287
(1) the term ‘‘Border Environment Cooperation
Agreement’’ means the November 1993 Agreement
Between the Government of the United States of
America and the Government of the United Mexican
States Concerning the Establishment of a Border
Environment Cooperation Commission and a North
American Development Bank;
(2) the terms ‘‘Border Environment Coopera-
tion Commission’’ and ‘‘Commission’’ mean the com-
mission established pursuant to Chapter I of the
Border Environment Cooperation Agreement; and
(3) the term ‘‘United States’’ means the United
States, its territories and possessions, and the Com-
monwealth of Puerto Rico.
PART 2—NORTH AMERICAN DEVELOPMENT
BANK AND RELATED PROVISIONS
SEC. 541. NORTH AMERICAN DEVELOPMENT BANK.
(a) ACCEPTANCE OF MEMBERSHIP.—The President
is hereby authorized to accept membership for the United
States in the North American Development Bank (here-
after in this part referred to as the ‘‘Bank’’) provided for
in Chapter II of the Border Environment Cooperation
Agreement (hereafter in this part referred to as the ‘‘Co-
operation Agreement’’).
(b) SUBSCRIPTION OF STOCK.—
288
(1) SUBSCRIPTION AUTHORITY.—
(A) IN GENERAL.—The Secretary of the
Treasury may subscribe on behalf of the United
States up to 150,000 shares of the capital stock
of the Bank.
(B) EFFECTIVENESS OF SUBSCRIPTION.—
Except as provided in paragraph (3), any such
subscription shall be effective only to such ex-
tent or in such amounts as are provided in ad-
vance in appropriations Acts.
(2) LIMITATIONS ON AUTHORIZATION OF AP-
PROPRIATIONS.—For payment by the Secretary of
the Treasury of the subscription of the United
States for shares described in paragraph (1), there
are authorized to be appropriated $1,500,000,000
($225,000,000 of which may be used for paid-in
capital and $1,275,000,000 of which may be used
for callable capital) without fiscal year limitation.
(3) FUNDING; LIMITATION ON CALLABLE CAP-
ITAL SUBSCRIPTIONS.—
(A) FUNDING.—For fiscal year 1995, the
Secretary of the Treasury shall pay to the Bank
out of any sums in the Treasury not otherwise
appropriated the sum of $56,250,000 for the
paid-in portion of the United States share of
289
the capital stock of the Bank, 10 percent of
which may be transferred by the Bank to the
President pursuant to section 543 to pay for
the cost of direct and guaranteed Federal loans.
(B) LIMITATION
ON
CALLABLE
CAPITAL
SUBSCRIPTIONS.—For fiscal year 1995, the
Secretary of the Treasury shall subscribe to the
callable capital portion of the United States
share of the capital stock of the Bank in an
amount not to exceed $318,750,000.
(4) DISPOSITION OF NET INCOME DISTRIBUTED
BY
THE
FACILITY.—Any payment made to the
United States by the Bank as a distribution of net
income shall be covered into the Treasury as a mis-
cellaneous receipt.
(c) COMPENSATION OF BOARD MEMBERS.—No per-
son shall be entitled to receive any salary or other com-
pensation from the Bank or the United States for services
as a Board member.
(d) APPLICABILITY
OF BRETTON WOODS AGREE-
MENTS ACT.—The provisions of section 4 of the Bretton
Woods Agreements Act shall apply with respect to the
Bank to the same extent as with respect to the Inter-
national Bank for Reconstruction and Development and
the International Monetary Fund.
290
(e) RESTRICTIONS.—Unless authorized by law, nei-
ther the President nor any person or agency shall, on be-
half of the United States—
(1) subscribe to additional shares of stock of
the Bank;
(2) vote for or agree to any amendment of the
Cooperation Agreement which increases the obliga-
tions of the United States, or which changes the
purpose or functions of the Bank; or
(3) make a loan or provide other financing to
the Bank.
(f) FEDERAL RESERVE BANKS AS DEPOSITORIES.—
Any Federal Reserve bank that is requested to do so by
the Bank shall act as its depository or as its fiscal agent,
and the Board of Governors of the Federal Reserve Sys-
tem shall supervise and direct the carrying out of these
functions by the Federal Reserve banks.
(g) JURISDICTION OF UNITED STATES COURTS AND
ENFORCEMENT OF ARBITRAL AWARDS.—For the purpose
of any civil action which may be brought within the United
States, its territories or possessions, or the Commonwealth
of Puerto Rico, by or against the Bank in accordance with
the Cooperation Agreement, including an action brought
to enforce an arbitral award against the Bank, the Bank
shall be deemed to be an inhabitant of the Federal judicial
291
district in which its principal office within the United
States or its agency appointed for the purpose of accepting
service or notice of service is located, and any such action
to which the Bank shall be a party shall be deemed to
arise under the laws of the United States, and the district
courts of the United States, including the courts enumer-
ated in section 460 of title 28, United States Code, shall
have original jurisdiction of any such action. When the
Bank is a defendant in any action in a State court, it may
at any time before trial remove the action into the appro-
priate district court of the United States by following the
procedure for removal provided in section 1446 of title 28,
United States Code.
(h) EXEMPTION FROM SECURITIES LAWS FOR CER-
TAIN SECURITIES ISSUED BY THE BANK; REPORTS RE-
QUIRED.—
(1) EXEMPTIONS FROM LIMITATIONS AND RE-
STRICTIONS ON THE POWER OF NATIONAL BANKING
ASSOCIATIONS TO DEAL IN AND UNDERWRITE IN-
VESTMENT SECURITIES OF THE BANK.—The seventh
sentence of the seventh undesignated paragraph of
section 5136 of the Revised Statutes of the United
States (12 U.S.C. 24), is amended by inserting ‘‘the
North American Development Bank,’’ after ‘‘Inter-
American Development Bank,’’.
292
(2) EXEMPTION FROM SECURITIES LAWS FOR
CERTAIN
SECURITIES
ISSUED
BY
THE
BANK; RE-
PORTS
REQUIRED.—Any securities issued by the
Bank (including any guarantee by the Bank, wheth-
er or not limited in scope) in connection with the
raising of funds for inclusion in the Bank’s capital
resources as defined in Section 4 of Article II of
Chapter II of the Cooperation Agreement, and any
securities guaranteed by the Bank as to both the
principal and interest to which the commitment in
Section 3(d) of Article II of Chapter II of the Co-
operation Agreement is expressly applicable, shall be
deemed to be exempted securities within the mean-
ing of section 3(a)(2) of the Securities Act of 1933
(15 U.S.C. 77c), and section 3(a)(12) of the Securi-
ties Exchange Act of 1934 (15 U.S.C. 78c). The
Bank shall file with the Securities and Exchange
Commission such annual and other reports with re-
gard to such securities as the Commission shall de-
termine to be appropriate in view of the special char-
acter of the Bank and its operations and necessary
in the public interest or for the protection of inves-
tors.
(3) AUTHORITY OF SECURITIES AND EXCHANGE
COMMISSION TO SUSPEND EXEMPTION; REPORTS TO
293
THE
CONGRESS.—The Securities and Exchange
Commission, acting in consultation with the Na-
tional Advisory Council on International Monetary
and Financial Problems, is authorized to suspend
the provisions of paragraph (2) at any time as to
any or all securities issued or guaranteed by the
Bank during the period of such suspension. The
Commission shall include in its annual reports to
Congress such information as it shall deem advisable
with regard to the operations and effect of this sub-
section and in connection therewith shall include any
views submitted for such purpose by any association
of dealers registered with the Commission.
SEC. 542. STATUS, IMMUNITIES, AND PRIVILEGES.
Article VIII of Chapter II of the Cooperation Agree-
ment shall have full force and effect in the United States,
its territories and possessions, and the Commonwealth of
Puerto Rico, upon entry into force of the Cooperation
Agreement.
SEC. 543. COMMUNITY ADJUSTMENT AND INVESTMENT
PROGRAM.
(a) THE PRESIDENT.—(1) The President may enter
into an agreement with the Bank that facilitates imple-
mentation by the President of a program for community
adjustment and investment in support of the Agreement
294
pursuant to chapter II of the Cooperation Agreement
(hereafter in this section referred to as the ‘‘community
adjustment and investment program’’).
(2) The President may receive from the Bank 10 per-
cent of the paid-in capital actually paid to the Bank by
the United States for the President to carry out, without
further appropriations, through Federal agencies and
their loan and loan guarantee programs, the community
adjustment and investment program, pursuant to an
agreement between the President and the Bank.
(3) The President may select one or more Federal
agencies that make loans or guarantees the repayment of
loans to assist in carrying out the community adjustment
and investment program, and may transfer the funds re-
ceived from the Bank to such agency or agencies for the
purpose of assisting in carrying out the community adjust-
ment and investment program.
(4)(A) Each Federal agency selected by the President
to assist in carrying out the community adjustment and
investment program shall use the funds transferred to it
by the President from the Bank to pay for the costs of
direct and guaranteed loans, as defined in section 502 of
the Congressional Budget Act of 1974, and, as appro-
priate, other costs associated with such loans, all subject
295
to the restrictions and limitations that apply to such agen-
cy’s existing loan or loan guarantee program.
(B) Funds transferred to an agency under subpara-
graph (A) shall be in addition to the amount of funds au-
thorized in any appropriations Act to be expended by that
agency for its loan or loan guarantee program.
(5) The President shall—
(A) establish guidelines for the loans and loan
guarantees to be made under the community adjust-
ment and investment program;
(B) endorse the grants made by the Bank for
the community adjustment and investment program,
as provided in Article I, section 1(b), and Article III,
section 11(a), of Chapter II of the Cooperation
Agreement; and
(C) endorse any loans or guarantees made by
the Bank for the community adjustment and invest-
ment program, as provided in Article I, section 1(b),
and Article III, section 6(a) and (c) of Chapter II
of the Cooperation Agreement.
(b) ADVISORY COMMITTEE.—
(1) ESTABLISHMENT.—The President shall es-
tablish an advisory committee to be known as the
Community Adjustment and Investment Program
Advisory Committee (in this section referred to as
296
the ‘‘Advisory Committee’’) in accordance with the
provisions of the Federal Advisory Committee Act.
(2) MEMBERSHIP.—
(A) IN GENERAL.—The Advisory Commit-
tee shall consist of 9 members of the public, ap-
pointed by the President, who, collectively, rep-
resent—
(i) community groups whose constitu-
encies include low-income families;
(ii) any scientific, professional, busi-
ness, nonprofit, or public interest organiza-
tion or association which is neither affili-
ated with, nor under the direction of, a
government;
(iii) for-profit business interests; and
(iv) other appropriate entities with
relevant expertise.
(B) REPRESENTATION.—Each of the cat-
egories described in clauses (i) through (iv) of
subparagraph (A) shall be represented by no
fewer than 1 and no more than 3 members of
the Advisory Committee.
(3) FUNCTION.—It shall be the function of the
Advisory Committee—
297
(A) to provide advice to the President re-
garding the implementation of the community
adjustment and investment program, including
advice on the guidelines to be established by the
President for the loans and loan guarantees to
be made pursuant to subsection (a)(4), advice
on identifying the needs for adjustment assist-
ance and investment in support of the goals and
objectives of the Agreement, taking into ac-
count economic and geographic considerations,
and advice on such other matters as may be re-
quested by the President; and
(B) to review on a regular basis the oper-
ation of the community adjustment and invest-
ment program and provide the President with
the conclusions of its review.
(4) TERMS OF MEMBERS.—
(A) IN GENERAL.—Each member of the
Advisory Committee shall serve at the pleasure
of the President.
(B) CHAIRPERSON.—The President shall
appoint a chairperson from among the members
of the Advisory Committee.
(C) MEETINGS.—The Advisory Committee
shall meet at least annually and at such other
298
times as requested by the President or the
chairperson. A majority of the members of the
Advisory Committee shall constitute a quorum.
(D) REIMBURSEMENT
FOR
EXPENSES.—
The members of the Advisory Committee may
receive reimbursement for travel, per diem, and
other necessary expenses incurred in the per-
formance of their duties, in accordance with the
Federal Advisory Committee Act.
(E) STAFF
AND
FACILITIES.—The Advi-
sory Committee may utilize the facilities and
services of employees of any Federal agency
without cost to the Advisory Committee, and
any such agency is authorized to provide serv-
ices as requested by the Committee.
(c) OMBUDSMAN.—The President shall appoint an
ombudsman to provide the public with an opportunity to
participate in the carrying out of the community adjust-
ment and investment program.
(1) FUNCTION.—It shall be the function of the
ombudsman—
(A) to establish procedures for receiving
comments from the general public on the oper-
ation of the community adjustment and invest-
ment program, to receive such comments, and
299
to provide the President with summaries of the
public comments; and
(B) to perform an independent inspection
and programmatic audit of the operation of the
community adjustment and investment program
and to provide the President with the conclu-
sions of its investigation and audit.
(2) AUTHORIZATION
OF
APPROPRIATIONS.—
There are authorized to be appropriated to the
President, or such agency as the President may des-
ignate, $25,000 for fiscal year 1995 and for each
fiscal year thereafter, for the costs of the ombuds-
man.
(d) REPORTING
REQUIREMENT.—The President
shall submit to the appropriate congressional committees
an annual report on the community adjustment and in-
vestment program (if any) that is carried out pursuant
to this section. Each report shall state the amount of the
loans made or guaranteed during the 12-month period
ending on the day before the date of the report.
SEC. 544. DEFINITION.
For purposes of this part, the term ‘‘Border Environ-
ment Cooperation Agreement’’ (referred to in this part as
the ‘‘Cooperation Agreement’’) means the November 1993
Agreement Between the Government of the United States
300
of America and the Government of the United Mexican
States Concerning the Establishment of a Border Envi-
ronment Cooperation Commission and a North American
Development Bank.
TITLE VI—CUSTOMS
MODERNIZATION
SEC. 601. REFERENCE.
Whenever in subtitle A, B, or C an amendment or
repeal is expressed in terms of an amendment to, or repeal
of, a part, section, subsection, or other provision, the ref-
erence shall be considered to be made a part, section, sub-
section, or other provision of the Tariff Act of 1930 (19
U.S.C. 1202 et seq.).
Subtitle A—Improvements in
Customs Enforcement
SEC. 611. PENALTIES FOR VIOLATIONS OF ARRIVAL, RE-
PORTING, ENTRY, AND CLEARANCE REQUIRE-
MENTS.
Section 436 (19 U.S.C. 1436) is amended—
(1) by amending subsection (a)—
(A) by striking out ‘‘433’’ in paragraph (1)
and inserting ‘‘431, 433, or 434 of this Act or
section 4197 of the Revised Statutes of the
United States (46 U.S.C. App. 91)’’,
301
(B) by amending paragraph (2) to read as
follows:
‘‘(2) to present or transmit, electronically or
otherwise, any forged, altered, or false document,
paper, information, data or manifest to the Customs
Service under section 431(e), 433(d), or 434 of this
Act or section 4197 of the Revised Statutes of the
United States (46 U.S.C. App. 91) without revealing
the facts; or’’, and
(C) by amending paragraph (3) to read as
follows:
‘‘(3) to fail to make entry or to obtain clearance
as required by section 434 or 644 of this Act, sec-
tion 4197 of the Revised Statutes of the United
States (46 U.S.C. App. 91), or section 1109 of the
Federal Aviation Act of 1958 (49 U.S.C. App.
1509); or’’; and
(2) by striking out ‘‘AND ENTRY’’ in the sec-
tion heading and inserting ‘‘ENTRY, AND CLEAR-
ANCE’’.
SEC. 612. FAILURE TO DECLARE.
Section 497(a) (19 U.S.C. 1497(a)) is amended—
(1) by inserting ‘‘or transmitted’’ after ‘‘made’’
in paragraph (1)(A); and
302
(2) by amending paragraph (2)(A) to read as
follows:
‘‘(A) if the article is a controlled sub-
stance, either $500 or an amount equal to
1,000 percent of the value of the article, which-
ever amount is greater; and’’.
SEC. 613. CUSTOMS TESTING LABORATORIES; DETENTION
OF MERCHANDISE.
(a) AMENDMENT.—Section 499 (19 U.S.C. 1499) is
amended to read as follows:
‘‘SEC. 499. EXAMINATION OF MERCHANDISE.
‘‘(a) ENTRY EXAMINATION.—
‘‘(1) IN GENERAL.—Imported merchandise that
is required by law or regulation to be inspected, ex-
amined, or appraised shall not be delivered from cus-
toms custody (except under such bond or other secu-
rity as may be prescribed by the Secretary to assure
compliance with all applicable laws, regulations, and
instructions which the Secretary or the Customs
Service is authorized to enforce) until the merchan-
dise has been inspected, appraised, or examined and
is reported by the Customs Service to have been
truly and correctly invoiced and found to comply
with the requirements of the laws of the United
States.
303
‘‘(2) EXAMINATION.—The Customs Service—
‘‘(A) shall designate the packages or quan-
tities of merchandise covered by any invoice or
entry which are to be opened and examined for
the purpose of appraisement or otherwise;
‘‘(B) shall order such packages or quan-
tities to be sent to such place as is designated
by the Secretary by regulation for such pur-
pose;
‘‘(C) may require such additional packages
or quantities as the Secretary considers nec-
essary for such purpose; and
‘‘(D) shall inspect a sufficient number of
shipments, and shall examine a sufficient num-
ber of entries, to ensure compliance with the
laws enforced by the Customs Service.
‘‘(3) UNSPECIFIED ARTICLES.—If any package
contains any article not specified in the invoice or
entry and, in the opinion of the Customs Service, the
article was omitted from the invoice or entry—
‘‘(A) with fraudulent intent on the part of
the seller, shipper, owner, agent, importer of
record, or entry filer, the contents of the entire
package in which such article is found shall be
subject to seizure; or
304
‘‘(B) without fraudulent intent, the value
of the article shall be added to the entry and
the duties, fees, and taxes thereon paid accord-
ingly.
‘‘(4) DEFICIENCY.—If a deficiency is found in
quantity, weight, or measure in the examination of
any package, the person finding the deficiency shall
make a report thereof to the Customs Service. The
Customs Service shall make allowance for the defi-
ciency in the liquidation of duties.
‘‘(5) INFORMATION REQUIRED FOR RELEASE.—
If an examination is conducted, any information re-
quired for release shall be provided, either electroni-
cally or in paper form, to the Customs Service at the
port of examination. The absence of such informa-
tion does not limit the authority of the Customs
Service to conduct an examination.
‘‘(b) TESTING LABORATORIES.—
‘‘(1) ACCREDITATION
OF
PRIVATE
TESTING
LABORATORIES.—The Customs Service shall estab-
lish and implement a procedure, under regulations
promulgated by the Secretary, for accrediting pri-
vate laboratories within the United States which
may be used to perform tests (that would otherwise
be performed by Customs Service laboratories) to es-
305
tablish the characteristics, quantities, or composition
of imported merchandise. Such regulations—
‘‘(A) shall establish the conditions required
for the laboratories to receive and maintain ac-
creditation for purposes of this subsection;
‘‘(B) shall establish the conditions regard-
ing the suspension and revocation of accredita-
tion, which may include the imposition of a
monetary penalty not to exceed $100,000 and
such penalty is in addition to the recovery, from
a gauger or laboratory accredited under para-
graph (1), of any loss of revenue that may have
occurred, but the Customs Service—
‘‘(i) may seek to recover lost revenue
only in cases where the gauger or labora-
tory intentionally falsified the analysis or
gauging report in collusion with the im-
porter; and
‘‘(ii) shall neither assess penalties nor
seek to recover lost revenue because of a
good faith difference of professional opin-
ion; and
‘‘(C) may provide for the imposition of a
reasonable charge for accreditation and periodic
reaccreditation.
306
The collection of any charge for accreditation and
reaccreditation under this section is not prohibited
by section 13031(e)(6) of the Consolidated Omnibus
Budget Reconciliation Act of 1985 (19 U.S.C.
58c(e)(6)).
‘‘(2) APPEAL OF ADVERSE ACCREDITATION DE-
CISIONS.—A laboratory applying for accreditation,
or that is accredited, under this section may contest
any decision or order of the Customs Service deny-
ing, suspending, or revoking accreditation, or impos-
ing a monetary penalty, by commencing an action in
accordance with chapter 169 of title 28, United
States Code, in the Court of International Trade
within 60 days after issuance of the decision or
order.
‘‘(3) 
TESTING
BY
ACCREDITED
LABORA-
TORIES.—When requested by an importer of record
of merchandise, the Customs Service shall authorize
the release to the importer of a representative sam-
ple of the merchandise for testing, at the expense of
the importer, by a laboratory accredited under para-
graph (1). The testing results from a laboratory ac-
credited under paragraph (1) that are submitted by
an importer of record with respect to merchandise in
an entry shall, in the absence of testing results ob-
307
tained from a Customs Service laboratory, be accept-
ed by the Customs Service if the importer of record
certifies that the sample tested was taken from the
merchandise in the entry. Nothing in this subsection
shall be construed to limit in any way or preclude
the authority of the Customs Service to test or ana-
lyze any sample or merchandise independently.
‘‘(4) AVAILABILITY
OF
TESTING
PROCEDURE,
METHODOLOGIES, AND INFORMATION.—Testing pro-
cedures and methodologies used by the Customs
Service, and information resulting from any testing
conducted by the Customs Service, shall be made
available as follows:
‘‘(A) Testing procedures and methodologies
shall be made available upon request to any
person unless the procedures or methodologies
are—
‘‘(i) proprietary to the holder of a
copyright or patent related to such proce-
dures or methodologies, or
‘‘(ii) developed by the Customs Serv-
ice for enforcement purposes.
‘‘(B) Information resulting from testing
shall be made available upon request to the im-
308
porter of record and any agent thereof unless
the information reveals information which is—
‘‘(i) proprietary to the holder of a
copyright or patent; or
‘‘(ii) developed by the Customs Serv-
ice for enforcement purposes.
‘‘(5) MISCELLANEOUS
PROVISIONS.—For pur-
poses of this subsection—
‘‘(A) any reference to a private laboratory
includes a reference to a private gauger; and
‘‘(B) accreditation of private laboratories
extends only to the performance of functions by
such laboratories that are within the scope of
those responsibilities for determinations of the
elements relating to admissibility, quantity,
composition, or characteristics of imported mer-
chandise that are vested in, or delegated to, the
Customs Service.
‘‘(c) DETENTIONS.—Except in the case of merchan-
dise with respect to which the determination of admissibil-
ity is vested in an agency other than the Customs Service,
the following apply:
‘‘(1) IN
GENERAL.—Within the 5-day period
(excluding weekends and holidays) following the date
on which merchandise is presented for customs ex-
309
amination, the Customs Service 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.
‘‘(2) NOTICE
OF
DETENTION.—The Customs
Service shall issue a notice to the importer or other
party having an interest in detained merchandise no
later than 5 days, excluding weekends and holidays,
after the decision to detain the merchandise is made.
The notice shall advise the importer or other inter-
ested party of—
‘‘(A) the initiation of the detention;
‘‘(B) the specific reason for the detention;
‘‘(C) the anticipated length of the deten-
tion;
‘‘(D) the nature of the tests or inquiries to
be conducted; and
‘‘(E) the nature of any information which,
if supplied to the Customs Service, may acceler-
ate the disposition of the detention.
‘‘(3) TESTING RESULTS.—Upon request by the
importer or other party having an interest in de-
tained merchandise, the Customs Service shall pro-
vide the party with copies of the results of any test-
ing conducted by the Customs Service on the mer-
310
chandise and a description of the testing procedures
and methodologies (unless such procedures or meth-
odologies are proprietary to the holder of a copyright
or patent or were developed by the Customs Service
for enforcement purposes). The results and test de-
scription shall be in sufficient detail to permit the
duplication and analysis of the testing and the re-
sults.
‘‘(4) SEIZURE AND FORFEITURE.—If otherwise
provided by law, detained merchandise may be seized
and forfeited.
‘‘(5) EFFECT OF FAILURE TO MAKE DETER-
MINATION.—
‘‘(A) The failure by the Customs Service 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, shall be treated
as a decision of the Customs Service to exclude
the merchandise for purposes of section
514(a)(4).
‘‘(B) For purposes of section 1581 of title
28, United States Code, a protest against the
decision to exclude the merchandise which has
311
not been allowed or denied in whole or in part
before the 30th day after the day on which the
protest was filed shall be treated as having been
denied on such 30th day.
‘‘(C) Notwithstanding section 2639 of title
28, United States Code, once an action respect-
ing a detention is commenced, unless the Cus-
toms Service 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 de-
tention and release the merchandise.’’.
(b) EXISTING LABORATORIES.—Accreditation under
section 499(b) of the Tariff Act of 1930 (as added by sub-
section (a)) is not required for any private laboratory (in-
cluding any gauger) that was accredited or approved by
the Customs Service as of the day before the date of the
enactment of this Act; but any such laboratory is subject
to reaccreditation under the provisions of such section and
the regulations promulgated thereunder.
SEC. 614. RECORDKEEPING.
Section 508 (19 U.S.C. 1508) is amended—
(1) by amending subsection (a) to read as fol-
lows:
312
‘‘(a) REQUIREMENTS.—Any—
‘‘(1) owner, importer, consignee, importer of
record, entry filer, or other party who—
‘‘(A) imports merchandise into the customs
territory of the United States, files a drawback
claim, or transports or stores merchandise car-
ried or held under bond, or
‘‘(B) knowingly causes the importation or
transportation or storage of merchandise car-
ried or held under bond into or from the cus-
toms territory of the United States;
‘‘(2) agent of any party described in paragraph
(1); or
‘‘(3) person whose activities require the filing of
a declaration or entry, or both;
shall make, keep, and render for examination and inspec-
tion records (which for purposes of this section include,
but are not limited to, statements, declarations, docu-
ments and electronically generated or machine readable
data) which—
‘‘(A) pertain to any such activity, or to the in-
formation contained in the records required by this
Act in connection with any such activity; and
‘‘(B) are normally kept in the ordinary course
of business.’’; and
313
(2) by amending subsection (c) to read as fol-
lows:
‘‘(c) PERIOD OF TIME.—The records required by sub-
sections (a) and (b) shall be kept for such period of time,
not to exceed 5 years from the date of entry or expor-
tation, as appropriate, as the Secretary shall prescribe; ex-
cept that records for any drawback claim shall be kept
until the 3rd anniversary of the date of payment of the
claim.’’.
SEC. 615. EXAMINATION OF BOOKS AND WITNESSES.
Section 509 (19 U.S.C. 1509) is amended as follows:
(1) Subsection (a) is amended—
(A) by striking out ‘‘and taxes’’ wherever
it appears and inserting ‘‘, fees and taxes’’;
(B) by amending paragraph (1) to read as
follows:
‘‘(1) examine, or cause to be examined, upon
reasonable notice, any record (which for purposes of
this section, includes, but is not limited to, any
statement, declaration, document, or electronically
generated or machine readable data) described in
the notice with reasonable specificity, which may be
relevant to such investigation or inquiry, except
that—
314
‘‘(A) if such record is required by law or
regulation for the entry of the merchandise
(whether or not the Customs Service required
its presentation at the time of entry) it shall be
provided to the Customs Service within a rea-
sonable time after demand for its production is
made, taking into consideration the number,
type, and age of the item demanded; and
‘‘(B) if a person of whom demand is made
under subparagraph (A) fails to comply with
the demand, the person may be subject to pen-
alty under subsection (g);’’;
(C) by amending that part of paragraph
(2) that precedes subparagraph (D) to read as
follows:
‘‘(2) summon, upon reasonable notice—
‘‘(A) the person who—
‘‘(i) imported, or knowingly caused to
be imported, merchandise into the customs
territory of the United States,
‘‘(ii) exported merchandise, or know-
ingly caused merchandise to be exported,
to Canada,
‘‘(iii) transported or stored merchan-
dise that was or is carried or held under
315
customs bond, or knowingly caused such
transportation or storage, or
‘‘(iv) filed a declaration, entry, or
drawback claim with the Customs Service;
‘‘(B) any officer, employee, or agent of any
person described in subparagraph (A);
‘‘(C) any person having possession, custody
or care of records relating to the importation or
other activity described in subparagraph (A);
or’’; and
(D) by striking out the comma at the end
of subparagraph (D) and inserting a semicolon.
(2) Subsections (b) and (c) are redesignated as
subsections (c) and (d), respectively.
(3) The following new subsection is inserted
after subsection (a):
‘‘(b) REGULATORY AUDIT PROCEDURES.—
‘‘(1) In conducting a regulatory audit under
this section (which does not include a quantity ver-
ification for a customs bonded warehouse or general
purpose foreign trade zone), the Customs Service
auditor shall provide the person being audited, in
advance of the audit, with a reasonable estimate of
the time to be required for the audit. If in the
course of an audit it becomes apparent that addi-
316
tional time will be required, the Customs Service
auditor shall immediately provide a further estimate
of such additional time.
‘‘(2) Before commencing an audit, the Customs
Service auditor shall inform the party to be audited
of his right to an entry conference at which time the
purpose will be explained and an estimated termi-
nation date set. Upon completion of on-site audit ac-
tivities, the Customs Service auditor shall schedule a
closing conference to explain the preliminary results
of the audit.
‘‘(3) Except as provided in paragraph (5), if the
estimated or actual termination date for an audit
passes without the Customs Service auditor provid-
ing a closing conference to explain the results of the
audit, the person being audited may petition in writ-
ing for such a conference to the appropriate regional
commissioner, who, upon receipt of such a request,
shall provide for such a conference to be held within
15 days after the date of receipt.
‘‘(4) Except as provided in paragraph (5), the
Customs Service auditor shall complete the formal
written audit report within 90 days following the
closing conference unless the appropriate regional
commissioner provides written notice to the person
317
being audited of the reason for any delay and the
anticipated completion date. After application of any
exemption contained in section 552 of title 5, United
States Code, a copy of the formal written audit re-
port shall be sent to the person audited no later
than 30 days following completion of the report.
‘‘(5) Paragraphs (3) and (4) shall not apply
after the Customs Service commences a formal in-
vestigation with respect to the issue involved.’’.
(4) Subsection (d) (as redesignated by para-
graph (2)) is amended—
(A) by striking out ‘‘statements, declara-
tions, or documents’’ in paragraph (1)(A) and
inserting ‘‘those’’;
(B) by inserting ‘‘, unless such custom-
house broker is the importer of record on an
entry’’ after ‘‘broker’’ in paragraph (1)(C)(i);
(C) by striking out ‘‘import’’ in each of
paragraphs (2)(B) and (4)(B);
(D) by inserting ‘‘described in section
508’’ after ‘‘transactions’’ in each of para-
graphs (2)(B) and (4)(B); and
(E) by inserting ‘‘, fees,’’ after ‘‘duties’’ in
paragraph (4)(A).
318
(5) The following new subsections are added at
the end thereof:
‘‘(e) LIST OF RECORDS AND INFORMATION.—The
Customs Service shall identify and publish a list of the
records or entry information that is required to be main-
tained and produced under subsection (a)(1)(A).
‘‘(f) RECORDKEEPING COMPLIANCE PROGRAM.—
‘‘(1) IN GENERAL.—After consultation with the
importing community, the Customs Service shall by
regulation establish a recordkeeping compliance pro-
gram which the parties listed in section 508(a) may
participate in after being certified by the Customs
Service under paragraph (2). Participation in the
recordkeeping compliance program by recordkeepers
is voluntary.
‘‘(2) CERTIFICATION.—A recordkeeper may be
certified as a participant in the recordkeeping com-
pliance program after meeting the general record-
keeping requirements established under the program
or after negotiating an alternative program suited to
the needs of the recordkeeper and the Customs Serv-
ice. Certification requirements shall take into ac-
count the size and nature of the importing business
and the volume of imports. In order to be certified,
319
the recordkeeper must be able to demonstrate that
it—
‘‘(A) understands the legal requirements
for recordkeeping, including the nature of the
records required to be maintained and produced
and the time periods involved;
‘‘(B) has in place procedures to explain the
recordkeeping requirements to those employees
who are involved in the preparation, mainte-
nance, and production of required records;
‘‘(C) has in place procedures regarding the
preparation 
and 
maintenance 
of 
required
records, and the production of such records to
the Customs Service;
‘‘(D) has designated a dependable individ-
ual or individuals to be responsible for record-
keeping compliance under the program and
whose duties include maintaining familiarity
with the recordkeeping requirements of the
Customs Service;
‘‘(E) has a record maintenance procedure
approved by the Customs Service for original
records, or, if approved by the Customs Service,
for alternative records or recordkeeping formats
other than the original records; and
320
‘‘(F) has procedures for notifying the Cus-
toms Service of occurrences of variances to, and
violations of, the requirements of the record-
keeping compliance program or the negotiated
alternative programs, and for taking corrective
action when notified by the Customs Service of
violations or problems regarding such program.
‘‘(g) PENALTIES.—
‘‘(1) DEFINITION.—For purposes of this sub-
section, the term ‘information’ means any record,
statement, declaration, document, or electronically
stored or transmitted information or data referred to
in subsection (a)(1)(A).
‘‘(2) EFFECTS OF FAILURE TO COMPLY WITH
DEMAND.—Except as provided in paragraph (4), if
a person fails to comply with a lawful demand for
information under subsection (a)(1)(A) the following
provisions apply:
‘‘(A) If the failure to comply is a result of
the willful failure of the person to maintain,
store, or retrieve the demanded information,
such person shall be subject to a penalty, for
each release of merchandise, not to exceed
$100,000, or an amount equal to 75 percent of
321
the appraised value of the merchandise, which-
ever amount is less.
‘‘(B) If the failure to comply is a result of
the negligence of the person in maintaining,
storing, or retrieving the demanded informa-
tion, such person shall be subject to a penalty,
for each release of merchandise, not to exceed
$10,000, or an amount equal to 40 percent of
the appraised value of the merchandise, which-
ever amount is less.
‘‘(C) In addition to any penalty imposed
under subparagraph (A) or (B) regarding de-
manded information, if such information related
to the eligibility of merchandise for a column 1
special rate of duty under title I, the entry of
such merchandise—
‘‘(i) if unliquidated, shall be liquidated
at the applicable column 1 general rate of
duty; or
‘‘(ii) if liquidated within the 2-year
period preceding the date of the demand,
shall be reliquidated, notwithstanding the
time limitation in section 514 or 520, at
the applicable column 1 general rate of
duty;
322
except that any liquidation or reliquidation
under clause (i) or (ii) shall be at the applicable
column 2 rate of duty if the Customs Service
demonstrates that the merchandise should be
dutiable at such rate.
‘‘(3) AVOIDANCE
OF
PENALTY.—No penalty
may be assessed under this subsection if the person
can show—
‘‘(A) that the loss of the demanded infor-
mation was the result of an act of God or other
natural casualty or disaster beyond the fault of
such person or an agent of the person;
‘‘(B) on the basis of other evidence satis-
factory to the Customs Service, that the de-
mand was substantially complied with; or
‘‘(C) the information demanded was pre-
sented to and retained by the Customs Service
at the time of entry or submitted in response to
an earlier demand.
‘‘(4) PENALTIES NOT EXCLUSIVE.—Any penalty
imposed under this subsection shall be in addition to
any other penalty provided by law except for—
‘‘(A) a penalty imposed under section 592
for a material omission of the demanded infor-
mation, or
323
‘‘(B) disciplinary action taken under sec-
tion 641.
‘‘(5) REMISSION
OR
MITIGATION.—A penalty
imposed under this section may be remitted or miti-
gated under section 618.
‘‘(6) CUSTOMS SUMMONS.—Nothing in this sub-
section shall limit or preclude the Customs Service
from issuing, or seeking the enforcement of, a cus-
toms summons.
‘‘(7) ALTERNATIVES TO PENALTIES.—
‘‘(A) IN GENERAL.—When a recordkeeper
who—
‘‘(i) has been certified as a participant
in the recordkeeping compliance program
under subsection (f); and
‘‘(ii) is generally in compliance with
the appropriate procedures and require-
ments of the program;
does not produce a demanded record or infor-
mation for a specific release or provide the in-
formation by acceptable alternative means, the
Customs Service, in the absence of willfulness
or repeated violations, shall issue a written no-
tice of the violation to the recordkeeper in lieu
of a monetary penalty. Repeated violations by
324
the recordkeeper may result in the issuance of
penalties and removal of certification under the
program until corrective action, satisfactory to
the Customs Service, is taken.
‘‘(B) CONTENTS OF NOTICE.—A notice of
violation issued under subparagraph (A) shall—
‘‘(i) state that the recordkeeper has
violated the recordkeeping requirements;
‘‘(ii) indicate the record or informa-
tion which was demanded; and
‘‘(iii) warn the recordkeeper that fu-
ture failures to produce demanded records
or information may result in the imposition
of monetary penalties.
‘‘(C) RESPONSE
TO
NOTICE.—Within a
reasonable time after receiving written notice
under subparagraph (A), the recordkeeper shall
notify the Customs Service of the steps it has
taken to prevent a recurrence of the violation.
‘‘(D) REGULATIONS.—The Secretary shall
promulgate regulations to implement this para-
graph. Such regulations may specify the time
periods for compliance with a demand for infor-
mation and provide guidelines which define re-
peated violations for purposes of this para-
325
graph. Any penalty issued for a recordkeeping
violation shall take into account the degree of
compliance compared to the total number of im-
portations, the nature of the demanded records
and the recordkeeper’s cooperation.’’.
SEC. 616. JUDICIAL ENFORCEMENT.
The second sentence of section 510(a) (19 U.S.C.
1510(a)) is amended by inserting ‘‘and such court may
assess a monetary penalty’’ after ‘‘as a contempt thereof’’.
SEC. 617. REVIEW OF PROTESTS.
Section 515 (19 U.S.C. 1515) is amended by insert-
ing at the end the following new subsections:
‘‘(c) If a protesting party believes that an application
for further review was erroneously or improperly denied
or was denied without authority for such action, it may
file with the Commissioner of Customs a written request
that the denial of the application for further review be set
aside. Such request must be filed within 60 days after the
date of the notice of the denial. The Commissioner of Cus-
toms may review such request and, based solely on the
information before the Customs Service at the time the
application for further review was denied, may set aside
the denial of the application for further review and void
the denial of protest, if appropriate. If the Commissioner
of Customs fails to act within 60 days after the date of
326
the request, the request shall be considered denied. All de-
nials of protests are effective from the date of original de-
nial for purposes of section 2636 of title 28, United States
Code. If an action is commenced in the Court of Inter-
national Trade that arises out of a protest or an applica-
tion for further review, all administrative action pertaining
to such protest or application shall terminate and any ad-
ministrative action taken subsequent to the commence-
ment of the action is null and void.
‘‘(d) If a protest is timely and properly filed, but is
denied contrary to proper instructions, the Customs Serv-
ice may on its own initiative, or pursuant to a written re-
quest by the protesting party filed with the appropriate
district director within 90 days after the date of the pro-
test denial, void the denial of the protest.’’.
SEC. 618. REPEAL OF PROVISION RELATING TO RELIQUIDA-
TION ON ACCOUNT OF FRAUD.
Section 521 (19 U.S.C. 1521) is repealed.
SEC. 619. PENALTIES RELATING TO MANIFESTS.
Section 584 (19 U.S.C. 1584) is amended—
(1) by amending subsection (a)—
(A) by striking out ‘‘appropriate customs
officer’’ wherever it appears and inserting
‘‘Customs Service’’,
327
(B) by striking out ‘‘officer demanding the
same’’ in paragraph (1) and inserting ‘‘officer
(whether of the Customs Service or the Coast
Guard) demanding the same’’, and
(C) by inserting ‘‘(electronically or other-
wise)’’ after ‘‘submission’’ in the last sentence
of paragraph (1); and
(2) by amending subsection (b)—
(A) by striking out ‘‘the appropriate cus-
toms officer’’, ‘‘he’’ (except in paragraph
(1)(F)), and ‘‘such officer’’ wherever they ap-
pear and inserting ‘‘the Customs Service’’,
(B) by striking out ‘‘written’’ wherever it
appears (other than paragraph (1)(F)),
(C) by inserting ‘‘or electronically trans-
mit’’ after ‘‘issue’’ wherever it appears, and
(D) by striking out ‘‘his intention’’ in the
first sentence of paragraph (1) and inserting
‘‘intent’’.
SEC. 620. UNLAWFUL UNLADING OR TRANSSHIPMENT.
Section 586 (19 U.S.C. 1586) is amended—
(1) by inserting ‘‘, or of a hovering vessel which
has received or delivered merchandise while outside
the territorial sea,’’ after ‘‘from a foreign port or
place’’ wherever it appears; and
328
(2) by amending subsection (f)—
(A) by striking out ‘‘the appropriate cus-
toms officer of the’’ and ‘‘the appropriate cus-
toms officer within the’’ and inserting ‘‘the
Customs Service at the’’; and
(B) by striking out ‘‘the appropriate cus-
toms officer is’’ and inserting ‘‘the Customs
Service is’’.
SEC. 621. PENALTIES FOR FRAUD, GROSS NEGLIGENCE,
AND NEGLIGENCE; PRIOR DISCLOSURE.
Section 592 (19 U.S.C. 1592) is amended—
(1) by inserting ‘‘or electronically transmitted
data or information’’ after ‘‘document’’ in subsection
(a)(1)(A)(i);
(2) by inserting ‘‘The mere nonintentional rep-
etition by an electronic system of an initial clerical
error does not constitute a pattern of negligent con-
duct.’’ at the end of subsection (a)(2);
(3) by amending subsection (b)—
(A) by amending the first sentence of
paragraph (1)(A)—
(i) by striking out ‘‘the appropriate
customs officer’’ and inserting ‘‘the Cus-
toms Service’’,
329
(ii) by striking out ‘‘he’’ and inserting
‘‘it’’, and
(iii) by striking out ‘‘his’’ and insert-
ing ‘‘its’’, and
(B) by amending paragraph (2)—
(i) by striking out ‘‘the appropriate
customs officer’’ wherever it appears and
inserting ‘‘the Customs Service’’,
(ii) by striking out ‘‘such officer’’
wherever it appears and inserting ‘‘the
Customs Service’’, and
(iii) by striking out ‘‘he’’ wherever it
appears and inserting ‘‘it’’;
(4) by amending subsection (c)(4)—
(A) by striking ‘‘time of disclosure or with-
in thirty days, or such longer period as the ap-
propriate customs officer may provide, after no-
tice by the appropriate customs officer of his’’
in subparagraph (A)(i) and by striking out
‘‘time of disclosure in 30 days, or such longer
period as the appropriate customs officer may
provide, after notice by the appropriate customs
officer of his’’ in subparagraph (B), and insert-
ing in each place ‘‘time of disclosure, or within
30 days (or such longer period as the Customs
330
Service may provide) after notice by the Cus-
toms Service of its’’; and
(B) by inserting after the last sentence the
following: ‘‘For purposes of this section, a for-
mal investigation of a violation is considered to
be commenced with regard to the disclosing
party and the disclosed information on the date
recorded in writing by the Customs Service as
the date on which facts and circumstances were
discovered or information was received which
caused the Customs Service to believe that a
possibility of a violation of subsection (a) ex-
isted.’’; and
(5) by amending subsection (d)—
(A) by striking out ‘‘the appropriate cus-
toms officer’’ and inserting ‘‘the Customs Serv-
ice’’,
(B) by striking out ‘‘duties’’ wherever it
appears and inserting ‘‘duties, taxes, or fees’’,
and
(C) by inserting ‘‘, TAXES OR FEES’’ after
‘‘DUTIES’’ in the sideheading.
SEC. 622. PENALTIES FOR FALSE DRAWBACK CLAIMS.
(a) AMENDMENT.—Part V of title IV is amended by
inserting after section 593 the following new section:
331
‘‘SEC. 593A. PENALTIES FOR FALSE DRAWBACK CLAIMS.
‘‘(a) PROHIBITION.—
‘‘(1) GENERAL RULE.—No person, by fraud, or
negligence—
‘‘(A) may seek, induce or affect, or at-
tempt to seek, induce, or affect, the payment or
credit to that person or others of any drawback
claim by means of—
‘‘(i) any document, written or oral
statement, or electronically transmitted
data or information, or act which is mate-
rial and false, or
‘‘(ii) any omission which is material;
or
‘‘(B) may aid or abet any other person to
violate subparagraph (A).
‘‘(2) EXCEPTION.—Clerical errors or mistakes
of fact are not violations of paragraph (1) unless
they are part of a pattern of negligent conduct. The
mere nonintentional repetition by an electronic sys-
tem of an initial clerical error does not constitute a
pattern of negligent conduct.
‘‘(b) PROCEDURES.—
‘‘(1) PREPENALTY NOTICE.—
‘‘(A) IN GENERAL.—If the Customs Serv-
ice has reasonable cause to believe that there
332
has been a violation of subsection (a) and deter-
mines that further proceedings are warranted,
the Customs Service shall issue to the person
concerned a written notice of intent to issue a
claim for a monetary penalty. Such notice
shall—
‘‘(i) identify the drawback claim;
‘‘(ii) set forth the details relating to
the seeking, inducing, or affecting, or the
attempted seeking, inducing, or affecting,
or the aiding or procuring of, the drawback
claim;
‘‘(iii) specify all laws and regulations
allegedly violated;
‘‘(iv) disclose all the material facts
which establish the alleged violation;
‘‘(v) state whether the alleged viola-
tion occurred as a result of fraud or neg-
ligence;
‘‘(vi) state the estimated actual or po-
tential loss of revenue due to the drawback
claim, and, taking into account all cir-
cumstances, the amount of the proposed
monetary penalty; and
333
‘‘(vii) inform such person that he shall
have a reasonable opportunity to make rep-
resentations, both oral and written, as to
why a claim for a monetary penalty should
not be issued in the amount stated.
‘‘(B) EXCEPTIONS.—The Customs Service
may not issue a prepenalty notice if the amount
of the penalty in the penalty claim issued under
paragraph (2) is $1,000 or less. In such cases,
the Customs Service may proceed directly with
a penalty claim.
‘‘(C) PRIOR
APPROVAL.—No prepenalty
notice in which the alleged violation occurred as
a result of fraud shall be issued without the
prior approval of Customs Headquarters.
‘‘(2) PENALTY CLAIM.—After considering rep-
resentations, if any, made by the person concerned
pursuant to the notice issued under paragraph (1),
the Customs Service shall determine whether any
violation of subsection (a), as alleged in the notice,
has occurred. If the Customs Service determines
that there was no violation, the Customs Service
shall promptly issue a written statement of the de-
termination to the person to whom the notice was
sent. If the Customs Service determines that there
334
was a violation, Customs shall issue a written pen-
alty claim to such person. The written penalty claim
shall specify all changes in the information provided
under clauses (i) through (vii) of paragraph (1)(A).
Such person shall have a reasonable opportunity
under section 618 to make representations, both oral
and written, seeking remission or mitigation of the
monetary penalty. At the conclusion of any proceed-
ing under section 618, the Customs Service shall
provide to the person concerned a written statement
which sets forth the final determination, and the
findings of fact and conclusions of law on which
such determination is based.
‘‘(c) MAXIMUM PENALTIES.—
‘‘(1) FRAUD.—A fraudulent violation of sub-
section (a) of this section is punishable by a civil
penalty in an amount not to exceed 3 times the ac-
tual or potential loss of revenue.
‘‘(2) NEGLIGENCE.—
‘‘(A) IN GENERAL.—A negligent violation
of subsection (a) is punishable by a civil penalty
in an amount not to exceed 20 percent of the
actual or potential loss of revenue for the 1st
violation.
336
States is or may be deprived as a result of
overpayment of the claim; or
‘‘(ii) if the violation resulted from
negligence, an amount equal to the interest
computed on the basis of the prevailing
rate of interest applied under section 6621
of the Internal Revenue Code of 1986 on
the amount of actual revenue of which the
United States is or may be deprived during
the period that—
‘‘(I) begins on the date of the
overpayment of the claim; and
‘‘(II) ends on the date on which
the person concerned tenders the
amount of the overpayment.
‘‘(B) CONDITION
AFFECTING
PENALTY
LIMITATIONS.—The limitations in subparagraph
(A) on the amount of the monetary penalty to
be assessed under subsection (c) apply only if
the person concerned tenders the amount of the
overpayment made on the claim at the time of
disclosure, or within 30 days (or such longer
period as the Customs Service may provide),
after notice by the Customs Service of its cal-
culation of the amount of the overpayment.
337
‘‘(C) BURDEN OF PROOF.—The person as-
serting lack of knowledge of the commencement
of a formal investigation has the burden of
proof in establishing such lack of knowledge.
‘‘(4) COMMENCEMENT
OF
INVESTIGATION.—
For purposes of this section, a formal investigation
of a violation is considered to be commenced with re-
gard to the disclosing party and the disclosed infor-
mation on the date recorded in writing by the Cus-
toms Service as the date on which facts and cir-
cumstances were discovered or information was re-
ceived which caused the Customs Service to believe
that a possibility of a violation of subsection (a) ex-
isted.
‘‘(5) EXCLUSIVITY.—Penalty claims under this
section shall be the exclusive civil remedy for any
drawback related violation of subsection (a).
‘‘(d) DEPRIVATION
OF LAWFUL REVENUE.—Not-
withstanding section 514, if the United States has been
deprived of lawful duties and taxes resulting from a viola-
tion of subsection (a), the Customs Service shall require
that such duties and taxes be restored whether or not a
monetary penalty is assessed.
‘‘(e) DRAWBACK COMPLIANCE PROGRAM.—
338
‘‘(1) IN GENERAL.—After consultation with the
drawback trade community, the Customs Service
shall establish a drawback compliance program in
which claimants and other parties in interest may
participate after being certified by the Customs
Service under paragraph (2). Participation in the
drawback compliance program is voluntary.
‘‘(2) CERTIFICATION.—A party may be certified
as a participant in the drawback compliance pro-
gram after meeting the general requirements estab-
lished under the program or after negotiating an al-
ternative program suited to the needs of the party
and the Customs Service. Certification requirements
shall take into account the size and nature of the
party’s drawback program and the volume of claims.
In order to be certified, the participant must be able
to demonstrate that it—
‘‘(A) understands the legal requirements
for filing claims, including the nature of the
records required to be maintained and produced
and the time periods involved;
‘‘(B) has in place procedures to explain the
Customs Service requirements to those employ-
ees that are involved in the preparation of
339
claims, and the maintenance and production of
required records;
‘‘(C) has in place procedures regarding the
preparation of claims and maintenance of re-
quired records, and the production of such
records to the Customs Service;
‘‘(D) has designated a dependable individ-
ual or individuals to be responsible for compli-
ance under the program and whose duties in-
clude maintaining familiarity with the drawback
requirements of the Customs Service;
‘‘(E) has a record maintenance procedure
approved by the Customs Service for original
records, or, if approved by the Customs Service,
for alternate records or recordkeeping formats
other than the original records; and
‘‘(F) has procedures for notifying the Cus-
toms Service of variances to, and violations of,
the requirements of the drawback compliance
program or any negotiated alternative pro-
grams, and for taking corrective action when
notified by the Customs Service for violations or
problems regarding such program.
‘‘(f) ALTERNATIVES TO PENALTIES.—
‘‘(1) IN GENERAL.—When a party that—
340
‘‘(A) has been certified as a participant in
the drawback compliance program under sub-
section (e); and
‘‘(B) is generally in compliance with the
appropriate procedures and requirements of the
program;
commits a violation of subsection (a), the Customs
Service, shall, in the absence of fraud or repeated
violations, and in lieu of a monetary penalty, issue
a written notice of the violation to the party. Re-
peated violations by a party may result in the issu-
ance of penalties and removal of certification under
the program until corrective action, satisfactory to
the Customs Service, is taken.
‘‘(2) CONTENTS OF NOTICE.—A notice of viola-
tion issued under paragraph (1) shall—
‘‘(A) state that the party has violated sub-
section (a);
‘‘(B) explain the nature of the violation;
and
‘‘(C) warn the party that future violations
of subsection (a) may result in the imposition
of monetary penalties.
‘‘(3) RESPONSE TO NOTICE.—Within a reason-
able time after receiving written notice under para-
341
graph (1), the party shall notify the Customs Service
of the steps it has taken to prevent a recurrence of
the violation.
‘‘(g) REPETITIVE VIOLATIONS.—
‘‘(1) A party who has been issued a written no-
tice under subsection (f)(1) and subsequently com-
mits a repeat negligent violation involving the same
issue is subject to the following monetary penalties:
‘‘(A) 2D VIOLATION.—An amount not to
exceed 20 percent of the loss of revenue.
‘‘(B) 3RD VIOLATION.—An amount not to
exceed 50 percent of the loss of revenue.
‘‘(C) 
4TH
AND
SUBSEQUENT
VIOLA-
TIONS.—An amount not to exceed 100 percent
of the loss of revenue.
‘‘(2) If a party that has been certified as a par-
ticipant in the drawback compliance program under
subsection (e) commits an alleged violation which
was not repetitive, the party shall be issued a ‘warn-
ing letter’, and, for any subsequent violation, shall
be subject to the same maximum penalty amounts
stated in paragraph (1).
‘‘(h) REGULATION.—The Secretary shall promulgate
regulations and guidelines to implement this section. Such
regulations shall specify that for purposes of subsection
342
(g), a repeat negligent violation involving the same issue
shall be treated as a repetitive violation for a maximum
period of 3 years.
‘‘(i) COURT OF INTERNATIONAL TRADE PROCEED-
INGS.—Notwithstanding any other provision of law, in any
proceeding commenced by the United States in the Court
of International Trade for the recovery of any monetary
penalty claimed under this section—
‘‘(1) all issues, including the amount of the pen-
alty, shall be tried de novo;
‘‘(2) if the monetary penalty is based on fraud,
the United States shall have the burden of proof to
establish the alleged violation by clear and convinc-
ing evidence; and
‘‘(3) if the monetary penalty is based on neg-
ligence, the United States shall have the burden of
proof to establish the act or omission constituting
the violation, and the alleged violator shall have the
burden of providing evidence that the act or omis-
sion did not occur as a result of negligence.’’.
(b) EFFECTIVE DATE.—The amendment made by
subsection (a) applies to drawback claims filed on and
after the nationwide operational implementation of an
automated drawback selectivity program by the Customs
343
Service. The Customs Service shall publish notice of this
date in the Customs Bulletin.
SEC. 623. INTERPRETIVE RULINGS AND DECISIONS; PUBLIC
INFORMATION.
Section 625 (19 U.S.C. 1625) is amended to read as
follows:
‘‘SEC. 625. INTERPRETIVE RULINGS AND DECISIONS; PUB-
LIC INFORMATION.
‘‘(a) PUBLICATION.—Within 90 days after the date
of issuance of any interpretive ruling (including any ruling
letter, or internal advice memorandum) or protest review
decision under this chapter with respect to any customs
transaction, the Secretary shall have such ruling or deci-
sion published in the Customs Bulletin or shall otherwise
make such ruling or decision available for public
inspection.
‘‘(b) APPEALS.—A person may appeal an adverse in-
terpretive ruling and any interpretation of any regulation
prescribed to implement such ruling to a higher level of
authority within the Customs Service for de novo review.
Upon a reasonable showing of business necessity, any such
appeal shall be considered and decided no later than 60
days following the date on which the appeal is filed. The
Secretary shall issue regulations to implement this sub-
section.
344
‘‘(c) MODIFICATION AND REVOCATION.—A proposed
interpretive ruling or decision which would—
‘‘(1) modify (other than to correct a clerical
error) or revoke a prior interpretive ruling or deci-
sion which has been in effect for at least 60 days;
or
‘‘(2) have the effect of modifying the treatment
previously accorded by the Customs Service to sub-
stantially identical transactions;
shall be published in the Customs Bulletin. The Secretary
shall give interested parties an opportunity to submit, dur-
ing not less than the 30-day period after the date of such
publication, comments on the correctness of the proposed
ruling or decision. After consideration of any comments
received, the Secretary shall publish a final ruling or deci-
sion in the Customs Bulletin within 30 days after the clos-
ing of the comment period. The final ruling or decision
shall become effective 60 days after the date of its
publication.
‘‘(d) PUBLICATION OF CUSTOMS DECISIONS THAT
LIMIT COURT DECISIONS.—A decision that proposes to
limit the application of a court decision shall be published
in the Customs Bulletin together with notice of oppor-
tunity for public comment thereon prior to a final decision.
345
‘‘(e) PUBLIC INFORMATION.—The Secretary may
make available in writing or through electronic media, in
an efficient, comprehensive and timely manner, all infor-
mation, including directives, memoranda, electronic mes-
sages and telexes which contain instructions, require-
ments, methods or advice necessary for importers and ex-
porters to comply with the Customs laws and regulations.
All information which may be made available pursuant to
this subsection shall be subject to any exemption from dis-
closure provided by section 552 of title 5, United States
Code.’’.
SEC. 624. SEIZURE AUTHORITY.
Section 596(c) (19 U.S.C. 1595a(c)) is amended to
read as follows:
‘‘(c) Merchandise which is introduced or attempted
to be introduced into the United States contrary to law
shall be treated as follows:
‘‘(1) The merchandise shall be seized and for-
feited if it—
‘‘(A) is stolen, smuggled, or clandestinely
imported or introduced;
‘‘(B) is a controlled substance, as defined
in the Controlled Substances Act (21 U.S.C.
801 et seq.), and is not imported in accordance
with applicable law; or
346
‘‘(C) is a contraband article, as defined in
section 1 of the Act of August 9, 1939 (49
U.S.C. App. 781).
‘‘(2) The merchandise may be seized and for-
feited if—
‘‘(A) its importation or entry is subject to
any restriction or prohibition which is imposed
by law relating to health, safety, or conserva-
tion and the merchandise is not in compliance
with the applicable rule, regulation, or statute;
‘‘(B) its importation or entry requires a li-
cense, permit or other authorization of an agen-
cy of the United States Government and the
merchandise is not accompanied by such li-
cense, permit, or authorization;
‘‘(C) it is merchandise or packaging in
which copyright, trademark, or trade name pro-
tection violations are involved (including, but
not limited to, violations of section 42, 43, or
45 of the Act of July 5, 1946 (15 U.S.C. 1124,
1125, or 1127), section 506 or 509 of title 17,
United States Code, or section 2318 or 2320 of
title 18, United States Code);
‘‘(D) it is trade dress merchandise involved
in the violation of a court order citing section
347
43 of such Act of July 5, 1946 (15 U.S.C.
1125);
‘‘(E) it is merchandise which is marked in-
tentionally in violation of section 304; or
‘‘(F) it is merchandise for which the im-
porter 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.
‘‘(3) If the importation or entry of the mer-
chandise is subject to quantitative restrictions re-
quiring a visa, permit, license, or other similar docu-
ment, or stamp from the United States Government
or from a foreign government or issuing authority
pursuant to a bilateral or multilateral agreement,
the merchandise shall be subject to detention in ac-
cordance with section 499 unless the appropriate
visa, license, permit, or similar document or stamp
is presented to the Customs Service; but if the visa,
permit, license, or similar document or stamp which
is presented in connection with the importation or
entry of the merchandise is counterfeit, the mer-
chandise may be seized and forfeited.
‘‘(4) If the merchandise is imported or intro-
duced contrary to a provision of law which governs
348
the classification or value of merchandise and there
are no issues as to the admissibility of the merchan-
dise into the United States, it shall not be seized ex-
cept in accordance with section 592.
‘‘(5) In any case where the seizure and forfeit-
ure of merchandise are required or authorized by
this section, the Secretary may—
‘‘(A) remit the forfeiture under section
618, or
‘‘(B) permit the exportation of the mer-
chandise, unless its release would adversely af-
fect health, safety, or conservation or be in con-
travention of a bilateral or multilateral agree-
ment or treaty.’’.
Subtitle B—National Customs
Automation Program
SEC. 631. NATIONAL CUSTOMS AUTOMATION PROGRAM.
Part I of title IV is amended—
(1) by striking out
‘‘PART I—DEFINITIONS
and inserting
‘‘PART I—DEFINITIONS AND NATIONAL CUSTOMS
AUTOMATION PROGRAM
‘‘Subpart A—Definitions’’;
and
349
(2) by inserting after section 402 the following:
‘‘Subpart B—National Customs Automation Program
‘‘SEC. 411. NATIONAL CUSTOMS AUTOMATION PROGRAM.
‘‘(a) ESTABLISHMENT.—The Secretary shall estab-
lish the National Customs Automation Program (herein-
after in this subpart referred to as the ‘Program’) which
shall be an automated and electronic system for processing
commercial importations and shall include the following
existing and planned components:
‘‘(1) Existing components:
‘‘(A) The electronic entry of merchandise.
‘‘(B) The electronic entry summary of re-
quired information.
‘‘(C) The electronic transmission of invoice
information.
‘‘(D) The electronic transmission of mani-
fest information.
‘‘(E) Electronic payments of duties, fees,
and taxes.
‘‘(F) The electronic status of liquidation
and reliquidation.
‘‘(G) The electronic selection of high risk
entries for examination (cargo selectivity and
entry summary selectivity).
‘‘(2) Planned components:
350
‘‘(A) The electronic filing and status of
protests.
‘‘(B) The electronic filing (including re-
mote filing under section 414) of entry informa-
tion with the Customs Service at any location.
‘‘(C) The electronic filing of import activity
summary statements and reconciliation.
‘‘(D) The electronic filing of bonds.
‘‘(E) The electronic penalty process.
‘‘(F) The electronic filing of drawback
claims, records, or entries.
‘‘(G) Any other component initiated by the
Customs Service to carry out the goals of this
subpart.
‘‘(b) PARTICIPATION IN PROGRAM.—The Secretary
shall by regulation prescribe the eligibility criteria for par-
ticipation in the Program. Participation in the Program
is voluntary.
‘‘SEC. 412. PROGRAM GOALS.
‘‘The goals of the Program are to ensure that all reg-
ulations and rulings that are administered or enforced by
the Customs Service are administered and enforced in a
manner that—
‘‘(1) is uniform and consistent;
351
‘‘(2) is as minimally intrusive upon the normal
flow of business activity as practicable; and
‘‘(3) improves compliance.
‘‘SEC. 413. IMPLEMENTATION AND EVALUATION OF PRO-
GRAM.
‘‘(a) OVERALL PROGRAM PLAN.—
‘‘(1) IN GENERAL.—Before the 180th day after
the date of the enactment of this Act, the Secretary
shall develop and transmit to the Committees an
overall plan for the Program. The overall Program
plan shall set forth—
‘‘(A) a general description of the ultimate
configuration of the Program;
‘‘(B) a description of each of the existing
components of the Program listed in section
411(a)(1); and
‘‘(C) estimates regarding the stages on
which planned components of the Program list-
ed in section 411(a)(2) will be brought on-line.
‘‘(2) ADDITIONAL INFORMATION.—In addition
to the information required under paragraph (1), the
overall Program plan shall include a statement re-
garding—
‘‘(A) the extent to which the existing com-
ponents of the Program currently meet, and the
352
planned components will meet, the Program
goals set forth in section 412; and
‘‘(B) the effects that the existing compo-
nents are currently having, and the effects that
the planned components will likely have, on—
‘‘(i) importers, brokers, and other
users of the Program, and
‘‘(ii) Customs Service occupations, op-
erations, processes, and systems.
‘‘(b) IMPLEMENTATION PLAN, TESTING, AND EVAL-
UATION.—
‘‘(1) IMPLEMENTATION PLAN.—For each of the
planned components of the Program listed in section
411(a)(2), the Secretary shall—
‘‘(A) develop an implementation plan;
‘‘(B) test the component in order to assess
its viability;
‘‘(C) evaluate the component in order to
assess its contribution toward achieving the
program goals; and
‘‘(D) transmit to the Committees the im-
plementation plan, the testing results, and an
evaluation report.
In developing an implementation plan under sub-
paragraph (A) and evaluating components under
353
subparagraph (C), the Secretary shall publish a re-
quest for comments in the Customs Bulletin and
shall consult with the trade community, including
importers, brokers, shippers, and other affected
parties.
‘‘(2) IMPLEMENTATION.—
‘‘(A) The Secretary may implement on a
permanent basis any Program component re-
ferred to in paragraph (1) on or after the date
which is 30 days after paragraph (1)(D) is
complied with.
‘‘(B) For purposes of subparagraph (A),
the 30 days shall be computed by excluding—
‘‘(i) the days either House is not in
session because of an adjournment of more
than 3 days to a day certain or an ad-
journment of the Congress sine die, and
‘‘(ii) any Saturday and Sunday, not
excluded under clause (i), when either
House is not in session.
‘‘(3) EVALUATION
AND
REPORT.—The Sec-
retary shall—
‘‘(A) develop a user satisfaction survey of
parties participating in the Program;
354
‘‘(B) evaluate the results of the user satis-
faction survey on a biennial basis (fiscal years)
and transmit a report to the Committees on the
evaluation by no later than the 90th day after
the close of each 2d fiscal year;
‘‘(C) with respect to the existing Program
component listed in section 411(a)(1)(G) trans-
mit to the Committees—
‘‘(i) a written evaluation of such com-
ponent before the 180th day after the date
of the enactment of this section and before
the implementation of the planned Pro-
gram 
components 
listed 
in 
section
411(a)(2) (B) and (C), and
‘‘(ii) a report on such component for
each of the 3 full fiscal years occurring
after the date of the enactment of this sec-
tion, which report shall be transmitted not
later than the 90th day after the close of
each such year; and
‘‘(D) not later than the 90th day after the
close of fiscal year 1994, and annually there-
after through fiscal year 2000, transmit to the
Committees a written evaluation with respect to
the implementation and effect on users of each
355
of the planned Program components listed in
section 411(a)(2).
In carrying out the provisions of this paragraph, the
Secretary shall publish requests for comments in the
Customs Bulletin and shall consult with the trade
community, including importers, brokers, shippers,
and other affected parties.
‘‘(c) COMMITTEES.—For purposes of this section, the
term ‘Committees’ means the Committee on Ways and
Means of the House of Representatives and the Committee
on Finance of the Senate.
‘‘SEC. 414. REMOTE LOCATION FILING.
‘‘(a) CORE ENTRY INFORMATION.—
‘‘(1) IN
GENERAL.—A Program participant
may file electronically an entry of merchandise with
the Customs Service from a location other than the
district designated in the entry for examination
(hereafter in this section referred to as a ‘remote lo-
cation’) if—
‘‘(A) the Customs Service is satisfied that
the participant has the capabilities referred to
in paragraph (2)(A) regarding such method of
filing; and
‘‘(B) the participant elects to file from the
remote location.
356
‘‘(2) REQUIREMENTS.—
‘‘(A) IN GENERAL.—In order to qualify for
filing from a remote location, a Program partic-
ipant must have the capability to provide, on an
entry-by-entry basis, for the following:
‘‘(i) The electronic entry of merchan-
dise.
‘‘(ii) The electronic entry summary of
required information.
‘‘(iii) The electronic transmission of
invoice information (when required by the
Customs Service).
‘‘(iv) The electronic payment of du-
ties, fees, and taxes.
‘‘(v) Such other electronic capabilities
within the existing or planned components
of the Program as the Secretary shall by
regulation require.
‘‘(B) RESTRICTION ON EXEMPTION FROM
REQUIREMENTS.—The Customs Service may
not permit any exemption or waiver from the
requirements established by this section for par-
ticipation in remote entry filing.
‘‘(3) CONDITIONS ON FILING UNDER THIS SEC-
TION.—The Secretary may prohibit a Program par-
357
ticipant from participating in remote location filing,
and may remove a Program participant from partici-
pation in remote location filing, if the participant—
‘‘(i) fails to meet all the compliance re-
quirements and operational standards of remote
location filing; or
‘‘(ii) fails to adhere to all applicable laws
and regulations.
‘‘(4) ALTERNATIVE FILING.—Any Program par-
ticipant that is eligible to file entry information elec-
tronically from a remote location but chooses not to
do so in the case of any entry must file any paper
documentation for the entry at the designated loca-
tion referred to in subsection (d).
‘‘(b) ADDITIONAL ENTRY INFORMATION.—
‘‘(1) IN GENERAL.—A Program participant that
is eligible under subsection (a) to file entry informa-
tion from a remote location may, if the Customs
Service is satisfied that the participant meets the re-
quirements under paragraph (2), also electronically
file from the remote location additional information
that is required by the Customs Service to be pre-
sented before the acceptance of entry summary in-
formation and at the time of acceptance of entry
summary information.
358
‘‘(2) REQUIREMENTS.—The Secretary shall
publish, and periodically update, a list of those capa-
bilities within the existing and planned components
of the Program that a Program participant must
have for purposes of this subsection.
‘‘(3) FILING OF ADDITIONAL INFORMATION.—
‘‘(A) IF
INFORMATION
ELECTRONICALLY
ACCEPTABLE.—A Program participant that is
eligible under paragraph (1) to file additional
information from a remote location shall elec-
tronically file all such information that the Cus-
toms Service can accept electronically.
‘‘(B) ALTERNATIVE FILING.—If the Cus-
toms Service cannot accept additional informa-
tion electronically, the Program participant
shall file the paper documentation with respect
to the information at the appropriate filing lo-
cation.
‘‘(C) APPROPRIATE LOCATION.—For pur-
poses of subparagraph (B), the ‘appropriate lo-
cation’ is—
‘‘(i) before January 1, 1999, a des-
ignated location; and
‘‘(ii) after December 31, 1998—
359
‘‘(I) if the paper documentation
is required for release, a designated
location; or
‘‘(II) if the paper documentation
is not required for release, a remote
location designated by the Customs
Service or a designated location.
‘‘(D) OTHER.—A Program participant that
is eligible under paragraph (1) to file additional
information electronically from a remote loca-
tion but chooses not to do so must file the
paper documentation with respect to the infor-
mation at a designated location.
‘‘(c) POST-ENTRY SUMMARY INFORMATION.—A Pro-
gram participant that is eligible to file electronically entry
information under subsection (a) and additional informa-
tion under subsection (b) from a remote location may file
at any remote location designated by the Customs Service
any information required by the Customs Service after
entry summary.
‘‘(d) DEFINITIONS.—As used in this section:
‘‘(1) The term ‘designated location’ means a
customs office located in the customs district des-
ignated by the entry filer for purposes of customs
examination of the merchandise.
360
‘‘(2) The term ‘Program participant’ means,
with respect to an entry of merchandise, any party
entitled 
to 
make 
the 
entry 
under 
section
484(a)(2)(B).’’.
SEC. 632. DRAWBACK AND REFUNDS.
(a) AMENDMENTS.—Section 313 (19 U.S.C. 1313) is
amended as follows:
(1) Subsection (a) is amended—
(A) by inserting ‘‘or destruction under cus-
toms supervision’’ after ‘‘Upon the expor-
tation’’;
(B) by inserting ‘‘provided that those arti-
cles have not been used prior to such expor-
tation or destruction,’’ after ‘‘manufactured or
produced in the United States with the use of
imported merchandise,’’;
(C) by inserting ‘‘or destruction’’ after ‘‘re-
funded upon the exportation’’; and
(D) by striking out ‘‘wheat imported after
ninety days after the date of the enactment of
this Act’’ and inserting ‘‘imported wheat’’.
(2) Subsection (b) is amended—
(A) by striking out ‘‘duty-free or domestic
merchandise’’ and inserting ‘‘any other mer-
chandise (whether imported or domestic)’’;
361
(B) by inserting ‘‘, or destruction under
customs supervision,’’ after ‘‘there shall be al-
lowed upon the exportation’’;
(C) by inserting ‘‘or destroyed’’ after ‘‘not-
withstanding the fact that none of the imported
merchandise may actually have been used in the
manufacture or production of the exported’’;
(D) by inserting ‘‘, but only if those arti-
cles have not been used prior to such expor-
tation or destruction’’ after ‘‘an amount of
drawback equal to that which would have been
allowable had the merchandise used therein
been imported’’; and
(E) by inserting ‘‘or destruction under cus-
toms supervision’’ after ‘‘but the total amount
of drawback allowed upon the exportation’’.
(3) Subsection (c) is amended to read as fol-
lows:
‘‘(c) MERCHANDISE NOT CONFORMING TO SAMPLE
OR SPECIFICATIONS.—Upon the exportation, or destruc-
tion under the supervision of the Customs Service, of mer-
chandise—
‘‘(1) not conforming to sample or specifications,
shipped without the consent of the consignee, or de-
362
termined to be defective as of the time of importa-
tion;
‘‘(2) upon which the duties have been paid;
‘‘(3) which has been entered or withdrawn for
consumption; and
‘‘(4) which, within 3 years after release from
the custody of the Customs Service, has been re-
turned to the custody of the Customs Service for ex-
portation or destruction under the supervision of the
Customs Service;
the full amount of the duties paid upon such merchandise,
less 1 percent, shall be refunded as drawback.’’.
(4) Subsection (j) is amended to read as fol-
lows:
‘‘(j) UNUSED MERCHANDISE DRAWBACK.—
‘‘(1) If imported merchandise, on which was
paid any duty, tax, or fee imposed under Federal
law because of its importation—
‘‘(A) is, before the close of the 3-year pe-
riod beginning on the date of importation—
‘‘(i) exported, or
‘‘(ii) destroyed under customs super-
vision; and
‘‘(B) is not used within the United States
before such exportation or destruction;
363
then upon such exportation or destruction 99 per-
cent of the amount of each duty, tax, or fee so paid
shall be refunded as drawback. The exporter (or de-
stroyer) has the right to claim drawback under this
paragraph, but may endorse such right to the im-
porter or any intermediate party.
‘‘(2) If there is, with respect to imported mer-
chandise on which was paid any duty, tax, or fee im-
posed under Federal law because of its importation,
any other merchandise (whether imported or domes-
tic), that—
‘‘(A) is commercially interchangeable with
such imported merchandise;
‘‘(B) is, before the close of the 3-year pe-
riod beginning on the date of importation of the
imported merchandise, either exported or de-
stroyed under customs supervision; and
‘‘(C) before such exportation or destruc-
tion—
‘‘(i) is not used within the United
States, and
‘‘(ii) is in the possession of, including
ownership while in bailment, in leased fa-
cilities, in transit to, or in any other man-
ner under the operational control of, the
364
party claiming drawback under this para-
graph, if that party—
‘‘(I) is the importer of the im-
ported merchandise, or
‘‘(II) received from the person
who imported and paid any duty due
on the imported merchandise a certifi-
cate of delivery transferring to the
party the imported merchandise, com-
mercially interchangeable merchan-
dise, or any combination of imported
and 
commercially 
interchangeable
merchandise (and any such trans-
ferred merchandise, regardless of its
origin, will be treated as the imported
merchandise and any retained mer-
chandise will be treated as domestic
merchandise);
then upon the exportation or destruction of
such other merchandise the amount of each
such duty, tax, and fee paid regarding the im-
ported merchandise shall be refunded as draw-
back, but in no case may the total drawback on
the imported merchandise, whether available
under this paragraph or any other provision of
365
law or any combination thereof, exceed 99 per-
cent of that duty, tax, or fee.
‘‘(3) The performing of any operation or com-
bination of operations (including, but not limited to,
testing, cleaning, repacking, inspecting, sorting, re-
furbishing, freezing, blending, repairing, reworking,
cutting, slitting, adjusting, replacing components,
relabeling, disassembling, and unpacking), not
amounting to manufacture or production for draw-
back purposes under the preceding provisions of this
section on—
‘‘(A) the imported merchandise itself in
cases to which paragraph (1) applies, or
‘‘(B) the commercially interchangeable
merchandise in cases to which paragraph (2)
applies,
shall not be treated as a use of that merchandise for
purposes of applying paragraph (1)(B) or (2)(C).’’.
(5) Subsection (l) is amended by striking out
‘‘the fixing of a time limit within which drawback
entries or entries for refund under any of the provi-
sions of this section or section 309(b) shall be filed
and completed,’’ and inserting ‘‘the authority for the
electronic submission of drawback entries’’.
366
(6) Subsection (p) is amended to read as fol-
lows:
‘‘(p) SUBSTITUTION OF FINISHED PETROLEUM DE-
RIVATIVES.—
‘‘(1) IN GENERAL.—Notwithstanding any other
provision of this section, if—
‘‘(A) an article (hereafter referred to in
this subsection as the ‘exported article’) of the
same kind and quality as a qualified article is
exported;
‘‘(B) the requirements set forth in para-
graph (2) are met; and
‘‘(C) a drawback claim is filed regarding
the exported article;
the amount of the duties paid on, or attributable to,
such qualified article shall be refunded as drawback
to the drawback claimant.
‘‘(2) REQUIREMENTS.—The requirements re-
ferred to in paragraph (1) are as follows:
‘‘(A) The exporter of the exported article—
‘‘(i) manufactured or produced the
qualified article in a quantity equal to or
greater than the quantity of the exported
article,
367
‘‘(ii) purchased or exchanged, directly
or indirectly, the qualified article from a
manufacturer or producer described in
subsection (a) or (b) in a quantity equal to
or greater than the quantity of the ex-
ported article,
‘‘(iii) imported the qualified article in
a quantity equal to or greater than the
quantity of the exported article, or
‘‘(iv) purchased or exchanged, directly
or indirectly, an imported qualified article
from an importer in a quantity equal to or
greater than the quantity of the exported
article.
‘‘(B) In the case of the requirement de-
scribed in subparagraph (A)(ii), the manufac-
turer or producer produced the qualified article
in a quantity equal to or greater than the quan-
tity of the exported article.
‘‘(C) In the case of the requirement of sub-
paragraph (A)(i) or (A)(ii), the exported article
is exported during the period that the qualified
article described in subparagraph (A)(i) or
(A)(ii) (whichever is applicable) is manufac-
368
tured or produced, or within 180 days after the
close of such period.
‘‘(D) In the case of the requirement of
subparagraph (A)(i) or (A)(ii), the specific pe-
troleum refinery or production facility which
made the qualified article concerned is identi-
fied.
‘‘(E) In the case of the requirement of sub-
paragraph (A)(iii) or (A)(iv), the exported arti-
cle is exported within 180 days after the date
of entry of an imported qualified article de-
scribed in subparagraph (A)(iii) or (A)(iv)
(whichever is applicable).
‘‘(F) Except as otherwise specifically pro-
vided in this subsection, the drawback claimant
complies with all requirements of this section,
including providing certificates which establish
the drawback eligibility of articles for which
drawback is claimed.
‘‘(G) The manufacturer, producer, im-
porter, exporter, and drawback claimant of the
qualified article and the exported article main-
tain all records required by regulation.
‘‘(3) DEFINITION
OF
QUALIFIED
ARTICLE,
ETC.—For purposes of this subsection—
369
‘‘(A) The term ‘qualified article’ means an
article—
‘‘(i) described in—
‘‘(I) headings 2707, 2708, 2710,
2711, 2712, 2713, 2714, 2715, 2901,
and 2902 of the Harmonized Tariff
Schedule of the United States, or
‘‘(II) headings 3901 through
3914 of such Schedule (as such head-
ings apply to liquids, pastes, powders,
granules, and flakes), and
‘‘(ii) which is—
‘‘(I) manufactured or produced
as described in subsection (a) or (b)
from crude petroleum or a petroleum
derivative, or
‘‘(II) imported duty-paid.
‘‘(B) An exported article is of the same
kind and quality as the qualified article for
which it is substituted under this subsection if
it is a product that is commercially interchange-
able with or referred to under the same eight-
digit classification of the Harmonized Tariff
Schedule of the United States as the qualified
article.
370
‘‘(C) The term ‘drawback claimant’ means
the exporter of the exported article or the re-
finer, producer, or importer of such article. Any
person eligible to file a drawback claim under
this subparagraph may designate another per-
son to file such claim.
‘‘(4) LIMITATION ON DRAWBACK.—The amount
of drawback payable under this subsection shall not
exceed the amount of drawback that would be attrib-
utable to the article—
‘‘(A) manufactured or produced under sub-
section (a) or (b) by the manufacturer or pro-
ducer described in clause (i) or (ii) of para-
graph (2)(A), or
‘‘(B) imported under clause (iii) or (iv) of
paragraph (2)(A).’’.
(7) The following new subsections are inserted
after subsection (p):
‘‘(q) PACKAGING MATERIAL.—Packaging material,
when used on or for articles or merchandise exported or
destroyed under subsection (a), (b), (c), or (j), shall be
eligible under such subsection for refund, as drawback, of
99 percent of any duty, tax, or fee imposed under Federal
law on the importation of such material.
‘‘(r) FILING DRAWBACK CLAIMS.—
371
‘‘(1) A drawback entry and all documents nec-
essary to complete a drawback claim, including those
issued by the Customs Service, shall be filed or ap-
plied for, as applicable, within 3 years after the date
of exportation or destruction of the articles on which
drawback is claimed, except that any landing certifi-
cate required by regulation shall be filed within the
time limit prescribed in such regulation. Claims not
completed within the 3-year period shall be consid-
ered abandoned. No extension will be granted unless
it is established that the Customs Service was re-
sponsible for the untimely filing.
‘‘(2) A drawback entry for refund filed pursu-
ant to any subsection of this section shall be deemed
filed pursuant to any other subsection of this section
should it be determined that drawback is not allow-
able under the entry as originally filed but is allow-
able under such other subsection.
‘‘(s) DESIGNATION OF MERCHANDISE BY SUCCES-
SOR.—
‘‘(1) For purposes of subsection (b), a draw-
back successor may designate imported merchandise
used by the predecessor before the date of succession
as the basis for drawback on articles manufactured
372
by the drawback successor after the date of succes-
sion.
‘‘(2) For purposes of subsection (j)(2), a draw-
back successor may designate—
‘‘(A) imported merchandise which the
predecessor, before the date of succession, im-
ported; or
‘‘(B) imported merchandise, commercially
interchangeable merchandise, or any combina-
tion of imported and commercially interchange-
able merchandise for which the successor re-
ceived, before the date of succession, from the
person who imported and paid any duty due on
the imported merchandise a certificate of deliv-
ery transferring to the successor such merchan-
dise;
as the basis for drawback on merchandise possessed
by the drawback successor after the date of succes-
sion.
‘‘(3) For purposes of this subsection, the term
‘drawback successor’ means an entity to which an-
other entity (in this subsection referred to as the
‘predecessor’) has transferred by written agreement,
merger, or corporate resolution—
373
‘‘(A) all or substantially all of the rights,
privileges, immunities, powers, duties, and li-
abilities of the predecessor; or
‘‘(B) the assets and other business inter-
ests of a division, plant, or other business unit
of such predecessor, but only if in such transfer
the value of the transferred realty, personalty,
and intangibles (other than drawback rights, in-
choate or otherwise) exceeds the value of all
transferred drawback rights, inchoate or other-
wise.
‘‘(4) No drawback shall be paid under this sub-
section until either the predecessor or the drawback
successor (who shall also certify that it has the pred-
ecessor’s records) certifies that—
‘‘(A) the transferred merchandise was not
and will not be claimed by the predecessor, and
‘‘(B) the predecessor did not and will not
issue any certificate to any other person that
would enable that person to claim drawback.
‘‘(t) DRAWBACK CERTIFICATES.—Any person who is-
sues a certificate which would enable another person to
claim drawback shall be subject to the recordkeeping pro-
visions of this chapter, with the retention period beginning
on the date that such certificate is issued.
374
‘‘(u) ELIGIBILITY
OF ENTERED
OR WITHDRAWN
MERCHANDISE.—Imported merchandise that has not been
regularly entered or withdrawn for consumption shall not
satisfy any requirement for use, exportation, or destruc-
tion under this section.
‘‘(v) MULTIPLE DRAWBACK CLAIMS.—Merchandise
that is exported or destroyed to satisfy any claim for draw-
back shall not be the basis of any other claim for draw-
back; except that appropriate credit and deductions for
claims covering components or ingredients of such mer-
chandise shall be made in computing drawback pay-
ments.’’.
(b) APPLICATION OF AMENDMENT TO FINISHED PE-
TROLEUM DERIVATIVES.—Notwithstanding section 514 of
the Tariff Act of 1930 (19 U.S.C. 1514) or any other pro-
vision of law, the amendment made by paragraph (6) of
subsection (a) shall apply to—
(1) claims filed or liquidated on or after Janu-
ary 1, 1988, and
(2) claims that are unliquidated, under protest,
or in litigation on the date of the enactment of this
Act.
SEC. 633. EFFECTIVE DATE OF RATES OF DUTY.
Section 315 (19 U.S.C. 1315) is amended—
375
(1) by striking out ‘‘appropriate customs officer
in the form and manner prescribed by regulations of
the Secretary of the Treasury,’’ in the first sentence
of subsection (a) and inserting ‘‘Customs Service by
written, electronic or such other means as the Sec-
retary by regulation shall prescribe,’’;
(2) by striking out ‘‘customs custody’’ in the
first sentence of subsection (b) and inserting ‘‘cus-
tody of the Customs Service’’; and
(3) by striking out ‘‘paragraph 813’’ in sub-
section (c) and inserting ‘‘chapter 98 of the Har-
monized Tariff Schedule of the United States’’.
SEC. 634. DEFINITIONS.
Section 401 (19 U.S.C. 1401) is amended—
(1) by amending subsection (k) to read as fol-
lows:
‘‘(k) The term ‘hovering vessel’ means—
‘‘(1) any vessel which is found or kept off the
coast of the United States within or without the cus-
toms waters, if, from the history, conduct, character,
or location of the vessel, it is reasonable to believe
that such vessel is being used or may be used to in-
troduce or promote or facilitate the introduction or
attempted introduction of merchandise into the
376
United States in violation of the laws of the United
States; and
‘‘(2) any vessel which has visited a vessel de-
scribed in paragraph (1).’’; and
(2) by inserting at the end thereof the following
new subsections:
‘‘(n) The term ‘electronic transmission’ means the
transfer of data or information through an authorized
electronic data interchange system consisting of, but not
limited to, computer modems and computer networks.
‘‘(o) The term ‘electronic entry’ means the electronic
transmission to the Customs Service of—
‘‘(1) entry information required for the entry of
merchandise, and
‘‘(2) entry summary information required for
the classification and appraisement of the merchan-
dise, the verification of statistical information, and
the determination of compliance with applicable law.
‘‘(p) The term ‘electronic data interchange system’
means any established mechanism approved by the Com-
missioner of Customs through which information can be
transferred electronically.
‘‘(q) The term ‘National Customs Automation Pro-
gram’ means the program established under section 411.
377
‘‘(r) The term ‘import activity summary statement’
refers to data or information transmitted electronically to
the Customs Service, in accordance with such regulations
as the Secretary prescribes, at the end of a specified pe-
riod of time which enables the Customs Service to assess
properly the duties, taxes and fees on merchandise im-
ported during that period, collect accurate statistics and
determine whether any other applicable requirement of law
(other than a requirement relating to release from customs
custody) is met.
‘‘(s) The term ‘reconciliation’ means an electronic
process, initiated at the request of an importer, under
which the elements of an entry, other than those elements
related to the admissibility of the merchandise, that are
undetermined at the time of entry summary are provided
to the Customs Service at a later time. A reconciliation
is treated as an entry for purposes of liquidation, reliqui-
dation, and protest.’’.
SEC. 635. MANIFESTS.
Section 431 (19 U.S.C. 1431) is amended—
(1) by amending subsections (a) and (b) to read
as follows:
‘‘(a) IN GENERAL.—Every vessel required to make
entry under section 434 or obtain clearance under section
4197 of the Revised Statutes of the United States (46
378
U.S.C. App. 91) shall have a manifest that complies with
the requirements prescribed under subsection (d).
‘‘(b) PRODUCTION OF MANIFEST.—Any manifest re-
quired by the Customs Service shall be signed, produced,
delivered or electronically transmitted by the master or
person in charge of the vessel, aircraft, or vehicle, or by
any other authorized agent of the owner or operator of
the vessel, aircraft, or vehicle in accordance with the re-
quirements prescribed under subsection (d). A manifest
may be supplemented by bill of lading data supplied by
the issuer of such bill. If any irregularity of omission or
commission occurs in any way in respect to any manifest
or bill of lading data, the owner or operator of the vessel,
aircraft or vehicle, or any party responsible for such irreg-
ularity, shall be liable for any fine or penalty prescribed
by law with respect to such irregularity. The Customs
Service may take appropriate action against any of the
parties.’’; and
(2) by inserting after subsection (c) the follow-
ing new subsection:
‘‘(d) REGULATIONS.—
‘‘(1) IN GENERAL.—The Secretary shall by reg-
ulation—
379
‘‘(A) specify the form for, and the informa-
tion and data that must be contained in, the
manifest required by subsection (a);
‘‘(B) allow, at the option of the individual
producing the manifest and subject to para-
graph (2), letters and documents shipments to
be accounted for by summary manifesting pro-
cedures;
‘‘(C) prescribe the manner of production
for, and the delivery for electronic transmittal
of, the manifest required by subsection (a); and
‘‘(D) 
prescribe 
the 
manner 
for
supplementing manifests with bill of lading data
under subsection (b).
‘‘(2) LETTERS AND DOCUMENTS SHIPMENTS.—
For purposes of paragraph (1)(B)—
‘‘(A) the Customs Service may require with
respect to letters and documents shipments—
‘‘(i) that they be segregated by coun-
try of origin, and
‘‘(ii) additional examination proce-
dures that are not necessary for individ-
ually manifested shipments;
‘‘(B) standard letter envelopes and stand-
ard document packs shall be segregated from
380
larger document shipments for purposes of cus-
toms inspections; and
‘‘(C) the term ‘letters and documents’
means—
‘‘(i) data described in General Head-
note 4(c) of the Harmonized Tariff Sched-
ule of the United States,
‘‘(ii) securities and similar evidences
of value described in heading 4907 of such
Schedule, but not monetary instruments
defined pursuant to chapter 53 of title 31,
United States Code, and
‘‘(iii) personal correspondence, wheth-
er on paper, cards, photographs, tapes, or
other media.’’.
SEC. 636. INVOICE CONTENTS.
Section 481 (19 U.S.C. 1481) is amended—
(1) by amending subsection (a)—
(A) by amending the matter preceding
paragraph (1) to read as follows: ‘‘IN GEN-
ERAL.—All invoices of merchandise to be im-
ported into the United States and any elec-
tronic equivalent thereof considered acceptable
by the Secretary in regulations prescribed under
this section shall set forth, in written, elec-
381
tronic, or such other form as the Secretary
shall prescribe, the following:’’,
(B) by amending paragraph (3) to read as
follows:
‘‘(3) A detailed description of the merchandise,
including the commercial name by which each item
is known, the grade or quality, and the marks, num-
bers, or symbols under which sold by the seller or
manufacturer in the country of exportation, together
with the marks and numbers of the packages in
which the merchandise is packed;’’, and
(C) by amending paragraph (10) to read
as follows:
‘‘(10) Any other fact that the Secretary may by
regulation require as being necessary to a proper ap-
praisement, examination and classification of the
merchandise.’’;
(2) by amending subsection (c) to read as
follows:
‘‘(c) IMPORTER PROVISION OF INFORMATION.—Any
information required to be set forth on an invoice may
alternatively be provided by any of the parties qualifying
as an ‘importer of record’ under section 484(a)(2)(B) by
such means, in such form or manner, and within such time
as the Secretary shall by regulation prescribe.’’; and
382
(3) by inserting before the period at the end of
subsection (d) the following: ‘‘and may allow for the
submission or electronic transmission of partial in-
voices, electronic equivalents of invoices, bills, or
other documents or parts thereof, required under
this section’’.
SEC. 637. ENTRY OF MERCHANDISE.
(a) AMENDMENTS TO SECTION 484.—Section 484
(19 U.S.C. 1484) is amended to read as follows:
‘‘SEC. 484. ENTRY OF MERCHANDISE.
‘‘(a) REQUIREMENT AND TIME.—
‘‘(1) Except as provided in sections 490, 498,
552, 553, and 336(j), one of the parties qualifying
as ‘importer of record’ under paragraph (2)(B), ei-
ther in person or by an agent authorized by the
party in writing, shall, using reasonable care—
‘‘(A) make entry therefor by filing with the
Customs Service—
‘‘(i) such documentation or, pursuant
to an electronic data interchange system,
such information as is necessary to enable
the Customs Service to determine whether
the merchandise may be released from cus-
toms custody, and
383
‘‘(ii) notification whether an import
activity summary statement will be filed;
and
‘‘(B) complete the entry by filing with the
Customs Service the declared value, classifica-
tion and rate of duty applicable to the merchan-
dise, and such other documentation or, pursu-
ant to an electronic data interchange system,
such other information as is necessary to enable
the Customs Service to—
‘‘(i) properly assess duties on the mer-
chandise,
‘‘(ii) collect accurate statistics with re-
spect to the merchandise, and
‘‘(iii) determine whether any other ap-
plicable requirement of law (other than a
requirement relating to release from cus-
toms custody) is met.
‘‘(2)(A) The documentation or information re-
quired under paragraph (1) with respect to any im-
ported merchandise shall be filed or transmitted in
such manner and within such time periods as the
Secretary shall by regulation prescribe. Such regula-
tions shall provide for the filing of import activity
summary statements, covering entries or warehouse
384
withdrawals made during a calendar month, within
such time period as is prescribed in regulations but
not to exceed the 20th day following such calendar
month.
‘‘(B) When an entry of merchandise is made
under this section, the required documentation or in-
formation shall be filed or electronically transmitted
either by the owner or purchaser of the merchandise
or, when appropriately designated by the owner, pur-
chaser, or consignee of the merchandise, a person
holding a valid license under section 641. When a
consignee declares on entry that he is the owner or
purchaser of merchandise the Customs Service may,
without liability, accept the declaration. For the pur-
poses of this Act, the importer of record must be one
of the parties who is eligible to file the documenta-
tion or information required by this section.
‘‘(C) The Secretary, in prescribing regulations
to carry out this subsection, shall establish proce-
dures which insure the accuracy and timeliness of
import statistics, particularly statistics relevant to
the classification and valuation of imports. Correc-
tions of errors in such statistical data shall be trans-
mitted immediately to the Director of the Bureau of
the Census, who shall make corrections in the statis-
385
tics maintained by the Bureau. The Secretary shall
also provide, to the maximum extent practicable, for
the protection of the revenue, the enforcement of
laws governing the importation and exportation of
merchandise, the facilitation of the commerce of the
United States, and the equal treatment of all im-
porters of record of imported merchandise.
‘‘(b) RECONCILIATION.—
‘‘(1) IN GENERAL.—A party that electronically
transmits an entry summary or import activity sum-
mary statement may at the time of filing such sum-
mary or statement notify the Customs Service of his
intention to file a reconciliation pursuant to such
regulations as the Secretary may prescribe. Such
reconciliation must be filed by the importer of record
within such time period as is prescribed by regula-
tion but no later than 15 months following the filing
of the entry summary or import activity summary
statement; except that the prescribed time period for
reconciliation issues relating to the assessment of
antidumping and countervailing duties shall require
filing no later than 90 days after the Customs Serv-
ice advises the importer that a period of review for
antidumping or countervailing duty purposes has
been completed. Before filing a reconciliation, an im-
386
porter of record shall post bond or other security
pursuant to such regulations as the Secretary may
prescribe.
‘‘(2) REGULATIONS
REGARDING
AD/CV
DU-
TIES.—The Secretary shall prescribe, in consultation
with the Secretary of Commerce, such regulations as
are necessary to adapt the reconciliation process for
use in the collection of antidumping and countervail-
ing duties.
‘‘(c) RELEASE
OF MERCHANDISE.—The Customs
Service may permit the entry and release of merchandise
from customs custody in accordance with such regulations
as the Secretary may prescribe. No officer of the Customs
Service shall be liable to any person with respect to the
delivery of merchandise released from customs custody in
accordance with such regulations.
‘‘(d) SIGNING
AND CONTENTS.—Entries shall be
signed by the importer of record, or his agent, unless filed
pursuant to an electronic data interchange system. If elec-
tronically filed, each transmission of data shall be certified
by an importer of record or his agent, one of whom shall
be resident in the United States for purposes of receiving
service of process, as being true and correct to the best
of his knowledge and belief, and such transmission shall
be binding in the same manner and to the same extent
387
as a signed document. The entry shall set forth such facts
in regard to the importation as the Secretary may require
and shall be accompanied by such invoices, bills of lading,
certificates, and documents, or their electronically submit-
ted equivalents, as are required by regulation.
‘‘(e) PRODUCTION OF INVOICE.—The Secretary may
provide by regulation for the production of an invoice,
parts thereof, or the electronic equivalents thereof, in such
manner and form, and under such terms and conditions,
as the Secretary considers necessary.
‘‘(f) STATISTICAL ENUMERATION.—The Secretary,
the Secretary of Commerce, and the United States Inter-
national Trade Commission shall establish from time to
time for statistical purposes an enumeration of articles in
such detail as in their judgment may be necessary, com-
prehending all merchandise imported into the United
States and exported from the United States, and shall
seek, in conjunction with statistical programs for domestic
production and programs for achieving international har-
monization of trade statistics, to establish the comparabil-
ity thereof with such enumeration of articles. All import
entries and export declarations shall include or have at-
tached thereto an accurate statement specifying, in terms
of such detailed enumeration, the kinds and quantities of
388
all merchandise imported and exported and the value of
the total quantity of each kind of article.
‘‘(g) STATEMENT OF COST OF PRODUCTION.—Under
such regulations as the Secretary may prescribe, the Cus-
toms Service may require a verified statement from the
manufacturer or producer showing the cost of producing
the imported merchandise, if the Customs Service consid-
ers such verification necessary for the appraisement of
such merchandise.
‘‘(h) ADMISSIBILITY
OF DATA ELECTRONICALLY
TRANSMITTED.—Any entry or other information transmit-
ted by means of an authorized electronic data interchange
system shall be admissible in any and all administrative
and judicial proceedings as evidence of such entry or infor-
mation.’’.
(b) AMENDMENT TO SECTION 771.—Section 771 (19
U.S.C. 1677) is amended by adding at the end the follow-
ing new paragraph:
‘‘(23) ENTRY.—The term ‘entry’ includes, in
appropriate circumstances as determined by the ad-
ministering authority, a reconciliation entry created
under a reconciliation process, defined in section
401(s), that is initiated by an importer. The liability
of an importer under an antidumping or countervail-
ing duty proceeding for entries of merchandise sub-
389
ject to the proceeding will attach to the correspond-
ing reconciliation entry or entries. Suspension of liq-
uidation of the reconciliation entry or entries, for the
purpose of enforcing this title, is equivalent to the
suspension of liquidation of the corresponding indi-
vidual entries; but the suspension of liquidation of
the reconciliation entry or entries for such purpose
does not preclude liquidation for any other pur-
pose.’’.
SEC. 638. APPRAISEMENT AND OTHER PROCEDURES.
Section 500 (19 U.S.C. 1500) is amended—
(1) by striking out ‘‘The appropriate customs
officer’’ and inserting ‘‘The Customs Service’’;
(2) by striking out ‘‘appraise’’ in subsection (a)
and inserting ‘‘fix the final appraisement of’’;
(3) by striking out ‘‘ascertain the’’ in sub-
section (b) and inserting ‘‘fix the final’’;
(4) by amending subsection (c)—
(A) by inserting ‘‘final’’ after ‘‘fix the’’,
and
(B) by inserting ‘‘, taxes, and fees’’ after
‘‘duties’’ wherever it appears; and
(5) by amending subsections (d) and (e) to read
as follows:
390
‘‘(d) liquidate the entry and reconciliation, if
any, of such merchandise; and
‘‘(e) give or transmit, pursuant to an electronic
data interchange system, notice of such liquidation
to the importer, his consignee, or agent in such form
and manner as the Secretary shall by regulation pre-
scribe.’’.
SEC. 639. VOLUNTARY RELIQUIDATIONS.
Section 501 (19 U.S.C. 1501) is amended—
(1) by striking out ‘‘the appropriate customs of-
ficer on his own initiative’’ and inserting ‘‘the Cus-
toms Service’’;
(2) by inserting ‘‘or transmitted’’ after ‘‘given’’
wherever it appears; and
(3) by amending the section heading to read as
follows:
‘‘SEC. 501. VOLUNTARY RELIQUIDATIONS BY THE CUSTOMS
SERVICE.’’.
SEC. 640. APPRAISEMENT REGULATIONS.
Section 502 (19 U.S.C. 1502) is amended—
(1) by amending subsection (a)—
(A) by inserting ‘‘(including regulations es-
tablishing procedures for the issuance of bind-
ing rulings prior to the entry of the merchan-
dise concerned)’’ after ‘‘law’’,
391
(B) by striking out ‘‘ports of entry, and’’
inserting ‘‘ports of entry. The Secretary’’,
(C) by inserting ‘‘or classifying’’ after ‘‘ap-
praising’’ wherever it appears, and
(D) by striking out ‘‘such port’’ and insert-
ing ‘‘any port, and may direct any customs offi-
cer at any port to review entries of merchandise
filed at any other port’’; and
(2) by striking out subsection (b) and redesig-
nating subsection (c) as subsection (b).
SEC. 641. LIMITATION ON LIQUIDATION.
Section 504 (19 U.S.C. 1504) is amended—
(1) by amending subsection (a)—
(A) by striking out ‘‘Except as provided in
subsection (b),’’ and inserting ‘‘Unless an entry
is extended under subsection (b) or suspended
as required by statute or court order,’’,
(B) by striking out ‘‘or’’ at the end of
paragraph (2),
(C) by inserting ‘‘or’’ after the semicolon
at the end of paragraph (3), and
(D) by inserting the following new para-
graph after paragraph (3):
‘‘(4) if a reconciliation is filed, or should have
been filed, the date of the filing under section 484
392
or the date the reconciliation should have been
filed;’’; and
(2) by amending subsections (b), (c), and (d) to
read as follows:
‘‘(b) EXTENSION.—The Secretary may extend the pe-
riod in which to liquidate an entry if—
‘‘(1) the information needed for the proper ap-
praisement or classification of the merchandise, or
for insuring compliance with applicable law, is not
available to the Customs Service; or
‘‘(2) the importer of record requests such exten-
sion and shows good cause therefor.
The Secretary shall give notice of an extension under this
subsection to the importer of record and the surety of such
importer of record. Notice shall be in such form and man-
ner (which may include electronic transmittal) as the Sec-
retary shall by regulation prescribe. Any entry the liquida-
tion of which is extended under this subsection shall be
treated as having been liquidated at the rate of duty,
value, quantity, and amount of duty asserted at the time
of entry by the importer of record at the expiration of 4
years from the applicable date specified in subsection (a).
‘‘(c) NOTICE OF SUSPENSION.—If the liquidation of
any entry is suspended, the Secretary shall by regulation
require that notice of the suspension be provided, in such
393
manner as the Secretary considers appropriate, to the im-
porter of record and to any authorized agent and surety
of such importer of record.
‘‘(d) REMOVAL OF SUSPENSION.—When a suspension
required by statute or court order is removed, the Customs
Service shall liquidate the entry within 6 months after re-
ceiving notice of the removal from the Department of
Commerce, other agency, or a court with jurisdiction over
the entry. Any entry not liquidated by the Customs Service
within 6 months after receiving such notice shall be treat-
ed as having been liquidated at the rate of duty, value,
quantity, and amount of duty asserted at the time of entry
by the importer of record.’’.
SEC. 642. PAYMENT OF DUTIES AND FEES.
(a) AMENDMENT
TO SECTION 505.—Section 505
(U.S.C. 1505) is amended to read as follows:
‘‘SEC. 505. PAYMENT OF DUTIES AND FEES.
‘‘(a) DEPOSIT OF ESTIMATED DUTIES, FEES, AND
INTEREST.—Unless merchandise is entered for warehouse
or transportation, or under bond, the importer of record
shall deposit with the Customs Service at the time of mak-
ing entry, or at such later time as the Secretary may pre-
scribe by regulation, the amount of duties and fees esti-
mated to be payable thereon. Such regulations may pro-
vide that estimated duties and fees shall be deposited be-
394
fore or at the time an import activity summary statement
is filed. If an import activity summary statement is filed,
the estimated duties and fees shall be deposited together
with interest, at a rate determined by the Secretary, ac-
cruing from the first date of the month the statement is
required to be filed until the date such statement is actu-
ally filed.
‘‘(b) COLLECTION OR REFUND OF DUTIES, FEES,
AND INTEREST DUE UPON LIQUIDATION OR RELIQUIDA-
TION.—The Customs Service shall collect any increased or
additional duties and fees due, together with interest
thereon, or refund any excess moneys deposited, together
with interest thereon, as determined on a liquidation or
reliquidation. Duties, fees, and interest determined to be
due upon liquidation or reliquidation are due 30 days after
issuance of the bill for such payment. Refunds of excess
moneys deposited, together with interest thereon, shall be
paid within 30 days of liquidation or reliquidation.
‘‘(c) INTEREST.—Interest assessed due to an
underpayment of duties, fees, or interest shall accrue, at
a rate determined by the Secretary, from the date the im-
porter of record is required to deposit estimated duties,
fees, and interest to the date of liquidation or reliquidation
of the applicable entry or reconciliation. Interest on excess
moneys deposited shall accrue, at a rate determined by
395
the Secretary, from the date the importer of record depos-
its estimated duties, fees, and interest to the date of liq-
uidation or reliquidation of the applicable entry or rec-
onciliation.
‘‘(d) DELINQUENCY.—If duties, fees, and interest de-
termined to be due or refunded are not paid in full within
the 30-day period specified in subsection (b), any unpaid
balance shall be considered delinquent and bear interest
by 30-day periods, at a rate determined by the Secretary,
from the date of liquidation or reliquidation until the full
balance is paid. No interest shall accrue during the 30-
day period in which payment is actually made.’’.
(b) CONFORMING AMENDMENT.—Subsection (d) of
section 520 (19 U.S.C. 1520(d)) is repealed.
SEC. 643. ABANDONMENT AND DAMAGE.
Section 506 (19 U.S.C. 1506) is amended—
(1) by striking out ‘‘the appropriate customs of-
ficer’’ and ‘‘such customs officer’’ wherever they ap-
pear and inserting ‘‘the Customs Service’’;
(2) by amending paragraph (1)—
(A) by striking out ‘‘not sent to the ap-
praiser’s stores for’’ and inserting ‘‘released
without an’’,
(B) by striking out ‘‘of the examination
packages or quantities of merchandise’’,
396
(C) by striking out ‘‘the appraiser’s stores’’
and inserting ‘‘the Customs Service’’, and
(D) by inserting ‘‘or entry’’ after ‘‘in-
voice’’, and
(3) by amending paragraph (2)—
(A) by inserting ‘‘, electronically or other-
wise,’’ after ‘‘files’’, and
(B) by striking out ‘‘written’’.
SEC. 644. CUSTOMS OFFICER’S IMMUNITY.
Section 513 (19 U.S.C. 1513) is amended to read as
follows:
‘‘SEC. 513. CUSTOMS OFFICER’S IMMUNITY.
‘‘No customs officer shall be liable in any way to any
person for or on account of—
‘‘(1) any ruling or decision regarding the ap-
praisement or the classification of any imported
merchandise or regarding the duties, fees, and taxes
charged thereon,
‘‘(2) the collection of any dues, charges, duties,
fees, and taxes on or on account of any imported
merchandise, or
‘‘(3) any other matter or thing as to which any
person might under this Act be entitled to protest or
appeal from the decision of such officer.’’.
397
SEC. 645. PROTESTS.
Section 514 (19 U.S.C. 1514) is amended—
(1) by amending subsection (a)—
(A) by striking out ‘‘appropriate customs
officer’’ in the text preceding paragraph (1) and
inserting ‘‘Customs Service’’,
(B) by inserting ‘‘or reconciliation as to
the issues contained therein,’’ after ‘‘entry,’’ in
paragraph (5),
(C) by striking out ‘‘and’’ and inserting
‘‘or’’ at the end of paragraph (6),
(D) by striking out the comma at the end
of paragraph (7) and inserting a semicolon, and
(E) by striking out ‘‘appropriate customs
officer, who’’ in the text following paragraph
(7) and inserting ‘‘Customs Service, which’’;
(2) by amending subsection (b) by striking out
‘‘appropriate customs officer’’ and inserting ‘‘Cus-
toms Service’’;
(3) by amending the first sentence of subsection
(c)(1) to read as follows: ‘‘A protest of a decision
made under subsection (a) shall be filed in writing,
or transmitted electronically pursuant to an elec-
tronic data interchange system, in accordance with
regulations prescribed by the Secretary. A protest
must set forth distinctly and specifically—
398
‘‘(A) each decision described in subsection
(a) as to which protest is made;
‘‘(B) each category of merchandise affected
by each decision set forth under paragraph (1);
‘‘(C) the nature of each objection and the
reasons therefor; and
‘‘(D) any other matter required by the Sec-
retary by regulation.’’;
(4) by redesignating paragraph (2) of sub-
section (c) as paragraph (3) and by striking out
‘‘such customs officer’’ in such redesignated para-
graph and inserting ‘‘the Customs Service’’;
(5) by designating the last sentence of para-
graph (1) of subsection (c) as paragraph (2);
(6) by striking out ‘‘customs officer’’ in sub-
section (d) and inserting ‘‘Customs Service’’; and
(7) by amending the section heading to read as
follows:
‘‘SEC. 514. PROTEST AGAINST DECISIONS OF THE CUSTOMS
SERVICE.’’.
SEC. 646. REFUNDS AND ERRORS.
Section 520 (19 U.S.C. 1520) is amended—
(1) by inserting ‘‘or reconciliation’’ after
‘‘entry’’ in paragraphs (1) and (4) of subsection (a);
and
399
(2) by amending subsection (c)—
(A) by striking out ‘‘appropriate customs
officer’’ wherever it appears and inserting
‘‘Customs Service’’,
(B) by inserting ‘‘or reconciliation’’ after
‘‘reliquidate an entry’’, and
(C) by inserting ‘‘, whether or not result-
ing from or contained in electronic trans-
mission,’’ after ‘‘inadvertence’’ the first place it
appears in paragraph (1).
SEC. 647. BONDS AND OTHER SECURITY.
Section 623 (19 U.S.C. 1623) is amended—
(1) by inserting ‘‘and the manner in which the
bond may be filed with or, pursuant to an author-
ized electronic data interchange system, transmitted
to the Customs Service’’ after ‘‘form of such bond’’
in subsection (b)(1); and
(2) by inserting at the end of subsection (d) the
following new sentence: ‘‘Any bond transmitted to
the Customs Service pursuant to an authorized elec-
tronic data interchange system shall have the same
force and effect and be binding upon the parties
thereto as if such bond were manually executed,
signed, and filed.’’.
400
SEC. 648. CUSTOMHOUSE BROKERS.
Section 641 (19 U.S.C. 1641) is amended—
(1) by adding at the end of subsection (a)(2)
the following new sentence: ‘‘It also includes the
preparation of documents or forms in any format
and the electronic transmission of documents, in-
voices, bills, or parts thereof, intended to be filed
with the Customs Service in furtherance of such ac-
tivities, whether or not signed or filed by the pre-
parer, or activities relating to such preparation, but
does not include the mere electronic transmission of
data received for transmission to Customs.’’;
(2) by amending subsection (c)(1) to read as
follows:
‘‘(1) IN GENERAL.—Each person granted a cus-
toms broker’s license under subsection (b) shall be
issued, in accordance with such regulations as the
Secretary shall prescribe, either or both of the
following:
‘‘(A) A national permit for the conduct of
such customs business as the Secretary pre-
scribes by regulation.
‘‘(B) A permit for each customs district in
which that person conducts customs business
and, except as provided in paragraph (2), regu-
larly employs at least 1 individual who is li-
406
system, to the Customs Service such information,
data,’’; and
(3) by amending subsection (e) to read as fol-
lows:
‘‘(e) PROHIBITION
ON
DEPARTURES
AND
DIS-
CHARGE.—Unless otherwise authorized by law, a vessel,
aircraft or vehicle after arriving in the United States or
Virgin Islands may, but only in accordance with regula-
tions prescribed by the Secretary—
‘‘(1) depart from the port, place, or airport of
arrival; or
‘‘(2) discharge any passenger or merchandise
(including baggage).’’.
SEC. 653. ENTRY OF VESSELS.
Section 434 (19 U.S.C. 1434) amended to read as
follows:
‘‘SEC. 434. ENTRY; VESSELS.
‘‘(a) FORMAL ENTRY.—Within 24 hours (or such
other period of time as may be provided under subsection
(c)(2)) after the arrival at any port or place in the United
States of—
‘‘(1) any vessel from a foreign port or place;
‘‘(2) any foreign vessel from a domestic port;