24380 Federal Register / Vol. 77, No. 79 / Tuesday, April 24, 2012 / Rules and Regulations 

(6) The country of origin of the 

merchandise; 

(7) The name and address of the 

exporter; and 

(8) The name and address of the 

importer. 

(e) Samples made available to the 

owner of the mark after seizure. At any 

time following a seizure of merchandise 

bearing a counterfeit mark under this 

section, CBP may provide a sample and 

its retail packaging, in its condition as 

presented for examination, to the owner 

of the mark for examination, testing, or 

other use in pursuit of a related private 

civil remedy for trademark 

infringement. To obtain a sample under 

this paragraph, the owner of the mark 

must furnish CBP a bond in the form 

and amount specified by the port 

director, conditioned to hold the United 

States, its officers and employees, and 

the importer or owner of the imported 

article harmless from any loss or 

damage to the sample resulting from the 

furnishing of a sample by CBP to the 

owner of the mark. CBP may demand 

the return of the sample at any time. 

The owner of the mark must return the 

sample to CBP upon demand or at the 

conclusion of the examination, testing, 

or other use in pursuit of a related 

private civil remedy for infringement. In 

the event that the sample is damaged, 

destroyed, or lost while in the 

possession of the owner of the mark, the 

owner must, in lieu of return of the 

sample, certify to CBP that: ‘‘The sample 

described as [insert description] and 

provided pursuant to 19 CFR 133.21(e) 

was (damaged/destroyed/lost) during 

examination, testing, or other use.’’ 

(f) Consent of the mark owner; failure 

to make appropriate disposition. The 

owner of the mark, within thirty days 

from notification of seizure, may 

provide written consent to the importer 

allowing the importation of the seized 

merchandise in its condition as 

imported or its exportation, entry after 

obliteration of the mark, or other 

appropriate disposition. Otherwise, the 

merchandise will be disposed of in 

accordance with § 133.52 of this part, 

subject to the importer’s right to petition 

for relief from forfeiture under the 

provisions of part 171 of this chapter. 

§ 133.22 [Amended] 

■ 4. Section 133.22(f), first sentence, is 

amended by removing the words 

‘‘within the 30-day period of detention’’ 

and adding in their place the words 

‘‘within the period of detention as 

provided in § 133.25 of this subpart’’. 

§ 133.23 [Amended] 

■ 5. Section 133.23(f), first sentence, is 

amended by removing the words 

‘‘within the 30-day period of detention’’ 

and adding in their place the words 

‘‘within the period of detention as 

provided in § 133.25 of this subpart’’. 

§ 133.26 [Amended] 

■ 6. Section 133.26 is amended by 

removing from the first sentence the 

words ‘‘subject to the restrictions of 

§ 133.22 or § 133.23 of this subpart’’ and 

adding in their place the words ‘‘subject 

to the restrictions of § 133.21, § 133.22 

or § 133.23 of this subpart’’. 

PART 151—EXAMINATION, SAMPLING 

AND TESTING OF MERCHANDISE 

■ 7. The general authority citation for 

part 151 continues to read as follows: 

Authority: 19 U.S.C. 66, 1202 (General 

Note 3(i) and (j), Harmonized Tariff Schedule 

of the United States (HTSUS), 1624; 

* * * * * 

■ 8. Section 151.16(a) is revised to read 

as follows: 

§ 151.16 Detention of merchandise. 

(a) Exemptions from applicability. 

The provisions of this section are not 

applicable to detentions effected by CBP 

on behalf of other agencies of the U.S. 

Government in whom the determination 

of admissibility is vested and to 

detentions arising from possibly 

piratical copies (see part 133, subpart E, 

of this Chapter), imports of articles 

bearing counterfeit marks or suspected 

counterfeit marks, goods bearing marks 

which are confusingly similar to 

recorded trademarks, or restricted gray 

market merchandise (see part 133, 

subpart C, of this chapter.) 

* * * * * 

David V. Aguilar, 

Acting Commissioner, U.S. Customs and 

Border Protection. 

Approved: April 18, 2012. 

Timothy E. Skud, 

Deputy Assistant Secretary of the Treasury. 

[FR Doc. 2012–9762 Filed 4–23–12; 8:45 am] 

BILLING CODE 9111–14–P 

DEPARTMENT OF THE TREASURY 

Internal Revenue Service 

26 CFR Part 1 

[TD 9585] 

RIN 1545–BI41 

Treatment of Gain Recognized With 

Respect to Stock in Certain Foreign 

Corporations Upon Distributions 

AGENCY: Internal Revenue Service (IRS), 

Treasury. 

ACTION: Final regulations and removal of 

temporary regulations. 

SUMMARY: This document contains final 

regulations relating to the 

characterization of gain recognized with 

respect to stock in certain foreign 

corporations upon distributions. The 

regulations finalize proposed 

regulations and remove temporary 

regulations that characterize gain 

recognized with respect to stock in 

foreign corporations upon distributions 

as a deemed dividend in certain 

situations. The regulations affect certain 

persons that recognize gain with respect 

to stock in connection with the receipt 

of a distribution of property from a 

foreign corporation. 

DATES: Effective Date: These regulations 

are effective on April 24, 2012. 

Applicability Date: These regulations 

apply to distributions occurring on or 

after February 10, 2009. 

FOR FURTHER INFORMATION CONTACT: 

Ryan A. Bowen, (202) 622–3860 (not a 

toll-free number). 

SUPPLEMENTARY INFORMATION: 

Background 

On February 11, 2009, the IRS and the 

Department of the Treasury (the 

Treasury Department) published 

temporary and proposed regulations in 

the Federal Register (REG–147636–08, 

74 FR 6824; TD 9444, 2009–1 CB 603) 

(the temporary or proposed regulations, 

as applicable, and collectively, the 2009 

regulations). The 2009 regulations, in 

part, provide that for purposes of 

section 1248(a), gain recognized under 

section 301(c)(3) in connection with the 

receipt of a distribution of property from 

a foreign corporation with respect to its 

stock shall be treated as gain from the 

sale or exchange of the stock of such 

foreign corporation (2009 section 1248 

regulations). 

The 2009 regulations also addressed 

the application of section 367 to certain 

related party stock transactions that are 

recharacterized under section 304. As 

described in Notice 2012–15 (2012–9 

IRB 495 (February 27, 2012)) (see 

§ 601.601(d)(2)(ii)(b) of this chapter), the 

IRS and the Treasury Department intend 

to amend the regulations under section 

367 to provide that the section 351 

exchange that is deemed to occur in a 

section 304 transaction is subject to 

section 367(a) and (b), as applicable. 

Accordingly, this Treasury decision 

does not finalize the portions of the 

2009 regulations that address the 

interaction of sections 304 and 367. 

Those portions of the 2009 regulations 

will be withdrawn in separate published 

guidance (REG–104400–12). 

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Federal Register / Vol. 77, No. 79 / Tuesday, April 24, 2012 / Rules and Regulations 24381 

No public hearing on the 2009 section 

1248 regulations was requested or held 

and no written comments were 

received. This Treasury decision adopts 

the 2009 section 1248 regulations, with 

one modification to remove a deadwood 

provision, as final regulations under 

section 1248(a). This Treasury decision 

also removes the temporary regulations 

under section 1248(a). 

Explanation of Provisions 

The final regulations provide that gain 

recognized under section 301(c)(3) on 

the receipt of a distribution of property 

from a foreign corporation with respect 

to its stock shall be treated for purposes 

of section 1248(a) as gain from the sale 

or exchange of the stock of such 

corporation. For purposes of section 

1248(a), a sale or exchange also includes 

a distribution that gives rise to gain with 

respect to stock under section 302(a) or 

331(a). The final regulations ensure that 

the earnings and profits of lower-tier 

foreign subsidiaries described in section 

1248(c)(2) are taken into account when 

gain is recognized with respect to stock 

of a controlled foreign corporation. 

The 2009 section 1248 regulations 

incorporated a provision from the prior 

final regulations under section 1248 

providing that section 1248(a) applies to 

gain recognized with respect to stock 

under section 331(a)(2) by reason of a 

partial liquidation of a corporation. The 

final regulations remove the reference to 

partial liquidations under section 

331(a)(2) in order to reflect amendments 

made in 1982 by the Tax Equity and 

Fiscal Responsibility Act of 1982 

(Public Law 97–248, 96 Stat. 324 

(1982)), which repealed section 

331(a)(2) and provided new rules 

regarding redemptions in partial 

liquidation under section 302. See 

section 302(b)(4) and (e). 

Special Analyses 

It has been determined that this 

Treasury decision is not a significant 

regulatory action as defined in 

Executive Order 12866. Therefore, a 

regulatory assessment is not required. It 

also has been determined that 5 U.S.C. 

553(b) and (d) do not apply to these 

regulations. Pursuant to the Regulatory 

Flexibility Act (5 U.S.C. 601 et seq.), it 

is hereby certified that this rule will not 

have a significant economic impact on 

a substantial number of small entities. 

These regulations primarily will affect 

large domestic corporations. Thus, the 

number of affected small entities will 

not be substantial. Pursuant to section 

7805(f) of the Internal Revenue Code, 

the notice of proposed rulemaking 

preceding this regulation was submitted 

to the Chief Counsel for Advocacy of the 

Small Business Administration for 

comments on its impact on small 

business. 

Drafting Information 

The principal author of these 

regulations is Ryan A. Bowen of the 

Office of Associate Chief Counsel 

(International). However, other 

personnel from the IRS and the Treasury 

Department participated in their 

development. 

List of Subjects in 26 CFR Part 1 

Income taxes, Reporting and 

recordkeeping requirements. 

Adoption of Amendments to the 

Regulations 

Accordingly, 26 CFR part 1 is 

amended as follows: 

PART 1—INCOME TAXES 

■ Paragraph 1. The authority citation 

for part 1 continues to read as follows: 

Authority: 26 U.S.C. 7805 * * * 

■ Par. 2. Section 1.1248–1 is amended 

by: 

■ 1. Revising paragraphs (b) and (g)(2). 

■ 2. Removing paragraph (h). 

The revisions read as follows. 

§ 1.1248–1 Treatment of gain from certain 

sales or exchanges of stock in certain 

foreign corporations. 

* * * * * 

(b) Sale or exchange. For purposes of 

section 1248(a), the term sale or 

exchange includes the receipt of a 

distribution which is treated as in 

exchange for stock under section 302(a) 

(relating to distributions in redemption 

of stock) or section 331(a) (relating to 

distributions in complete liquidation of 

a corporation). For purposes of section 

1248(a), gain recognized by a 

shareholder under section 301(c)(3) in 

connection with a distribution of 

property by a corporation with respect 

to its stock shall be treated as gain from 

the sale or exchange of stock of such 

corporation. 

* * * * * 

(g) * * * 

(2) Paragraph (b) of this section 

applies to distributions that occur on or 

after February 10, 2009. 

§ 1.1248–1T [Removed] 

■ Par. 3. Section 1.1248–1T is removed. 

Steven T. Miller, 

Deputy Commissioner for Services and 

Enforcement. 

Approved: April 13, 2012. 

Emily S. McMahon, 

Acting Assistant Secretary of the Treasury 

(Tax Policy). 

[FR Doc. 2012–9760 Filed 4–23–12; 8:45 am] 

BILLING CODE 4830–01–P 

DEPARTMENT OF HOMELAND 

SECURITY 

Coast Guard 

33 CFR Part 165 

[Docket No. USCG–2011–1159] 

RIN 1625–AA87 

Security Zone; Passenger Vessel 

SAFARI EXPLORER Arrival/Departure, 

Kaunakakai Harbor, Molokai, HI 

AGENCY: Coast Guard, DHS. 

ACTION: Temporary interim rule; 

reopening of comment period. 

SUMMARY: The Coast Guard is reopening 

the comment period for the temporary 

interim rule that established a 

temporary security zone for Kaunakakai 

Harbor, including the entrance channel 

and offshore area adjacent to the 

channel’s entrance during the arrival 

and departure of the Passenger Vessel 

Safari Explorer in Kaunakakai Harbor, 

Molokai, Hawaii. The effective period 

for this temporary security zone began 

on January 19, 2012 and ends on May 

15, 2012. The Coast Guard held informal 

public meetings regarding the interim 

rule. Following the public meetings, the 

Coast Guard prepared a written synopsis 

of the public comments received at the 

public meetings. This synopsis may be 

viewed at http://www.regulations.gov 

under docket number USCG–2011– 

1159. During this additional comment 

period, the Coast Guard invites 

comments on how the temporary 

interim rule can be improved. 

DATES: The Coast Guard will consider 

all comments that we receive on or 

before May 7, 2012. 

ADDRESSES: You may submit written 

comments identified by docket number 

USCG–2011–1159 using any one of the 

following methods: 

(1) Federal eRulemaking Portal: 

http://www.regulations.gov. 

(2) Fax: 202–493–2251. 

(3) Mail: Docket Management Facility 

(M–30), U.S. Department of 

Transportation, West Building Ground 

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