Federal Register / Vol. 63, No. 110 /Tuesday, June 9, 1998 / Proposed Rules 31385

List of Subjects in 14 CFR Part 71

Airspace, Incorporation by reference,

Navigation (air).

The Proposed Amendment

In consideration of the foregoing, the

Federal Aviation Administration

proposes to amend 14 CFR part 71 as

follows:

PART 71—DESIGNATION OF CLASS A,

CLASS B, CLASS C, CLASS D, AND

CLASS E AIRSPACE AREAS;

AIRWAYS; ROUTES; AND REPORTING

POINTS

1. The authority citation for 14 CFR

part 71 continues to read as follows:

Authority: 49 U.S.C. 106(g), 40103, 40113,

40120; E.O. 10854, 24 FR 9565, 3 CFR, 1959–

1963 Comp., p. 389.

§ 71.1 [Amended]

2. The incorporation by reference in

14 CFR 71.1 of the Federal Aviation

Administration Order 7400.9E, Airspace

Designations and Reporting Points,

dated September 10, 1997, and effective

September 16, 1997, is amended as

follows:

Paragraph 5000 Class D airspace areas.

* * * * *

ASW TX D Dallas NAS Dallas, TX [Revised]

Dallas NAS Hensley Field, TX

(lat. 32°44′04′′N., long. 96°58′03′′W.)

Dallas, Redbird Airport, TX

(lat. 32°40′51′′N., long. 96°52′06′′W.)

Grand Prairie Municipal Airport, TX

(lat. 32°41′54′′N., long. 97°02′48′′W.)

That airspace extending upward from the

surface to and including 2,000 feet MSL

within a 4.2-mile radius of Dallas NAS

Hensley Field and within a 4.2–mile radius

of the Redbird Airport excluding that

airspace east of a line from lat. 32°37′40′′N.,

long. 96°55′21′′W.; to lat. 32°39′35′′N., long.

96°54′16′′W.; to lat. 32°44′20′′N., long.

96°53′59′′W.; and that airspace upward from

the surface to but not including 3,000 feet

MSL within a 4.2-mile radius of the Grand

Prairie Municipal Airport; excluding that

airspace west of a line from lat. 32°45′52′′N.,

long. 97°04′30′′W.; to lat. 32°38′12′′N., long.

97°05′10′′W.; excluding that airspace within

the Dallas-Fort Worth, TX, Class B airspace

area. This Class D airspace is effective during

the specific dates and times established in

advance by a Notice to Airmen. The effective

date and time will thereafter be continuously

published in the Airport/Facility Directory.

* * * * *

Issued in Fort Worth, TX, on May 26, 1998.

Albert L. Viselli,

Acting Manager, Air Traffic Division,

Southwest Region.

[FR Doc. 98–15310 Filed 6–8–98; 8:45 am]

BILLING CODE 4910–13–M

DEPARTMENT OF THE TREASURY

Customs Service

19 CFR Parts 113 and 151

RIN 1515–AB60

Accreditation of Commercial Testing

Laboratories; Approval of Commercial

Gaugers

AGENCY: Customs Service, Treasury.

ACTION: Notice of proposed rulemaking.

SUMMARY: This document proposes to

amend the Customs Regulations relating

to the commercial testing and gauging of

imported merchandise, pursuant to

Customs modernization provisions of

the North American Free Trade

Agreement Implementation Act. The

proposed regulations revise the general

procedures for the accreditation/

reaccreditation of commercial

laboratories, the approval/reapproval of

commercial gaugers, and the suspension

and revocation of such accreditations/

approvals. Further, the proposed

regulations establish a reimbursable fee

schedule that Customs will charge such

laboratories/gaugers to accredit/

approve and periodically reaccredit/

reapprove their commercial services,

and make provision for the imposition

of monetary penalties for failure to

adhere to any of the provisions

applicable to the examination,

sampling, and testing of imported

merchandise.

DATES: Comments must be received on

or before August 10, 1998.

ADDRESSES: Written comments

(preferably in triplicate) may be

addressed to the Regulations Branch,

Office of Regulations and Rulings, U.S.

Customs Service, 1300 Pennsylvania

Avenue, NW., Washington, DC 20229.

Comments submitted may be inspected

at the Regulations Branch, Office of

Regulations and Rulings, U.S. Customs

Service, Suite 3000, 1300 Pennsylvania

Avenue, NW., Washington, DC.

FOR FURTHER INFORMATION CONTACT: Ira

Reese, Laboratories & Scientific

Services, (202) 927–1060.

SUPPLEMENTARY INFORMATION:

Background

On December 8, 1993, the United

States enacted the North American Free

Trade Agreement Implementation Act

(the Act), Pub. L. 103–182, 107 Stat.

2057. Title VI of the Act contains

provisions pertaining to Customs

Modernization (107 Stat. 2170); section

613 of Subtitle A to Title VI amends

section 499 of the Tariff Act of 1930 (19

U.S.C. 1499), which provides Customs

with the authority to conduct

examinations and detain imported

merchandise.

The Commercial Laboratory/Gauger

Testing Provisions of Section 613

The provisions of section 613, among

other things, codify Customs regulations

and administrative guidelines

concerning the use of commercial

laboratories and gaugers by adding a

new paragraph (b) to section 499 (19

U.S.C. 1499(b)). Regarding the

accreditation/approval aspects of

commercial laboratories/gaugers, the

provisions of new paragraph (b)

authorize Customs to:

(1) Set procedures for the

accreditation of commercial laboratories

in the United States, which may be used

to perform tests relating to the

admissibility, quantity, composition, or

characteristics of imported

merchandise, and the approval of

commercial gaugers in the United

States, which may be used to perform

tests to establish the quantities of

imported merchandise;

(2) Impose reasonable charges for

such accreditations/approvals and

periodic reaccreditations/reapprovals;

and

(3) Establish the conditions regarding

the suspension and revocation of such

accreditations and approvals, which

may include the imposition of monetary

penalties not to exceed $100,000, in

addition to penalties for any loss of

revenue, in appropriate cases.

Regarding the testing/gauging aspects

of commercial laboratories/gaugers, new

paragraph (b) further provides that:

(1) In the absence of Customs testing,

Customs shall accept analysis and

quantity results from Customsaccredited laboratories and Customsapproved gaugers; however, this

circumstance does not limit or

otherwise preclude Customs or any

other Federal agency from

independently testing, analyzing, or

quantifying any sample or merchandise;

(2) Testing procedures and

methodologies will be made available

upon request to any person, except

when they are proprietary to the holder

of a copyright or patent or developed by

Customs for enforcement purposes;

information resulting from any Customs

testing will be made available to the

importer of record and any agents

thereof, except when the information

meets the above specified exclusions

from disclosure; and

(3) Laboratories/gaugers may seek

judicial review of any final Customs

decision that adversely affects their

accreditation/approval, i.e., denial,

suspension, or revocation, or that
31386 Federal Register / Vol. 63, No. 110 /Tuesday, June 9, 1998 / Proposed Rules

imposes a monetary penalty, by

commencing an action within 60 days of

such decision in the Court of

International Trade.

New paragraph (b) also provides that

commercial laboratories/gaugers already

accredited/approved under current

Customs regulations (see, 19 CFR

151.13) will not be required to reapply,

but will be subject to reaccreditation/

reapproval procedures and

requirements. Until the time for

reaccreditation/reapproval, those

commercial laboratories/gaugers already

accredited/approved may conduct only

those tests they were originally

accredited/approved to perform.

A. Proposed Amendments Concerning

Accrediting Commercial Laboratories

Heretofore, Customs accredited

commercial laboratories to perform

selected tests on certain imported

merchandise entered under chapters 27

(pertaining to mineral fuels, mineral oils

and products of their distillation;

bituminous substances; and mineral

waxes) and 29 (pertaining to organic

chemicals) of the Harmonized Tariff

Schedule of the United States (HTSUS).

The proposed amendments will expand

the scope of accreditation to allow

laboratories to perform the majority of

tests vested in, or delegated to, the

Customs Service; accreditation will

extend to the performance of functions

for determining the admissibility,

quantity, composition, or characteristics

of imported merchandise. Accordingly,

more importers may now choose, at

their expense, to have merchandise

tested by Customs-accredited

laboratories whose test results will be

accepted by Customs, if the importer

certifies that the sample tested was

taken from the merchandise in the

entry. This could result in the earlier

availability of test results and should

assist in the proper classification and

entry of imported merchandise.

The proposed regulations do not

preclude Customs from testing

merchandise from a shipment which

has already been tested by an accredited

laboratory at the importer’s expense.

Occasionally, Customs may request

sample splits (discussed below) retained

by accredited laboratories to test. In

cases where merchandise has been

analyzed by both Customs and an

accredited laboratory, Customs actions

will be based upon the analysis

provided by Customs, unless other

action is indicated by the Director,

Laboratories & Scientific Services

(Director).

Merchandise samples tested by

accredited laboratories will be from an

importer’s actual importations. Customs

will release to the importer a

representative sample of the

merchandise, which will be taken and

split into two essentially equal parts

under Customs supervision at the port

of entry. Each part will be of sufficient

size so that complete testing for

Customs purposes can be performed.

The accredited laboratory will test one

part and retain the second sample and

any remnants from the testing, under

proper storage conditions, for a period

of one year from the date of the

laboratory’s final analysis report, unless

other instructions are issued in writing

by Customs. At the end of the one-year

retention time period the accredited

laboratory may dispose of the retained

samples and sample remnants in a

manner consistent with federal, state,

and local statutes; perishable samples

and sample remnants may be disposed

of more expeditiously, if done in

accordance with acceptable laboratory

procedures.

Commercial laboratories will be

accredited to perform accepted industry

and Customs-specified tests on

merchandise by commodity groups that

parallel the chapters and subheadings

contained in the HTSUS. These

commodity groups are set forth in the

proposed rule. Laboratories may be

accredited to perform testing in more

than one of these commodity groups.

Further, because certain tests require

expensive, highly-specialized

equipment or narrow technical

expertise, and because any given

commodity group may involve many

different chemical, physical, or

mechanical tests, Customs will

consider, upon application, granting

accreditation for subgroups of tests

within a commodity group. Customs

may expand the list of commodity

groups for accreditation.

While Customs recognizes that many

laboratory-accreditation systems

perform accreditation by fields of

testing, such as chemical, biological,

mechanical, etc., Customs is not

proposing to adopt this method of

accreditation. Instead, Customs

proposes to perform accreditation by

commodity groups and subgroups

because of Customs technical

requirements and because many

commodities require testing in more

than one traditional field. Accordingly,

laboratories seeking Customs

accreditation should become aware of

Customs testing requirements and seek

accreditation in the multiple fields

required to test a particular commodity

for Customs purposes. For example, a

metals-testing laboratory, in order to

obtain Customs accreditation, will need

to have the ability to perform both

chemical and mechanical testing.

Specific testing methods for

accreditation will be designated in

Commodity Group Brochures available

from Customs to ensure that the

importer-client is aware of the

appropriate test procedures for Customs

purposes. Some of these testing methods

may reference general industry

standards, published by such

organizations as the American Society

for Testing and Materials (ASTM) and

the American Petroleum Institute (API).

It is recognized that different test

methods may produce different results,

and it is imperative for this program that

Customs laboratories and Customsaccredited laboratories utilize the same

test methods.

To become a Customs-accredited

laboratory, individuals or commercial

organizations must submit a letter of

application to Customs requesting

accreditation to perform testing for

specific commodity groups, e.g., textiles

or metals. The technical and operational

requirements for accreditation include

having an appropriate facility properly

equipped to perform the designated

tests and staff capable of performing

these tests. In addition to reviewing an

applicant’s overall physical plant and

management system, specific review

and testing will be conducted for each

commodity group in which

accreditation is sought. Customs

evaluation of an applicant’s professional

abilities will be in accordance with the

general criteria contained in ASTM

E548: Standard Guide for General

Criteria Used for Evaluating Laboratory

Competence. Customs determination of

an applicant’s overall competence,

independence, and character will be

based on the information contained in

the application submitted by the

Laboratory and by conducting on-site

inspections and background

investigations.

Applicants will be required to retain

certain records so that Customs can

evaluate and verify all Customs-related

work performed. The normal recordretention period under the Customs

Regulations is five years (see, present

§ 151.13(i)). However, should litigation

arise within the five-year recordretention-period of time that involves

certain laboratory records, those records

may be required by Customs to be

maintained for a longer period of time.

Should laboratory operations cease, the

laboratory shall inform Customs where

the records will be located. Failure to

properly safeguard or account for

analysis records and laboratory testing/

gauger measurement results will make

the accredited laboratory/approved
Federal Register / Vol. 63, No. 110 /Tuesday, June 9, 1998 / Proposed Rules 31387

gauger subject to liquidated damages in

the amount of the bond (discussed

below) or, in the event of bankruptcy,

render the surety liable for such

damages.

Further, applicants will be required to

obtain a bond executed in accordance

with part 113 of the Customs

Regulations (19 CFR part 113). The

limits of liability on the bond will be

established by the Customs port nearest

to the applicant’s main office in

consultation with the Director.

Following Customs evaluation of a

laboratory’s overall competence to

become an accredited laboratory,

Customs will notify the laboratory in

writing of its approval/nonselection; in

the case of nonselection, specific

reasons will be given. Laboratories

receiving an adverse accreditation

determination, and wishing to appeal

the decision must file an appeal within

30 days to the Director. Within 30 days

of receipt of the appeal, the Director will

make a determination and notify the

laboratory in writing. If the Director

reaffirms the nonselection, again citing

specific reasons, the applicant may then

choose to either submit a new

application to the Director after waiting

90 days from the date of the Director’s

last decision; or commence an action in

the Court of International Trade within

60 days after issuance of Customs

decision or order.

Once accredited, laboratories may

apply to expand their accreditation at

any time. Extensions of accreditation

may be requested to add a new site and/

or to increase the number of accredited

commodity groups or subgroups at a

previously accredited site. The

procedure for extensions of

accreditation is essentially the same as

that for accreditation; certain initial

processing steps, e.g., background

investigations and review of educational

credentials, however, may not need to

be repeated. The reaccreditation fee will

be adjusted accordingly. Customsaccredited laboratories must undergo

reaccreditation every three years.

Regarding adverse reaccreditation

determinations and any suspension/

revocation/penalty decisions (discussed

below), the appeal procedures discussed

above will apply.

Once accredited, a laboratory must

maintain its accreditation credentials by

maintaining its overall physical plant

and management system, as well as by

remaining proficient at performing

approved methods of analysis. In

particular, accredited laboratories will

be required to perform periodic analyses

of check samples and to submit the

results to Customs. Check samples are

samples which have been distributed by

Customs to test proficiency in a certain

area of accreditation. The results must

demonstrate that the laboratory has the

continuing ability to produce a work

product that assists in the proper

classification and entry of imported

merchandise.

In addition to establishing the

requirements and procedures for

laboratories to receive and maintain

accreditation, the proposed regulations

make provision for the suspension or

revocation of such accreditation, and

the imposition of monetary penalties

not to exceed $ 100,000 in addition to

the recovery of any loss of revenue that

may have occurred. Customs will seek

to recover lost revenue from accredited

laboratories in cases where the

laboratory intentionally falsified the

analysis in collusion with the importer.

Customs may assess monetary penalties

on an accredited laboratory for failure to

adhere to any of the regulatory

requirements imposed on accredited

commercial laboratories. Otherwise,

Customs will not assess penalties nor

seek to recover lost revenue merely

because of a good-faith difference of

professional opinion. Via a separate

Federal Register document, Customs

will publish guidelines governing

penalties and any mitigating factors it

will consider in imposing such

penalties.

B. Proposed Amendments Concerning

Approving Commercial Gaugers

The regulatory amendments proposed

separately provide for the approval of

commercial gaugers and the acceptance

of reports from Customs-approved

commercial gaugers. The commercial

gauger-approval amendments generally

parallel those concerning laboratory

accreditation. Approval may extend to

the performance of the functions of

gauging and measuring merchandise.

Customs approval extends only to the

performance of such functions as are

vested in, or delegated to, Customs. The

imported products for which gauging

approval may be obtained remains the

same as those currently listed in the

regulations. But Customs may expand

the list of commodity groups for

approval.

C. Proposed Amendments Concerning

Reimbursable Fees for Accreditation/

Approval and Periodic Reaccreditation/

Reapproval

At the time of promulgating the

Customs Modernization provisions of

the Act, Congress agreed that in order

for Customs to expand the Customs

laboratory/gauger program the cost of

the program should be recaptured

through the imposition of reasonable

fees. A Customs task force was formed

to study the kind of fee structure that

would be necessary for Customs to

recoup the costs associated with the

application process, travel costs,

conducting ongoing background

investigations, and maintaining the

program. The fee structure adopted

would have to cover the costs associated

with implementing the expanded

program.

The regulatory amendments proposed

provide for the imposition of

reasonable, i.e., reimbursable, charges

associated with the work required by

Customs to accredit/approve and

periodically reaccredit/reapprove

commercial laboratories/gaugers. These

charges necessarily will be variable,

dependent on specific travel costs and

the scope of particular accreditation/

approval applications, and are designed

merely to reimburse Customs for the

actual costs of establishing and

regulating the laboratory/gauger

program. Accordingly, the fee structure

is based on recovering those expenses

which are variable, directly associated

with specific travel and the conduct of

background investigations, and those

expenses which are fixed, based on

administrative estimates generally

applicable to recovering the technical

and clerical support costs associated

with the program.

Variable Costs

The variable portion of the

accreditation-reaccreditation/approvalreapproval fee schedules will be based

on the actual costs incurred for travel

and associated with the scope of the

background investigation. These charges

are estimated to be approximately $

1,000 per visit and $ 1,700 per

background investigation. Whenever

possible, Customs will endeavor to

bundle these variable costs so that

where travel or investigations costs

apply to more than one laboratory or

gauger, the costs will be fairly

apportioned between applicants.

In the event of a dispute concerning

the amount of assessment for travel

costs and per diem charges relating to a

scheduled inspection visit, the

laboratory/gauger concerned may file an

appeal within 30 days of the assessment

with the Director. The appeal letter

must specify which charges are

disputed and give reasons for the

dispute, accompanied by supporting

documentation where appropriate.

Fixed Costs

The fixed portion of the accreditationreaccreditation/ approval-reapproval fee

schedules is based on administrative

guidelines which estimate program
31388 Federal Register / Vol. 63, No. 110 /Tuesday, June 9, 1998 / Proposed Rules

administrative support costs that do not

consider salary or related costs. The

primary accreditation/approval fee is

meant to defray the following costs:

(1) Preparation and distribution of

methods manuals (for laboratories only)

and policies;

(2) Development and distribution of

application packages;

(3) Set up and storage of company

and/or branch files;

(4a) For laboratories, check samples

and blind sample programs (costs of

collection, documentation, and mailing

of samples; costs of obtaining and

storing samples; and costs of excess

sample disposal);

(4b) For gaugers, development and

application of proficiency testing; and

(5) Office supplies used to administer

the program, i.e., copier costs,

envelopes, etc.

Customs is authorized to charge 15%

of program costs for administrative

overhead. See, 19 CFR 24.21. Based on

the above referenced administrative

estimates of program-support costs,

Customs has determined that the

following initial fee schedules for

accrediting/reaccrediting laboratories

and approving/reapproving gaugers are

reasonable:

For Laboratories:

General Accreditation Fee ........... $ 750

Additional Commodities Fee ...... 200

Laboratory Reaccreditation Fee ... 375

Commodity Reaccreditation Fee 150

For Gaugers:

General Approval Fee .................. 400

Reapproval Fee ............................. 200

Laboratories/gaugers will be required

to submit to the Director, fifty percent

of the applicable accreditation/ general

approval fee amount with their initial

application for accreditation/approval,

to cover preliminary processing costs.

This pre-payment is nonrefundable.

Before a laboratory/gauger will be

designated by Customs as an accredited/

approved facility or can have its existing

accreditation/approval extended to

cover additional commodity testing it

must have paid the applicable variable

charges assessed and the balance of the

fixed fee associated with the action

within 30 days of notification to

Customs, and have its laboratory/gauger

bond on file. Then the applicant will

receive accreditation/approval

documentation and a notice of

accreditation/approval or extension of

existing accreditation/approval will be

published in the Federal Register and

Customs Bulletin.

Three years from the date of the initial

accreditation/ approval, Customs,

Account Services Division, will bill the

licensee for reaccreditation/reapproval.

There will be a 30-day billing period. If

payment is not received by Customs

within the 30 day billing period,

revocation procedures will be initiated

against all accreditations/ approvals

granted the licensee.

Following the first year of operation,

these initial fee schedules may be

revised to capture expenses not

reimbursed to Customs. If the fee

schedules are revised, they will be

published in the Federal Register and

the Customs Bulletin.

Already Accredited/Approved

Laboratories/Gaugers

Laboratories accredited and gaugers

approved under Customs regulations

prior to December 8, 1993, will not be

required to apply for initial

accreditation/approval. Until the time

for reaccreditation/reapproval, however,

those commercial laboratories/gaugers

already accredited/approved must,

however, conduct their business in a

manner consistent with the

administrative portions of the amended

regulations, and will be required to pay

applicable reaccreditation/ reapproval

fees in the third year following the date

these proposed regulations become

final.

Customs-accredited laboratories may

make their accreditation known to

potential customers, but must accurately

represent the tests for the commodity

group(s) for which accreditation has

been obtained. Such laboratories will be

limited to the use of terms that appear

in the Notice of Accreditation they

receive at the time they are accredited.

Parallel provisions will apply to

Customs-approved gaugers.

The regulations currently

implementing the examination of

merchandise provisions of 19 U.S.C.

1499 are found in part 151 of the

Customs Regulations (19 CFR part 151);

§ 151.13 currently pertains to both

commercial laboratories and gaugers.

Other Customs regulatory provisions

referencing part 151 are found in part

113 (19 CFR part 113). In this document

Customs proposes to amend parts 113

and 151 of the Customs Regulations, as

discussed below, to implement the

Customs Modernization provisions

pertaining to laboratory accreditations/

gauger approvals (19 U.S.C. 1499(b)), as

discussed above.

In sum, it is proposed to revise two

references in § 113.67 of the Customs

Regulations (19 CFR 113.67) to carry the

proper cross references for the

commercial laboratory or gauger

provisions that are redesignated as

proposed in this document. In part 151,

it is proposed to provide for commercial

laboratories and gaugers in separate

sections, so that each program can be

more easily administered. Accordingly,

§ 151.12, currently reserved, will be

amended to set forth the accreditation

requirements and procedures applicable

to commercial laboratories, and § 151.13

will be amended to set forth the

approval requirements and procedures

applicable to commercial gaugers.

Section 151.14 will be revised to remove

reference to the product characteristic

table currently contained in

§ 151.13(a)(2), as these analysis methods

will be contained in Commodity Group

Brochures.

Discussion of Proposed Changes to

Regulations

It is proposed to utilize § 151.12—

currently reserved—to set forth the

provisions concerning the accreditation

of commercial laboratories. Section

151.12 will contain 11 paragraphs ((a)

through (k)) in a new question and

answer format designed to facilitate an

understanding of how the new

laboratory-accreditation program will

operate.

Proposed New Section 151.12

Paragraph (a) will contain the

definitions of three terms or phrases that

will be used throughout the remaining

paragraphs of § 151.12.

Paragraph (b) will pose the question

‘‘What is a ‘‘Customs-accredited

laboratory’’?’’ and describes the

eligibility requirements for commercial

laboratories. The paragraph explains

that those laboratories that can

demonstrate the capability to perform

approved methods of analysis used to

determine the admissibility, quantity,

composition, or characteristics for

certain tariff commodity groups can be

accredited by Customs to perform such

tests for Customs purposes.

Paragraph (c) will pose the question

‘‘What are the obligations of a Customsaccredited laboratory?’’ and delineates

the six requirements commercial

laboratories must agree to before they

can be accredited by Customs.

Paragraph (d) will pose the question

‘‘What are the commodity groups for

which accreditation may be sought?’’

and contains the list of commodity

groups for which accreditation is

available without special permission

from the Director. The list of commodity

groups, although similar to the

provisions currently at § 151.13(a)(2), is

expanded from two HTSUS chapters to

include more than 40 HTSUS chapters

to reflect the scope of imported

merchandise for which Customs is

responsible for testing.

Paragraph (e) will pose the question

‘‘What are the approved methods of
Federal Register / Vol. 63, No. 110 /Tuesday, June 9, 1998 / Proposed Rules 31389

analysis?’’ and provides that the

approved methods of testing will be

published in Customs Commodity

Group Brochures. The brochures will

specify the particular testing procedures

required, unless written permission

from the Director is given to use an

alternate method. Procedures required

by the Director may reference applicable

general industry standards, published

by such organizations as the American

Society for Testing and Materials

(ASTM) and the American Petroleum

Institute (API).

Paragraph (f) will pose the question

‘‘How would a commercial laboratory

become a Customs-accredited

laboratory?’’ and explains the essential

requirements that prospective

commercial laboratories must respond

to when applying for accreditation: (1)

What the application should contain, (2)

where an application should be sent,

and (3) how the application will be

reviewed. Further, this paragraph will

describe the criteria by which Customs

will appraise each applicant’s overall

physical plant and management system

to ascertain the laboratory’s ability to

manage and control the acquisition of

technical data associated with the

accreditation sought and describe

Customs determination of an applicant’s

competence.

Paragraph (g) will pose the question

‘‘How will an applicant be notified

concerning accreditation?’’ and

describes the procedures Customs will

follow when notifying applicants

concerning the disposition of their

applicationor request for extension of

accreditation. The paragraph also

describes the grounds for nonselection,

based on application, background

investigation, or capability matters, and

the appeal procedures applicants must

follow to appeal adverse determinations

concerning their application or request

for extension of accreditation.

Paragraph (h) will pose the question

‘‘What are the accreditation/

reaccreditation fee requirements?’’ and

provides that any fixed fee changes will

be published in the Customs Bulletin

and the Federal Register; the fees for the

first year are as discussed above.

Paragraph (i) will pose the question

‘‘Can existing Customs-accredited

laboratories continue to operate?’’ and

provides that while such laboratories,

accredited prior to December 8, 1993,

will retain that accreditation, they must,

however, conduct their business in a

manner consistent with the

administrative portions of the new

regulations. This paragraph also

provides that these existing facilities

will have their status reevaluated in the

third year following the effective date of

this regulation. At the time of

reaccreditation, these laboratories must

meet the requirements of the regulations

and pay the applicable fees; a failure to

meet these requirements will result in

revocation or suspension of the

accreditation.

Paragraph (j) will pose the question

‘‘How will Customs-accredited

laboratories operate?’’ and describes (1)

the testing of samples, (2) the

acceptance of reports by Customs, (3)

recordkeeping requirements, (4) limited

representation of Customs accreditation,

and (5) a prohibition against accredited

laboratories subcontracting Customsrelated analyses work. The testing of

samples procedures provide that

importers may have samples of their

merchandise tested by Customsaccredited laboratories, and that the

commercial laboratory designated to test

the sample is required to test only one

part of the sample that will be split into

two parts under Customs supervision,

reserving the second part for a period of

one year. Further, these provisions

provide that Customs and any other

Federal agency reserve the right to

independently challenge the results of

such reports.

Lastly, paragraph (k) will pose the

question ‘‘How can a laboratory have its

accreditation suspended or revoked or

be required to pay a monetary penalty?’’

and explains (1) how the laboratory’s

accreditation may be revoked or

suspended or how the laboratory may be

assessed a monetary penalty in lieu of,

or in addition to, suspension or

revocation of accreditation, (2) what are

the grounds for suspension, revocation,

or assessment of a monetary penalty, (3)

the notice requirements Customs will

follow, (4) the appeal rights of the

laboratory, (5) publication requirements,

and (6) penalty provisions. Regarding

the appeal of a revocation, suspension,

or penalty decision, these provisions

parallel the appeal provisions regarding

nonselection. Regarding the monetary

penalty provisions, these can be in

addition to or in lieu of an order

regarding suspension or revocation of

accreditation. No penalty may exceed

$100,000.

Proposed Amended Section § 151.13

It is further proposed to amend the

provisions of § 151.13, which currently

contains provisions pertaining to both

commercial gaugers and laboratories, to

make its provisions exclusive to

commercial gaugers. Section 151.13 will

contain 9 paragraphs ((a) through (i)) in

a similar question and answer format

designed to facilitate how the new

gauger-approval program will operate.

Paragraph (a) will pose the question

‘‘What is a ‘Customs-approved gauger’?’’

and describes the eligibility

requirements for commercial gaugers.

The paragraph explains that those

gaugers that can demonstrate the

capability to perform the approved

gauging and measurement procedures

for certain tariff commodity groups

listed in the section can be approved by

Customs to perform such procedures for

Customs purposes.

Paragraph (b) will pose the question

‘‘What are the obligations of a Customsapproved gauger?’’ and delineates the

six requirements commercial gaugers

must agree to before they can be

approved by Customs.

Paragraph (c) will pose the question

‘‘What are the approved gauging and

measurement procedures?’’ and

provides that the approved gauging and

measurement procedures will be

published in Customs Commodity

Group Brochures. The brochures will

specify the particular measurements and

procedures required, unless written

permission from the Director is given to

use an alternate method. Procedures

required by the Director may reference

applicable general industry standards,

published by such organizations as the

American Society for Testing and

Materials (ASTM) and the American

Petroleum Institute (API).

Paragraph (d) will pose the question

‘‘How would a commercial gauger

become a Customs-approved gauger?’’

and explains the essential requirements

that prospective commercial gaugers

must meet when applying for approval.

These provisions substantially mirror

the requirements discussed above for

proposed § 151.12(f).

Paragraph (e) will pose the question of

‘‘How will an applicant be notified

concerning approval?’’ and describes

the procedures Customs will follow

when notifying applicants concerning

the disposition of their application or

request for extension of approval. The

paragraph also describes the grounds for

nonselection, based on application,

background investigation, or capability

matters, and the appeal procedures

applicants must follow if their

application or request is disapproved.

These provisions substantially mirror

the requirements discussed above for

proposed § 151.12(g).

Paragraph (f) will pose the question

‘‘What are the approval/reapproval fee

requirements?’’ and provides that any

fixed fee changes will be published in

the Customs Bulletin and the Federal

Register. These provisions substantially

mirror the requirements discussed

above for proposed § 151.12(h).
31390 Federal Register / Vol. 63, No. 110 /Tuesday, June 9, 1998 / Proposed Rules

Paragraph (g) will pose the question

‘‘Can existing Customs-approved

gaugers continue to operate?’’ and

provides that while such gaugers,

approved prior to December 8, 1993,

will retain that approval, they must,

however, conduct their business in a

manner consistent with the

administrative portions of the new

regulations. Other provisions in this

paragraph applicable to gaugers

substantially mirror the requirements

discussed above for laboratories at

proposed § 151.12(i).

Paragraph (h) will pose the question

‘‘How will Customs-approved gaugers

operate?’’ and describes (1) the

acceptance of reports by Customs, (2)

recordkeeping requirements, (3) limited

representation of Customs approval

requirements, and (4) a prohibition

against approved gaugers subcontracting

Customs-related work. These provisions

substantially mirror the requirements

discussed above for proposed

§ 151.12(j).

Paragraph (i) will pose the question

‘‘How can a gauger have its approval

suspended or revoked or be required to

pay a monetary penalty?’’ and explains

(1) how the gauger’s approval may be

revoked or suspended or how the gauger

may be assessed a monetary penalty in

lieu of, or in addition to, suspension or

revocation of approval, (2) what are the

grounds for suspension, revocation, or

assessment of a monetary penalty, (3)

the notice requirements Customs will

follow, (4) the appeal rights of the

gauger, (5) publication requirements,

and (6) penalty provisions. These

provisions substantially mirror the

requirements discussed above for

proposed § 151.12(k).

Other Regulatory Amendments

Proposed

Section 151.14 will be revised to

remove a reference to the table of

product characteristics found at

§ 151.13(a)(2) because product

characteristics will no longer be set

forth in the regulations, but will be

contained in specific Commodity Group

Brochures.

In § 113.67, two references to current

§ 151.13 will be revised to correspond to

the changes proposed to §§ 151.13 and

151.14.

Comments

Before adopting these proposed

regulations 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 a.m. and

4:30 p.m. at the Regulations Branch,

Office of Regulations and Rulings, U.S.

Customs Service, Suite 3000, 1300

Pennsylvania Avenue, NW.,

Washington, DC.

The Regulatory Flexibility Act, and

Executive Order 12866

Because the number of accredited

laboratories and approved gaugers is

expected to be small, and such

accreditation and approval will confer a

benefit on the importing public,

pursuant to the 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 adverse economic impact

on a substantial number of small

entities. Accordingly, they are not

subject to the regulatory analysis or

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

604. This document does not meet the

criteria for a ‘‘significant regulatory

action’’ as specified in E.O. 12866.

Paperwork Reduction Act

The collection of information

contained in this notice of proposed

rulemaking has been submitted to the

Office of Management and Budget

(OMB) for review in accordance with

the Paperwork Reduction Act of 1995

(44 U.S.C. 3507). Comments on the

collection of information should be sent

to OMB, Attention: Desk Officer for the

Department of the Treasury, Office of

Information and Regulatory Affairs,

Washington, DC 20503. A copy should

also be sent to the Regulations Branch

at the address set forth previously.

Comments should be submitted within

the time frame that comments are due

regarding the substance of the proposal.

Comments are invited on:

(a) Whether the collection of

information is necessary for the proper

performance of the functions of the

agency, including whether the

information shall have practical utility;

(b) The accuracy of the agency’s

estimate of the information collection

burden;

(c) Ways to enhance the quality,

utility, and clarity of the information to

be collected;

(d) Ways to minimize the information

collection burden on respondents,

including through the use of automated

collection techniques or other forms of

information technology; and

(e) Estimates of capital or start up

costs and costs of operations,

maintenance, and purchase of services

to provide information.

An agency may not conduct or

sponsor, and a person is not required to

respond to, a collection of information

unless the collection of information

displays a valid control number.

The collections of information in

these proposed regulations are in

§§ 151.12(e) and 151.13(c). The

information requested is necessary so

that Customs can determine whether

those laboratories/gaugers seeking

accreditation/approval to test/measure

imported merchandise are competent to

receive or maintain such credentials.

The likely respondents are individuals

and commercial organizations who

either analyze merchandise or measure,

gauge, or sample merchandise.

Estimated total annual reporting and/

or recordkeeping burden: 50 hours.

Estimated average annual burden per

respondent/ recordkeeper: 5 hours.

Estimated number of respondents

and/or recordkeepers: 10.

Estimated annual frequency of

responses: 1.

Part 178 of the Customs Regulations

(19 CFR part 178), which lists the

information collections contained in the

regulations and control numbers

assigned by OMB, would be amended

accordingly if this proposal is adopted.

Drafting Information

The principal author of this document

was Gregory R. Vilders, Attorney,

Regulations Branch, Office of

Regulations and Rulings. However,

personnel from other offices

participated in its development.

List of Subjects

19 CFR Part 113

Bonds, Customs duties and

inspection, Exports, Freight, Imports,

Reporting and recordkeeping

requirements.

19 CFR Part 151

Customs duties and inspection,

Examination, Fees assessment, Gaugers,

Imports, Laboratories, Licensing,

Penalties, Reporting and recordkeeping

requirements, Sampling and testing.

Amendments to the Regulations

For the reasons stated above, it is

proposed to amend parts 113 and 151 of

the Customs Regulations (19 CFR parts

113 and 151) as set forth below:

PART 113—CUSTOMS BONDS

1. The general authority citation for

part 113 continues to read as follows:

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

* * * * *
Federal Register / Vol. 63, No. 110 /Tuesday, June 9, 1998 / Proposed Rules 31391

§ 113.67 [Amended]

2. In § 113.67, paragraph (a)(1)(ii) is

amended by removing the words ‘‘terms

of the Commercial Gauger Agreement

[see § 151.13(b)(9)] and by the’’; and by

removing the citations ‘‘§§ 151.13 and

151.14’’ and adding, in their place, the

citation ‘‘§ 151.13(b)’’.

§ 113.67 [Amended]

3. In § 113.67, paragraph (b)(1)(ii) is

amended by removing the words ‘‘terms

of the Commercial Laboratory

Agreement [see § 151.13(b)(9)] and by

the’’; and by removing the citation

‘‘§ 151.13’’ and adding, in its place, the

citation ‘‘§ 151.12(c)’’.

PART 151—EXAMINATION,

SAMPLING, AND TESTING OF

MERCHANDISE

1. The general authority citation for

part 151 continues to read as follows:

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

Notes 20 and 21, Harmonized Tariff Schedule

of the United States (HTSUS)), 1624. Subpart

A also issued under 19 U.S.C. 1499.

* * * * *

2. In subpart A, § 151.12 is added to

read as follows:

§ 151.12 Accreditation of commercial

laboratories.

This section sets forth the

requirements for commercial

laboratories to obtain accreditation by

Customs for the testing of certain

commodities, and explains the

operation of such accredited

laboratories. This section also provides

for the imposition of accreditation and

reaccreditation fees, sets forth grounds

for the suspension and revocation of

accreditation, and provides for the

imposition of a monetary penalty for an

accredited commercial laboratory that

fails to adhere to the provisions of this

section.

(a) Definitions. For purposes of this

section, the following words and

phrases have the meanings indicated:

Analysis record. An ‘‘analysis record’’

is a compilation of all documents which

have been generated during the course

of analysis of a particular sample which,

under normal circumstances,

culminates in the issuance of a

laboratory report. An analysis record

may include, both in paper and

electronic-form, such documents as

work sheets, notes, associated spectra

(both spectra of the actual product and

any standard spectra used for

comparison), photographs and

microphotographs, and the laboratory

report.

Check samples. ‘‘Check samples’’ are

samples which have been distributed by

Customs to accredited laboratories to

test their proficiency in a certain area of

accreditation.

Commodity Group Brochure. A

‘‘Commodity Group Brochure’’ is a

booklet which contains a listing of the

laboratory methods and application

procedures which commercial

laboratories are required to have the

capability to perform to qualify for

Customs-accreditation in a particular

commodity group. The brochures will

specify the particular laboratory testing

procedures required for particular

commodity groups, unless written

permission from the Director is given to

use an alternate method. Procedures

required by the Director may reference

applicable general industry testing

standards, published by such

organizations as the American Society

for Testing and Materials (ASTM) and

the American Petroleum Institute (API).

Commodity Group Brochures are

available from the U.S. Customs Service,

Attention: Director, Laboratories &

Scientific Services, Washington, D.C.

20229.

Director. In §§ 151.12 and 151.13,

references to the ‘‘Director’’ mean the

Director, Laboratories & Scientific

Services, located in Washington, DC.

(b) What is a ‘‘Customs-accredited

laboratory’’? ‘‘Commercial laboratories’’

are individuals and commercial

organizations that analyze merchandise,

i.e., determine its composition and/or

characteristics, through laboratory

analysis. A ‘‘Customs-accredited

laboratory’’ is a commercial laboratory,

within the United States, that has

demonstrated, to the satisfaction of the

Director, pursuant to this section, the

capability to perform analysis of certain

commodities to determine elements

relating to the admissibility, quantity,

composition, or characteristics of

imported merchandise. Customs

accreditation extends only to the

performance of such functions as are

vested in, or delegated to, Customs.

(c) What are the obligations of a

Customs-accredited laboratory? A

commercial laboratory accredited by

Customs agrees to the following

conditions and requirements:

(1) To comply with the requirements

of part 151, Customs Regulations (19

CFR part 151), and to conduct

professional services in conformance

with approved standards and

procedures, including procedures which

may be required by the Commissioner of

Customs or the Director;

(2) To have no interest in or other

connection with any business or other

activity which might affect the unbiased

performance of duties as a Customsaccredited laboratory. It is understood

that this does not prohibit acceptance of

the usual fees for professional services;

(3) To maintain the ability, i.e., the

instrumentation, equipment, qualified

staff, facilities, etc., to perform the

services for which the laboratory is

accredited, and allow the Director to

evaluate that ability on a periodic basis

by such means as on-site inspections,

demonstrations of analysis procedures,

reviews of submitted records, and

proficiency testing through check

samples;

(4) To retain those laboratory records

beyond the five-year record-retention

period specified by Customs as

necessary to address matters concerned

in pending litigation, and, should

laboratory operations or accreditation

cease, to contact Customs immediately

regarding the disposition of records

retained;

(5) To promptly investigate any

circumstance which might affect the

accuracy of work performed as an

accredited laboratory, to correct the

situation immediately, and to notify

both the port director and the Director

of such matters, their consequences, and

any corrective action taken or that needs

to be taken; and

(6) To immediately notify both the

port director and the Director of any

attempt to impede, influence, or coerce

laboratory personnel in the performance

of their duties, or of any decision to

terminate laboratory operations or

accredited status. Further, within 5 days

of any changes involving legal name,

address, ownership, parent-subsidiary

relationships, bond, other offices or

sites, managerial or professional or

executive staff, approved signatories,

facilities, instruments, or equipment,

etc., to notify the Director by certified

mail.

(d) What are the commodity groups

for which accreditation may be sought?

(1) Commercial laboratories may apply

for accreditation to perform tests for any

of the commodity groups listed in

paragraph (d)(2) of this section.

Applicable test procedures are listed in

Commodity Group Brochures.

Application may be made for

accreditation in more than one

commodity group. At the discretion of

the Director accreditation may be

granted for subgroups of tests within a

commodity group or for commodity

groups not specifically enumerated.

Once accredited, a Customs-accredited

laboratory may apply at any time to

expand its accreditation, to add new

testing sites, or increase the number of

commodity groups or subgroups

accredited.

(2) The commodity groups for which

accreditation may be sought without
31392 Federal Register / Vol. 63, No. 110 /Tuesday, June 9, 1998 / Proposed Rules

special permission from the Director

are:

(i) Dairy and Chocolate Products

entered under Chapters 4, 18, and 21 of

the Harmonized Tariff Schedule of the

United States (HTSUS);

(ii) Food and Food Products entered

under Chapters 7–12, 15, 16, and 19–21,

HTSUS;

(iii) Botanical Identification—

materials and products entered under

Chapter 14 and Section IX, HTSUS;

(iv) Sugar, Sugar Syrups, and

Confectionery products entered under

Chapter 17, HTSUS;

(v) Spirituous Beverages entered

under Chapter 22, HTSUS;

(vi) Inorganic Materials, including

Inorganic Compounds and Ores, entered

under Chapters 26, 28, 31, and 36–38,

HTSUS;

(vii) Petroleum and Petroleum

Products entered under Chapters 27 and

29, HTSUS;

(viii) Organic Materials, including

Intermediates and Pharmaceuticals,

entered under Chapters 29, 30, 34, 35,

and 38, HTSUS;

(ix) Building Stone, Ceramics,

Glassware, and Other Mineral

Substances entered under Chapter 25

and Section XIII, HTSUS;

(x) Rubber, Plastics, Polymers,

Pigments and Paints entered under

Chapter 32 and Section VII, HTSUS;

(xi) Essential Oils and Perfumes

entered under Chapter 33, HTSUS;

(xii) Leather and Articles of Leather

entered under Chapters 41 and 42,

HTSUS;

(xiii) Wood and Articles of Wood

entered under Chapters 44 and 46,

HTSUS;

(xiv) Paper and Paper Products

entered under Section X, HTSUS;

(xv) Textiles and Related Products,

including footwear and hats, entered

under Sections XI and XII, HTSUS; and,

(xvi) Metals and Alloys entered under

Section XV, HTSUS.

(e) What are the approved methods of

analysis? Customs-accredited

laboratories shall follow the general or

specific testing methods set forth in

Commodity Group Brochures in the

testing of designated commodities,

unless the Director gives written

permission to use an alternate method.

Alternative methods will be considered

and approved on a case-by-case basis.

(f) How would a commercial

laboratory become a Customsaccredited laboratory?—(1) What should

an application contain? An application

for Customs-accreditation shall contain

the following information:

(i) The applicant’s legal name and the

addresses of its principal place of

business and any other facility out of

which it will work;

(ii) Detailed statements of ownership

and any partnerships, parent-subsidiary

relationships, or affiliations with any

other domestic or foreign organizations,

including, but not limited to, importers,

other commercial laboratories,

producers, refiners, Customs brokers,

and carriers;

(iii) A statement of financial

condition;

(iv) If a corporation, a copy of the

articles of incorporation and the names

of all officers and directors;

(v) The names, titles, and

qualifications of each person who will

be authorized to sign or approve

analysis reports on behalf of the

commercial laboratory;

(vi) A complete description of the

applicant’s facilities, instruments, and

equipment;

(vii) Express agreement that if notified

by Customs of pending accreditation to

execute a bond in accordance with part

113, Customs Regulations (19 CFR part

113), and submit it to the Customs port

nearest to the applicant’s main office.

(The limits of liability on the bond will

be established by the Customs port in

consultation with the Director. In order

to retain Customs accreditation, the

laboratory must maintain an adequate

bond, as determined by the port

director);

(viii) A listing of each commodity

group for which accreditation is being

sought and, if procedures are being

submitted for approval which are not

specifically provided for in a

Commodity Group Brochure, a listing of

such procedures;

(ix) A statement for each commodity

group for which accreditation is being

sought, providing:

(A) That all tests on all commodities

in a named group can be performed, or

(B) That all tests on the commodities

in a group except those indicated can be

performed; or,

(C) That the listed procedures which

are not specifically provided for in the

Commodity Group Brochure are being

submitted for approval for use;

(x) Express agreement to be bound by

the obligations contained in paragraph

(c) of this section; and,

(xi) A nonrefundable pre-payment

equal to 50 percent of the fixed

accreditation fee, as published in the

Federal Register and Customs Bulletin,

to cover preliminary processing costs.

Further, the applicant agrees to pay

Customs within 30 days of notification

the associated charges assessed for

accreditation, i.e., those charges for

actual travel and background

investigation costs, and the balance of

the fixed accreditation fee.

(2) Where should an application be

sent? A commercial laboratory seeking

accreditation or an extension of an

existing accreditation shall send a letter

of application to the U.S. Customs

Service, Attention: Director,

Laboratories & Scientific Services,

Washington, D.C. 20229.

(3) How will an application be

reviewed?

(i) Physical plant and management

system. The facility of the applicant will

be inspected to ensure that it is properly

equipped to perform the necessary tests

and that staff personnel are capable of

performing required tests. Customs

evaluation of an applicant’s professional

abilities will be in accordance with the

general criteria contained in the

American Society for Testing and

Materials (ASTM) E548: Standard Guide

for General Criteria Used for Evaluating

Laboratory Competence. This review

will ascertain the laboratory’s ability to

manage and control the acquisition of

technical data. The review will be

performed at the time of initial

application and upon reaccreditation at

three-year intervals.

(ii) Ability to perform tests on

specified commodity groups. For each

commodity group applied for, the

applicant will undergo a separate

review and testing. The specific

accreditation will be based on the

laboratory’s ability to perform the tests

required for that commodity group. This

will include the qualifications of the

technical personnel in this field and the

instrument availability required by the

test methods. Maintenance of

accreditation will be on-going and will

require the submission of test results on

periodic check samples. The criteria for

acceptance will be based on the

laboratory’s ability to produce a work

product that assists in the proper

classification and entry of imported

merchandise.

(iii) Determination of competence.

The Director shall determine the

applicant’s overall competence,

independence, and character by

conducting on-site inspections, which

will include demonstrations by the

applicant of analysis procedures;

reviewing analysis records submitted;

conducting proficiency testing through

check samples; and conducting

background investigations.

(iv) Evaluation of technical and

operational requirements. Customs shall

determine whether the following

technical and operational requirements

are met:

(A) Equipment. The laboratory shall

be equipped with all of the instruments

and equipment needed to conduct the

tests for which it is accredited. The
Federal Register / Vol. 63, No. 110 /Tuesday, June 9, 1998 / Proposed Rules 31393

laboratory shall ensure that all

instruments and equipment are properly

calibrated, checked, and maintained.

(B) Facilities. The laboratory shall

have, at a minimum, adequate space,

lighting, and environmental controls to

ensure compliance with the conditions

prescribed for appropriate test

procedures.

(C) Personnel. The laboratory shall be

staffed with persons having the

necessary education, training,

knowledge, and experience for their

assigned functions (e.g., maintaining

equipment, calibrating instruments,

performing laboratory analyses,

evaluating analytical results, and

signing analysis reports on behalf of the

laboratory). In general, each technical

staff member should hold, at a

minimum, a bachelor’s degree in

science or have two years related

experience in an analytical laboratory.

(g) How will an applicant be notified

concerning accreditation?—(1) Notice of

approval or nonselection. When

Customs evaluation of a laboratory’s

credentials is completed, the Director

shall notify the laboratory in writing of

its preliminary approval or

nonselection. (Final approval

determinations will not be made until

the applicant has satisfied all bond

requirements and made payment on all

assessed charges and the balance of the

applicable accreditations fee). Notices of

nonselection will state the reasons for

the determination. All notices of

accreditation, reaccreditation, or

extension of existing accreditations will

be published in the Federal Register

and Customs Bulletin.

(2) Grounds for nonselection. The

Director may deny a laboratory’s

application for any of the following

reasons:

(i) The application contains false or

misleading information concerning a

material fact;

(ii) The laboratory, a principal of the

laboratory, or a person the Director

determines is exercising substantial

ownership or control over such

laboratory or officer, has been indicted

for, convicted of, or committed acts

which, under United States federal or

state law, would constitute any felony

or misdemeanor involving

misstatements, fraud, theft-related

offenses or any other violation which

would reflect adversely on the business

integrity of the applicant;

(iii) A determination is made that the

laboratory-applicant does not possess

the capability or have adequate facilities

and management to perform the

approved methods of analysis for

Customs purposes;

(iv) A determination is made that the

laboratory has submitted false reports or

statements concerning the sampling of

merchandise, or that the applicant was

subject to sanctions by state, local, or

professional administrative bodies for

such conduct;

(v) Nonpayment of assessed charges

and the balance of the fixed

accreditation fee; or

(vi) Failure to execute a bond in

accordance with part 113 of this

chapter.

(3) Appeal of adverse determinations.

Laboratories receiving an adverse

accreditation determination and

wishing to appeal the determination

must file an appeal within 30 days to

the Director. Within 30 days of receipt

of the appeal, the Director shall make a

final determination regarding the appeal

and notify the laboratory in writing. If

the Director reaffirms the nonselection,

again citing specific reasons, then the

applicant may choose to either:

(i) Submit a new application to the

Director after waiting 90 days from the

date of the Director’s last decision; or

(ii) File an action with the Court of

International Trade, pursuant to chapter

169 of title 28, United States Code,

within 60 days after the issuance of the

Director’s final decision.

(h) What are the accreditation/

reaccreditation fee requirements?

(1) In general. A fixed fee,

representing Customs administrative

overhead expense, will be assessed for

each application for accreditation or

reaccreditation. In addition, associated

assessments, representing the actual

costs associated with travel and per

diem of Customs employees related to

verification of application criteria and

background investigations will be

charged. The combination of the fixed

fee and associated assessments

represent reimbursement to Customs for

costs related to accreditation and

reaccreditation. The fixed fee will be

published in the Customs Bulletin and

the Federal Register. Based on a review

of the actual costs associated with the

program, the fixed fee may be adjusted

periodically; any changes will be

published in the Customs Bulletin and

the Federal Register.

(i) Accreditation fees. A

nonrefundable pre-payment equal to 50

percent of the fixed accreditation fee to

cover preliminary processing costs must

accompany each application for

accreditation. Before a laboratory will be

accredited, it must remit to Customs,

Account Services Division, within the

30 day billing period the associated

charges assessed for the accreditation

and the balance of the fixed

accreditation fee.

(ii) Reaccreditation fees. Before a

laboratory will be reaccredited, it must

submit to Customs, Account Services

Division, within the 30 day billing

period the fixed reaccreditation fee.

(2) Disputes. In the event a laboratory

disputes the charges assessed for travel

and per diem costs associated with

scheduled inspection visits, it may file

an appeal within 30 days of the date of

the assessment with the Director. The

appeal letter must specify which

charges are in dispute and provide such

supporting documentation as may be

available for each allegation. The

Director shall make findings of fact

concerning the merits of an appeal and

communicate the agency decision to the

laboratory in writing within 30 days of

the date of the appeal.

(i) Can existing Customs-accredited

laboratories continue to operate?

Commercial laboratories accredited by

the Director prior to December 8, 1993,

will retain that accreditation under

these regulations provided they conduct

their business in a manner consistent

with the administrative portions of this

section. This paragraph does not pertain

to any laboratory which has had its

accreditation suspended or revoked.

Laboratories which have had their

accreditations continued under this

section will have their status

reevaluated in the third year following

the effective date of this regulation. At

the time of reaccreditation, these

laboratories must meet the requirements

of this section and remit to Customs,

Account Services Division, within the

30 day billing period the fixed

reaccreditation fee. Failure to meet these

requirements will result in revocation or

suspension of the accreditation.

(j) How will Customs-accredited

laboratories operate?

(1)(i) Samples for testing. Upon

request by the importer of record of

merchandise, the port director will

release a representative sample of the

merchandise for testing by a Customsaccredited laboratory at the expense of

the importer. Under Customs

supervision, the sample shall be split

into two essentially equal parts and

given to the Customs-accredited

laboratory. One portion of the sample

may be used by the Customs-accredited

laboratory for its testing. The other

portion shall be retained by the

laboratory, under appropriate storage

conditions, for Customs use, as

necessary, unless Customs requires

other specific procedures. Upon request,

the sample portion reserved for Customs

purposes shall be surrendered to

Customs. Samples reserved for Customs

and sample remnants from any testing

shall be retained by the accredited
31394 Federal Register / Vol. 63, No. 110 /Tuesday, June 9, 1998 / Proposed Rules

laboratory for a period of one year from

the date of the laboratory’s final analysis

report, unless other instructions are

issued in writing by Customs. At the

end of the one-year retention time

period the accredited laboratory may

dispose of the retained samples and

sample remnants in a manner consistent

with federal, state, and local statutes;

perishable samples and sample

remnants may be disposed of more

expeditiously, if done in accordance

with acceptable laboratory procedures.

(2) Contents of reports. The testing

results from a Customs-accredited

laboratory that are submitted by an

importer of record with respect to

merchandise in an entry shall, in the

absence of testing conducted by

Customs laboratories, be accepted by

Customs provided that the importer of

record certifies that the sample tested

was taken from the merchandise in the

entry and the report establishes

elements relating to the admissibility,

quantity, composition, or characteristics

of the merchandise entered, as required

by law. The data must be obtained using

methods approved by the Director.

Nothing in these regulations shall

preclude Customs from sampling and

testing merchandise from a shipment

which has been sampled and tested by

a Customs-accredited laboratory at the

request of an importer. In cases where

a shipment has been analyzed by both

Customs and a Customs-accredited

laboratory, all Customs actions will be

based upon the analysis provided by the

Customs laboratory, unless the Director

advises otherwise. If a Customs

laboratory performs a test of

merchandise, it shall release the results

of its test to the importer of record or its

agent upon request unless it is

proprietary to the holder of a copyright

or patent, or developed by Customs for

enforcement purposes.

(3) Recordkeeping requirements.

Customs-accredited laboratories shall

maintain records of the type normally

kept in the ordinary course of business

in accordance with the provisions of

this chapter and any other applicable

provision of law, and make them

available during normal business hours

for Customs inspection. In addition,

these laboratories shall maintain all

records necessary to permit the

evaluation and verification of all

Customs-related work, including, as

appropriate, those described below. All

records shall be maintained for five

years, unless the laboratory is notified

in writing by Customs that a longer

retention time is necessary for particular

records. Electronic data storage and

transmission may be approved by

Customs.

(i) Sample records. Records for each

sample tested for Customs purposes

must be readily accessible and contain

the following information:

(A) A unique identifying number;

(B) The date when the sample was

received or taken;

(C) The identity of the commodity

(e.g., crude oil);

(D) The name of the client;

(E) The source of the sample (e.g.,

name of vessel, flight number of airline,

name of individual taking the sample);

and,

(F) If available, the Customs entry

date, entry number, and port of entry

and the names of the importer, exporter,

manufacturer, and country-of-origin.

(ii) Major equipment records. Records

for each major piece of equipment or

instrument (including analytical

balances) used in Customs-related work

must identify the name and type of

instrument, the manufacturer’s name,

the instrument’s model and any serial

numbers, and the occurrence of all

servicing performed on the equipment

or instrument, to include recalibration

and any repair work, identifying who

performed the service and when.

(iii) Records of analytical procedures.

The Customs-accredited laboratory must

maintain complete and up-to-date

copies of all approved analytical

procedures, calibration methods, etc.,

and must document the procedures each

staff member is authorized to perform.

These procedures must be readily

available to appropriate staff.

(iv) Laboratory analysis records. The

Customs-accredited laboratory must

identify each analysis by sample record

number (see paragraph (j)(3)(i) of this

section) and must maintain all

information or data (such as sample

weights, temperatures, references to

filed spectra, etc.) associated with each

Customs-related laboratory analysis.

Each analysis record must be dated and

initialed or signed by the staff

member(s) who did the work.

(v) Laboratory analysis reports. Each

laboratory analysis report submitted to

Customs must include:

(A) The name and address of the

Customs-accredited laboratory;

(B) A description and identification of

the sample, including its unique

identifying number;

(C) The designations of each analysis

procedure used;

(D) The analysis report itself (i.e., the

pertinent characteristics of the sample);

(E) The date of the report; and

(F) The signature of the person

accepting technical responsibility for

the analysis report (i.e., an approved

signatory).

(4) Representation of Customsaccredited status. Commercial

laboratories accredited by Customs shall

limit statements or wording regarding

their accreditation to an accurate

description of the tests for the

commodity group(s) for which

accreditation has been obtained. Use of

terms other than those appearing in the

notice of approval (see paragraph (f) of

this section) is prohibited.

(5) Subcontracting prohibited.

Customs-accredited laboratories shall

not subcontract Customs-related

analysis work.

(k) How can a laboratory have its

accreditation suspended or revoked or

be required to pay a monetary penalty?

(1) Grounds for suspension,

revocation, or monetary penalty. (i)

General. A laboratory’s accreditation

may be revoked or suspended or a

laboratory may be assessed a monetary

penalty at any time by the Director.

(ii) Grounds for suspension,

revocation, or assessment of a monetary

penalty. A laboratory’s accreditation

may be suspended or revoked, or a

monetary penalty may be assessed

because:

(A) The selection was obtained

through fraud or the misstatement of a

material fact by the laboratory;

(B) The laboratory, or other person the

port director determines is exercising

substantial ownership or control over

the laboratory operation or corporate

officer, is indicted for, convicted of, or

has committed acts which would

constitute any felony or misdemeanor

under United States Federal or State

law. In the absence of an indictment,

conviction, or other legal process, a port

director must have probable cause to

believe the proscribed acts occurred;

(C) Staff laboratory personnel refuse

or otherwise fail to follow any proper

order of a Customs officer or any

Customs order, rule, or regulation

relative to continued licensing as a

Customs-accredited laboratory;

(D) The laboratory fails to operate in

accordance with the obligations of

paragraph (c) of this section;

(E) A determination is made that the

laboratory is no longer technically or

operationally proficient at performing

the approved methods of analysis for

Customs purposes;

(F) The laboratory fails to remit to

Customs, the Accounts Services

Division, within the 30 day billing

period the associated charges assessed

for the accreditation and the balance of

the fixed accreditation fee;

(G) The laboratory fails to maintain its

bond; or

(H) The laboratory fails to remit to

Customs, the Accounts Services

Division, within the 30 day billing

period the fixed reaccreditation fee.
Federal Register / Vol. 63, No. 110 /Tuesday, June 9, 1998 / Proposed Rules 31395

(iii) Assessment of monetary

penalties. The assessment of a monetary

penalty under this section, may be in

lieu of, or in addition to, a suspension

or revocation of accreditation under this

section. The monetary penalty may not

exceed $100,000 per violation and shall

be assessed and mitigated pursuant to

published guidelines. Any monetary

penalty under this section can be in

addition to the recovery of any loss of

revenue or liquidated damages assessed

under the laboratory’s Customs bond.

(2) Notice. When a decision to

suspend, revoke, and/or to assess a

monetary penalty is contemplated,

Customs shall immediately notify the

laboratory in writing of the proposed

action. The notice of proposed action

shall contain a description of the

grounds for the proposed revocation,

suspension, and/or assessment of a

monetary penalty action, and advise the

laboratory of the procedures for filing

appeals.

(3) Appeal procedures. A Customsaccredited laboratory receiving a notice

of suspension or revocation of

accreditation, and/or of assessment of a

monetary penalty, and wishing to

appeal the decision shall follow the

appeal procedures set forth in paragraph

(g)(3) of this section. An appeal to the

Director may contain an acceptance of

responsibility and may also provide

extenuating circumstances and/or

rebuttal evidence. Further, the appeal

may ask for a meeting with the Director

or his designee to discuss proposed

actions. Should the laboratory fail to file

an appeal within the required time

period, the Director shall take actions to

implement the proposed suspension or

revocation and/or to collect the

monetary penalty assessed in the notice.

(4) Publication. All final notices of

suspension or revocation of a

laboratory’s accreditation and/or

assessment of a monetary penalty will

be published in the Federal Register

and Customs Bulletin, giving the

effective date, duration, and scope of

each action.

3. Section 151.13 is revised to read as

follows:

§ 151.13 Approval of commercial gaugers.

This section sets forth the

requirements for commercial gaugers to

obtain approval by Customs for the

measuring of certain merchandise, and

explains the operation of such approved

gaugers. This section also provides for

the imposition of approval and

reapproval fees, sets forth grounds for

the suspension or revocation of

approval, and provides for the

imposition of a monetary penalty for an

approved commercial gauger that fails

to adhere to the provisions of this

section.

(a) What is a ‘‘Customs-approved

gauger’’? ‘‘Commercial gaugers’’ are

individuals and commercial

organizations that measure, gauge, or

sample merchandise (usually

merchandise in bulk form) and who

deal mainly with petroleum, petroleum

products, and bulk chemicals. A

‘‘Customs-approved gauger’’ is a

commercial concern, within the United

States, that has demonstrated, to the

satisfaction of the Director (defined at

§ 151.12(a)), pursuant to this section the

capability to perform certain gauging

and measurement procedures for certain

commodities. Customs approval extends

only to the performance of such

functions as are vested in, or delegated

to, Customs.

(b) What are the obligations of a

Customs-approved gauger? A

commercial gauger approved by

Customs agrees to the following

conditions and requirements:

(1) To comply with the requirements

of part 151, Customs Regulations (19

CFR part 151), and to conduct

professional services in conformance

with approved standards and

procedures, including procedures which

may be required by the Commissioner of

Customs or the Director;

(2) To have no interest in or other

connection with any business or other

activity which might affect the unbiased

performance of duties as a Customsapproved gauger. It is understood that

this does not prohibit acceptance of the

usual fees for professional services;

(3) To maintain the ability, i.e., the

instrumentation, equipment, qualified

staff, facilities, etc., to perform the

services for which the gauger is

approved, and allow the Director to

evaluate that ability on a periodic basis

by such means as on-site inspections,

demonstrations of gauging procedures,

and reviews of submitted records;

(4) To retain those gauger records

beyond the five-year record-retention

period specified by Customs as

necessary to address matters concerned

in pending litigation, and, should

laboratory operations or accreditation

cease, to contact Customs immediately

regarding the disposition of records

retained;

(5) To promptly investigate any

circumstance which might affect the

accuracy of work performed as an

approved gauger, to correct the situation

immediately, and to notify both the port

director and the Director of such

matters, their consequences, and any

corrective action taken or that needs to

be taken; and

(6) To immediately notify both the

port director and the Director of any

attempt to impede, influence, or coerce

gauger personnel in the performance of

their duties, or of any decision to

terminate laboratory operations or

accredited status. Further, within 5 days

of any changes involving legal name,

address, ownership, parent-subsidiary

relationships, bond, other offices or

sites, managerial or professional or

executive staff, approved signatories,

facilities, instruments, or equipment,

etc., to notify the Director by certified

mail.

(c) What are the approved gauging

and measurement procedures? Customsaccredited gaugers shall follow the

general or specific gauging and

measurement procedures set forth in

Commodity Group Brochures (see

definition at § 151.12(a)) in the testing of

designated commodities, unless the

Director gives written permission to use

an alternate method. Alternative

methods will be considered and

approved on a case-by-case basis.

(d) How would a commercial gauger

become a Customs-approved gauger? (1)

What should an application contain?

An application for approval shall

contain the following information:

(i) The applicant’s legal name and the

addresses of its principal place of

business and any other facility out of

which it will work;

(ii) Detailed statements of ownership

and any partnerships, parent-subsidiary

relationships, or affiliations with any

other domestic or foreign organizations,

including, but not limited to, importers;

producers; refiners; Customs brokers; or

carriers;

(iii) A statement of financial

condition;

(iv) If a corporation, a copy of the

articles of incorporation and the names

of all officers and directors;

(v) The names, titles, and

qualifications of each person who will

be authorized to sign or approve gauging

reports on behalf of the commercial

gauger;

(vi) A complete description of the

applicant’s facilities, instruments, and

equipment;

(vii) Express agreement that if notified

by Customs of pending accreditation to

execute a bond in accordance with part

113, Customs Regulations (19 CFR part

113), and submit it to the Customs port

nearest to the applicant’s main office.

(The limits of liability on the bond will

be established by the Customs port in

consultation with the Director. In order

to retain Customs approval, the gauger

must maintain an adequate bond, as

determined by the port director);
31396 Federal Register / Vol. 63, No. 110 /Tuesday, June 9, 1998 / Proposed Rules

(viii) Express agreement to be bound

by the obligations contained in

paragraph (b) of this section; and,

(ix) A nonrefundable pre-payment

equal to 50 percent of the fixed approval

fee, as published in the Federal Register

and Customs Bulletin, to cover

preliminary processing costs. Further,

the applicant agrees to pay to Customs

within 30 days of notification the

associated charges assessed for

approval, i.e., those charges for actual

travel and background investigation

costs, and the balance of the fixed

approval fee.

(2) Where should an application be

sent? A commercial gauger seeking

approval or an extension of an existing

approval shall send a letter of

application to the U.S. Customs Service,

Attention: Director, Laboratories &

Scientific Services, Washington, DC

20229.

(3) How will an application be

reviewed?

(i) Determination of competence. The

Director shall determine the applicant’s

overall competence, independence, and

character by conducting on-site

inspections, which will include

demonstrations by the applicant of

gauging procedures; reviewing records

submitted; and conducting background

investigations.

(ii) Evaluation of technical and

operational requirements. Customs shall

determine whether the following

technical and operational requirements

are met:

(A) Equipment. The facility shall be

equipped with all of the instruments

and equipment needed to conduct

approved services. The gauger shall

ensure that all instruments and

equipment are properly calibrated,

checked, and maintained.

(B) Facilities. The facility shall have,

at a minimum, adequate space, lighting,

and environmental controls to ensure

compliance with the conditions

prescribed for appropriate

measurements.

(C) Personnel. The facility shall be

staffed with persons having the

necessary education, training,

knowledge, and experience for their

assigned functions (e.g., maintaining

equipment, calibrating instruments,

performing gauging services, evaluating

gauging results, and signing gauging

reports on behalf of the commercial

gauger). In general, each technical staff

member should have, at a minimum, six

(6) months training and experience in

gauging.

(e) How will an applicant be notified

concerning approval?

(1) Notice of approval or nonselection.

When Customs evaluation of a gauger’s

credentials is completed, the Director

shall notify the gauger in writing of its

approval or nonselection. (Final

approval decisions will not be made

until the applicant has satisfied all bond

requirements and made payment on all

assessed charges and the balance of the

application fee.) Notices of nonselection

will state the reasons for the decision.

All notices of approval, reapproval, or

extension of a gauger’s existing

Customs-approval will be published in

the Federal Register and Customs

Bulletin.

(2) Grounds for nonselection. The

Director may deny a gauger’s

application for any of the following

reasons:

(i) The application contains false or

misleading information concerning a

material fact;

(ii) The gauger has been indicted for,

convicted of, or committed acts which

under United States federal or state law

would constitute any felony or

misdemeanor involving misstatements,

fraud, theft-related offenses or any other

violation which would reflect adversely

on the business integrity of the

applicant;

(iii) A determination is made that the

gauger-applicant does not possess the

capability or have adequate facilities

and management to perform the

approved methods of measurement for

Customs purposes;

(iv) A determination is made that the

gauger has submitted false reports or

statements concerning the measurement

of merchandise, or that the applicant

was subject to sanctions by state, local,

or professional administrative bodies for

such conduct;

(v) Nonpayment of assessed charges

and the balance of the fixed approval

fee; or

(vi) Failure to execute a bond in

accordance with part 113 of this

chapter.

(3) Appeal of adverse determinations.

Gaugers receiving an adverse approval

determination and wishing to appeal the

determination must file an appeal

within 30 days to the Director. Within

30 days of receipt of the appeal, the

Director shall make a final

determination regarding the appeal and

notify the gauger in writing. If the

Director reaffirms the nonselection,

again citing specific reasons, then the

applicant may choose to either:

(i) Submit a new application to the

Director after waiting 90 days from the

date of the Director’s last decision; or

(ii) File an action with the Court of

International Trade, pursuant to chapter

169 of title 28, United States Code,

within 60 days after the issuance of the

Director’s final decision.

(f) What are the approval/reapproval

fee requirements?

(1) In general. A fixed fee,

representing Customs administrative

overhead expense, will be assessed for

each application for approval or

reapproval. In addition, associated

assessments, representing the actual

costs associated with travel and per

diem of Customs employees related to

verification of application criteria and

background investigations will be

charged. The combination of the fixed

fee and associated assessments

represent reimbursement to Customs for

costs related to approval and

reapproval. The fixed fee will be

published in the Customs Bulletin and

the Federal Register. Based on a review

of the actual costs associated with the

program, the fixed fee may be adjusted

periodically; any changes will be

published in the Customs Bulletin and

the Federal Register.

(i) Approval fees. A nonrefundable

pre-payment equal to 50 percent of the

fixed approval fee to cover preliminary

processing costs must accompany each

application for approval. Before a gauger

will be approved, it must submit to

Customs, Account Services Division,

within the 30 day billing period the

associated charges assessed for the

approval and the balance of the fixed

approval fee.

(ii) Reapproval fees. Before a gauger

will be reapproved, it must submit to

Customs, Account Services Division,

within the 30 day billing period the

fixed reapproval fee.

(2) Disputes. In the event a gauger

disputes the charges assessed for travel

and per diem costs associated with

scheduled inspection visits, it may file

an appeal within 30 days of the date of

the assessment with the Director. The

appeal letter must specify which

charges are in dispute and provide such

supporting documentation as may be

available for each allegation. The

Director shall make findings of fact

concerning the merits of an appeal and

communicate the agency decision to the

gauger in writing within 30 days of the

date of the appeal.

(g) Can existing Customs-approved

gaugers continue to operate?

Commercial gaugers approved by the

Director prior to December 8, 1993, will

retain approval under these regulations

provided that they conduct their

business in a manner consistent with

the administrative portions of this

section. This paragraph does not pertain

to any gauger which has had its

approval suspended or revoked. Gaugers

which have had their approvals

continued under this section will have

their status reevaluated in the third year
Federal Register / Vol. 63, No. 110 /Tuesday, June 9, 1998 / Proposed Rules 31397

following the effective date of this

regulation. At the time of reapproval,

these gaugers must meet the

requirements of this section and remit to

Customs, Account Services Division,

within the 30 day billing period the

fixed reapproval fee. Failure to meet

these requirements will result in

revocation or suspension of the

approval.

(h) How will Customs-approved

gaugers operate?

(1)(i) Contents of reports. The

measurement results from a Customsapproved gauger that are submitted by

an importer of record with respect to

merchandise in an entry shall, in the

absence of measurement conducted by

Customs laboratories, be accepted by

Customs, provided that the importer of

record certifies that the measurement

was of the merchandise in the entry. All

reports shall measure net landed

quantity, except in the case of crude

petroleum of Heading 2709,

Harmonized Tariff Schedule of the

United States (HTSUS), which may be

measured by gross quantity. Reports

shall be given in the appropriate HTSUS

units of quantity, e.g., liters, barrels, or

kilograms.

HTSUS Product Unit of quantity

Headings 1501–1515 ....................................................... Animal and vegetable oils ................................................ Kilogram.

Subheadings 2707.10–2707.30 and 2902.20–2902.44 ... Benzene, toluene and xylene .......................................... Liter.

Heading 2709 ................................................................... Crude Petroleum .............................................................. Barrel.

Heading 2710 (various subheadings) .............................. Fuel oils, motor oils, kerosene, naphtha, lubricating oils Barrel

Chapter 29 (various subheadings) ................................... Organic compounds in bulk and liquid form .................... Kilogram, liter, etc.

(ii) Nothing in these regulations shall

preclude Customs from gauging a

shipment which has been gauged by a

Customs-approved gauger at the request

of an importer. In cases where a

shipment has been gauged by both

Customs and a Customs-approved

gauger, all Customs actions will be

based upon the gauging reports issued

by Customs, unless the Director advises

other actions. If Customs measures

merchandise, it shall release the reports

of its measurements to the importer of

record or its agent upon request unless

it is proprietary to the holder of a

copyright or patent, or developed by

Customs for enforcement purposes.

(2) Recordkeeping requirements.

Customs-approved gaugers shall

maintain records of the type normally

kept in the ordinary course of business

in accordance with the provisions of

this chapter and any other applicable

provisions of law, and make them

available during normal business hours

for Customs inspection. In addition,

these gaugers shall maintain all records

necessary to permit the evaluation and

verification of all Customs-related work,

including, as appropriate, those

described below. All records shall be

maintained for five years, unless the

gauger is notified in writing by Customs

that a longer retention time is necessary

for particular records. Electronic data

storage and transmission may be

approved by Customs.

(i) Transaction records. Records for

each Customs-related transaction must

be readily accessible and have the

following:

(A) A unique identifying number;

(B) The date and location where the

transaction occurred;

(C) The identity of the product (e.g.

crude oil);

(D) The name of the client;

(E) The source of the product (e.g.,

name of vessel, flight number of airline);

and

(F) If available, the Customs entry

date, entry number, and port of entry

and the names of the importer, exporter,

manufacturer, and country-of-origin.

(ii) Major equipment records. Records

for each major piece of equipment used

in Customs-related work must identify

the name and type of instrument, the

manufacturer’s name, the instrument’s

model and any serial numbers, and the

occurrence of all servicing performed on

the equipment or instrument, to include

recalibration and any repair work,

identifying who performed the service

and when.

(iii) Records of gauging procedures.

The Customs-approved gauger must

maintain complete and up-to-date

copies of all approved gauging

procedures, calibration methods, etc.,

and must document the procedures that

each staff member is authorized to

perform. These procedures must be

readily available to appropriate staff.

(iv) Gauging records. The Customsapproved gauger must identify each

transaction by transaction record

number (see paragraph (h)(2)(i) of this

section) and must maintain all

information or data (such as

temperatures, etc.) associated with each

Customs-related gauging transaction.

Each gauging record (i.e., the complete

file of all data for each separate

transaction) must be dated and initialed

or signed by the staff member(s) who

did the work.

(v) Gauging reports. Each gauging

report submitted to Customs must

include:

(A) The name and address of the

Customs-approved gauger;

(B) A description and identification of

the transaction, including its unique

identifying number;

(C) The designations of each gauging

procedure used;

(D) The gauging report itself (i.e., the

quantity of the merchandise);

(E) The date of the report; and,

(F) The signature of the person

accepting technical responsibility for

the gauging report (i.e., an approved

signatory).

(3) Representation of Customsapproved status. Commercial gaugers

approved by Customs shall limit

statements or wording regarding their

approval to an accurate description of

the commodities for which approval has

been obtained.

(4) Subcontracting prohibited.

Customs-approved gaugers shall not

subcontract Customs-related work.

(i) How can a gauger have its approval

suspended or revoked or be required to

pay a monetary penalty?

(1) Grounds for suspension,

revocation, or assessment of a monetary

penalty.—(i) General. A gauger’s

approval may be revoked or suspended

or a gauger may be assessed a monetary

penalty at any time by the Director.

(ii) Grounds for suspension,

revocation, or monetary penalty. A

gauger’s accreditation may be

suspended or revoked, or a monetary

penalty may be assessed because:

(A) The selection was obtained

through fraud or the misstatement of a

material fact by the gauger;

(B) The gauger, or other person the

port director determines is exercising

substantial ownership or control over

the gauger operation or corporate

officer, is indicted for, convicted of, or

has committed acts which would

constitute any felony or misdemeanor

under United States Federal or State

law. In the absence of an indictment,

conviction, or other legal process, a port

director must have probable cause to

believe the proscribed acts occurred;
31398 Federal Register / Vol. 63, No. 110 /Tuesday, June 9, 1998 / Proposed Rules

(C) Staff gauger personnel refuse or

otherwise fail to follow any proper order

of a Customs officer or any Customs

order, rule, or regulation relative to

continued licensing as a Customsaccredited gauger;

(D) The gauger fails to operate in

accordance with the obligations of

paragraph (b) of this section;

(E) A determination is made that the

gauger is no longer technically or

operationally proficient at performing

the approved methods of measurement

for Customs purposes;

(F) The gauger fails to remit to

Customs, the Accounts Services

Division, within the 30 day billing

period the associated charges assessed

for the approval and the balance of the

fixed approval fee;

(G) The gauger fails to maintain its

bond; or

(H) The gauger fails to remit to

Customs, the Accounts Services

Division, within the 30 day billing

period the fixed reapproval fee.

(iii) Assessment of monetary

penalties. The assessment of a monetary

penalty under this section, may be in

lieu of, or in addition to, a suspension

or revocation of accreditation under this

section. The monetary penalty may not

exceed $100,000 per violation and shall

be assessed and mitigated pursuant to

published guidelines. Any monetary

penalty under this section can be in

addition to the recovery of any loss of

revenue or liquidated damages assessed

under the gauger’s Customs bond.

(2) Notice. When a decision to

suspend, revoke, and/or to assess a

monetary penalty is contemplated,

Customs shall immediately notify the

gauger in writing of the proposed action.

The notice of proposed action shall

contain a description of the grounds for

the proposed revocation, suspension,

and/or assessment of a monetary

penalty action, and advise the gauger of

the procedures for filing appeals.

(3) Appeal procedures. A Customsapproved gauger receiving a notice of

suspension or revocation of approval,

and/or of assessment of a monetary

penalty, and wishing to appeal the

decision, shall follow the appeal

procedures set forth in paragraph (e)(3)

of this section. An appeal to the Director

may contain an acceptance of

responsibility and may also provide

extenuating circumstances and/or

rebuttal evidence. Further, the appeal

may ask for a meeting with the Director

or his designee to discuss proposed

actions. Should the gauger fail to file an

appeal within the required time period,

the Director shall take actions to

implement the proposed suspension or

revocation and/or to collect the

monetary penalty assessed in the notice.

(4) Publication. All final notices of

suspension or revocation of a

commercial gauger’s approval, and/or

assessment of a monetary penalty will

be published in the Federal Register

and Customs Bulletin, giving the

effective date, duration, and scope of

each action.

4. In § 151.14, the first sentence is

amended by removing the words

‘‘ ‘sediment and water’ characteristic as

set out in § 151.13(a)(2)’’ and adding, in

its place, the words ‘‘analysis method

for crude petroleum contained in ASTM

D96 or other approved analysis

method’’.

Approved: May 6, 1998.

Samuel H. Banks,

Acting Commissioner of Customs.

John P. Simpson,

Deputy Assistant Secretary of the Treasury.

[FR Doc. 98–15336 Filed 6–8–98; 8:45 am]

BILLING CODE 4820–02–P

ENVIRONMENTAL PROTECTION

AGENCY

40 CFR Part 63

[AD–FRL–6106–3]

RIN 2060–A100

National Emission Standards for

Hazardous Air Pollutants: Petroleum

Refineries

AGENCY: Environmental Protection

Agency (EPA).

ACTION: Proposed rule.

SUMMARY: This action proposes

revisions to the ‘‘National Emission

Standards for Hazardous Air Pollutants:

Petroleum Refineries,’’ which was

issued as a final rule on August 18,

1995. This rule is commonly known as

the Petroleum Refineries national

emission standards for hazardous air

pollutants (NESHAP). This action

proposes to revise the date by which the

Implementation Plan for emissions

averaging is to be submitted. This action

also proposes an exemption for specific

hydrogen plant vent streams from the

miscellaneous process vent

requirements. Because the revisions do

not alter the intended applicability,

stringency, or schedule of the NESHAP,

the EPA does not anticipate receiving

adverse comments. Consequently, the

revisions are also being issued as a

direct final rule in the final rules section

of this Federal Register. If no relevant

adverse comments are timely received,

no further action will be taken with

respect to this proposal and the direct

final rule will become final on the date

provided in that action.

DATES: Comments. Comments must be

received on or before July 9, 1998.

Additionally, a hearing will be

convened if requests to speak are

received by June 24, 1998. If a hearing

is held, it will take place on July 1, 1998

beginning at 10:00 a.m. and the record

on the hearing will remain open for 30

days after the hearing to provide an

opportunity for submission of rebuttal

and supplementary information.

ADDRESSES: Comments. Comments

should be submitted (in duplicate, if

possible) to: Air and Radiation Docket

and Information Center (6102),

Attention Docket Number A–93–48 (see

docket section below), U.S.

Environmental Protection Agency, 401

M Street, SW, Washington, DC 20460.

The EPA requests that a separate copy

also be sent to the contact person listed

below.

Electronic Submittal of Comments

Electronic comments can be sent

directly to EPA at: A-and-RDocket@epamail.epa.gov. Electronic

comments must be submitted as an

ASCII file avoiding the use of special

characters and any form of encryption.

Comments and data will also be

accepted on disks in WordPerfect 6.1

file format or ASCII file format. All

comments and data in electronic form

must be identified by the docket number

A–93–48. Electronic comments on this

proposed rule may be filed online at

many Federal Depository Libraries.

Public Hearing. If a public hearing is

held, it will be held at the EPA’s Office

of Administration Auditorium, Research

Triangle Park, North Carolina or at an

alternate site nearby. Persons interested

in attending the hearing or wishing to

present oral testimony should notify Ms.

JoLynn Collins, U.S. Environmental

Protection Agency, Research Triangle

Park, NC 27711, telephone (919) 541–

5671.

Docket. Docket No. A–93–48,

containing the supporting information

for the original NESHAP and this action,

is available for public inspection and

copying between 8:00 a.m. and 5:30

p.m., Monday through Friday, at EPA’s

Air and Radiation Docket and

Information Center (MC–6102), 401 M

Street SW, Washington, DC 20460, or by

calling (202) 260–7548. The docket is

located at the above address in Room

M–1500, Waterside Mall (ground floor).

A reasonable fee may be charged for

copying.

FOR FURTHER INFORMATION CONTACT: Mr.

James Durham, Waste and Chemical