[Federal Register Volume 60, Number 249 (Thursday, December 28, 1995)]
[Rules and Regulations]
[Pages 67057-67059]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 95-31325]



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DEPARTMENT OF THE TREASURY
19 CFR Part 162

[T.D. 96-2]
RIN 1515-AB62


Seizure of Merchandise

AGENCY: Customs Service, Treasury.

ACTION: Final rule.

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SUMMARY: In this document, Customs is amending 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 
amendment follows the legislation and specifies the circumstances under 
which the mandatory and permissive seizures may take place. The 
amendment also contains provisions for the detention of merchandise and 
the remission of articles subject to seizure and forfeiture.

EFFECTIVE DATE: January 29, 1996.

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.
    On May 3, 1995, Customs published a Notice of Proposed Rulemaking 
in the Federal Register (60 FR 21788), which proposed amending the 
Customs Regulations to reflect these statutory 

[[Page 67058]]
changes. Because no comments were received in response to the Notice of 
Proposed Rulemaking, Customs is now amending its regulations as 
proposed.
    The Mod Act amendments to Sec. 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 amendment addresses conditions where seizure 
is mandatory.
    Paragraph (b) of the 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 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 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 amendment.

Regulatory Flexibility Act

    Insofar as the regulations closely follow legislative direction, 
pursuant to the provisions of the Regulatory Flexibility Act (5 U.S.C. 
601, et seq.), it is certified that the amendment 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.

Amendment

    Section 162, Customs Regulations (19 CFR Part 162) is amended as 
set forth below:

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

    1. The general authority citation for Part 162 is revised and a new 
specific cite for Sec. 162.23 is added 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 section 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. 80302).
    (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 Sec. 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. 

[[Page 67059]]

    (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 of this chapter).
    (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).
George J. Weise,
Commissioner of Customs.

    Approved: November 29, 1995.
Dennis M. O'Connell,
Acting Deputy Assistant Secretary of the Treasury.
[FR Doc. 95-31325 Filed 12-27-95; 8:45 am]
BILLING CODE 4820-02-P