[Federal Register Volume 61, Number 109 (Wednesday, June 5, 1996)]
[Proposed Rules]
[Pages 28522-28524]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-14124]



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DEPARTMENT OF THE TREASURY

Customs Service

19 CFR Part 151

RIN 1515-AB75


Detention of Merchandise

AGENCY: Customs Service, Department of the Treasury.

ACTION: Proposed rule.

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SUMMARY: This document proposes amendments to the Customs Regulations 
to provide for procedures regarding the detention of merchandise that 
is undergoing extended Customs examination. It is intended that the

[[Page 28523]]

Customs Regulations regarding this subject accurately reflect recent 
amendments to the underlying statutory authority, enacted as part of 
the Customs modernization portion of the North American Free Trade 
Agreement Implementation Act.

DATES: Comments must be received on or before August 5, 1996.

ADDRESSES: Written comments (preferably in triplicate) may be addressed 
to the Regulations Branch, Office of Regulations and Rulings, U.S. 
Customs Service, 1301 Constitution Avenue, NW., Washington, DC 20229. 
Comments submitted may be inspected at the Regulations Branch, Office 
of Regulations and Rulings, Franklin Court, 1099 14th Street, Suite 
4000, Washington, DC.

FOR FURTHER INFORMATION CONTACT: Jeremy Baskin, Penalties Branch, 202-
482-6950.

SUPPLEMENTARY INFORMATION:

Background

    On December 8, 1993, amendments to certain Customs and navigation 
laws became effective as the result of the enactment of the North 
American Free Trade Agreement (NAFTA) Implementation Act, Public Law 
103-182, Title VI of which is the Customs modernization portion 
thereof, popularly known as the Customs Modernization Act (Mod Act). 
Section 613 of the Mod Act amended the provisions of section 499 of the 
Tariff Act of 1930, as amended (19 U.S.C. 1499), to provide for the 
detention of merchandise in any case where Customs is unable, upon 
initial examination, to make a determination as to whether that 
imported merchandise complies with requirements of the laws of the 
United States. Much of the new legislation brought the law into 
conformity with existing Customs practice with regard to the 
examination and detention of merchandise.
    Prior to this amendment, Customs, while having extensive 
examination authority, had no specific statutory or regulatory 
procedures for detaining merchandise whose admissibility had not yet 
been determined. The Mod Act codified Customs current detention 
practices. Importers are provided an accelerated method to receive 
administrative or judicial review of any decision to exclude.
    Customs has five days after merchandise is presented for 
examination to determine whether such merchandise should be detained or 
can be released. Through this document Customs is proposing that 
merchandise shall be considered to be presented for Customs examination 
when it is in a condition to be viewed and examined by a Customs 
officer. Mere presentation to the examining officer of a cargo van, 
container or instrument of international traffic in which the 
merchandise to be examined is contained will not be considered to be 
presentation of the merchandise for Customs examination for purposes of 
starting the five-day period in which the decision to detain or release 
must be made. Further, consistent with the provisions of Sec. 151.7 of 
the Customs Regulations (19 CFR 151.7), relating to the examination of 
merchandise at a place other than the public stores, the importer shall 
bear any expense involved in preparing the merchandise for Customs 
examination.
    Customs is required to issue a written notice of detention to the 
importer or other party having an interest in the subject merchandise. 
The notice shall advise the importer or other interested party of the 
initiation of the detention, the specific reason for same, the 
anticipated length of the detention, the nature of the tests or 
inquiries to be conducted and the nature of any information which, if 
supplied to Customs, may accelerate the disposition of the detention. 
The importer or other interested party shall be afforded the 
opportunity to remedy the cause for detention and bring the detained 
merchandise into compliance within 30 days after issuance of the 
notice. After 30 days or such longer period as authorized by law, if 
Customs has not made a final determination to release or seize, the 
goods are deemed to be excluded. Under Customs proposal, the 30-day 
limitation may be extended when the importer or interested party 
requests in writing an extension of the detention period, in order to 
comply with Customs requirements. In the absence of a written request 
for an extension, the importer or interested party may file a protest 
as to the exclusion. If, within 30 days after filing of the protest, 
Customs fails to act, the importer or interested party may seek 
judicial review in the Court of International Trade. The detention/
exclusion period will generally not extend beyond 60 days (unless a 
longer period is authorized by law) without the importer or interested 
party being afforded judicial review. At any time during the detention 
period, the merchandise may be seized and forfeited, if the facts so 
warrant. The proposed regulations also permit Customs to allow 
exportation of the goods in lieu of seizure with all costs of 
exportation being borne by the importer.
    The law compels Customs to make timely decisions, provide timely 
notices, disclose available testing results and descriptions of 
procedures and methodologies that are not proprietary to Customs or the 
holder of any copyright or patent, and process any exclusion protests 
within a prescribed statutory time period. If a notice to exclude is 
not issued within such time period, the burden of proof is on Customs 
to show, by a preponderance of the evidence, good cause as to why an 
admissibility decision had not been made prior to the time the importer 
commenced suit. If Customs makes the decision to exclude, an importer 
wishing to challenge the decision shall bear the burden of proof. These 
procedures are applicable to those cases where Customs has the 
responsibility and authority to determine the admissibility of the 
merchandise. They do not apply to those situations where the decision 
of admissibility lies with another Federal agency.
    This document proposes to amend the regulations to accurately 
reflect the statutory changes promulgated by the Mod Act.

Comments

    Before adopting the proposed amendments, consideration will be 
given to any written comments (preferably in triplicate) that are 
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 
Regulations Branch, 1099 14th Street, NW., Suite 4000, Washington, DC.

Regulatory Flexibility Act and Executive Order 12866

    For the reasons given in the preamble to this document, pursuant to 
the provisions of the Regulatory Flexibility Act (5 U.S.C. 601 et 
seq.), it is certified that the proposed amendments would not have a 
significant economic impact on a substantial number of small entities. 
Thus, they are not subject to the requirements of 5 U.S.C. 603 or 604. 
Nor would the proposed rule result in a ``significant regulatory 
action'' under 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 
for review in accordance with the Paperwork Reduction Act of 1995 (44 
U.S.C. 3507).

[[Page 28524]]

    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 collection of information in this document is in Sec. 151.16 
(d) and (f). This information is necessary and will be used to 
determine the admissibility of imported merchandise and to otherwise 
comply with the requirements of the Mod Act and protect the revenue. 
The likely respondents and/or recordkeepers are business or other for-
profit institutions.
    Estimated annual reporting and/or recordkeeping burden: 500 hours.
    Estimated average annual burden per respondent/recordkeeper: 2 
hours.
    Estimated number of respondents and/or recordkeepers: 250.
    Estimated annual frequency of responses: 1.
    Comments on the collection of information should be sent to the 
Office of Management and Budget, Attention: Desk Officer of the 
Department of the Treasury, Office of Information and Regulatory 
Affairs, Washington, DC 20503. A copy should also be sent to the 
Regulations Branch, Office of Regulations and Rulings, U.S. Customs 
Service, 1301 Constitution Avenue, NW., Washington, DC 20229. 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 burden of the collection of 
the information; (c) ways to enhance the quality, utility, and clarity 
of the information to be collected; and (d) ways to minimize the burden 
of the collection of information on respondents, including through the 
use of automated collection techniques or other forms of information 
technology.

List of Subjects in 19 CFR Part 151

    Examination, Sampling and testing of merchandise.

Proposed Amendments to the Regulations

    It is proposed to amend part 151, Customs Regulations (19 CFR part 
151), as set forth below:

PART 151--EXAMINATION, SAMPLING AND TESTING OF MERCHANDISE

    1. The general authority citation for part 151, and the specific 
authority for subpart A, would continue to read as follows:

    Authority: 19 U.S.C. 66, 1202 (General Notes 20 and 21, 
Harmonized Tariff Schedule of the United States), 1624. Subpart A 
also issued under 19 U.S.C. 1499. * * *

    2. It is proposed to amend part 151 by adding a new Sec. 151.16 to 
read as follows:


Sec. 151.16  Detention of merchandise.

    (a) Other agencies not affected. The provisions of this section are 
not applicable to detentions effected by Customs on behalf of other 
agencies of the U.S. Government.
    (b) Decision to detain or release. Within the 5-day period 
(excluding weekends and holidays) following the date on which 
merchandise is presented for Customs examination, Customs shall decide 
whether to release or detain the merchandise. Merchandise which is not 
released within such 5-day period shall be considered to be detained 
merchandise. For purposes of this section, merchandise shall be 
considered to be presented for Customs examination when it is in a 
condition to be viewed and examined by a Customs officer. Mere 
presentation to the examining officer of a cargo van, container or 
instrument of international traffic in which the merchandise to be 
examined is contained will not be considered to be presentation of 
merchandise for Customs examination for purposes of this section. All 
costs relating to the preparation of merchandise for examination shall 
be borne by the importer.
    (c) Notice of detention. If a decision to detain merchandise is 
made, Customs shall issue a notice to the importer or other party 
having an interest in such merchandise no later than 5 days (excluding 
weekends and holidays) after such decision. The notice shall be 
prepared by the Customs officer detaining the merchandise and shall 
advise the importer or other interested party of the:
    (1) Initiation of the detention;
    (2) Specific reason for the detention;
    (3) Anticipated length of the detention;
    (4) Nature of the tests or inquiries to be conducted; and
    (5) Nature of any information which, if supplied to the Customs, 
may accelerate the disposition of the detention.
    (d) Providing testing results. Upon written request by the importer 
or other party having an interest in the detained merchandise, Customs 
shall provide copies of the results of any testing conducted on the 
merchandise together with a description of the testing procedures and 
methodologies used (unless such procedures or methodologies are 
proprietary to the holder of a copyright or patent or were developed by 
Customs for enforcement 9 purposes). The results and test description 
shall be in sufficient detail to permit the duplication and analysis of 
the testing and the results.
    (e) Seizure and forfeiture; denial of entry or exportation. If 
otherwise provided by law, detained merchandise may be seized and 
forfeited. In lieu of seizure and forfeiture, Customs may deny entry 
and, where not otherwise prohibited by law, permit the merchandise to 
be exported with all expenses of exportation being borne by the 
importer.
    (f) Final decisions; extension of time. A final decision with 
respect to detained merchandise will be made within 30 days from the 
date the shipment was detained. The 30-day limitation may be extended 
when the importer or interested party requests in writing an extension 
of the detention period, in order to comply with Customs requirements.
    (g) Effect of failure to make a determination. The failure by 
Customs to make a final determination with respect to the admissibility 
of detained merchandise within 30 days after the merchandise has been 
presented for Customs examination, or such longer period if 
specifically authorized by law, or such extension of time as allowed by 
paragraph (f) of this section, shall be treated as a decision by 
Customs to exclude the merchandise for purposes of Sec. 514(a)(4) of 
the Tariff Act of 1930, as amended (19 U.S.C. 1514(a)(4)). Such 
decision may be the subject of a protest.
    (h) Effect of failure to decide protest. If a protest which is 
filed as a result of exclusion of detained merchandise is not allowed 
or is denied in whole or in part before the 30th day after the day on 
which the protest was filed, it shall be treated as having been denied 
on such 30th day.
    (i) Burden of proof and decisions of the court. Once an action 
respecting a detention is commenced, unless Customs establishes by a 
preponderance of the evidence that an admissibility decision has not 
been reached for good cause, the court shall grant the appropriate 
relief which may include, but is not limited to, an order to cancel the 
detention and release the merchandise.
George J. Weise,
Commissioner of Customs.

    Approved: April 18, 1996.
John P. Simpson,
Deputy Assistant Secretary of the Treasury.
[FR Doc. 96-14124 Filed 6-4-96; 8:45 am]
BILLING CODE 4820-02-P