known point and, in our view, the most important: Article L. 511-3 expressly refers to the person “who has entered into a settlement”, in the same way as one who has been finally convicted, for the offences of smuggling and importation or exportation without declaration and the related offences listed in the text (Art. L. 513-1 to L. 513-6, L. 513-8 and L. 513-9), and doubles the fine incurred if a further offence from the same list is committed within the following five years, which means that a company agreeing to settle on the basis of a délit classification, sometimes to obtain a discount of a few thousand euros on the proposed fine, places itself for five years in a position where the slightest irregularity of the same kind will be penalised twice as heavily as that of its competitors. The rule does not apply to contraventions. In the Lyon example, classified as a false declaration of origin, it is irrelevant; it becomes decisive as soon as the administration adopts importation without declaration.
6. Litigate or settle: a decision grid
There is no general answer. There are cases where settling is the only reasonable decision, and others where settlement amounts to paying for an offence that does not exist.
Settlement is the right course where the facts are established by the company’s own documents, the classification adopted is the least severe possible and the amount proposed is lower than what a court would probably impose. It is also the right course where the company cannot afford a public conviction, or where individuals, directors or employees, are exposed to prosecution for a délit.
Litigation becomes preferable where the classification is open to challenge (a disputed tariff classification, a value resting on an interpretation, an origin for which proof exists but was produced late), where the official report has serious nullities, or where part of the operations is time-barred. It also becomes preferable where the stakes go beyond the case: a tariff position that will apply to all future imports deserves to be decided by a court rather than abandoned through a settlement that entrenches it.
Between the two lies the counter-proposal. The administration is not obliged to negotiate, but it often does when presented with a reasoned file showing the weakness of its classification or of its basis of calculation. A counter-proposal is drafted like written submissions: texts, documents, figures. It is not argued over the telephone.
Finally, after a conviction, remission remains available. The administration may, at the request of the person liable, grant total or partial remission of the tax penalties imposed, taking into account that person’s resources, expenses or other particular circumstances, with the assent of the president of the court that gave judgment (Art. L. 623-1 and L. 623-2, formerly Art. 390 bis).
The firm analyses settlement proposals, prepares counter-proposals and conducts the defence before the police court and the criminal court where litigation is the best option. Hervé Guyader is co-author of the Guide Lamy des procédures douanières, currently being updated following the recodification. See the page customs lawyer in Paris or contact the firm, with a reply within 24 business hours.
If the matter turns into a reassessment, see our page on challenging a French customs reassessment.
This analysis is part of the firm’s work in international trade law.
Frequently asked questions
How much is a customs fine for a false declaration?
For a false declaration as to tariff description, value or origin that evades or jeopardises a duty, Article R. 515-5 of the Customs Code provides for a fine of 3,700 euros and confiscation of the goods involved in the fraud. Other irregularities that have evaded a duty incur 3,000 euros or twice the duties evaded if that amount is higher (Art. R. 515-6). A fine is imposed for each established offence (Art. L. 511-1), which quickly multiplies the total across several declarations.
Does a customs settlement wipe out the duties owed?
No. Settlement ends criminal and tax proceedings, but the evaded duties and taxes remain payable and are recovered separately, generally by a notice of assessment. The settlement fine is therefore added to the duties. The proposal must state the amount of that fine, the payment terms and what is to happen to the goods (Art. R. 613-4 of the Customs Code).
How long do I have to accept a settlement proposed by customs?
Two months from receipt of the proposal. An offender who accepts it returns it signed within that period, by any means providing proof of receipt; otherwise, the proposal is deemed refused (Art. R. 613-5 of the Customs Code). This period allows the classification to be checked, the litigation risk to be assessed and a reasoned counter-proposal to be submitted.
Does a settlement with customs count as a conviction?
It is not entered on the criminal record and it extinguishes the public prosecution. But for repeat offending, Article L. 511-3 of the Customs Code treats it as a final conviction: a person who has settled a smuggling offence or an offence of importation or exportation without declaration (Art. L. 513-1 to L. 513-6, L. 513-8 and L. 513-9) and commits a further offence from that list within five years incurs a doubled fine. Contraventions do not fall within this mechanism. Professionals who make declarations on behalf of others are exposed to it only in the case of personal fault (Art. L. 511-4).
Who can settle on behalf of the customs administration?
Interregional directors and heads of national services, where the duties at stake do not exceed 100,000 euros or, with no duties at stake, where the value of the goods does not exceed 300,000 euros (600,000 euros for counterfeits), as well as for offences free of any suspicion of abuse giving rise only to fines. Beyond that, the minister (Art. R. 613-1 of the Customs Code), after the opinion of the committee on tax, customs and exchange control disputes where no judicial proceedings have been brought (Art. L. 613-2).
For more on the substance, our analyses also cover preferential origin and dual-use items.
See also, on the neighbouring stages: liability of the customs representative; repayment and remission of customs duties; Authorised Economic Operator status.
On the same litigation path, regarding the inspection and the interview: Customs inspection at your company: what to do as soon as the officers arrive; regarding the official report and its nullities: Official customs report: how to challenge it and which remedies to pursue; regarding detained goods: Goods seized by customs: how to obtain release.
References: Customs Code, Art. L. 511-1, L. 511-3, L. 511-4, L. 511-5, L. 513-1, L. 513-4, L. 513-5, L. 515-1, L. 522-1 to L. 522-3, L. 613-1 to L. 613-4, L. 613-6, L. 623-1, L. 623-2, R. 515-5, R. 515-6, R. 515-9, R. 613-1, R. 613-4, R. 613-5, in force since 1 May 2026 (Ordinance No. 2026-265 and Decree No. 2026-266 of 8 April 2026); Code of Criminal Procedure, Art. 6; Doctrine: Guide Lamy des procédures douanières, co-authored by Hervé Guyader.