[Federal Register Volume 60, Number 85 (Wednesday, May 3, 1995)]
[Proposed Rules]
[Pages 21778-21779]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 95-10855]



=======================================================================
-----------------------------------------------------------------------

DEPARTMENT OF THE TREASURY

Customs Service

19 CFR Part 162

RIN 1515-AB62


Seizure of Merchandise

AGENCY: Customs Service, Department of the Treasury.

ACTION: Notice of proposed rulemaking.

-----------------------------------------------------------------------

SUMMARY: In this document, Customs is proposing to amend its 
regulations in response to enactment of the Customs Modernization Act 
(``The Mod Act''). Among its other provisions, the Mod Act amended 
Section 596(c) of the Tariff Act of 1930 (19 U.S.C. 1595a(c)) to 
clarify and codify Customs authority to seize and forfeit merchandise 
introduced or attempted to be introduced into the United States 
contrary to law. The Mod Act distinguishes between circumstances under 
which seizure of such merchandise is mandatory and those in which it is 
permissive. The proposed amendment follows the legislation and 
specifies the circumstances under which the mandatory and permissive 
seizures may take place. The proposed amendment also contains 
provisions for the detention of merchandise and the remission of 
articles subject to seizure and forfeiture.

DATES: Comments must be received on or before July 3, 1995.

ADDRESSES: Comments (preferably in triplicate) may be submitted to the 
Regulations Branch, Office of Regulations and Rulings, U.S. Customs 
Service, Franklin Court, 1301 Constitution Avenue, NW., Washington, DC 
20229, and may be inspected at Franklin Court, 1099 14th Street NW., 
Washington, DC.

FOR FURTHER INFORMATION CONTACT: Todd Schneider, Penalties Branch (202) 
482-6950.

SUPPLEMENTARY INFORMATION:

Background

    On December 8, 1993, the President signed the North American Free 
Trade Agreement Implementation Act (Pub. L. 103-182). The Customs 
Modernization portion of this Act (Title VI), popularly known as the 
Customs Modernization Act, or ``the Mod Act'' became effective when it 
was signed. Section 624 of Title VI amended section 596(c) of the 
Tariff Act of 1930 (19 U.S.C. 1595a(c)) to codify and clarify the 
circumstances under which merchandise may be seized and forfeited by 
Customs. Customs is now proposing to amend its regulations so that they 
will conform to the amended statute.
    The Mod Act amendments to section 1595a(c) provide that merchandise 
which is introduced or attempted to be introduced into the United 
States contrary to law shall be treated in two different manners 
depending upon the circumstances of the introduction or attempted 
introduction. In instances where the merchandise is stolen, smuggled, 
or clandestinely imported or introduced or is a controlled substance or 
contraband article, seizure is mandatory.
    Paragraph (a) of the proposed amendment addresses conditions where 
seizure is mandatory.
    Paragraph (b) of the proposed amendment covers those situations in 
which seizure is permissive. Seizure is permissive in instances where 
the merchandise is subject to health, safety or conservation 
restrictions which have not been complied with; when licenses, permits 
or other authorizations of a U.S. Government agency are required but do 
not accompany the merchandise; when copyright, trademark, or trade name 
violations are involved; when trade dress merchandise involved is in 
violation of a court order citing section 43 of the Act of July 5, 1946 
(15 U.S.C. 1125); and when the merchandise is marked intentionally in 
violation of section 304, Tariff Act of 1930 (19 U.S.C. 1304). The 
legislation also provides that merchandise may be seized if it is 
merchandise for which the importer has received written notices that 
previous importations of identical merchandise from the same supplier 
were found to have been marked in violation of section 304, Tariff Act 
of 1930 (19 U.S.C. 1304).
    Paragraph (c) of the proposed amendment provides instructions on 
procedures which Customs will follow in resolving questions which 
result from seizures which have been made under section 1595a(c).
    Paragraph (d) of the proposed amendment contains language 
specifying that merchandise which is misclassified or incorrectly 
valued, where there is no issue of admissibility, will be subject to 
seizure only under section 1592.
    The Mod Act also provides that merchandise which is subject to 
quantitative restrictions requiring a visa, permit, license or other 
similar document from the United States Government or a foreign 
government or issuing authority pursuant to a bilateral or multilateral 
agreement shall be subject to detention until the appropriate visa, 
license, permit or similar document or stamp is presented to Customs. 
However, if the visa, license, permit, or similar document or stamp is 
counterfeit as presented, the merchandise may be seized. This provision 
is contained in paragraph (e) of the proposed amendment.

Comments

    Before adopting the proposed amendment, 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), Sec. 1.4, Treasury Regulations (31 
CFR 1.4), and Sec. 103.11(b), 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 [[Page 21779]] Regulations Branch, 1099 14th Street NW., Suite 
4000, Washington, DC.

Regulatory Flexibility Act

    Because the proposed regulations closely follow legislative 
requirements, pursuant to the provisions of the Regulatory Flexibility 
Act (5 U.S.C. 601, et seq.), it is certified that the proposed 
regulations, if adopted, will not have a significant economic impact on 
a substantial number of small entities. Accordingly, it is not subject 
to the regulatory analysis or other requirements of 5 U.S.C. 603 and 
604.

Executive Order 12866

    This amendment does not meet the criteria for a ``significant 
regulatory action'' as specified in E.O. 12866.

Drafting Information

    The principal author of this document was Peter T. Lynch, 
Regulations Branch, Office of Regulations and Rulings, U.S. Customs 
Service. However, personnel from other offices participated in its 
development.

List of Subjects in 19 CFR Part 162

    Customs duties and inspection, Law enforcement, Seizures and 
forfeitures.

Proposed Amendment

    It is proposed to amend Part 162, Customs Regulations (19 CFR part 
162) as set forth below:

PART 162--RECORDKEEPING, INSPECTION, SEARCH, AND SEIZURE

    1. The authority citation for part 162 would be revised in part to 
read as follows:

    Authority: 5 U.S.C. 301; 19 U.S.C. 66, 1624.
* * * * *
    Section 162.23 also issued under 19 U.S.C. 1595a(c).
* * * * *
    2. In part 162, a new Sec. 162.23 is added to read as follows:


Sec. 162.23  Seizure under section 596(c), Tariff Act of 1930, as 
amended (19 U.S.C. 1595a(c)).

    (a) Mandatory seizures. The following, if introduced or attempted 
to be introduced into the United States contrary to law, shall be 
seized pursuant to section 596(c), Tariff Act of 1930, as amended (19 
U.S.C. 1595a(c)):
    (1) Merchandise that is stolen, smuggled, or clandestinely imported 
or introduced;
    (2) A controlled substance, as defined in the Controlled Substance 
Act (21 U.S.C. 801 et seq.), not imported in accordance with law; or
    (3) A contraband article, as defined in section 1 of the Act of 
August 9, 1939 (49 U.S.C. App. 781).
    (b) Permissive seizures. The following, if introduced or attempted 
to be introduced into the United States contrary to law, may be seized 
pursuant to section 596(c), Tariff Act of 1930, as amended (19 U.S.C. 
1595a(c)):
    (1) Merchandise, the importation or entry of which is subject to 
any restriction or prohibition imposed by law relating to health, 
safety, or conservation, and which is not in compliance with the 
applicable rule, regulation or statute;
    (2) Merchandise the importation or entry of which requires a 
license, permit or other authorization of a United States Government 
agency, and which is not accompanied by such license, permit or 
authorization;
    (3) Merchandise or packaging in which copyright, trademark or trade 
name protection violations are involved (including, but not limited to, 
a violation of sections 42, 43 or 45 of the Act of July 5, 1946 (15 
U.S.C. 1124, 1125 or 1127), sections 506 or 509 of title 17, United 
States Code, or sections 2318 or 2320 of title 18, United States Code);
    (4) Trade dress merchandise involved in the violation of a court 
order citing section 43 of the Act of July 5, 1946 (15 U.S.C. 1125);
    (5) Merchandise marked intentionally in violation of 19 U.S.C. 
1304;
    (6) Merchandise for which the importer has received written notices 
that previous importations of identical merchandise from the same 
supplier were found to have been in violation of 19 U.S.C. 1304; or
    (7) Merchandise subject to quantitative restrictions, found to bear 
a counterfeit visa, permit, license, or similar document, or stamp from 
the United States or from a foreign government or issuing authority 
pursuant to a multilateral or bilateral agreement (but see paragraph 
(e), of this section).
    (c) Resolution of seizure under section 1595a(c). When merchandise 
is either required or authorized to be seized under this section, the 
forfeiture incurred may be remitted in accord with 19 U.S.C. 1618, to 
include as a possible option the exportation of the merchandise under 
such conditions as Customs shall impose, unless its release would 
adversely affect health, safety, or conservation, or be in 
contravention of a bilateral or multilateral agreement or treaty.
    (d) Seizure under 19 U.S.C. 1592. If merchandise is imported, 
introduced or attempted to be introduced contrary to a provision of law 
governing its classification or value, and there is no issue of 
admissibility, such merchandise shall not be seized pursuant to 19 
U.S.C. 1595a(c). Any seizure of such merchandise shall be in accordance 
with section 1592 (see Sec. 162.75).
    (e) Detention only. Merchandise subject to quantitative 
restrictions requiring a visa, permit, license, or other similar 
document, or stamp from the United States Government or from a foreign 
government or issuing authority pursuant to a bilateral or multilateral 
agreement, shall be subject to detention in accordance with 19 U.S.C. 
1499, unless the appropriate visa, permit, license, or similar 
document, or stamp is presented to Customs (but see paragraph (b)(7) of 
this section for instances when seizure may occur).
Michael H. Lane,
Acting Commissioner of Customs.

    Approved: April 5, 1995.
John P. Simpson,
Deputy Assistant Secretary of the Treasury.
[FR Doc. 95-10855 Filed 5-2-95; 8:45 am]
BILLING CODE 4820-02-P