[Federal Register Volume 77, Number 58 (Monday, March 26, 2012)]
[Proposed Rules]
[Pages 17364-17367]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2012-7105]


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DEPARTMENT OF HOMELAND SECURITY

U.S. Customs and Border Protection

DEPARTMENT OF THE TREASURY

19 CFR Part 12

[Docket No. USCBP-2012-0004]
RIN 1515-AD82


Inadmissibility of Consumer Products and Industrial Equipment 
Noncompliant With Applicable Energy Conservation or Labeling Standards

AGENCIES: U.S. Customs and Border Protection, Department of Homeland 
Security; Department of the Treasury.

ACTION: Notice of proposed rulemaking.

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SUMMARY: This document proposes amendments to the Customs and Border 
Protection (CBP) regulations to provide that if certain imports do not 
comply with applicable energy conservation or labeling standards, CBP 
will refuse admission when so notified by the Department of Energy 
(DOE) or the Federal Trade Commission (FTC) and CBP may, upon a 
recommendation from DOE or FTC, conditionally release the goods so that 
they may be brought into compliance. Specifically, CBP will refuse 
admission into the customs territory of the United States to consumer 
products and industrial equipment deemed noncompliant with the Energy 
Policy and Conservation Act of 1975 (EPCA) and its implementing 
regulations, and for which CBP has received written notice from the DOE 
or the FTC that identifies merchandise as noncompliant with applicable 
EPCA requirements. In lieu of immediate refusal of admission, and upon 
written or electronic notice by DOE or FTC, CBP may conditionally 
release under bond to the importer such noncompliant products or 
equipment for purposes of reconditioning, re-labeling, or other action 
so as to bring the subject product or equipment into compliance with 
applicable energy conservation and labeling admissibility standards. If 
the subject import is not timely brought into compliance, CBP, at the 
direction of DOE or FTC, will issue a refusal of admission notice to 
the importer and

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demand redelivery of the subject products to CBP custody. A failure to 
comply with a demand for redelivery will result in the assessment of 
liquidated damages. This proposed regulation, if adopted, will 
implement the mandate of the EPCA, as amended, to preclude admission 
into the United States of certain consumer products and industrial 
equipment that do not meet applicable labeling or energy conservation 
requirements.

DATES: Comments must be received on or before May 25, 2012.

ADDRESSES: You may submit comments, identified by USCBP docket number, 
by one of the following methods:
    <bullet> Federal eRulemaking Portal: http://www.regulations.gov. 
Follow the instructions for submitting comments via docket number 
USCBP-2012-0004.
    <bullet> Mail: Trade and Commercial Regulations Branch, Regulations 
and Rulings, Office of International Trade, U.S. Customs and Border 
Protection, 799 9th Street NW. (Mint Annex), Washington, DC 20229-1179.
    Instructions: All submissions received must include the agency name 
and USCBP docket number for this rulemaking. All comments received will 
be posted without change to http://www.regulations.gov, including any 
personal information provided. For detailed instructions on submitting 
comments and additional information on the rulemaking process, see the 
``Public Participation'' heading of the SUPPLEMENTARY INFORMATION 
section of this document.
    Docket: For access to the docket to read background documents or 
comments received, go to http://www.regulations.gov. Submitted comments 
may also be inspected during regular business days between the hours of 
9 a.m. and 4:30 p.m. at the Trade and Commercial Regulations Branch, 
Regulations and Rulings, Office of International Trade, U.S. Customs 
and Border Protection, 799 9th Street NW., 5th Floor, Washington, DC. 
Arrangements to inspect submitted comments should be made in advance by 
calling Joseph Clark at (202) 325-0118.

FOR FURTHER INFORMATION CONTACT: Mike Craig, Chief, Interagency 
Requirements Branch, Trade Policy and Programs, Office of International 
Trade, (202) 863-6558. Valarie M. Neuhart, Import Safety & Interagency 
Requirements Division, Office of International Trade, (202) 863-6223.

SUPPLEMENTARY INFORMATION: 

Public Participation

    Interested persons are invited to participate in this rulemaking by 
submitting written data, views, or arguments on all aspects of the 
proposed rule. Customs and Border Protection (CBP) also invites 
comments that relate to the economic, environmental, or federalism 
effects that might result from this proposed rule. If appropriate to a 
specific comment, the commenter should reference the specific portion 
of the proposed rule, explain the reason for any recommended change, 
and include data, information, or authority that support such 
recommended change.

Background

General

    Title III, Part B of the Energy Policy and Conservation Act of 1975 
(EPCA), Public Law 94-163 (42 U.S.C. 6291-6309), as amended, 
established the Energy Conservation Program for Consumer Products Other 
Than Automobiles, a program covering most major household appliances. 
Similarly, Title III, Part C of the EPCA, (42 U.S.C. 6311-6317) as 
amended, added by Public Law 95-619, Title IV, section 441(a), 
established the Energy Conservation Program for Certain Industrial 
Equipment, a program covering industrial equipment.
    Section 6302(a) of title 42 of the United States Code (42 U.S.C. 
6302(a)), and its implementing regulations, prescribe the specific 
energy conservation and labeling standards applicable to manufacturers 
and, in some instances, private labelers, distributors, and retailers. 
Sections 6301 and 6316 of title 42 of the United States Code (42 U.S.C. 
6301 and 6316) require the Secretary of the Treasury to issue 
regulations refusing admission into the customs territory of the United 
States to covered products or covered equipment offered for importation 
in violation of 42 U.S.C. 6302. The statute also provides the Secretary 
with the discretion to authorize the importation of covered products or 
covered industrial equipment under such terms and conditions (including 
the furnishing of a bond) that ensure that the merchandise will not 
violate 42 U.S.C. 6302.

Proposed Regulation

    Pursuant to 42 U.S.C. 6301, this document proposes to amend part 12 
of title 19 of the Code of Federal Regulations (19 CFR Part 12) by 
adding a new Sec.  12.50 which provides that CBP will refuse admission 
into the customs territory of the United States to covered imports that 
the Department of Energy (DOE) or the Federal Trade Commission (FTC) 
has determined to be in violation of 42 U.S.C. 6302, upon receipt of 
written or electronic notice from the DOE or FTC, as appropriate. The 
notice will identify a named regulated party as being in violation of 
42 U.S.C. 6302 and will describe the subject product or equipment in a 
manner sufficient to enable CBP to identify the articles.
    While refusal of admission will be the norm, there may be instances 
where reconditioning, re-labeling, or other modification may bring an 
import into compliance with applicable energy conservation or labeling 
admissibility standards. Accordingly, this rule proposes a procedure to 
allow CBP to conditionally release noncompliant imports to the importer 
under a CBP basic importation and entry bond for purposes of bringing 
the merchandise into conformity with the applicable standards, upon a 
recommendation by the DOE or FTC. In any case involving conditional 
release of a covered import under bond, the CBP port director always 
retains the discretion to require additional security in any case where 
he believes that acceptance of a continuous bond would hamper the 
enforcement of the law. See 19 CFR 113.13(d). An initial conditional 
release period of 30 days is proposed to be established by this 
rulemaking.
    If the DOE or FTC notifies CBP that the subject imports have been 
brought into compliance with applicable energy conservation and 
labeling admissibility standards before the conclusion of the 30-day 
conditional release period, or any authorized extension thereof, CBP 
may release the subject goods into the commerce and entry may be 
completed.
    If attempts at modification fail within the 30-day conditional 
release period, or any authorized extension thereof, the DOE or FTC 
will notify CBP of that fact, and CBP will issue a notice of refusal of 
admission to the importer concurrent with a demand for redelivery under 
the terms and conditions of the CBP bond. A failure to comply with the 
demand for redelivery will result in the assessment of liquidated 
damages equal to three times the value of the imports at issue. 
Moreover, covered imports that are conditionally released will be under 
the concurrent jurisdiction of DOE and/or FTC.
    The proposed amendments are consistent with Sec.  429.5(b) of title 
10 of the Code of Federal Regulations (10 CFR 429.5(b)), which is a DOE 
regulation that further notifies the importing public that any covered 
product or equipment offered for importation that does not meet the 
applicable energy

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conservation standards set forth in 42 U.S.C. 6291-6317 will be refused 
admission into the customs territory of the United States under CBP 
issued regulations.

Executive Order 12866

    Executive Orders 13563 and 12866 direct agencies to assess costs 
and benefits of available regulatory alternatives and, if regulation is 
necessary, to select regulatory approaches that maximize net benefits 
(including potential economic, environmental, public health and safety 
effects, distributive impacts, and equity). Executive Order 13563 
emphasizes the importance of quantifying both costs and benefits, of 
reducing costs, of harmonizing rules, and of promoting flexibility. 
This rule has been designated a ``significant regulatory action'' 
although not economically significant, under section 3(f) of Executive 
Order 12866. Accordingly, the rule has been reviewed by the Office of 
Management and Budget.

The Regulatory Flexibility Act

    This section examines the impact of the rule on small entities as 
required by the Regulatory Flexibility Act (5 U.S.C. 601 et seq.), as 
amended by the Small Business Regulatory Enforcement and Fairness Act 
of 1996. A small entity may be a small business (defined as any 
independently owned and operated business not dominant in its field 
that qualifies as a small business per the Small Business Act); a small 
not-for-profit organization; or a small governmental jurisdiction 
(locality with fewer than 50,000 people).
    The proposed rule, if finalized, will establish a procedure whereby 
the DOE or the FTC will notify CBP of any imported article that is in 
violation of 42 U.S.C 6302 and its implementing regulations. Upon 
notification, CBP will refuse these articles admission into the 
commerce of the United States. Upon a recommendation by the DOE or FTC, 
however, CBP will conditionally release noncompliant imported articles 
under a CBP basic importation and entry bond for the purpose of 
bringing the merchandise into compliance with 42 U.S.C. 6302 and its 
implementing regulations. This conditional release is valid for a 
period of 30 days, but it may be extended by the DOE or FTC.
    The DOE has identified only a small number of businesses importing 
noncompliant articles, of which fewer than five were small entities. 
When notified of their noncompliance, each of these businesses ceased 
importation of these articles. Given the small number of small entities 
identified by DOE as having been noncompliant and that the law 
prohibiting the importation of these noncompliant articles within the 
United States was enacted in 1975, CBP does not anticipate a 
significant number of small entities attempting to import articles 
which violate 42 U.S.C 6302 and its implementing regulations. If a 
small entity does import an article in violation of 42 U.S.C 6302 and 
its implementing regulations, the small entity can request the DOE or 
the FTC allow CBP to grant the imported article a conditional release. 
CBP believes that cost associated with this conditional release to be 
negligible because this request is virtually costless to the small 
entity and the importer is already required to maintain a CBP basic 
importation and entry bond.
    Accordingly, CBP does not believe this rule will have a significant 
impact on a substantial number of small entities. CBP welcomes any 
comments regarding this assessment. If CBP does not receive any 
comments contradicting this finding, CBP will certify that this rule 
will not have a significant economic impact on a substantial number of 
small entities at the final rule stage.

Paperwork Reduction Act

    As there is no collection of information proposed in this document, 
the provisions of the Paperwork Reduction Act of 1995 (44 U.S.C. 3507) 
are inapplicable.

Signing Authority

    This proposed regulation is being issued in accordance with 19 CFR 
0.1(a)(1) pertaining to the Secretary of the Treasury's authority (or 
that of his delegate) to approve regulations related to certain customs 
revenue functions.

List of Subjects in 19 CFR Part 12

    Customs duties and inspection, Electronic products, Entry of 
merchandise, Imports, Prohibited merchandise, Reporting and 
recordkeeping requirements, Restricted merchandise, Seizure and 
forfeiture.

Proposed Amendments to the CBP Regulations

    For the reasons stated above, it is proposed to amend part 12 of 
title 19 of the Code of Federal Regulations (19 CFR Part 12) as set 
forth below.

PART 12--SPECIAL CLASSES OF MERCHANDISE

    1. The general authority citation for part 12 continues to read as 
follows and the specific authority citation is added to read as 
follows:

    Authority:  5 U.S.C. 301; 19 U.S.C. 66, 1202 (General Note 3(i), 
Harmonized Tariff Schedule of the United States (HTSUS)), 1624;
* * * * *
    Section 12.50 also issued under 42 U.S.C. 6301;
* * * * *
    2. A new center heading and new Sec.  12.50 are added to read as 
follows:

Consumer Products and Industrial Equipment Subject to Energy 
Conservation or Labeling Standards


Sec.  12.50  Consumer products and industrial equipment subject to 
energy conservation or labeling standards.

    (a) Definitions. For purposes of this section, the following terms 
have the meanings indicated:
    Covered import. The term ``covered import'' means a consumer 
product or industrial equipment that is classified by the Department of 
Energy as covered by an applicable energy conservation standard, or by 
the Federal Trade Commission as covered by an applicable energy 
labeling standard, pursuant to the Energy Policy and Conservation Act 
of 1975, as amended (42 U.S.C. 6291- 6317), and that is imported or 
attempted to be imported.
    DOE. The term ``DOE'' means the Department of Energy.
    Energy conservation standard. The term ``energy conservation 
standard'' means any standard meeting the definitions of that term in 
42 U.S.C. 6291(6) or 42 U.S.C. 6311(18).
    FTC. The term ``FTC'' means the Federal Trade Commission.
    Noncompliant covered import. The term ``noncompliant covered 
import'' means a covered import that the Department of Energy (DOE) or 
the Federal Trade Commission (FTC) has determined to be in violation of 
42 U.S.C. 6302.
    (b) CBP action. If a covered import does not comply with applicable 
energy conservation or labeling admissibility standards, the DOE or FTC 
may direct CBP to either refuse admission of the covered import 
pursuant to paragraph (c) of this section or recommend conditional 
release of the covered import to be brought into compliance pursuant to 
paragraph (d) of this section.
    (c) Refusal of admission. CBP will refuse admission into the 
customs territory of the United States to any noncompliant covered 
import upon receipt of written or electronic notice from the DOE (see 
also 10 CFR 429.5) or FTC that identifies the importer of the 
noncompliant covered import and describes the subject import in a 
manner

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sufficient to enable CBP to identify the article.
    (d) Conditional release. In lieu of immediate refusal of admission 
into the customs territory of the United States, CBP, upon a 
recommendation from the DOE or FTC, may permit the release of a 
noncompliant covered import to the importer of record for purposes of 
reconditioning, re-labeling, or other modification. The release from 
CBP custody of any such covered import will be deemed conditional and 
subject to the bond conditions set forth in Sec.  113.62 of this 
Chapter. Note: Conditionally released covered imports will also be 
subject to the jurisdiction of DOE and/or FTC.
    (1) Duration. Unless extended in accordance with paragraph (d)(2) 
of this section, the conditional release period will terminate upon the 
earliest occurring of the following events:
    (i) The date that CBP issues a notice of refusal of admission 
pursuant to paragraph (c) of this section;
    (ii) The date that the DOE or FTC issues a notice to CBP stating 
that the covered import is in compliance and may proceed; or
    (iii) At the conclusion of the 30-day period following the date of 
release.
    (2) Extension. The conditional release period may be extended if 
both CBP and the importer of record receive, within the initial 30-day 
conditional release period or any subsequent authorized extension 
thereof, a written or electronic notice from the DOE or FTC stating the 
reason for and anticipated length of the extension.
    (3) Issuance of a redelivery notice and demand for redelivery. If 
the noncompliant covered import is not timely brought into compliance, 
and if so directed by DOE or FTC, CBP will issue a refusal of admission 
notice to the importer pursuant to paragraph (c) of this section and, 
in addition, CBP will demand the redelivery of the specified covered 
product to CBP custody. The demand for redelivery may be made 
concurrently with the notice of refusal of admission.
    (4) Liquidated damages. A failure to comply with a demand for 
redelivery made under this paragraph (d) will result in the assessment 
of liquidated damages equal to three times the value of the covered 
product. Value as used in this provision means value as determined 
under 19 U.S.C. 1401a.

     Approved: March 20, 2012.
David V. Aguilar,
Acting Commissioner, U.S. Customs and Border Protection.
Timothy E. Skud,
Deputy Assistant Secretary of the Treasury.
[FR Doc. 2012-7105 Filed 3-23-12; 8:45 am]
BILLING CODE 9111-14-P