14630 Federal Register / Vol. 60, No. 53 / Monday, March 20, 1995 / Rules and Regulations

Office of Filings and Information

Services believes it appropriate, he or

she may submit the matter to the

Commission.

* * * * *

36. Section 200.30–12 is removed and

reserved.

37. In § 200.30–13, the word

‘‘Comptroller’’ in the heading and the

words ‘‘Comptroller of the Commission’’

in the text are revised to read ‘‘Associate

Executive Director of the Office of the

Comptroller’’.

38. In § 200.30–14, remove the

semicolon at the end of paragraph (a)

and ‘‘; and’’ at the end of paragraph (b)

and add in both their places a period.

39. Section 200.30–15 is revised to

read as follows:

§ 200.30–15 Delegation of authority to

Executive Director.

Under Pub. L. 100–181, 101 Stat. 1254

(15 U.S.C. 78d–1, 78d–2), the Securities

and Exchange Commission hereby

delegates, until the Commission orders

otherwise, the following functions to the

Executive Director to be performed by

him or her or under his or her direction

by persons designated by the Chairman

of the Commission: To identify and

implement additional changes within

the Commission that will promote the

principles and standards of the National

Performance Review and the strategic

and quality management approaches

described by the Federal Quality

Institute’s ‘‘Presidential Award for

Quality’’ or its successor awards.

PART 270—RULES AND

REGULATIONS, INVESTMENT

COMPANY ACT OF 1940

40. The authority citation for part 270

continues to read in part as follows:

Authority: 15 U.S.C. 80a–1 et seq., 80a–37,

80a–39, unless otherwise noted;

* * * * *

41. In the last sentence of § 270.8b–

25(b), the words ‘‘(j) and (k)’’ are revised

to read ‘‘(h) and (i)’’.

By the Commission.

Dated: March 14, 1995.

Margaret H. McFarland,

Deputy Secretary.

[FR Doc. 95–6696 Filed 3–17–95; 8:45 am]

BILLING CODE 8010–01–P

DEPARTMENT OF THE TREASURY

Customs Service

19 CFR Part 10

[T.D. 95–22]

RIN 1515–AB65

Temporary Importation Bonds;

Anticipatory Breach, Assessment

Amounts, Petitions for Relief

AGENCY: Customs Service, Department

of the Treasury.

ACTION: Final rule.

SUMMARY: This document amends the

Customs Regulations to permit

anticipatory breach and provide for

early payment of liquidated damages in

Temporary Importation Bond (TIB)

cases. It also amends the regulations to

permit assessment of liquidated

damages in excess of double the duties

in those cases where the district director

requires extra bonding in order to

protect the revenue and to state that the

term ‘‘duties’’ for TIB assessment shall

also include any applicable

merchandise processing fees that

otherwise would be charged on an entry

for consumption. Finally, the document

amends the regulations to eliminate

forwarding of petitions for relief in TIB

cases to Customs Headquarters when

the bond principal or surety is

dissatisfied with the decision on the

petition afforded by the district director.

EFFECTIVE DATE: April 19, 1995.

FOR FURTHER INFORMATION CONTACT:

Jeremy Baskin, Penalties Branch, Office

of Regulations and Rulings, 202–482–

6950.

SUPPLEMENTARY INFORMATION:

Background

Under the provisions of Chapter 98,

Subchapter XIII, Harmonized Tariff

Schedule of the United States (HTSUS),

merchandise may be entered under the

terms of a Temporary Importation Bond

(TIB) without the payment of duties if

the merchandise is entered for a specific

purpose enumerated in Subchapter XIII,

HTSUS. Per U.S. Note 1 to Subchapter

XIII, the merchandise is permitted to

remain in the United States for a oneyear period subsequent to the date of

importation (with a maximum of two

one-year extensions allowed). Prior to

the expiration of the bond period or any

properly approved extension thereof,

the merchandise must be exported or

destroyed under Customs supervision.

Failure to export or destroy in a timely

manner results in the imposition of

liquidated damages against the

importer.

Instances arise where, after initiation

of a TIB entry, the importer decides that

the merchandise will remain in the

United States in violation of the terms

of the bond. Rather than wait for the

one-year period to end and for

liquidated damages to be assessed,

importers inquired as to the possibility

of early payment of liquidated damages.

The Customs Regulations currently do

not provide for an anticipatory breach of

a TIB.

In a Notice of Proposed Rulemaking

(NPRM) published in the Federal

Register of September 29, 1992 (57 FR

44714), it was proposed to amend the

regulations to permit anticipatory

breach of a TIB and allow the importer

to pay the full measure of liquidated

damages and thereby close the bond.

Through payment of the liquidated

damages, the importer would waive his

right to receipt of notice of a claim for

liquidated damages pursuant to

§ 172.1(a), Customs Regulations (19 CFR

172.1(a)).

For TIB entries, the provisions of

§ 10.31(f) of the Customs Regulations

(19 CFR 10.31(f)) require that a bond

shall be given containing the conditions

set forth in § 113.62 of the Customs

Regulations (19 CFR 113.62) in an

amount equal to double the duties

which it is estimated would have

accrued (or such larger amount as the

district director shall state in writing to

the entrant is necessary to protect the

revenue) had all the articles covered by

the entry been entered under an

ordinary consumption entry. By

contrast, under the provisions of

§ 10.39(d), if any article entered under

Chapter 98, Subchapter XIII, HTSUS,

has not been exported or destroyed in

accordance with the regulations within

the period of time during which the

articles may remain in the Customs

territory of the United States under

bond (including any lawful extension),

the district director shall make a

demand in writing under the bond for

the payment of liquidated damages

equal to double the estimated duties

applicable to such entry, unless a lower

amount is prescribed by § 10.31(f).

On the one hand, § 10.31(f) empowers

the district director to require a bond in

excess of double the duties, but the

provisions of § 10.39(d) only permit him

to assess liquidated damages at double

the estimated duties or such lower

amount (emphasis added) as prescribed

by § 10.31(f). These regulations can

provide anomalous results and

inefficient protection of the revenue.

Accordingly, the NPRM proposed an

amendment to the regulations to permit,

in the case of breach of a TIB,

assessment of liquidated damages in an
Federal Register / Vol. 60, No. 53 / Monday, March 20, 1995 / Rules and Regulations 14631

amount equal to double the estimated

duties or any different amount

prescribed by § 10.31(f) rather than only

a lower amount.

When a TIB entry is filed, no

merchandise processing fees are charged

to the importer of record. However,

section 111 of the Customs and Trade

Act of 1990 (Pub. L. 101–382) amended

19 U.S.C. 58c(g) (the statute which

requires payment of the merchandise

processing fee) to provide that all

administrative and enforcement

provisions of the Customs laws and

regulations, except those relating to

drawback, shall apply with respect to

any fee prescribed under 19 U.S.C.

58c(a) (which requires payment of the

merchandise processing fee), and with

respect to persons liable therefor, as if

such fee is a Customs duty. Any penalty

which is expressed in terms of a

relationship to the amount of the duty

(e.g., liquidated damages expressed in

terms of an amount equal to double the

estimated duties due on an entry) shall

be assessed as a multiple of the unpaid

fee. Accordingly, when calculating the

measure of liquidated damages for

breach of a TIB, the amount of estimated

duties due for breach should include

duties plus the merchandise processing

fees that would have been applicable to

the entry had an entry for consumption

been filed. The NPRM proposed an

amendment to the regulations to

provide that, for purposes of assessment

of liquidated damages for breach of a

TIB, the term duties includes any

merchandise processing fees that would

have been due on a consumption entry

that would have been filed with regard

to such TIB merchandise.

Under the provisions of § 10.39(e) of

the Customs Regulations (19 CFR

10.39(e)), if there has been a default

with respect to all the articles covered

by the bond and a written petition for

relief is filed timely, the regulations

state that the petition ‘‘shall be

transmitted to Headquarters, U.S.

Customs Service, with a full report of

the facts, unless it is allowed by the

district director in whole or in part in

accordance with this regulation, * * *.’’

This language noting referral to

Headquarters is unique to TIB cases in

which all the articles covered by the

bond are in default and the district

director allows no mitigation. The

NPRM posited that the jurisdictional

amount found in § 172.21 of the

Customs Regulations (19 CFR 172.21)

should govern review of all petitions.

Jurisdiction should not be predicated on

a denial of relief in a limited fact

situation. Accordingly, the NPRM

proposed that § 10.39(e) be amended to

remove the reference regarding referral

of the petition to Customs Headquarters.

Analysis of Comments

Five comments were received with

regard to the subject document. It

should initially be noted that Customs,

in error, indicated the harbor

maintenance fees, as required by the

provisions of the Harbor Maintenance

Review Act of 1986 (Pub. L. 99–682), are

not imposed on TIB entries. The NPRM

then went on to state also in error that

unpaid harbor maintenance fees, as well

as merchandise processing fees, should

be included in any calculation of double

the duties or 110 percent of the duties

for assessment of liquidated damages.

Two commenters noted these errors.

Customs concedes these mistakes, and

the final rule avoids any mention of

harbor maintenance fees in the

calculation of duties, fees and charges in

TIB liquidated damages assessment.

Two commenters suggested that the

proposed regulatory amendment would

only permit anticipatory breach as to the

entire amount of merchandise entered

under a TIB and would not permit

anticipatory breach if a percentage of

TIB merchandise covered by a single

entry was intended to remain in the

United States in violation of the bond

provisions but the remaining percentage

was to be exported or destroyed in

compliance with bond conditions. The

regulations require assessment of the

full amount of liquidated damages

applicable to the entry. The commenters

suggest that there would be little

incentive to comply with anticipatory

breach provisions because the importer

who wishes to file a partial anticipatory

breach would be required to pay for the

full amount of the entry.

Customs concedes that the comment

has some validity but it should be

emphasized that acceptance of payment

in recognition of anticipatory breach of

TIB conditions is being promulgated in

response to requests made to Customs

and as a courtesy to the importing

community. It will permit importers to

close out the records on a TIB rather

than wait for the one-year bond period

to expire. Partial anticipatory breaches

would be difficult for Customs to

administer, particularly if merchandise

which the importer still intends to

export or destroy in compliance with

bond conditions has not yet been

exported or destroyed so as to close the

bond out in its entirety. Customs will

not accept a partial anticipatory breach

if the merchandise not covered by the

breach has not been exported or

destroyed in compliance with bond

terms because of the difficulty of

administration.

A comment received from a

representative of surety companies did

not oppose the concept of anticipatory

breach, but did request that Customs

notify a surety that anticipatory breach

occurred, liquidated damages were paid

and that the bond could be closed with

regard to that particular TIB entry.

Customs has no objection to this request

and has added language which would

require surety notification by the

importer when an anticipatory breach

occurs. Inasmuch as the importer seeks

the benefit of anticipatory breach,

Customs does not find it burdensome to

require the importer to notify surety of

its actions.

One commenter was of the view that

the proposed amendment to § 10.31(f)

gave Customs excessively broad

discretion in deciding the bond amount.

We disagree. The provisions of § 10.31(f)

give the district director discretion to

require a bond in sufficient size to

protect the revenue. As a condition

precedent to requiring a larger bond, the

district director must notify the entrant,

in writing or by equivalent electronic

notification, of the increase. The

language of the regulation does not

permit an increase in the bond amount

without cause.

Finally, one commenter indicates that

under proposed amendments to

§ 10.39(e) of the regulations, Customs

could be faced with an anomalous

situation regarding review of petitions

for relief. As proposed, the district

director would review petitions for

relief in all cases where the claim is for

$100,000 or less and the entire amount

of merchandise entered under a TIB is

in default. Under the provisions of

§ 10.39(f), a petition for relief could be

reviewed by the district director when

a partial default occurs and the liability

for liquidated damages on the articles in

respect of which there has been a

default does not exceed $50,000. Thus,

jurisdictional amounts are not

consistent, and Headquarters review

would be required in certain TIB

liquidated damages cases, depending

upon what percentage of articles are in

default. We agree with the comment

and, therefore, are amending § 10.39(f)

to be consistent with the change to

§ 10.39(e).

Accordingly, the regulations are

amended as proposed except that

references to the harbor maintenance fee

have been removed, notice of

anticipatory breach will now be

required to be afforded to sureties by the

breaching importer, and the

jurisdictional amount in § 10.39(f) is

amended to $100,000 to be consistent

with § 10.39(e).
14632 Federal Register / Vol. 60, No. 53 / Monday, March 20, 1995 / Rules and Regulations

Regulatory Flexibility Act and

Executive Order 12866

Pursuant to the provisions of the

Regulatory Flexibility Act (5 U.S.C. 601

et seq.), it is certified that the

amendments will not have a significant

economic impact on a substantial

number of small entities. Accordingly,

the amendments are not subject to the

regulatory analysis requirements of 5

U.S.C. 603 and 604. The document does

not meet the criteria for a ‘‘significant

regulatory action’’ as specified in

Executive Order 12866.

List of Subjects in 19 CFR Part 10

Articles conditionally free, Customs

duties and inspection, Exports,

temporary importations under bond.

Amendments

Part 10, Customs Regulations (19 CFR

part 10), is amended as set forth below.

PART 10—ARTICLES CONDITIONALLY

FREE, SUBJECT TO A REDUCED

RATE, ETC.

1. The general authority citation for

part 10 continues to read as follows:

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

Note 17, Harmonized Tariff Schedule of the

United States), 1481, 1484, 1498, 1508, 1623,

1624;

* * * * *

2. Section 10.31 is amended by

revising the first two sentences of

paragraph (f) to read as follows:

§ 10.31 Entry; bond.

* * * * *

(f) With the exceptions stated herein,

a bond shall be given on Customs Form

301, containing the bond conditions set

forth in § 113.62 of this chapter, in an

amount equal to double the duties,

including fees, which it is estimated

would accrue (or such larger amount as

the district director shall state in writing

or by the electronic equivalent to the

entrant is necessary to protect the

revenue) had all the articles covered by

the entry been entered under an

ordinary consumption entry. In the case

of samples solely for use in taking

orders entered under subheading

9813.00.20, HTSUS, motion-picture

advertising films entered under

subheading 9813.00.25, HTSUS, and

professional equipment, tools of trade

and repair components for such

equipment or tools entered under

subheading 9813.00.50, HTSUS, the

bond required to be given shall be in an

amount equal to 110 percent of the

estimated duties, including fees,

determined at the time of entry. * * *

* * * * *

3. Section 10.39(d)(1) is amended by

removing the word ‘‘lower’’ in the first

sentence and by adding in its place the

word ‘‘different’’, and by adding a

sentence at the end of the paragraph to

read as follows:

§ 10.39 Cancellation of bond charges.

* * * * *

(d) (1) * * * For purposes of this

section, the term estimated duties shall

include any merchandise processing

fees applicable to such entry.

* * * * *

4. Section 10.39(e) is amended by

revising its first sentence to read as

follows:

§ 10.39 Cancellation of bond charges.

* * * * *

(e) If there has been a default with

respect to all the articles covered by the

bond and a written petition for relief has

been timely filed as provided in part

172 of this chapter, it shall be reviewed

by the district director if the full amount

of the claim does not exceed $100,000

and by the Director, International Trade

Compliance Division, Office of

Regulations and Rulings, Customs

Headquarters, if the full amount of the

claim exceeds $100,000.

* * * * *

§ 10.39 [Amended]

* * * * *

5. Section 10.39(f) is amended by

removing the figure ‘‘$50,000’’ in the

first sentence and by adding in its place

the figure ‘‘$100,000’’.

6. Section 10.39 is amended by

redesignating paragraph (g) as paragraph

(h) and by adding a new paragraph (g)

to read as follows:

* * * * *

§ 10.39 Cancellation of bond charges.

* * * * *

(g) Anticipatory breach. If an importer

anticipates that the merchandise entered

under a Temporary Importation Bond

will not be exported or destroyed in

accordance with the terms of the bond,

the importer may indicate to Customs in

writing before the bond period has

expired of the anticipatory breach. At

the time of written notification of the

breach, the importer shall pay to

Customs the full amount of liquidated

damages that would be assessed at the

time of breach of the bond, and the

entry will be closed. The importer shall

notify the surety in writing of the breach

and payment. By this payment, the

importer waives his right to receive a

notice of claim for liquidated damages

as required by § 172.1(a) of this chapter.

* * * * *

Approved: February 23, 1995.

Peter J. Baish,

Acting Commissioner of Customs.

Dennis M. O’Connell,

Acting Deputy Assistant Secretary of the

Treasury.

[FR Doc. 95–6759 Filed 3–17–95; 8:45 am]

BILLING CODE 4820–02–P

DEPARTMENT OF HOUSING AND

URBAN DEVELOPMENT

Office of the Secretary

24 CFR Parts 200 and 760

[Docket No. R–95–1750; FR–3468–F–02]

RIN 2501–AB83

Participant’s Consent To Release of

Information

AGENCY: Office of the Secretary, HUD.

ACTION: Final rule.

SUMMARY: This final rule implements

the amendments made to Section 904 of

the Stewart B. McKinney Homeless

Assistance Amendments Act of 1988

(the McKinney Act) by Section 903 of

the Housing and Community

Development Act of 1992, and Section

3003 of the Omnibus Budget

Reconciliation Act of 1993. Section 904

of the McKinney Act authorizes HUD to

require applicants or participants in any

HUD program involving review of an

applicant’s or participant’s income to

sign a consent form authorizing HUD,

the Housing Agency/Authority, or the

owner to verify income information by

requesting wage and claim data from

employers and the State agency

responsible for the administration of the

State unemployment laws.

EFFECTIVE DATE: April 19, 1995.

FOR FURTHER INFORMATION CONTACT:

Edward Whipple, Director, Occupancy

Division, Office of Assisted Housing,

Room 4206, concerning occupancy

matters; Barbara D. Hunter, Acting

Division Director, Planning and

Procedures Division, Office of

Multifamily Housing Management,

Room 6180 concerning housing

assistance programs administered by

this office; and David L. Decker,

Director, Computer Matching Activities,

Room 5156, concerning computer

matching/tenant income verification

matters. They may be contacted at the

Department of Housing and Urban

Development, 451 Seventh Street, S.W.,

Washington, D.C. 20410, telephone

(202) 708–0744, (202) 708–3944 and

(202) 708–0099, respectively. Hearing or

speech-impaired individuals may call