Federal Register / Vol. 62, No. 160 / Tuesday, August 19, 1997 / Proposed Rules 44099

A B C

For pressurized airplanes, at 6,000

hr. total TIS or within the next 100

hours TIS whichever occurs later,

inspect fuselage station (F.S.) 100

for cracks.

If cracked, prior to further flight, repair with an approved repair

scheme (see paragraph (b) of this

AD), and continue to inspect at

1,000 hr. intervals.

If no cracks, repeat inspection at

1,000 hr. intervals until cracks are

found, then accomplish PART III B

of this AD

PART III .......................... For non-pressurized airplanes, at

12,000 hr. total TIS or within the

next 100 hours TIS whichever occurs later, inspect F.S. 100 for

cracks..

(Accomplish in accordance with

PART III of Compliance Section in

Twin Commander SB 223, dated

Oct. 24, 1996 as amended by Revision Notice No. 1, dated May 8,

1997.)

(Accomplish in accordance with

PART III of Compliance Section in

Twin Commander SB 223, dated

Oct. 24, 1996 as amended by Revision Notice No. 1, dated May 8,

1997.)

(Accomplish in accordance with

PART III of Compliance Section in

Twin Commander SB 223, dated

Oct. 24, 1996 as amended by Revision Notice No. 1, dated May 8,

1997.)

(b) Obtain an FAA-approved repair scheme

from the manufacturer through the Manager

of the Seattle Aircraft Certification Office at

the address specified in paragraph (f) of this

AD.

(c) For Twin Commander Models 520 and

560 airplanes, upon the accumulation of

6,000 hours total TIS or within the next 100

hours TIS whichever occurs later,

accomplish PART II of the table in paragraph

(a) of this AD. Accomplish PART III in

accordance with the compliance times in the

above table of paragraph (a). These models

are excluded from the wing leading edge

access hole installation in PART I of the table

in paragraph (a) of this AD.

(d) For Twin Commander Models 690C and

695 airplanes, accomplish PARTS I and II in

accordance with the compliance times in the

above table of paragraph (a). These Models

are excluded from PART III of the table in

paragraph (a) of this AD.

(e) Special flight permits may be issued in

accordance with sections 21.197 and 21.199

of the Federal Aviation Regulations (14 CFR

21.197 and 21.199) to operate the airplane to

a location where the requirements of this AD

can be accomplished.

(f) An alternative method of compliance or

adjustment of the initial or repetitive

compliance times that provides an equivalent

level of safety may be approved by the

Manager, Seattle Aircraft Certification Office,

1601 Lind Ave. SW., Renton, Washington

98055–4056. The request shall be forwarded

through an appropriate FAA Maintenance

Inspector, who may add comments and then

send it to the Manager, Seattle Aircraft

Certification Office.

Note 2: Information concerning the

existence of approved alternative methods of

compliance with this AD, if any, may be

obtained from the Seattle Aircraft

Certification Office.

(g) All persons affected by this directive

may obtain copies of the document referred

to herein upon request to Twin Commander

Aircraft Corporation, P.O. Box 3369,

Arlington, Washington 98223; telephone

(360) 435–9797; facsimile (360) 435–1112; or

may examine this document at the FAA,

Central Region, Office of the Assistant Chief

Counsel, Room 1558, 601 E. 12th Street,

Kansas City, Missouri 64106.

Issued in Kansas City, Missouri, on August

12, 1997.

Michael Gallagher,

Manager, Small Airplane Directorate, Aircraft

Certification Service.

[FR Doc. 97–21873 Filed 8–18–97; 8:45 am]

BILLING CODE 4910–13–P

FEDERAL TRADE COMMISSION

16 CFR Part 403

Deceptive Use of ‘‘Leakproof,’’

‘‘Guaranteed Leakproof,’’ Etc., as

Descriptive of Dry Cell Batteries

AGENCY: Federal Trade Commission.

ACTION: Notice of proposed rulemaking.

SUMMARY: The Federal Trade

Commission (the ‘‘FTC’’ or

‘‘Commission’’) announces the

commencement of a rulemaking

proceeding for the Trade Regulation

Rule on Deceptive Use of ‘‘Leakproof,’’

‘‘Guaranteed Leakproof,’’ Etc., as

Descriptive of Dry Cell Batteries (‘‘the

Dry Cell Battery Rule’’ or ‘‘the Rule’’),

16 CFR Part 403. The proceeding will

address whether or not the Dry Cell

Battery Rule should be repealed. The

Commission invites interested parties to

submit written data, views, and

arguments on how the Rule has affected

consumers, businesses and others, and

on whether there currently is a need for

the Rule. This document includes a

description of the procedures to be

followed, an invitation to submit

written comments, a list of questions

and issues upon which the Commission

particularly desires comments, and

instructions for prospective witnesses

and other interested persons who desire

to participate in the proceeding.

DATES: Written comments must be

submitted on or before September 18,

1997. Notifications of interest in

testifying must be submitted on or

before September 18, 1997. If interested

parties request the opportunity to

present testimony, the Commission will

publish a document in the Federal

Register, stating the time and place at

which the hearings will be held and

describing the procedures that will be

followed in conducting the hearings. In

addition to submitting a request to

testify, interested parties who wish to

present testimony must submit, on or

before September 18, 1997, a written

comment or statement that describes the

issues on which the party wishes to

testify and the nature of the testimony

to be given.

ADDRESSES: Written comments and

requests to testify should be submitted

to Office of the Secretary, Federal Trade

Commission, Room H–159, Sixth and

Pennsylvania Ave., NW., Washington,

DC 20580, (202) 326–2506. Comments

and requests to testify should be

identified as ‘‘16 CFR Part 403

Comment—Dry Cell Battery Rule’’ and

‘‘16 CFR Part 403 Request to Testify—

Dry Cell Battery Rule,’’ respectively. If

possible, submit comments both in

writing and on a personal computer

diskette in Word Perfect or other word

processing format (to assist in

processing, please identify the format

and version used). Written comments

should be submitted, when feasible and

not burdensome, in five copies.

FOR FURTHER INFORMATION CONTACT:

Neil Blickman, Attorney, Federal Trade

Commission, Bureau of Consumer

Protection, Division of Enforcement,

Sixth and Pennsylvania Ave., NW.,

Washington, DC 20580, (202) 326–3038.

SUPPLEMENTARY INFORMATION:

I. Introduction

Pursuant to the Federal Trade

Commission Act (‘‘FTC Act’’), 15 U.S.C.

41–58, and the Administrative

Procedure Act, 5 U.S.C. 551–59, 701–06,

by this Notice of Proposed Rulemaking
44100 Federal Register / Vol. 62, No. 160 / Tuesday, August 19, 1997 / Proposed Rules

1 In accordance with section 18 of the FTC Act,

15 U.S.C. 57a, the Commission submitted this NPR

to the Chairman of the Committee on Commerce,

Science, and Transportation, United States Senate,

and the Chairman of the Committee on Commerce,

United States House of Representatives, 30 days

prior to its publication in the Federal Register.

2See section 8.1 of ANSI Standard C18.1M–1992.

3See section 7.5 of ANSI Standard C18.1M–1992.

4 62 FR 14050.

5The comment submitted in response to the

ANPR has been placed on the public record, and

is filed as document number B21969700001. In

today’s notice, the comment is cited as NEMA, #1.

6NEMA, #1.

7Repealing the Dry Cell Battery Rule would

eliminate the Commission’s ability to obtain civil

penalties for any future misrepresentations that dry

cell batteries are leakproof. The Commission,

however, has tentatively determined that repealing

the Rule would not seriously jeopardize the

Commission’s ability to act effectively. Any

significant problems that might arise could be

addressed on a case-by-case basis under section 5

of the FTC Act, 15 U.S.C. 45, either administratively

or through Section 13(b) actions, 15 U.S.C. 53(b),

filed in federal district court. Prosecuting serious

misrepresentations in district court allows the

Commission to obtain injunctive relief as well as

equitable remedies, such as redress or

disgorgement.

(‘‘NPR’’) the Commission initiates a

proceeding to consider whether the Dry

Cell Battery Rule should be repealed or

remain in effect.1 The Commission is

undertaking this rulemaking proceeding

as part of the Commission’s ongoing

program of evaluating trade regulation

rules and industry guides to determine

their effectiveness, impact, cost and

need. This proceeding also responds to

President Clinton’s National Regulatory

Reinvention Initiative, which, among

other things, urges agencies to eliminate

obsolete or unnecessary regulations.

II. Background Information

On May 20, 1964, the Commission

promulgated a trade regulation rule that

states that in connection with the sale

of dry cell batteries in commerce, the

use of the word ‘‘leakproof,’’ the term

‘‘guaranteed leakproof,’’ or any other

word or term of similar import, or any

abbreviation thereof, in advertising,

labeling, marking or otherwise, as

descriptive of dry cell batteries,

constitutes an unfair method of

competition and an unfair or deceptive

act or practice in violation of section 5

of the FTC Act (16 CFR 403.4). This

Rule was based on the Commission’s

finding that, despite efforts by dry cell

battery manufacturers to eliminate

electrolyte leakage, battery leakage and

damage therefrom occurs from the use

to which consumers ordinarily subject

dry cell batteries.

The Rule provides that manufacturers

or marketers are not prohibited from

offering or furnishing guarantees that

provide for restitution in the event of

damage from battery leakage, provided

no representation is made, directly or

indirectly, that dry cell batteries will not

leak (16 CFR 403.5). The Rule further

provides that in the event any person

develops a new dry cell battery that he

believes is in fact leakproof, he may

apply to the Commission for an

amendment to the Rule, or other

appropriate relief (16 CFR 403.6).

The Commission conducted an

informal review of industry practices by

examining the advertising, labeling and

marking of dry cell batteries available

for retail sale. This review revealed no

representations that the batteries were

leakproof. The Commission’s review,

therefore, indicated general compliance

with the Rule’s provisions. Moreover,

the Commission has no record of

receiving any complaints regarding noncompliance with the Rule, or of

initiating any law enforcement actions

alleging violations of the Rule.

Additionally, the Commission’s

review indicated general voluntary

compliance by the industry with the

requirements of American National

Standards Institute (‘‘ANSI’’) Standard

C18.1M–1992 Dry Cells and Batteries—

Specifications. The ANSI standard

contains specifications for dry cell

batteries, and requirements for labeling

the products and their packages. The

ANSI standard requires the following

information to be printed on the outside

of each battery (when necessary, the

standard permits some of this

information to be applied to the unit

package): (1) the name or trade name of

the manufacturer; (2) the ANSI/National

Electronic Distributors Association

number, or some other identifying

designation; (3) year and month, week

or day of manufacture, which may be a

code, or the expiration of a guarantee

period, in a clear readable form; (4) the

nominal voltage; (5) terminal polarity;

and (6) warnings or cautionary notes

where applicable.2

The ANSI standard recommends that

dry cell battery manufacturers and

sellers include on their products and

packages several battery user guidelines

and warnings that are relevant to this

proceeding. They are: (1) although

batteries basically are trouble-free

products, conditions of abuse or misuse

can cause leakage; (2) failure to replace

all batteries in a unit at the same time

may result in battery leakage; (3) mixing

batteries of various chemical systems,

ages, applications, types or

manufacturers may result in poor device

performance and battery leakage; (4)

attempting to recharge a nonrechargeable battery is unsafe because it

could cause leakage; (5) reverse

insertion of batteries may cause

charging, which may result in leakage;

(6) devices that operate on either

household current or battery power may

subject batteries to a charging current,

which may cause leakage; (7) do not

store batteries or battery-powered

equipment in high-temperature areas;

and (8) do not dispose of batteries in

fire.3 At a minimum, each dry cell

battery and battery package inspected by

Commission staff informed consumers

that the batteries may explode or leak if

recharged, inserted improperly,

disposed of in fire, or mixed with

different battery types.

Based on the foregoing, on March 25,

1997, the Commission published an

Advance Notice of Proposed

Rulemaking (‘‘ANPR’’) tentatively

concluding that industry members that

comply with the ANSI standard’s pointof-sale disclosure requirements, of

necessity, also are in compliance with

the Rule. Accordingly, the Commission

tentatively determined that the Dry Cell

Battery Rule is no longer necessary, and

sought comments on the proposed

repeal of the Rule.4

The only comment received in

response to the ANPR was submitted by

the National Electrical Manufacturers

Association (‘‘NEMA’’), a trade

association representing all major U.S.

manufacturers of dry cell batteries.5

NEMA supports repeal of the

Commission’s Dry Cell Battery Rule,

indicating that it has been superseded

effectively in the marketplace by ANSI

Standard C18.1M–1992.6

Accordingly, after reviewing the

comment submitted, and in light of

ANSI Standard C18.1M–1992, the

Commission has determined that the

Dry Cell Battery Rule is no longer

necessary.7 The Commission, therefore,

seeks comments on the proposed repeal

of the Dry Cell Battery Rule.

III. Rulemaking Procedures

The Commission finds that the public

interest will be served by using

expedited procedures in this

proceeding. First, there do not appear to

be any material issues of disputed fact

to resolve in determining whether to

repeal the Rule. Second, using

expedited procedures will support the

Commission’s goal of eliminating

obsolete or unnecessary regulations

without an undue expenditure of

resources, while ensuring that the

public has an opportunity to submit

data, views and arguments on whether

the Commission should repeal the Rule.

The Commission, therefore, has

determined, pursuant to 16 CFR 1.20, to

use the procedures set forth in this

notice. These procedures include: (1)
Federal Register / Vol. 62, No. 160 / Tuesday, August 19, 1997 / Proposed Rules 44101

8Section 22 of the FTC Act, 15 U.S.C. 57b–3, also

requires the Commission to issue a preliminary

regulatory analysis relating to proposed rules when

the Commission publishes a notice of proposed

rulemaking. The Commission has determined that

a preliminary regulatory analysis is not required by

section 22 in this proceeding because the

Commission has no reason to believe that repeal of

the Rule: (1) will have an annual effect on the

national economy of $100,000,000 or more; (2) will

cause a substantial change in the cost or price of

goods or services that are used extensively by

particular industries, that are supplied extensively

in particular geographical regions, or that are

acquired in significant quantities by the Federal

Government, or by State or local governments; or

(3) otherwise will have a significant impact upon

persons subject to the Rule or upon consumers.

publishing this Notice of Proposed

Rulemaking; (2) soliciting written

comments on the Commission’s

proposal to repeal the Rule; (3) holding

an informal hearing, if requested by

interested parties; (4) obtaining a final

recommendation from staff; and (5)

announcing final Commission action in

a notice published in the Federal

Register.

IV. Invitation To Comment And

Questions For Comment

Interested persons are required to

submit written data, views or arguments

on any issue of fact, law or policy they

believe may be relevant to the

Commission’s decision on whether to

repeal the Rule. The Commission

requests that commenters provide

representative factual data in support of

their comments. Individual firms’

experiences are relevant to the extent

they typify industry experience in

general or the experience of similarsized firms. Commenters opposing the

proposed repeal of the Rule should

explain the reasons they believe the

Rule is still needed and, if appropriate,

suggest specific alternatives. Proposals

for alternative requirements should

include reasons and data that indicate

why the alternatives would better

protect consumers from unfair or

deceptive acts or practices under section

5 of the FTC Act, 15 U.S.C. 45.

Although the Commission welcomes

comments on any aspect of the

proposed repeal of the Rule, the

Commission is particularly interested in

comments on questions and issues

raised in this Notice. All written

comments should state clearly the

question or issue that the commenter is

addressing.

Before taking final action, the

Commission will consider all written

comments timely submitted to the

Secretary of the Commission and

testimony given on the record at any

hearings scheduled in response to

requests to testify. Written comments

submitted will be available for public

inspection in accordance with the

Freedom of Information Act, 5 U.S.C.

552, and Commission regulations, on

normal business days between the hours

of 8:30 a.m. to 5:00 p.m. at the Federal

Trade Commission, Public Reference

Room, Room H–130, Sixth St. and

Pennsylvania Ave., NW., Washington,

DC 20580, (202) 326–2222.

Questions

(1) Should the Dry Cell Battery Rule

be kept in effect, or should it be

repealed?

(2) What benefits do consumers derive

from the Rule?

(3) How would repealing the Rule

affect the benefits experienced by

consumers?

(4) How would repealing the Rule

affect the benefits and burdens

experienced by firms that must comply

with the Rule?

(5) Are ‘‘leakproof’’ or ‘‘guaranteed

leakproof’’ representations a significant

problem in the marketplace?

(6) Are there any other federal, state,

or local laws or regulations, or private

industry standards, that eliminate the

need for the Rule?

(7) Does the existence of ANSI

Standard C18.1M–1992 for Dry Cell

Batteries eliminate or greatly lessen the

need for the Rule?

V. Requests for Public Hearings

Because there does not appear to be

any dispute as to the material facts or

issues raised by this proceeding and

because written comments appear

adequate to present the views of all

interested parties, a public hearing has

not been scheduled. If any person

would like to present testimony at a

public hearing, he or she should follow

the procedures set forth in the DATES

and ADDRESSES sections of this notice.

VI. Preliminary Regulatory Analysis

The Regulatory Flexibility Act

(‘‘RFA’’), 5 U.S.C. 601–12, requires an

analysis of the anticipated impact of the

proposed repeal of the Rule on small

businesses.8 The analysis must contain,

as applicable, a description of the

reasons why action is being considered,

the objectives of and legal basis for the

proposed action, the class and number

of small entities affected, the projected

reporting, recordkeeping and other

compliance requirements being

proposed, any existing federal rules

which may duplicate, overlap or

conflict with the proposed action, and

any significant alternatives to the

proposed action that accomplish its

objectives and, at the same time,

minimize its impact on small entities.

A description of the reasons why

action is being considered and the

objectives of the proposed repeal of the

Rule have been explained elsewhere in

this Notice. Repeal of the Rule would

appear to have little or no effect on any

small business. The Commission is not

aware of any existing federal laws or

regulations that would conflict with

repeal of the Rule.

For these reasons, the Commission

certifies, pursuant to section 605 of

RFA, 5 U.S.C. 605, that if the

Commission determines to repeal the

Rule, that action will not have a

significant impact on a substantial

number of small entities. To ensure that

no substantial economic impact is being

overlooked, however, the Commission

requests comments on this issue. After

reviewing any comments received, the

Commission will determine whether it

is necessary to prepare a final regulatory

flexibility analysis.

VII. Paperwork Reduction Act

The Dry Cell Battery Rule imposes no

third-party disclosure requirements that

constitute ‘‘information collection

requirements’’ under the Paperwork

Reduction Act, 44 U.S.C. 3501 et seq.

Since 1964, therefore, the Rule has

imposed no paperwork burdens on

marketers of dry cell batteries. In any

event, repeal of the Dry Cell Battery

Rule would permanently eliminate any

burdens on the public imposed by the

Rule.

VIII. Additional Information for

Interested Persons

A. Motions or Petitions

Any motions or petitions in

connection with this proceeding must

be filed with the Secretary of the

Commission.

B. Communications by Outside Parties

to Commissioners or Their Advisors

Pursuant to Rule 1.18(c) of the

Commission’s Rules of Practice, 16 CFR

1.18(c), communications with respect to

the merits of this proceeding from any

outside party to any Commissioner or

Commissioner’s advisor during the

course of this rulemaking shall be

subject to the following treatment.

Written communications, including

written communications from members

of Congress, shall be forwarded

promptly to the Secretary for placement

on the public record. Oral

communications, not including oral

communications from members of

Congress, are permitted only when such

oral communications are transcribed

verbatim or summarized at the

discretion of the Commissioner or

Commissioner’s advisor to whom such

oral communications are made, and are
44102 Federal Register / Vol. 62, No. 160 / Tuesday, August 19, 1997 / Proposed Rules

promptly placed on the public record,

together with any written

communications relating to such oral

communications. Memoranda prepared

by a Commissioner or Commissioner’s

advisor setting forth the contents of any

oral communications from members of

Congress shall be placed promptly on

the public record. If the communication

with a member of Congress is

transcribed verbatim or summarized, the

transcript or summary will be placed

promptly on the public record.

Authority: 15 U.S.C. 41–58.

List of Subjects in 16 CFR Part 403

Advertising, Dry cell batteries,

Labeling, Trade practices.

By direction of the Commission.

Donald S. Clark,

Secretary.

[FR Doc. 97–21922 Filed 8–18–97; 8:45 am]

BILLING CODE 6750–01–M

DEPARTMENT OF THE TREASURY

Customs Service

19 CFR Part 118

RIN 1515–AC07

Centralized Examination Stations

AGENCY: Customs Service, Treasury.

ACTION: Notice of proposed rulemaking.

SUMMARY: This document proposes to

amend the Customs Regulations

regarding the establishment and scope

of operation of Centralized Examination

Stations (CESs). To reflect Customs

interest in maximizing compliance with

export control laws and regulations

without unduly impeding the

movement of outbound merchandise, it

is proposed to expand the definition of

a CES to allow merchandise intended to

be exported as well as imported

merchandise to be handled by a CES.

Further, Customs is proposing to allow

for the inspection of outbound cargo at

CESs at ports other than the shipment’s

designated port of exit. To make the CES

application procedure more amenable to

local conditions, Customs is proposing

more flexibility regarding the time frame

for an applicant to conform a facility to

meet Customs security or other physical

or equipment requirements. Lastly,

Customs is proposing to amend one of

the criteria on the application to operate

a CES because Customs believes it is too

subjective. These changes are proposed

in order to keep the CES program

responsive to both Customs and the

trade community’s demands for the

facilitated examinations of trade

merchandise.

DATES: Comments must be received on

or before October 20, 1997.

ADDRESSES: Comments (preferably in

triplicate) must be submitted to the U.S.

Customs Service, ATTN: Regulations

Branch, Franklin Court, 1301

Constitution Avenue, NW., Washington,

DC 20229, and may be inspected at the

Regulations Branch, 1099 14th Street,

NW., Suite 4000, Washington, DC.

FOR FURTHER INFORMATION CONTACT:

For Policy Inquiries: Steven T. Soggin,

Office of Field Operations, Trade

Compliance, (202) 927–0765;

For Legal Inquiries: Jerry Laderberg,

Office of Regulations and Rulings, Entry

Procedures and Carriers Branch, (202)

482–7052.

SUPPLEMENTARY INFORMATION:

Background

In T.D. 93–6 (58 FR 5596) Customs

amended the Customs Regulations (19

CFR Chapter 1) to create a new Part 118

that set forth the regulatory framework

for the establishment, operation, and

termination of Centralized Examination

Stations (CESs). A CES is a privatelyoperated facility, not in the charge of a

Customs officer, at which imported

merchandise is made available to

Customs officers for physical

examination.

Currently, CESs are authorized to

provide inspectional facilities for

Customs officers to examine only

imported merchandise. However,

because merchandise intended to be

exported often is required to be

examined, Customs would like CESs to

be authorized to provide inspectional

facilities for this merchandise as well.

Customs has statutory authority to

inspect merchandise intended to be

exported pursuant to 22 U.S.C. 401,

concerning the exportation of munitions

and other articles, and 31 U.S.C. 5317,

concerning the search and forfeiture of

monetary instruments. Further, Customs

broad authority to conduct warrantless

examinations of outbound merchandise

has long been recognized by the courts.

See e.g., United States v. Udofot, 711

F.2d 831, 839 (8th Cir. 1983), cert.

denied, 464 U.S. 896 (1983); United

States v. Ajlouny, 629 F.2d 830, 834 (2d

Cir. 1980), cert. denied, 449 U.S. 111

(1981); United States v. Stanley, et al.,

545 F.2d 661, 665–67 (9th Cir. 1976),

cert. denied, 436 U.S. 917 (1978); cf.,

California Bankers Ass’n v. Shultz, 416

U.S. 21, 63 (1974). Accordingly, to

reflect the authority to inspect

merchandise intended to be exported,

the authority citation for Part 118 is

revised. Also, Customs proposes to

amend the first sentence of § 118.1 by

removing the word ‘‘imported’’ to allow

CESs to provide inspectional facilities

for merchandise regardless of whether it

is inbound or outbound.

Customs ability to inspect at inland

ports shipments scheduled for export

from another port is authorized at the

functional equivalent of the border. See,

United States v. Udofot, 711 F.2d 831

(8th Cir. 1983), cert. denied, 464 U.S.

896 (1983); United States v. HernandezSalazar, 813 F.2d 1126 (11th Cir. 1987).

To conduct such inspections at

locations other than the port of export,

the exportation must be imminent and

the goods committed to export.

Accordingly, should a carrier, freight

forwarder, or shipper wish to have its

shipment inspected at a CES at a port

other than the designated port of export,

sufficient evidence that exportation is

imminent and that the goods are

committed to export must be made

available to Customs. Alternatively,

evidence of the shipper’s consent to

Customs inspection at an inland port

may be presented. To advise the

exporting community of Customs

requirements for inspecting

merchandise declared for export at a

port other than the port of exit, Customs

proposes to further amend § 118.1 by

adding a new sentence at the end that

provides that either proof of the

shipper’s consent to the inspection must

be furnished or transportation

documents must accompany outbound

shipments to evidence that the

exportation of the goods is imminent

and that the goods are committed to

export.

Pursuant to the provisions of 19 CFR

118.4(g), the CES operator is required to

maintain a custodial bond. The terms

and conditions of the custodial bond

obligate the bond principal to accept

only merchandise authorized under

Customs Regulations (see 19 CFR

113.63(a)(2)), and keep safe any

merchandise placed in its custody (see

19 CFR 113.63(b)(2)). A proposed

amendment to § 118.4(g) makes it clear

that the CES operator is authorized to

accept and must keep safe all

merchandise that is delivered for

examination. Accordingly, the custodial

bond will guarantee the receipt and

safekeeping of merchandise delivered

for an import or export examination.

Regarding the application procedure

to operate a CES, paragraph (b) of

§ 118.11 currently provides that where a

significant capital expenditure would be

required in order for an existing facility

to meet security or other physical or

equipment requirements necessary for

the CES operation, an applicant may