[Federal Register Volume 63, Number 105 (Tuesday, June 2, 1998)]
[Notices]
[Pages 30039-30040]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 98-14512]


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DEPARTMENT OF THE TREASURY

Customs Service
[T.D. 98-53]


Customs Bond Cancellation Standards for Imports of Softwood 
Lumber From Canada

AGENCY: U. S. Customs Service, Department of the Treasury.

ACTION: General notice.

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SUMMARY: Under section 623(c) of the Tariff Act of 1930, as amended (19 
U.S.C. 1623(c)), the Secretary of the Treasury is required to publish 
guidelines for the cancellation of Customs bonds or charges thereunder. 
On February 26, 1997, Customs published T.D. 97-9 in the Federal 
Register (62 FR 8620) setting forth interim amendments to the Customs 
Regulations concerning the entry of certain softwood lumber products 
from Canada. Those amendments included additions to the conditions of 
the basic importation bond (19 CFR 113.62) to cover the production of, 
and liability for liquidated damages for failure to produce, export 
permit information pertaining to such softwood lumber products. This 
document publishes guidelines for cancellation of bond charges arising 
from such defaults.

EFFECTIVE DATE: These guidelines will take effect on June 2, 1998, and 
shall be applicable to all cases which are currently open at the 
petition or supplemental petition stage.

FOR FURTHER INFORMATION CONTACT: Jeremy Baskin, Penalties Branch, 
Office of Regulations and Rulings (202-927-2344).

SUPPLEMENTARY INFORMATION:

Background

    Section 1904 of the Omnibus Trade and Competitiveness Act of 1988 
(Pub. L. 100-418, 102 Stat. 1107) amended section 623(c) of the Tariff 
Act of 1930, as amended (19 U.S.C. 1623(c)), to require that the 
Secretary of the Treasury publish guidelines establishing standards for 
setting the terms and conditions for cancellation of Customs bonds or 
charges thereunder. The authority to promulgate such guidelines had 
been delegated to the Commissioner of Customs by Paragraph 1 of 
Treasury Department Order No. 165, revised (T.D. 53654). Guidelines 
pursuant to section 623(c) were initially published by Customs in the 
Federal Register in T.D. 89-48 on April 21, 1989 (54 FR 16182), and 
those guidelines were subsequently revised and republished in their 
entirety in T.D. 94-38 which appeared in the Federal Register on April 
14, 1994 (59 FR 17830).
    On February 26, 1997, Customs published T.D. 97-9 in the Federal 
Register (62 FR 8620) setting forth interim amendments to the Customs 
Regulations concerning the entry of certain softwood lumber products 
from Canada. Those amendments included the addition of a new 
Sec. 12.140 (19 CFR 12.140) which sets forth special entry requirements 
for the subject lumber, including the obligation of the importer of 
record to obtain and provide to Customs information regarding the 
issuance of a Canadian export permit for the lumber. T.D. 97-9 also 
amended the provisions of the basic importation bond in Sec. 113.62 (19 
CFR 113.62) by the addition of a new paragraph (k) (with existing 
paragraph (k) redesignated as paragraph (l)) and by the addition of a 
new subparagraph (5) under newly designated paragraph (l). New 
paragraph (k) obligates the bond principal, as required by new 
Sec. 12.140(a), to assume the obligation to ensure within 20 working 
days of release of the merchandise, and establish to the satisfaction 
of Customs, that the applicable export permit has been issued by the 
Government of Canada. Under new paragraph (l)(5), failure of the bond 
principal to meet the paragraph (k) obligation will result in 
assessment of liquidated damages equal to $100 per thousand board feet 
of the imported lumber.
    In accordance with the provisions of section 623(c), this document 
sets forth standards for the cancellation of claims for liquidated 
damages assessed under Secs. 12.140, 113.62(k) and 113.62(l)(5). These 
standards distinguish those claims in which the required export permits 
are presented in an untimely fashion from those instances where the 
export permits are not presented at all. The standards permit 
cancellation of liquidated damages incurred for late presentation of 
the necessary information upon payment of an amount between 25 and 50 
percent of the claim but not less than $500 and not more than $3,000 
per entry depending upon the experience of the importer and the number 
of violations incurred by the importer as compared to the number of 
importations made. If the claim is issued for $500 or less, no relief 
will be granted. If the necessary information is never provided, the 
claim will be collected in full. These claims for liquidated damages 
may only be assessed with regard to entries filed subsequent to the 
effective date of the interim regulations.
    The text of the new guidelines is set forth below:

Guidelines for Cancellation of Claims for Late Filing or Failure to 
File Softwood Lumber Information (19 CFR 12.140, 19 CFR 113.62(k), 
19 CFR 113.62(l)(5))

    A. Late presentation of export permit information. Claims for 
liquidated damages for late presentation of export permit information 
shall be processed in accordance with the following guidelines.
    1. Modified CF-5955A. Notices of liquidated damages incurred may be 
issued on a modified CF-5955A. The modified form shall specify two 
options from which the petitioner may choose to resolve the demand.
    a. Option 1. He may pay a specified sum within 60 days and the case 
will be closed. By electing this option in lieu of petitioning, he 
waives his right to file a petition.
    b. Option 2. Petition for relief. The bond principal or surety may 
file a petition for relief. By filing a petition for relief, the 
petitioner will no longer be afforded the Option 1 mitigation amount. 
The Fines, Penalties, and Forfeitures Officer shall grant full relief 
when the petitioner demonstrates that the violation did not occur or 
occurred solely as a result of Customs error. If the petitioner fails 
to demonstrate that the violation did not occur or occurred solely as a 
result of Customs error, the Fines, Penalties, and Forfeitures Officer 
may cancel the claim upon payment of an amount no less than $100 
greater than the Option 1 amount.
    2. Cancellation of claims for late presentation of export permit 
information. Liquidated damages incurred for late presentation of the 
necessary information may be cancelled upon payment of an amount 
between 25 and 50 percent of the claim but not less than $500 and not 
more than $3,000. Such amount may be afforded as an Option 1 amount. 
Mitigation shall be based upon the experience of the importer and the 
number of violations incurred compared with the number of importations 
made. No relief shall be

[[Page 30040]]

granted from any claim issued for $500 or less.
    B. Failure to present export permit information. If the importer 
fails to present the appropriate export permit information, no relief 
from the claim for liquidated damages will be granted unless the 
importer can show that the information was not required or that the 
violation occurred solely as a result of Customs error. Upon 
presentation of proof which satisfies the Fines, Penalties, and 
Forfeitures Officer that the information was not required or that the 
violation occurred solely as a result of Customs error, the claim shall 
be cancelled without payment.

    Dated: May 27, 1998.
Samuel H. Banks,
Acting Commissioner of Customs.
[FR Doc. 98-14512 Filed 6-1-98; 8:45 am]
BILLING CODE 4820-02-P