What Every Member of the

Trade Community Should Know About:

Accreditation of

Laboratories

And Gaugers

A Basic Level

Informed Compliance Publication of the

U.S. Customs Service

Revised March, 2000
ii

NOTICE:

This publication is intended to provide guidance and information to the trade community.

It reflects the Customs Service’s position on or interpretation of the applicable laws or

regulations as of the date of publication, which is shown on the front cover. It does not

in any way replace or supersede those laws or regulations. Only the latest official

version of the laws or regulations is authoritative.

Publication History

First Issued: September, 1999

Revised: March, 2000

PRINTING NOTE:

This publication was designed for electronic distribution via the Customs Electronic

Bulletin Board and Customs World Wide Web site (http://www.customs.gov) and is

being distributed in a variety of formats. It was originally set up in Microsoft Word97®.

Pagination and margins in downloaded versions may vary depending upon which word

processor or printer you use. If you wish to maintain the original settings, you may wish

to download the .pdf version, which can then be printed using the freely available Adobe

Acrobat Reader®.
iii

PREFACE

On December 8, 1993, Title VI of the North American Free Trade Agreement

Implementation Act (Pub. L. 103-182, 107 Stat. 2057), also known as the Customs

Modernization or “Mod” Act, became effective. These provisions amended many sections of the

Tariff Act of 1930 and related laws.

Two new concepts that emerge from the Mod Act are “informed compliance” and

“shared responsibility,” which are premised on the idea that in order to maximize voluntary

compliance with Customs laws and regulations, the trade community needs to be clearly and

completely informed of its legal obligations. Accordingly, the Mod Act imposes a greater

obligation on Customs to provide the public with improved information concerning the trade

community's rights and responsibilities under the Customs and related laws. In addition, both

the trade and Customs share responsibility for carrying out these requirements. For example,

under Section 484 of the Tariff Act as amended (19 U.S.C. §1484), the importer of record is

responsible for using reasonable care to enter, classify and determine the value of imported

merchandise and to provide any other information necessary to enable Customs to properly

assess duties, collect accurate statistics, and determine whether other applicable legal

requirements, if any, have been met. The Customs Service is then responsible for fixing the

final classification and value of the merchandise. An importer of record’s failure to exercise

reasonable care could delay release of the merchandise and, in some cases, could result in the

imposition of penalties.

The Office of Regulations and Rulings has been given a major role in meeting Customs

informed compliance responsibilities. In order to provide information to the public, Customs has

issued a series of informed compliance publications, and videos, on new or revised Customs

requirements, regulations or procedures, and a variety of classification and valuation issues.

The Office of Regulations and Rulings has prepared this publication on Accreditation of

Laboratories & Gaugers as part of a series of informed compliance publications advising the

trade community of changes in Customs procedures as a result of the Mod Act and other

legislation. This revision includes clarifications to the notice and appeals procedures. We

sincerely hope that this material, together with seminars and increased access to Customs

rulings, will help the trade community to improve, as smoothly as possible, voluntary compliance

with Customs laws.

The material in this publication is provided for general information purposes only.

Because many complicated factors can be involved in customs issues, an importer may wish to

obtain a ruling under Customs Regulations, 19 CFR Part 177, or to obtain advice from an expert

who specializes in customs matters, for example, a licensed customs broker, attorney or

consultant. Reliance solely on the information in this pamphlet may not be considered

reasonable care.

Comments and suggestions are welcomed and should be addressed to the Assistant

Commissioner at the Office of Regulations and Rulings, U.S. Customs Service, 1300

Pennsylvania Avenue, NW, Washington, D.C. 20229.

Stuart P. Seidel,

Assistant Commissioner

Office of Regulations and Rulings
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TABLE OF CONTENTS

INTRODUCTION.............................................................................................................1

Summary......................................................................................................................1

ACCREDITATION OF COMMERCIAL LABORATORIES ...............................................2

What is a “Customs-accredited laboratory”?................................................................2

What are the obligations of a Customs-accredited laboratory?....................................2

What are the commodity groups for which accreditation may be sought? ...................3

What are the approved methods of analysis?..............................................................4

How would a commercial laboratory become a Customs-accredited laboratory?........5

What should an application contain?........................................................................5

Where should an application be sent? .....................................................................6

How will an application be reviewed?.......................................................................6

Physical plant and management system ..............................................................6

Ability to perform tests on specified commodity groups ........................................6

Determination of competence...............................................................................6

Evaluation of technical and operational requirements ..........................................7

How will an applicant be notified concerning accreditation? ........................................7

Notice of approval or nonselection ...........................................................................7

Grounds for nonselection .........................................................................................7

Adverse accreditation decisions...............................................................................8

Preliminary notice .................................................................................................8

Final notice ...........................................................................................................8

Appeal decision ....................................................................................................9

What are the accreditation or reaccreditation fee requirements?.................................9

In general .................................................................................................................9

Accreditation fees .................................................................................................9

Reaccreditation fees ...........................................................................................10

Disputes .................................................................................................................10

Can existing Customs-accredited laboratories continue to operate? .........................10

How will Customs-accredited laboratories operate? ..................................................10

Samples for testing.................................................................................................10

Retention of non-perishable samples .................................................................10

Retention of perishable samples.........................................................................11

Reports...................................................................................................................11

Contents of reports .............................................................................................11

Status of commercial reports where Customs also tests merchandise...............11

Recordkeeping requirements .................................................................................11

Sample records...................................................................................................12

Major equipment records ....................................................................................12

Records of analytical procedures........................................................................12

Laboratory analysis records................................................................................12

Laboratory analysis reports.................................................................................12

Representation of Customs-accredited status........................................................13

Subcontracting prohibited.......................................................................................13
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APPROVAL OF COMMERCIAL GAUGERS .................................................................13

What is a “Customs-approved gauger”? ....................................................................13

What are the obligations of a Customs-approved gauger? ........................................13

What are the approved measurement procedures?...................................................14

How would a commercial gauger become a Customs-approved gauger? .................14

What should an application contain?......................................................................14

Where should an application be sent? ...................................................................15

How will an application be reviewed?.....................................................................15

Determination of competence.............................................................................15

Evaluation of technical and operational requirements ........................................15

How will an applicant be notified concerning approval?.............................................16

Notice of approval or nonselection .........................................................................16

Grounds for nonselection .......................................................................................16

Adverse approval decisions....................................................................................17

Preliminary notice ...............................................................................................17

Final notice .........................................................................................................17

Appeal decision ..................................................................................................17

What are the approval or reapproval fee requirements?............................................18

In general ...............................................................................................................18

Approval fees......................................................................................................18

Reapproval fees..................................................................................................18

Disputes .................................................................................................................18

Can existing Customs-approved gaugers continue to operate? ................................19

How will Customs-approved gaugers operate? .........................................................19

Reports...................................................................................................................19

Contents of reports .............................................................................................19

Status of commercial reports where Customs also gauges merchandise...........20

Recordkeeping requirements .................................................................................20

Transaction records ............................................................................................20

Major equipment records ....................................................................................20

Records of gauging procedures..........................................................................20

Gauging records .................................................................................................21

Gauging reports ..................................................................................................21

Representation of Customs-approved status .........................................................21

Subcontracting prohibited.......................................................................................21

HOW CAN A LABORATORY OR GAUGER HAVE ITS ACCREDITATION OR

APPROVAL SUSPENDED OR REVOKED OR BE REQUIRED TO PAY A MONETARY

PENALTY? ....................................................................................................................21

General ......................................................................................................................21

Specific grounds for suspension, revocation, or assessment of a monetary penalty .22

Assessment of monetary penalties.........................................................................22

Notice.........................................................................................................................23

Immediate suspension or revocation......................................................................23

Proposed suspension, revocation, or assessment of monetary penalty.................23

Preliminary notice ...............................................................................................23
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Final Notice.........................................................................................................23

Administrative Appeal Decision..............................................................................24

Publication..............................................................................................................24

ADDITIONAL INFORMATION.......................................................................................25

The Internet................................................................................................................25

Customs Regulations.................................................................................................25

Customs Bulletin........................................................................................................25

Importing Into the United States.................................................................................26

Video Tapes...............................................................................................................26

Informed Compliance Publications.............................................................................27

Value Publications .....................................................................................................29

“Your Comments are Important” ................................................................................29
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Accreditation of Laboratories and Gaugers

March, 2000

1

INTRODUCTION

On December 8, 1993, the United States enacted the North American Free Trade

Agreement Implementation Act (“the Act”), Pub. L. 103-182, 107 Stat. 2057. Title VI of

the Act contains provisions pertaining to Customs Modernization (107 Stat. 2170), and is

commonly referred to as the Customs Modernization Act or “Mod Act” for short. Section

613 of the “Mod Act” amended section 499 of the Tariff Act of 1930 (19 U.S.C. 1499),

which provides Customs with the authority to conduct examinations and detain imported

merchandise, by adding a new paragraph (b) concerning commercial laboratories and

gaugers.

Summary

Section 613 authorized Customs to set procedures for the accreditation of

commercial laboratories and the approval of commercial gaugers, and the suspension

and revocation of accreditation or approvals. Customs accreditation extends only to the

performance of functions which are vested in, or delegated to, Customs (for example,

the analysis of certain commodities to determine admissibility, quantity, or composition of

imported merchandise under the Customs laws). Commercial laboratories and gaugers

may be accredited only to perform tests that otherwise would be performed by Customs

laboratories. Laboratories and gaugers that are currently accredited under Customs

regulations will not be required to reapply, but will be subject to reaccreditation. The

“Mod Act” also creates appeal rights for commercial laboratories and gaugers to

challenge in the Court of International Trade any final order or decision relating to their

accreditation or reaccreditation or the assessment of a penalty within 60 days of its

issuance.

In the absence of Customs testing, Customs must accept quantity and analysis

results from the Customs-accredited laboratories and Customs-approved gaugers.

However, nothing limits or precludes Customs or any other Federal agency from

independently testing, analyzing, or quantifying any merchandise.

The Secretary of the Treasury is required to prescribe regulations that establish

the conditions under which the Customs Service may suspend or revoke accreditation or

institute penalties for violations of law, regulations, or the commercial laboratory or

gauger agreement. Such penalties must not exceed $100,000 and will be in addition to

recoveries of any actual or potential loss of revenue that may have resulted from an

intentionally falsified report or analysis submitted by an accredited laboratory or gauger.

Fees for receiving accreditation and reaccreditation are specifically authorized by section

613.
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March, 2000

2

Under the “Mod Act,” testing procedures and methodologies will be made

available upon request to laboratories and importers or their agents, unless they are

proprietary to the Customs Service (i.e. developed by Customs for enforcement

purposes) or the holder of a copyright or patent. Test results will, unless they reveal

information proprietary to the Customs Service or the holder of a copyright or patent, be

made available on request to the importer or its agents.

The regulations implementing section 613 were published as amendments to

sections 151.12 and 151.13 of the Customs Regulations (19 CFR §151.12 and §151.13)

in the Federal Register on September 7,1999 (64 FR 48528) and were effective on

October 7, 1999. Because questions were raised concerning time frames, notifications

of adverse determinations, and appeals, amendments clarifying these points were

published in the Federal Register on February 25, 2000 (65 FR 10007). In this

publication, references to Part 151, section 151.12 or 151.13, or any of their paragraphs

are to the revised regulations.

ACCREDITATION OF COMMERCIAL LABORATORIES

What is a “Customs-accredited laboratory”?

“Commercial laboratories” are individuals and commercial organizations that

analyze merchandise, i.e., determine its composition and/or characteristics, through

laboratory analysis. A “Customs-accredited laboratory” is a commercial laboratory,

within the United States, that has demonstrated, to the satisfaction of the Executive

Director, Laboratories & Scientific Services, U.S. Customs Service, (“the Executive

Director”) pursuant to the new regulations, the capability to perform analysis of certain

commodities to determine elements relating to the admissibility, quantity, composition, or

characteristics of imported merchandise. Customs accreditation extends only to the

performance of functions which are vested in, or delegated to, Customs.

Also, Customs wishes to note that laboratories may be accredited in Puerto Rico,

as the United States is defined to include Puerto Rico, see, 19 CFR 101.1, “Customs

territory of the United States.”

What are the obligations of a Customs-accredited laboratory?

A commercial laboratory accredited by Customs agrees to the following conditions

and requirements:

! To comply with the requirements of Part 151, and to conduct professional

services in conformance with approved standards and procedures, including
Accreditation of Laboratories and Gaugers

March, 2000

3

procedures which may be required by the Commissioner of Customs or the

Executive Director;

! To have no interest in or other connection with any business or other activity

which might affect the unbiased performance of duties as a Customs-accredited

laboratory. It is understood that this does not prohibit acceptance of the usual

fees for professional services;

! To maintain the ability, i.e., the instrumentation, equipment, qualified staff,

facilities, etc., to perform the services for which the laboratory is accredited, and

allow the Executive Director to evaluate that ability on a periodic basis by such

means as on-site inspections, demonstrations of analysis procedures, reviews of

submitted records, and proficiency testing through check samples (“Check

samples” are samples which have been distributed by Customs to accredited

laboratories to test their proficiency in a certain area of accreditation);

! To retain those laboratory records beyond the five-year record-retention period

and samples (see 151.12(j)) specified by Customs as necessary to address

matters concerned in pending litigation, and, if laboratory operations or

accreditation cease, to contact Customs immediately regarding the disposition of

records/samples retained;

! To promptly investigate any circumstance which might affect the accuracy of

work performed as an accredited laboratory, to correct the situation immediately,

and to notify both the port director and the Executive Director of such matters,

their consequences, and any corrective action taken or that needs to be taken;

and

! To immediately notify both the port director and the Executive Director of any

attempt to impede, influence, or coerce laboratory personnel in the performance

of their duties, or of any decision to terminate laboratory operations or accredited

status. Further, within 5 days of any changes involving legal name, address,

ownership, parent-subsidiary relationships, bond, other offices or sites, or

approved signatories to notify the Executive Director by certified mail.

What are the commodity groups for which accreditation may be

sought?

Commercial laboratories may apply for accreditation to perform tests without

special permission from the Executive Director for any of the following commodity

groups:

! Dairy and Chocolate Products entered under Chapters 4, 18, and 21 of the

Harmonized Tariff Schedule of the United States (HTSUS);

! Food and Food Products entered under Chapters 7-12, 15, 16, and 19-21,

HTSUS;

! Botanical Identification - materials and products entered under Chapters 14 and

44-46, HTSUS;
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March, 2000

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! Sugar, Sugar Syrups, and Confectionery products entered under Chapter 17,

HTSUS;

! Spirituous Beverages entered under Chapter 22, HTSUS;

! Building Stone, Ceramics, Glassware, and Other Mineral Substances entered

under Chapters 25 and 68-70, HTSUS;

! Inorganic Materials, including Inorganic Compounds and Ores, entered under

Chapters 26, 28, 31, and 36-38, HTSUS;

! Petroleum and Petroleum Products entered under Chapters 27 and 29, HTSUS;

! Organic Materials, including Intermediates and Pharmaceuticals, entered under

Chapters 29, 30, 34, 35, and 38, HTSUS;

! Rubber, Plastics, Polymers, Pigments and Paints entered under Chapters 32, 39,

and 40, HTSUS;

! Essential Oils and Perfumes entered under Chapter 33, HTSUS;

! Leather and Articles of Leather entered under Chapters 41 and 42, HTSUS;

! Paper and Paper Products entered under Chapters 47-49, HTSUS;

! Textiles and Related Products, including footwear and hats, entered under

Chapters 50-67, HTSUS; and,

! Metals and Alloys entered under Chapters 72-83, HTSUS.

Application may be made for accreditation in more than one commodity group. At

the discretion of the Executive Director accreditation may be granted for subgroups of

tests within a commodity group or for commodity groups not specifically enumerated.

Once accredited, a Customs-accredited laboratory may apply at any time to expand its

accreditation, to add new testing sites, or increase the number of commodity groups or

subgroups accredited.

What are the approved methods of analysis?

Customs-accredited laboratories must follow the general or specific testing

methods set forth in Commodity Group Brochures and the U.S. Customs Laboratory

Methods Manual in the testing of designated commodities, unless the Executive Director

gives written permission to use an alternate method. Alternative methods will be

considered and approved on a case-by-case basis.

A “Commodity Group Brochure” is a booklet which contains a listing of laboratory

methods which commercial laboratories are required to have the capability to perform to

qualify for Customs-accreditation in a particular commodity group. The brochures and

the U.S. Customs Laboratory Methods Manual will specify the particular laboratory

testing methods required for particular commodity groups, unless written permission from

the Executive Director is given to use an alternate method. Procedures required by the

Executive Director may reference applicable general industry testing standards,

published by such organizations as the American Society for Testing and Materials

(ASTM) and the American Petroleum Institute (API). Commodity Group Brochures and a

listing of the methods found in the U.S. Customs Laboratory Methods Manual are
Accreditation of Laboratories and Gaugers

March, 2000

5

available from the U.S. Customs Service, Attention: Executive Director, Laboratories &

Scientific Services, Washington, D.C. 20229 and can also be found on the Customs

Internet Web Site: http://www.customs.gov.

How would a commercial laboratory become a Customs-accredited

laboratory?

What should an application contain?

An application for Customs accreditation must contain the following information:

• The applicant's legal name and the address of its principal place of business and

any other facility out of which it will work;

• Detailed statements of ownership and any partnerships, parent-subsidiary

relationships, or affiliations with any other domestic or foreign organizations,

including, but not limited to, importers, other commercial laboratories, producers,

refiners, Customs brokers, and carriers;

• A statement of financial condition;

• If a corporation, a copy of the articles of incorporation and the names of all officers

and directors;

• The names, titles, and qualifications of each person who will be authorized to sign

or approve analysis reports on behalf of the commercial laboratory;

• A complete description of the applicant's facilities, instruments, and equipment;

• An express agreement that if notified by Customs of pending accreditation to

execute a bond in accordance with part 113, Customs Regulations (19 CFR part

113), and submit it to the Customs port nearest to the applicant's main office.

(The limits of liability on the bond will be established by the Customs port in

consultation with the Executive Director. In order to retain Customs accreditation,

the laboratory must maintain an adequate bond, as determined by the port

director);

• A listing of each commodity group for which accreditation is being sought and, if

methods are being submitted for approval which are not specifically provided for

in a Commodity Group Brochure and the U.S. Customs Laboratory Methods

Manual, a listing of such methods;

• A listing by commodity group of each method according to its Customs Laboratory

Method Number for which the laboratory is seeking accreditation;

• An express agreement to be bound by the obligations contained in paragraph (c)

of this section; and,

• A nonrefundable pre-payment equal to 50 percent of the fixed accreditation fee,

as published in the Federal Register and Customs Bulletin, to cover preliminary

processing costs. Further, the applicant agrees to pay Customs within 30 days of

notification of preliminary accreditation the associated charges assessed for
Accreditation of Laboratories and Gaugers

March, 2000

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accreditation, i.e., those charges for actual travel and background investigation

costs, and the balance of the fixed accreditation fee.

Where should an application be sent?

A commercial laboratory seeking accreditation or an extension of an existing

accreditation must send a letter of application to the U.S. Customs Service, Attention:

Executive Director, Laboratories & Scientific Services, 1300 Pennsylvania Ave., NW,

Washington, D.C. 20229.

How will an application be reviewed?

Physical plant and management system

The facility of the applicant will be inspected to ensure that it is properly equipped

to perform the necessary tests and that staff personnel are capable of performing

required tests. Customs evaluation of an applicant’s professional abilities will be in

accordance with the general criteria contained in either the American Society for Testing

and Materials (ASTM) E548 (Standard Guide for General Criteria Used for Evaluating

Laboratory Competence) or the ISO/IEC Guide 25 (General Requirements for the

Competence of Calibration and Testing Laboratories). This review will ascertain the

laboratory's ability to manage and control the acquisition of technical data. The review

will be performed at the time of initial application and upon reaccreditation at three-year

intervals.

Ability to perform tests on specified commodity groups

For each commodity group applied for, the applicant will undergo a separate

review of testing capabilities. The specific accreditation will be based on the

laboratory's ability to perform the tests required for that commodity group. This will

include the qualifications of the technical personnel in this field and the instrument

availability required by the test methods.

Maintenance of accreditation will be on-going and may require the submission of

test results on periodic check samples. The criteria for acceptance shall be based on

the laboratory's ability to produce a work product that assists in the proper classification

and entry of imported merchandise.

Determination of competence

The Executive Director will determine the applicant's overall competence,

independence, and character by conducting on-site inspections, which may include

demonstrations by the applicant of analysis procedures and a review of analysis records

submitted, and background investigations. An "analysis record" is a compilation of all

documents which have been generated during the course of analysis of a particular

sample which, under normal circumstances, may include, both in paper and electronic-
Accreditation of Laboratories and Gaugers

March, 2000

7

form, such documents as work sheets, notes, associated spectra (both spectra of the

actual product and any standard spectra used for comparison), photographs and

microphotographs, and the laboratory report. The Executive Director may also conduct

proficiency testing through check samples.

Evaluation of technical and operational requirements

Customs will determine whether the following technical and operational

requirements are met:

! Equipment. The laboratory must be equipped with all of the instruments and

equipment needed to conduct the tests for which it is accredited. The laboratory

shall ensure that all instruments and equipment are properly calibrated, checked,

and maintained.

! Facilities. The laboratory must have, at a minimum, adequate space, lighting,

and environmental controls to ensure compliance with the conditions prescribed

for appropriate test procedures.

! Personnel. The laboratory shall be staffed with persons having the necessary

education, training, knowledge, and experience for their assigned functions (e.g.,

maintaining equipment, calibrating instruments, performing laboratory analyses,

evaluating analytical results, and signing analysis reports on behalf of the

laboratory). In general, each technical staff member should hold, at a minimum,

a bachelor's degree in science or have two years related experience in an

analytical laboratory.

How will an applicant be notified concerning accreditation?

Notice of approval or nonselection

When Customs evaluation of a laboratory’s credentials is completed, the

Executive Director will notify the laboratory in writing of its preliminary accreditation or

nonselection. (Final accreditation determinations will not be made until the applicant

has satisfied all bond requirements and made payment on all assessed charges and the

balance of the applicable accreditation fee). All final notices of accreditation,

reaccreditation, or extension of existing Customs accreditation will be published in the

Federal Register and Customs Bulletin.

Grounds for nonselection

The Executive Director may deny a laboratory's application for any of the

following reasons:

! The application contains false or misleading information concerning a material

fact;

! The laboratory, a principal of the laboratory, or a person the Executive Director

determines is exercising substantial ownership or control over the laboratory

operation is indicted for, convicted of, or has committed acts which would, under

United States federal or state law, constitute a felony or misdemeanor involving
Accreditation of Laboratories and Gaugers

March, 2000

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misstatements, fraud, theft-related offenses or any other violation which would

reflect adversely on the business integrity of the applicant;

! A determination is made that the laboratory-applicant does not possess the

technical capability, have adequate facilities or management to perform the

approved methods of analysis for Customs purposes;

! A determination is made that the laboratory has submitted false reports or

statements concerning the sampling of merchandise, or that the applicant was

subject to sanctions by state, local, or professional administrative bodies for such

conduct;

! Nonpayment of assessed charges and the balance of the fixed accreditation fee;

or

! Failure to execute a bond in accordance with part 113 of the Customs

Regulations (19 CFR Part 113).

Adverse accreditation decisions

Preliminary notice

A laboratory which is not selected for accreditation will be sent a preliminary

notice of nonselection. The preliminary notice of nonselection will state the specific

grounds for the proposed nonselection decision and advise the laboratory that it may file

a response addressing the grounds for the action proposed with the Executive Director

within 30 calendar days of the date the preliminary notice of nonselection was received

by the laboratory.

Final notice

If the laboratory does not respond to the preliminary notice, the Executive

Director will issue a final notice of nonselection within 60 calendar days of the date the

preliminary notice of nonselection was received by the laboratory applicant. The final

notice of nonselection will state the specific grounds for the nonselection and advise the

laboratory that it may choose to pursue one of the following two options:

• Submit a new application for accreditation, 180 days after the date of the final

notice of nonselection; or

• Administratively appeal the final notice of nonselection to the Assistant

Commissioner within 30 calendar days of the date of the final notice of

nonselection.

If the laboratory files a timely response, the Executive Director will issue a final

determination regarding the laboratory’s accreditation within 30 calendar days of the

date the applicant’s response is received by the Executive Director. If this final

determination is adverse to the laboratory, then the final notice of nonselection will state

the specific grounds for nonselection and advise the laboratory that it may choose to

pursue one of the two options provided above.
Accreditation of Laboratories and Gaugers

March, 2000

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Appeal decision

The Assistant Commissioner will issue a decision on the appeal within 30

calendar days of the date the appeal is received. If the appeal decision is adverse to

the laboratory, then the decision notice will advise the laboratory that it may choose to

pursue one of the following two options:

• Submit a new application for accreditation, 120 days after the date of the appeal

decision; or

• File an action with the Court of International Trade, pursuant to chapter 169 of title

28, United States Code, within 60 days of the date of the appeal decision.

What are the accreditation or reaccreditation fee requirements?

In general

A fixed fee, representing Customs administrative overhead expense, will be

assessed for each application for accreditation or reaccreditation. In addition,

associated assessments, representing the actual costs associated with travel and per

diem of Customs employees related to verification of application criteria and

background investigations will be charged. The combination of the fixed fee and

associated assessments represent reimbursement to Customs for costs related to

accreditation and reaccreditation. The fixed fee will be published in the Customs

Bulletin and the Federal Register. Based on a review of the actual costs associated

with the program, the fixed fee may be adjusted periodically; any changes shall be

published in the Customs Bulletin and the Federal Register.

The initial fixed fee schedules for accrediting or reaccrediting laboratories are:

General Accreditation Fee $ 750

Additional Commodities Fee $ 200

Laboratory Reaccreditation Fee $ 375

Commodity Reaccreditation Fee $ 150

The initial variable fee schedules for accrediting or reaccrediting laboratories are

approximately $ 1,000 for travel per visit and $ 1,700 per background investigation.

Accreditation fees

A nonrefundable pre-payment equal to 50 percent of the fixed accreditation fee to

cover preliminary processing costs must accompany each application for accreditation.

Before a laboratory will be accredited, it must remit to Customs, Account Services

Division, within the 30 day billing period the associated charges assessed for the

accreditation and the balance of the fixed accreditation fee.
Accreditation of Laboratories and Gaugers

March, 2000

10

Reaccreditation fees

Before a laboratory will be reaccredited, it must submit to Customs, Account

Services Division, within the 30 day billing period the fixed reaccreditation fee.

Disputes

In the event a laboratory disputes the charges assessed for travel and per diem

costs associated with scheduled inspection visits, it may file an appeal within 30

calendar days of the date of the assessment with the Executive Director. The appeal

letter must specify which charges are in dispute and provide such supporting

documentation as may be available for each allegation. The Executive Director will

make findings of fact concerning the merits of an appeal and communicate the agency

decision to the laboratory in writing within 30 calendar days of the date of the appeal.

Can existing Customs-accredited laboratories continue to operate?

Commercial laboratories accredited by the Executive Director prior to December

8, 1993, (except for laboratories which have had their accreditation suspended or

revoked) will retain that accreditation under the regulations provided they conduct their

business in a manner consistent with the administrative portions of the new regulations

in section 151.12. Laboratories which have had their accreditations continued under

this section will have their status reevaluated on their next triennial inspection date

which is no earlier than three years after the effective date of the new regulation. At the

time of reaccreditation, these laboratories must meet the requirements of section 151.12

and remit to Customs, Account Services Division, within the 30 day billing period the

fixed reaccreditation fee. Failure to meet these requirements will result in revocation or

suspension of the accreditation.

How will Customs-accredited laboratories operate?

Samples for testing

Upon request by the importer of record of merchandise, the port director will

release a representative sample of the merchandise for testing by a Customsaccredited laboratory at the expense of the importer. Under Customs supervision, the

sample will be split into two essentially equal parts and given to the Customs-accredited

laboratory. One portion of the sample may be used by the Customs-accredited

laboratory for its testing. The other portion must be retained by the laboratory, under

appropriate storage conditions, for Customs use, as necessary, unless Customs

requires other specific procedures. Upon request, the sample portion reserved for

Customs purposes must be surrendered to Customs.

Retention of non-perishable samples

Non-perishable samples reserved for Customs and sample remnants from any
Accreditation of Laboratories and Gaugers

March, 2000

11

testing must be retained by the accredited laboratory for a period of four months from

the date of the laboratory's final analysis report, unless other instructions are issued in

writing by Customs. At the end of this retention time period the accredited laboratory

may dispose of the retained samples and sample remnants in a manner consistent with

federal, state, and local statutes.

Retention of perishable samples

Perishable samples reserved for Customs and sample remnants from any testing

can be disposed of more expeditiously than provided above, if done in accordance with

acceptable laboratory procedures, unless other instructions are issued in writing by

Customs.

Reports

Contents of reports

Testing data must be obtained using methods approved by the Executive

Director. The testing results from a Customs-accredited laboratory that are submitted

by an importer of record with respect to merchandise in an entry, in the absence of

testing conducted by Customs laboratories, will be accepted by Customs provided that

the importer of record certifies that the sample tested was taken from the merchandise

in the entry and the report establishes elements relating to the admissibility, quantity,

composition, or characteristics of the merchandise entered, as required by law.

Status of commercial reports where Customs also tests merchandise

Nothing in the regulations precludes Customs from sampling and testing

merchandise from a shipment which has been sampled and tested by a Customsaccredited laboratory at the request of an importer. In cases where a shipment has

been analyzed by both Customs and a Customs-accredited laboratory, all Customs

actions will be based upon the analysis provided by the Customs laboratory, unless the

Executive Director advises otherwise. If Customs tests merchandise, it will release the

results of its test to the importer of record or its agent upon request unless the testing

information is proprietary to the holder of a copyright or patent, or developed by

Customs for enforcement purposes.

Recordkeeping requirements

Customs-accredited laboratories must maintain records of the type normally kept

in the ordinary course of business in accordance with the provisions of this chapter and

any other applicable provision of law, and make them available during normal business

hours for Customs inspection. In addition, these laboratories must maintain all records

necessary to permit the evaluation and verification of all Customs-related work,

including, as appropriate, those described below. All records must be maintained for

five years, unless the laboratory is notified in writing by Customs that a longer retention
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12

time is necessary for particular records. Electronic data storage and transmission may

be approved by Customs.

Sample records

Records for each sample tested for Customs purposes must be readily

accessible and contain the following information:

! A unique identifying number;

! The date when the sample was received or taken;

! The identity of the commodity (e.g. crude oil);

! The name of the client;

! The source of the sample (e.g., name of vessel, flight number of airline, name of

individual taking the sample); and,

! If available, the Customs entry date, entry number, and port of entry and the

names of the importer, exporter, manufacturer, and country-of-origin.

Major equipment records

Records for each major piece of equipment or instrument (including analytical

balances) used in Customs-related work must identify the name and type of instrument,

the manufacturer's name, the instrument's model and any serial numbers, and the

occurrence of all servicing performed on the equipment or instrument, to include

recalibration and any repair work, identifying who performed the service and when.

Records of analytical procedures

The Customs-accredited laboratory must maintain complete and up-to-date

copies of all approved analytical procedures, calibration methods, etc., and must

document the procedures each staff member is authorized to perform. These

procedures must be readily available to appropriate staff.

Laboratory analysis records

The Customs-accredited laboratory must identify each analysis by sample record

number (see 19 CFR §151.12 (j)(3)(i)) and must maintain all information or data (such

as sample weights, temperatures, references to filed spectra, etc.) associated with each

Customs-related laboratory analysis. Each analysis record must be dated and initialed

or signed by the staff member(s) who did the work.

Laboratory analysis reports

Each laboratory analysis report submitted to Customs must include:

! The name and address of the Customs-accredited laboratory;

! A description and identification of the sample, including its unique identifying

number;

! The designations of each analysis procedure used;
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! The analysis report itself (i.e., the pertinent characteristics of the sample);

! The date of the report; and,

! The typed name and signature of the person accepting technical responsibility for

the analysis report (i.e., an approved signatory).

Representation of Customs-accredited status

Commercial laboratories accredited by Customs must limit statements or wording

regarding their accreditation to an accurate description of the tests for the commodity

group(s) for which accreditation has been obtained. Use of terms other than those

appearing in the notice of approval (see §151.12(g)) is prohibited.

Subcontracting prohibited

Customs-accredited laboratories shall not subcontract Customs-related analysis

work to non Customs-accredited laboratories or non Customs-approved gaugers, but

may subcontract to other facilities that are Customs-accredited or approved and in good

standing.

APPROVAL OF COMMERCIAL GAUGERS

What is a “Customs-approved gauger”?

“Commercial gaugers” are individuals and commercial organizations that

measure, gauge, or sample merchandise (usually merchandise in bulk form) and who

deal mainly with animal and vegetable oils, petroleum, petroleum products, and bulk

chemicals. A “Customs-approved gauger” is a commercial concern, within the United

States, that has demonstrated, to the satisfaction of the Executive Director,

Laboratories & Scientific Services, U.S. Customs Service, (“the Executive Director”) the

capability to perform certain gauging and measurement procedures for certain

commodities. Customs approval extends only to the performance of such functions as

are vested in, or delegated to, Customs.

Also, Customs wishes to note that gaugers may be approved in Puerto Rico, as

the United States is defined to include Puerto Rico, see, 19 CFR 101.1, “Customs

territory of the United States.”

What are the obligations of a Customs-approved gauger?

A commercial gauger approved by Customs agrees to the following conditions

and requirements:

! To comply with the requirements of part 151, and to conduct professional

services in conformance with approved standards and procedures, including

procedures which may be required by the Commissioner of Customs or the

Executive Director;

! To have no interest in or other connection with any business or other activity
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14

which might affect the unbiased performance of duties as a Customs-approved

gauger. It is understood that this does not prohibit acceptance of the usual fees

for professional services;

! To maintain the ability, i.e., the instrumentation, equipment, qualified staff,

facilities, etc., to perform the services for which the gauger is approved, and

allow the Executive Director to evaluate that ability on a periodic basis by such

means as on-site inspections, demonstrations of gauging procedures, and

reviews of submitted records;

! To retain those gauger records beyond the five-year record-retention period

specified by Customs as necessary to address matters concerned in pending

litigation, and, if gauger operations or approval cease, to contact Customs

immediately regarding the disposition of records retained;

! To promptly investigate any circumstance which might affect the accuracy of

work performed as an approved gauger, to correct the situation immediately, and

to notify both the port director and the Executive Director of such matters, their

consequences, and any corrective action taken or that needs to be taken; and

! To immediately notify both the port director and the Executive Director of any

attempt to impede, influence, or coerce gauger personnel in the performance of

their duties, or of any decision to terminate gauger operations or approval status.

Further, within 5 days of any changes involving legal name, address, ownership,

parent-subsidiary relationships, bond, other offices or sites, or approved

signatories to notify the Executive Director by certified mail.

What are the approved measurement procedures?

Customs-approved gaugers must comply with appropriate procedures published

by such professional organizations as the American Society for Testing and Materials

(ASTM) and the American Petroleum Institute (API), unless the Executive Director gives

written permission to use an alternate method. Alternative methods will be considered

and approved on a case-by-case basis.

How would a commercial gauger become a Customs-approved

gauger?

What should an application contain?

An application for Customs approval must contain the following information:

! The applicant's legal name and the addresses of its principal place of business

and any other facility out of which it will work;

! Detailed statements of ownership and any partnerships, parent-subsidiary

relationships, or affiliations with any other domestic or foreign organizations,

including, but not limited to, importers; producers; refiners; Customs brokers; or

carriers;

! A statement of financial condition;

! If a corporation, a copy of the articles of incorporation and the names of all

officers and directors;
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! The names, titles, and qualifications of each person who will be authorized to

sign or approve gauging reports on behalf of the commercial gauger;

! A complete description of the applicant's facilities, instruments, and equipment;

! An express agreement that if notified by Customs of pending approval to execute

a bond in accordance with part 113, Customs Regulations (19 CFR part 113),

and submit it to the Customs port nearest to the applicant's main office. (The

limits of liability on the bond will be established by the Customs port in

consultation with the Executive Director. In order to retain Customs approval, the

gauger must maintain an adequate bond, as determined by the port director);

! An express agreement to be bound by the obligations contained in paragraph (b)

of this section; and,

! A nonrefundable pre-payment equal to 50 percent of the fixed approval fee, as

published in the Federal Register and Customs Bulletin, to cover preliminary

processing costs. Further, the applicant agrees to pay Customs within 30 days

of notification of preliminary approval the associated charges assessed for

approval, i.e., those charges for actual travel and background investigation costs,

and the balance of the fixed approval fee.

Where should an application be sent?

A commercial gauger seeking approval or an extension of an existing approval

must send a letter of application to the U.S. Customs Service, Attention: Executive

Director, Laboratories & Scientific Services, 1300 Pennsylvania Ave., NW, Washington,

D.C. 20229.

How will an application be reviewed?

Determination of competence

The Executive Director will determine the applicant's overall competence,

independence, and character by conducting on-site inspections, which may include

demonstrations by the applicant of gauging procedures and a review of records

submitted, and background investigations. The Executive Director may also conduct

proficiency testing through check samples.

Evaluation of technical and operational requirements

Customs will determine whether the following technical and operational

requirements are met:

! Equipment. The facility shall be equipped with all of the instruments and

equipment needed to conduct approved services. The gauger shall ensure that

all instruments and equipment are properly calibrated, checked, and maintained.

! Facilities. The facility shall have, at a minimum, adequate space, lighting, and

environmental controls to ensure compliance with the conditions prescribed for

appropriate measurements.
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! Personnel. The facility shall be staffed with persons having the necessary

education, training, knowledge, and experience for their assigned functions (e.g.,

maintaining equipment, calibrating instruments, performing gauging services,

evaluating gauging results, and signing gauging reports on behalf of the

commercial gauger). In general, each technical staff member should have, at a

minimum, six months training and experience in gauging.

How will an applicant be notified concerning approval?

Notice of approval or nonselection

When Customs evaluation of a gauger’s credentials is completed, the Executive

Director will notify the gauger in writing of its preliminary approval or nonselection.

(Final approval determinations will not be made until the applicant has satisfied all bond

requirements and made payment on all assessed charges and the balance of the

applicable approval fee). All final notices of approval, reapproval, or extension of

existing Customs approval will be published in the Federal Register and Customs

Bulletin.

Grounds for nonselection

The Executive Director may deny a gauger's application for any of the following

reasons:

! The application contains false or misleading information concerning a material

fact;

! The gauger, a principal of the gauging facility, or a person the Executive Director

determines is exercising substantial ownership or control over the gauger

operation is indicted for, convicted of, or has committed acts which would, under

United States federal or state law, constitute a felony or misdemeanor involving

misstatements, fraud, theft-related offenses or which would reflect adversely on

the business integrity of the applicant;

! A determination is made that the gauger-applicant does not possess the

capability, have adequate facilities, or management to perform the approved

methods of measurement for Customs purposes;

! A determination is made that the gauger has submitted false reports or

statements concerning the measurement of merchandise, or that the applicant

was subject to sanctions by state, local, or professional administrative bodies for

such conduct;

! Nonpayment of assessed charges and the balance of the fixed approval fee; or

! Failure to execute a bond in accordance with part 113 of the regulations.
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Adverse approval decisions

Preliminary notice

A gauger which is not selected for approval will be sent a preliminary notice of on

selection. The preliminary notice of nonselection will state the specific grounds for the

proposed nonselection decision and advise the gauger that it may file a response

addressing the grounds for the action proposed with the Executive Director within 30

calendar days of the date the preliminary notice of nonselection was received by the

gauger.

Final notice

If the gauger does not respond to the preliminary notice, the Executive Director

will issue a final notice of nonselection within 60 calendar days of the date the

preliminary notice of nonselection was received by the gauger applicant. The final

notice of nonselection will state the specific grounds for the nonselection and advise the

gauger that it may choose to pursue one of the following two options:

• Submit a new application for approval, 180 days after the date of the final notice

of nonselection; or

• Administratively appeal the final notice of nonselection to the Assistant

Commissioner within 30 calendar days of the date of the final notice of

nonselection.

If the gauger files a timely response, the Executive Director will issue a final

determination regarding the gauger=s approval within 30 calendar days of the date the

applicant=s response is received by the Executive Director. If this final determination is

adverse to the gauger, then the final notice of nonselection will state the specific

grounds for nonselection and advise the gauger that it may choose to pursue one of the

two options provided above.

Appeal decision

The Assistant Commissioner will issue a decision on the appeal within 30 calendar days

of the date the appeal is received. If the appeal decision is adverse to the gauger, then

the decision notice will advise the gauger that it may choose to pursue one of the

following two options:

• Submit a new application for approval, 120 days after the date of the appeal

decision; or

• File an action with the Court of International Trade, pursuant to chapter 169 of title

28, United States Code, within 60 days of the date of the appeal decision.
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What are the approval or reapproval fee requirements?

In general

A fixed fee, representing Customs administrative overhead expense, will be

assessed for each application for approval or reapproval. In addition, associated

assessments, representing the actual costs associated with travel and per diem of

Customs employees related to verification of application criteria and background

investigations will be charged. The combination of the fixed fee and associated

assessments represent reimbursement to Customs for costs related to approval and

reapproval. The fixed fee will be published in the Customs Bulletin and the Federal

Register. Based on a review of the actual costs associated with the program, the fixed

fee may be adjusted periodically; any changes will be published in the Customs Bulletin

and the Federal Register.

The initial fixed fee schedules for approving or reapproving gaugers are:

General Approval Fee $ 400

Reapproval Fee $ 200

The initial variable fee schedules for approving or reapproving gaugers are

approximately $ 1,000 for travel per visit and $ 1,700 per background investigation.

Approval fees

A nonrefundable pre-payment equal to 50 percent of the fixed approval fee to

cover preliminary processing costs must accompany each application for approval.

Before a gauger will be approved, it must submit to Customs, Account Services

Division, within the 30 day billing period the associated charges assessed for the

approval and the balance of the fixed approval fee.

Reapproval fees

Before a gauger will be reapproved, it must submit to Customs, Account Services

Division, within the 30 day billing period the fixed reapproval fee.

Disputes

In the event a gauger disputes the charges assessed for travel and per diem

costs associated with scheduled inspection visits, it may file an appeal within 30

calendar days of the date of the assessment with the Executive Director. The appeal

letter must specify which charges are in dispute and provide such supporting

documentation as may be available for each allegation. The Executive Director must

make findings of fact concerning the merits of an appeal and communicate the agency

decision to the gauger in writing within 30 calendar days of the date of the appeal.
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Can existing Customs-approved gaugers continue to operate?

Commercial gaugers approved by the Executive Director prior to December 8,

1993, will retain approval under the new regulations provided that they have not had

their approval suspended or revoked and they conduct their business in a manner

consistent with the administrative portions of this section. Gaugers which have had

their approvals continued under this section will have their status reevaluated on their

next triennial inspection date which is no earlier than three years after the effective date

of the new regulations. At the time of reapproval, these gaugers must meet the

requirements of section 151.13 and remit to Customs, Account Services Division, within

the 30 day billing period the fixed reapproval fee. Failure to meet these requirements

will result in revocation or suspension of the approval.

How will Customs-approved gaugers operate?

Reports

Contents of reports

The measurement results from a Customs-approved gauger that are submitted

by an importer of record with respect to merchandise in an entry, in the absence of

measurements conducted by Customs, will be accepted by Customs, provided that the

importer of record certifies that the measurement was of the merchandise in the entry.

All reports must measure net landed quantity, except in the case of crude petroleum of

Heading 2709, Harmonized Tariff Schedule of the United States (HTSUS), which may

be measured by gross quantity. Reports must be given in the appropriate HTSUS units

of quantity, e.g., liters, barrels, or kilograms.

HTSUS Product Unit of Quantity

Headings 1501 - 1515 Animal and vegetable oils Kilogram

Subheadings 2707.10 -

2707.30 and 2902.20 -

2902.44

Benzene, toluene and

xylene

Liter

Heading 2709 Crude Petroleum Barrel

Heading 2710 (various

subheadings)

Fuel oils, motor oils,

kerosene, naphtha,

lubricating oils

Barrel

Chapter 29 (various

subheadings)

Organic compounds in bulk

and liquid form

Kilogram, liter, etc.
Accreditation of Laboratories and Gaugers

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Status of commercial reports where Customs also gauges merchandise

Nothing in the regulations precludes Customs from gauging a shipment which

has been gauged by a Customs-approved gauger at the request of an importer. In

cases where a shipment has been gauged by both Customs and a Customs-approved

gauger, all Customs actions will be based upon the gauging reports issued by Customs,

unless the Executive Director advises other actions. If Customs gauges merchandise, it

will release the report of its measurements to the importer of record or its agent upon

request unless the gauging information is proprietary to the holder of a copyright or

patent, or developed by Customs for enforcement purposes.

Recordkeeping requirements

Customs-approved gaugers must maintain records of the type normally kept in

the ordinary course of business in accordance with the provisions of the Customs

Regulations and any other applicable provisions of law, and make them available during

normal business hours for Customs inspection. In addition, these gaugers must

maintain all records necessary to permit the evaluation and verification of all Customsrelated work, including, as appropriate, those described below. All records must be

maintained for five years, unless the gauger is notified in writing by Customs that a

longer retention time is necessary for particular records. Electronic data storage and

transmission may be approved by Customs.

Transaction records

Records for each Customs-related transaction must be readily accessible and

have the following:

$ A unique identifying number;

$ The date and location where the transaction occurred;

$ The identity of the product (e.g. crude oil);

$ The name of the client;

$ The source of the product (e.g., name of vessel, flight number of airline); and,

$ If available, the Customs entry date, entry number, and port of entry and the

names of the importer, exporter, manufacturer, and country-of-origin.

Major equipment records

Records for each major piece of equipment used in Customs-related work must

identify the name and type of instrument, the manufacturer's name, the instrument's

model and any serial numbers, and the occurrence of all servicing performed on the

equipment or instrument, to include recalibration and any repair work, identifying who

performed the service and when.

Records of gauging procedures

The Customs-approved gauger must maintain complete and up-to-date copies of
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all approved gauging procedures, calibration methods, etc., and must document the

procedures that each staff member is authorized to perform. These procedures must

be readily available to appropriate staff.

Gauging records

The Customs-approved gauger must identify each transaction by transaction

record number (see 19 CFR 151.13 (h)(2)(i)) and must maintain all information or data

(such as temperatures, etc.) associated with each Customs-related gauging transaction.

Each gauging record (i.e., the complete file of all data for each separate transaction)

must be dated and initialed or signed by the staff member(s) who did the work.

Gauging reports

Each gauging report submitted to Customs must include:

$ The name and address of the Customs-approved gauger;

$ A description and identification of the transaction, including its unique identifying

number;

$ The designations of each gauging procedure used;

$ The gauging report itself (i.e., the quantity of the merchandise);

$ The date of the report; and,

$ The typed name and signature of the person accepting technical responsibility for

the gauging report (i.e., an approved signatory).

Representation of Customs-approved status

Commercial gaugers approved by Customs must limit statements or wording

regarding their approval to an accurate description of the commodities for which

approval has been obtained. Use of terms other than those appearing in the notice of

approval (see 151.13(g)) is prohibited.

Subcontracting prohibited

Customs-approved gaugers must not subcontract Customs-related work to non

Customs-approved gaugers or non Customs-accredited laboratories, but may

subcontract to other facilities that are Customs approved or accredited and in good

standing.

HOW CAN A LABORATORY OR GAUGER HAVE ITS

ACCREDITATION OR APPROVAL SUSPENDED OR REVOKED OR

BE REQUIRED TO PAY A MONETARY PENALTY?

General

The Executive Director may immediately suspend or revoke the accreditation or

approval of a laboratory or gauger (referred to as “facility” below) only in cases where
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the facility’s actions are intentional violations of any Customs law or when required by

public health or safety. In other situations where the Executive Director has cause, the

Executive Director will propose the suspension or revocation of a facility’s accreditation

or approval or propose a monetary penalty and provide the facility with the opportunity

to respond to the notice of proposed action.

Specific grounds for suspension, revocation, or assessment of a

monetary penalty

A facility’s accreditation or approval may be suspended or revoked, or a

monetary penalty may be assessed because:

$ The selection was obtained through fraud or the misstatement of a material fact

by the laboratory or gauger;

$ The facility, a principal of the facility, or a person the port director determines is

exercising substantial ownership or control over the facility operation is indicted

for, convicted of, or has committed acts which would, under United States federal

or state law, constitute a felony or misdemeanor involving misstatements, fraud,

or a theft-related offense; or would reflect adversely on the business integrity of

the applicant. In the absence of an indictment, conviction, or other legal process,

a port director must have probable cause to believe the proscribed acts occurred;

$ Staff facility personnel refuse or otherwise fail to follow any proper order of a

Customs officer or any Customs order, rule, or regulation;

$ The facility fails to operate in accordance with the obligations of §151.12(c) or

§151.13(g), respectively;

$ A determination is made that the facility is no longer technically or operationally

proficient at performing the approved methods of analysis or measurement for

Customs purposes;

$ The facility fails to remit to Customs, the Accounts Services Division, within the

30 day billing period the associated charges assessed for the accreditation or

approval and the balance of the fixed accreditation or approval fee;

$ The facility fails to maintain its bond; or

$ The facility fails to remit to Customs, the Accounts Services Division, within the

30 day billing period the fixed reaccreditation or reapproval fee; or

$ The facility fails to remit any monetary penalties assessed under §151.12 (k) or

§151.13(i), respectively.

Assessment of monetary penalties

The assessment of a monetary penalty under sections 151.12 or 151.13, may be

in lieu of, or in addition to, a suspension or revocation of accreditation or approval. The

monetary penalty may not exceed $100,000 per violation and shall be assessed and

mitigated pursuant to published guidelines. Any monetary penalty under this section

can be in addition to the recovery of:

$ Any loss of revenue, in cases where the laboratory or gauger intentionally

falsified the analysis or gauging report in collusion with the importer; or,

$ Liquidated damages assessed under the facility’s Customs bond.
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Notice

When a decision to suspend, or revoke accreditation or approval, and/or to

assess a monetary penalty is made, the Executive Director will immediately notify the

facility in writing of the decision, indicating whether the action is effective immediately or

is proposed.

Immediate suspension or revocation

Where the suspension or revocation of accreditation or approval is immediate,

the Executive Director will issue a final notice of adverse determination. The final notice

of adverse determination will state the specific grounds for the immediate suspension or

revocation, direct the facility to cease performing any Customs-accredited or approved

functions, and advise the facility that it may choose to pursue one of the following two

options:

• Submit a new application for accreditation or approval, 180 days after the date of

the final notice of adverse determination; or

• Administratively appeal the final notice of adverse determination to the Assistant

Commissioner within 30 calendar days of the date of the final notice of adverse

determination.

Proposed suspension, revocation, or assessment of monetary penalty

Preliminary notice

Where the suspension or revocation of accreditation or approval, and/or the

assessment of a monetary penalty is proposed, the Executive Director will issue a

preliminary notice of action. The preliminary notice of proposed action will state the

specific grounds for the proposed action and advise the facility that it may continue to

perform those functions requiring Customs-accreditation until the Executive Director’s

final notice is issued, and advise the laboratory that it may file a response addressing

the grounds for the action proposed with the Executive Director within 30 calendar days

of the date the preliminary notice of proposed action was received by the facility. The

facility may respond by accepting responsibility, explaining extenuating circumstances,

and/or providing rebuttal evidence. The facility also may ask for a meeting with the

Executive Director or his designee to discuss the proposed action.

Final Notice

If the facility does not respond to the preliminary notice of proposed action, the

Executive Director will issue a final notice of adverse determination within 60 calendar

days of the date the preliminary notice of proposed action was received by the facility.

The final notice of adverse determination will state the specific grounds for the adverse

determination, direct the facility to cease performing any Customs-accredited or
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approved functions, and advise the facility that it may choose to pursue one of the

following two options:

• Submit a new application for accreditation or approval, 180 days after the date of

the final notice of adverse determination; or

• Administratively appeal the final notice of adverse determination to the Assistant

Commissioner within 30 calendar days of the date of the final notice of adverse

determination.

If the facility files a timely response, the Executive Director will issue a final

determination regarding the status of the facility’s accreditation within 30 calendar days

of the date the facility’s response is received by the Executive Director. If this final

determination is adverse to the facility, then the final notice of adverse determination will

state the specific grounds for the adverse action, advise the facility to cease performing

any functions requiring Customs accreditation or approval, and advise the facility that it

may choose to pursue one of the two options provided above.

Administrative Appeal Decision

The Assistant Commissioner will issue a decision on the appeal within 30

calendar days of the date the appeal is received. If the appeal decision is adverse to

the facility, then the decision notice will advise the facility that it may choose to pursue

one of the following two options:

• Submit a new application for accreditation or approval, 120 days after the date of

the appeal decision; or

• File an action with the Court of International Trade, pursuant to chapter 169 of title

28, United States Code, within 60 days of the date of the appeal decision.

Publication

Any final notices of adverse determination issued by the Executive Director

resulting in a laboratory being directed to cease performing Customs-accredited

functions will be published in the Federal Register and Customs Bulletin and the

notice published will include the effective date, duration, and scope of the determination.
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ADDITIONAL INFORMATION

The Internet

The U. S. Customs Service’s home page on the Internet’s World Wide Web,

provides the trade community with current, relevant information regarding Customs

operations and items of special interest. The site posts information -- which includes

proposed regulations, news releases, Customs publications and notices, etc. -- that can

be searched, read on-line, printed or downloaded to your person computer. The web

site was established as a trade-friendly mechanism to assist the importing and exporting

community. The web site links to the Customs Electronic Bulletin Board (CEBB), an

older electronic system on which Customs notices and drafts were posted. After

December, 1999 the CEBB will be only accessible through the web site. The web site

also links to the home pages of many other agencies whose importing or exporting

regulations Customs helps to enforce. Customs web site also contains a wealth of

information of interest to a broader public than the trade community -- to international

travelers, for example.

The Customs Service’s web address is http://www.customs.gov.

Customs Regulations

The current edition of Customs Regulations of the United States is a loose-leaf,

subscription publication available from the Superintendent of Documents, U.S.

Government Printing Office, Washington, DC 20402; telephone 202-512-1800. A

bound, 1999 edition of Title 19, Code of Federal Regulations, which incorporates all

changes to the Customs Regulations from April 1998 through March 1999, is also

available for sale from the same address. All proposed and final regulations are

published in the Federal Register, which is published daily by the Office of the Federal

Register, National Archives and Records Administration, and distributed by the

Superintendent of Documents. Information about on-line access to the Federal Register

may be obtained by calling (202) 512-1530 between 7 a.m. and 5 p.m. Eastern time.

These notices are also published in the weekly Customs Bulletin, described below.

Customs Bulletin

The Customs Bulletin and Decisions (“Customs Bulletin”) is a weekly publication

that contains decisions, rulings, regulatory proposals, notices and other information of

interest to the trade community. It also contains decisions issued by the U.S. Court of

International Trade, as well as Customs-related decisions of the U.S. Court of Appeals

for the Federal Circuit. Each year, the Government Printing Office publishes bound

volumes of the Customs Bulletin. Subscriptions may be purchased from the

Superintendent of Documents at the address and phone number listed above.
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26

Importing Into the United States

This publication provides an overview of the importing process and contains

general information about import requirements. The 1998 edition of Importing Into the

United States contains much new and revised material brought about pursuant to the

Customs Modernization Act (“Mod Act”). The Mod Act has fundamentally altered the

relationship between importers and the Customs Service by shifting to the importer the

legal responsibility for declaring the value, classification, and rate of duty applicable to

entered merchandise.

The 1998 edition contains a new section entitled "Informed Compliance." A key

component of informed compliance is the shared responsibility between Customs and

the import community, wherein Customs communicates its requirements to the importer,

and the importer, in turn, uses reasonable care to assure that Customs is provided

accurate and timely data pertaining to his or her importations.

Single copies may be obtained from local Customs offices or from the Office of

Public Affairs, U.S. Customs Service, 1300 Pennsylvania Avenue NW, Washington, DC

20229. An on-line version is available at the Customs web site. Importing Into the

United States is also available for sale, in single copies or bulk orders, from the

Superintendent of Documents by calling (202) 512-1800, or by mail from the

Superintendent of Documents, Government Printing Office, P.O. Box 371954,

Pittsburgh, Pennsylvania 15250-7054.

Video Tapes

The Customs Service has prepared a series of video tapes in VHS format for the

trade community and other members of the public. As of the date of this publication,

four tapes are available and are described below.

If you would like more information on any of the tapes described below, or if you

would like to order them, please send a written request to: U.S. Customs Service, Office

of Regulations and Rulings, Suite 3.4A, 1300 Pennsylvania Avenue, NW, Washington,

DC 20229, Attn: Operational Oversight Division. Orders must be accompanied by a

check or money order drawn on a U.S. financial institution and made payable to U.S.

Customs Service. Prices include postage.

• Rules of Origin for Textiles and Apparel Products is a two-hour tape aimed at

increasing understanding of the new rules, which became effective July 1, 1996.

Copies of this tape are available from many trade organizations, customs

brokers, consultants and law firms, or it can be ordered from the U.S. Customs

Service for $20.00.

• Customs Compliance: Why You Should Care is a 30-minute tape divided into two

parts. Part I, almost 18 minutes in length, is designed to provide senior

executives and others in the importing or exporting business with an overview of
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the significant features of the Customs Modernization Act and the reasons to

adopt new strategies in order to minimize legal exposure under the Act.

Part II is intended primarily for import/export compliance officers, legal

departments and company officers. About 12 minutes long, Part II explains why

Customs and the trade can benefit from sharing responsibilities under Customs

laws. It also provides viewers with legal detail on record keeping, potential

penalties for noncompliance, and on the Customs prior-disclosure program. The

cost is $15.00.

• Account Management: Team Building for World Trade, a 13-1⁄2-minute tape on

account management, discusses what account management is and why there is

a need for it. Account Management is a new approach to working with the trade

in which a company is treated as an account, rather than being dealt with on a

transaction by transaction basis. The tape includes discussions with Customs

account managers and representatives of importers (“accounts”) relating to the

benefits of account management from the perspectives of the both the Customs

Service and the trade community. The cost is $15.00.

• General-Order Warehousing: Rules for Handling Unclaimed Merchandise, 90

minutes long, was prepared jointly by the Customs Service and the trade

community on the subject of general-order merchandise (unclaimed goods). The

tape includes question and answer discussions that define procedures required

to implement the new general-order laws and regulations and why there is a

need to have effective procedures for handling unclaimed goods. The cost is

$15.00.

Informed Compliance Publications

The U. S. Customs Service has prepared a number of Informed Compliance

publications in the “What Every Member of the Trade Community Should Know About”:

series. As of the date of this publication, the subjects listed below were available.

■4 1. Customs Value (15/96, 4

Revised 12/99)

■1 2. Raw Cotton: Tariff Classification and Import Quotas (5/13/96)

■1 3. NAFTA for Textiles & Textile Articles (5/14/96)

■ 4. Buying & Selling Commissions (16/96, Revised 1/2000)

■1 5. Fibers & Yarn (8/96)

■3 6. Textile & Apparel Rules of Origin (110/96, Revised 11/98)

■1 7. Mushrooms (10/96)

■1 8. Marble (11/96)

■1 9. Peanuts (11/96)

■ 10. Bona Fide Sales & Sales for Exportation (111/96, Revised 1/2000)

■2 11. Caviar (2/97)

■2 12. Granite (2/97)

■2 13. Distinguishing Bolts from Screws (5/97)
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■2 14. Internal Combustion Piston Engines (5/97)

■2 15. Vehicles, Parts and Accessories (5/97)

■2 16. Articles of Wax, Artificial Stone and Jewelry (8/97)

■2 17. Tariff Classification (11/97)

■2 18. Classification of Festive Articles (11/97)

■3 19. Ribbons & Trimmings (1/98)

■3 20. Agriculture Actual Use (1/98)

■3 21. Reasonable Care (1/98)

■3 22. Footwear (1/98)

■3 23. Drawback (3/98)

■3 24. Lamps, Lighting and Candle Holders (3/98)

■3 25. NAFTA Eligibility and Building Stone (3/98, Revised 12/98)

■3 26. Rules of Origin (5/98)

■3 27. Records and Recordkeeping Requirements (6/98)

■3 28. ABC’s of Prior Disclosure (6/98)

■3 29. Gloves, Mittens and Mitts (6/98)

■3 30. Waste & Scrap under Chapter 81 (6/98)

■3 31. Tableware, Kitchenware, Other Household Articles and Toilet Articles of

Plastics (11/98)

■3 32. Textile & Apparel Rules of Origin Index of Rulings (11/98)

■4 33. Knit to Shape Apparel Products (1/99)

■4 34. Hats and Other Headgear (under HTSUS 6505) (3/99)

■4 35. Customs Enforcement of Intellectual Property Rights (6/99)

■4 36. Classification of Children’s Apparel (6/99)

■ 37. Accreditation of Laboratories and Gaugers (4

9/99, Revised 3/2000)

■4 38. Classification of Sets (9/99)

■4 39. Marking Requirements for Wearing Apparel (9/99)

■4 40. Fiber Trade Names & Generic Terms (11/99)

■4 41. NAFTA Country of Origin Rules for Monumental & Building Stone (12/99)

■ 42. Diodes, Transistors & Similar Semiconductor Devices (1/2000)

■ 43. Soldering and Welding Machines and Apparatus (1/2000)

■ 44. Cane and Beet Sugar (Quota, Classification & Entry) (1/2000)

■ 45. Turbojets, Turbopropellers and Other Gas Turbines, (HTSUS 8411) and

Parts Thereof (1/2000)

■ 46. Writing Instruments of Heading 9609 HTSUS (1/2000)

■ 47. New Decisions on Candle Holders v. Decorative Glass Articles (2/2000)

■ 48. Customs Brokers (3/2000)

■ indicates publications which are, or will be, available for downloading from the

Customs Electronic Bulletin Board or through Customs Home Page on the Internet:

http://www.customs.gov;

1 denotes reprinted in 30/31 Customs Bulletin No.50/1, January 2, 1997;

2 denotes reprinted in 32 Customs Bulletin No.2/3, January 21, 1998;

3 denotes reprinted in 32 Customs Bulletin No. 51, December 23, 1998.

4

denotes reprinted in 33 Customs Bulletin No. 51, December 22, 1999
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Check the Customs Electronic Bulletin Board and the Customs Internet website for

more recent publications.

Value Publications

Customs Valuation under the Trade Agreements Act of 1979 is a 96-page book

containing a detailed narrative description of the customs valuation system, the customs

valuation title of the Trade Agreements Act (§402 of the Tariff Act of 1930, as amended

by the Trade Agreements Act of 1979 (19 U.S.C. §1401a)), the Statement of

Administrative Action which was sent to the U.S. Congress in conjunction with the TAA,

regulations (19 CFR §§152.000-152.108) implementing the valuation system (a few

sections of the regulations have been amended subsequent to the publication of the

book) and questions and answers concerning the valuation system. A copy may be

obtained from the U.S. Customs Service, Office of Regulations and Rulings, Value

Branch, 1300 Pennsylvania Avenue, NW, Washington, D.C. 20229.

Customs Valuation Encyclopedia (with updates) is comprised of relevant

statutory provisions, Customs Regulations implementing the statute, portions of the

Customs Valuation Code, judicial precedent, and administrative rulings involving

application of valuation law. A copy may be purchased for a nominal charge from the

Superintendent of Documents, Government Printing Office, P.O. Box 371954,

Pittsburgh, Pennsylvania 15250-7054. This publication is also available on the Customs

Service Internet website.

The information provided in this publication is for general information

purposes only. Recognizing that many complicated factors may be

involved in customs issues, an importer may wish to obtain a ruling under

Customs Regulations, 19 CFR Part 177, or obtain advice from an expert

(such as a licensed Customs Broker, attorney or consultant) who

specializes in Customs matters. Reliance solely on the general

information in this pamphlet may not be considered reasonable care.

Additional information may be also be obtained from Customs ports of entry.

Please consult your telephone directory for a Customs office near you. The listing will

be found under U.S. Government, Treasury Department.

“Your Comments are Important”

The Small Business and Regulatory Enforcement Ombudsman and 10 regional

Fairness Boards were established to receive comments from small businesses about

federal agency enforcement activities and rate each agency’s responsiveness to small

business. If you wish to comment on the enforcement actions of U.S. Customs, call 1-

888-REG-FAIR (1-888-734-3247).
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REPORT SMUGGLING 1-800-BE-ALERT

Visit our Internet website: http://www.customs.gov