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
Federal Register / Vol. 62, No. 160 / Tuesday, August 19, 1997 / Proposed Rules 44103

request in the application, and the port

director may allow, up to an additional

30 calendar days after tentative

selection to conform the facility to such

requirements. Because compliance with

the 30-calendar-day time-frame

requirement for significant capital

expenditures is subject to building

permits and other requirements of a

local nature, which may not be

forthcoming within the time period

specified, this requirement imposes a

burdensome condition in the

application procedure, which may

operate to dissuade many potential

applicants from applying to become CES

operators. Accordingly, Customs

proposes to remove this requirement

and instead allow the time frames for

making capital improvements to a

facility to be addressed locally.

Further, paragraph (g) of this same

section currently provides that an

applicant must present any information

showing the applicant’s experience in

international cargo operations and

knowledge of Customs procedures and

regulations, ‘‘or a commitment to

acquire that knowledge.’’ Because a

demonstrable knowledge of such

operations, procedures, and regulations

is essential prior to selection as a CES

operator, the alternative ‘‘commitment

to acquire that knowledge’’ language in

the regulation is too subjective a

standard by which to measure an

applicant’s credentials to operate a CES.

Accordingly, Customs proposes to

remove this language.

Comments

Before adopting this proposal as a

final rule, consideration will be given to

any written comments timely submitted

to Customs. Comments submitted will

be available for public inspection in

accordance with the Freedom of

Information Act (5 U.S.C. 552), § 1.4 of

the Treasury Department Regulations

(31 CFR 1.4), and § 103.11(b) of the

Customs Regulations (19 CFR

103.11(b)), on regular business days

between the hours of 9:00 a.m. and 4:30

p.m. at the Regulations Branch, U.S.

Customs Service, 1099 14th Street, NW.,

Suite 4000, Washington, DC.

Regulatory Flexibility Act

Pursuant to provisions of the

Regulatory Flexibility Act (5 U.S.C. 601

et seq.), it is certified that, if adopted,

the proposed amendments will not have

a significant economic impact on a

substantial number of small entities,

because the amendments would operate

to confer new benefits on potential CES

operations, by allowing them to perform

more services. Accordingly, the

proposed amendments are not subject to

the regulatory analysis or other

requirements of 5 U.S.C. 603 and 604.

Executive Order 12866

This document does not meet the

criteria for a ‘‘significant regulatory

action’’ as defined in E.O. 12866.

List of Subjects in 19 CFR Part 118

Administrative practice and

procedure, Customs duties and

inspection, Examination stations,

Exports, Imports, Licensing, Reporting

and recordkeeping requirements.

Proposed Amendment

For the reasons stated above, it is

proposed to amend part 118, Customs

Regulations (19 CFR part 118), as set

forth below:

PART 118—CENTRALIZED

EXAMINATION STATIONS

1. The authority citation for part 118

is revised to read as follows:

Authority: 19 U.S.C. 66, 1499, 1623, 1624;

22 U.S.C. 401; 31 U.S.C. 5317.

2. In § 118.1, the first sentence is

amended by removing the word

‘‘imported’’, and a new sentence is

added at the end to read as follows:

§ 118.1 Definition.

* * * To present outbound cargo for

inspection at a CES at a port other than

the shipment’s designated port of exit,

either proof of the shipper’s consent to

the inspection must be furnished or a

complete set of transportation

documents must accompany the

shipment to evidence that exportation of

the goods is imminent and that the

goods are committed to export, thereby,

making them subject to Customs

examination.

3. In § 118.4, paragraph (g) is

amended by adding a new second

sentence to read as follows:

§ 118.4 Responsibilities of a CES operator.

* * * * *

(g) * * * The CES operator will

accept and keep safe all merchandise

delivered to the CES for examination.

* * *

* * * * *

4. In § 118.11, the second sentence in

paragraph (b) is amended by removing

the words ‘‘, and the port director may

allow, up to an additional 30 calendar

days after tentative selection to conform

the facility to such requirements, but in

such a case the agreement referred to in

§ 118.3 of this part shall not be executed

until those requirements are met’’ and

adding, in their place, the words ‘‘time

to conform the facility to such

requirements. The agreement referred to

in § 118.3 of this part shall not be

executed, in any event, until the facility

is conformed to meet the requirements’’;

and paragraph (g) is amended by

removing the words ‘‘, or a commitment

to acquire that knowledge’’.

Approved: June 3, 1997.

Samuel H. Banks,

Acting Commissioner of Customs.

[FR Doc. 97–21843 Filed 8–18–97; 8:45 am]

BILLING CODE 4820–02–P

DEPARTMENT OF THE TREASURY

Internal Revenue Service

26 CFR Parts 1 and 25

[REG–209823–96]

RIN 1545–AU25

Guidance Regarding Charitable

Remainder Trusts; Hearing

AGENCY: Internal Revenue Service (IRS),

Treasury.

ACTION: Postponement of hearing,

extension of time for requesting to speak

and submitting written comments, and

requests to teleconference hearing.

SUMMARY: This document postpones the

public hearing on proposed regulations

relating to charitable remainder trusts

under section 664 of the Internal

Revenue Code and special valuation

rules for transfers of interest in trusts

under section 2702. In addition, this

document extends the time for

requesting to speak and for submitting

written comments and announces that

persons wishing to testify who are

outside the Washington, DC and Los

Angeles, California areas may request

that the Service teleconference to their

sites.

DATES: Requests to teleconference the

hearing to other sites must be received

by September 5, 1997.

ADDRESSES: Requests must be sent to:

CC:DOM:CORP:R (REG–209823-96),

room 5226, Internal Revenue Service,

POB 7604, Ben Franklin Station,

Washington, DC 20044. Requests may

also be hand delivered between the

hours of 8 a.m. and 5 p.m. to:

CC:DOM:CORP:R (REG–209823–96),

Courier’s Desk, Internal Revenue

Service, 1111 Constitution Avenue,

NW., Washington, DC. Alternatively,

requests may be submitted

electronically via the internet by

selecting the ‘‘Tax Regs’’ option on the

IRS Home Page, or by submitting

comments directly to the IRS internet

site at http://www.irs.ustreas.gov/prod/

taxllregs/comments.html.