H. R. 3450—128
Service may provide), after notice by the Customs Service
of its calculation of the amount of the overpayment.
‘‘(C) BURDEN
OF
PROOF.—The person asserting lack
of knowledge of the commencement of a formal investiga-
tion 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 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) existed.
‘‘(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.—Notwithstanding sec-
tion 514, if the United States has been deprived of lawful duties
and taxes resulting from a violation 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.—
‘‘(1) IN GENERAL.—After consultation with the drawback
trade community, the Customs Service shall establish a draw-
back 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 partici-
pant in the drawback compliance program after meeting the
general requirements established under the program or after
negotiating an alternative 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 employees that are involved
in the preparation of claims, and the maintenance and
production of required records;
‘‘(C) has in place procedures regarding the preparation
of claims and maintenance of required records, and the
production of such records to the Customs Service;
‘‘(D) has designated a dependable individual or individ-
uals to be responsible for compliance under the program
and whose duties include 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 record-
keeping formats other than the original records; and
‘‘(F) has procedures for notifying the Customs Service
of variances to, and violations of, the requirements of the
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H. R. 3450—129
drawback compliance program or any negotiated alter-
native programs, 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—
‘‘(A) has been certified as a participant in the drawback
compliance program under subsection (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. Repeated violations by a party may result in
the issuance 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 violation issued
under paragraph (1) shall—
‘‘(A) state that the party has violated subsection (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 reasonable time after
receiving written notice under paragraph (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 notice under
subsection (f)(1) and subsequently commits a repeat negligent
violation involving the same issue is subject to the following
monetary penalties:
‘‘(A) 2D VIOLATION.—An amount not to exceed 20 per-
cent of the loss of revenue.
‘‘(B) 3RD VIOLATION.—An amount not to exceed 50 per-
cent of the loss of revenue.
‘‘(C) 4TH AND SUBSEQUENT VIOLATIONS.—An amount
not to exceed 100 percent of the loss of revenue.
‘‘(2) If a party that has been certified as a participant
in the drawback compliance program under subsection (e) com-
mits an alleged violation which was not repetitive, the party
shall be issued a ‘warning 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 (g), a repeat negligent viola-
tion involving the same issue shall be treated as a repetitive viola-
tion for a maximum period of 3 years.
‘‘(i) COURT OF INTERNATIONAL TRADE PROCEEDINGS.—Notwith-
standing 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 penalty, shall
be tried de novo;
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H. R. 3450—130
‘‘(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 convincing evidence; and
‘‘(3) if the monetary penalty is based on negligence, the
United States shall have the burden of proof to establish the
act or omission constituting the violation, and the alleged viola-
tor shall have the burden of providing evidence that the act
or omission 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 oper-
ational implementation of an automated drawback selectivity pro-
gram by the Customs Service. The Customs Service shall publish
notice of this date in the Customs Bulletin.
SEC. 623. INTERPRETIVE RULINGS AND DECISIONS; PUBLIC INFORMA-
TION.
Section 625 (19 U.S.C. 1625) is amended to read as follows:
‘‘SEC. 625. INTERPRETIVE 
RULINGS 
AND 
DECISIONS; 
PUBLIC
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 decision published in the Customs Bulletin or shall
otherwise make such ruling or decision available for public inspec-
tion.
‘‘(b) APPEALS.—A person may appeal an adverse interpretive
ruling and any interpretation of any regulation prescribed to imple-
ment 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.
‘‘(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 decision 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 substantially identical
transactions;
shall be published in the Customs Bulletin. The Secretary shall
give interested parties an opportunity to submit, during not less
than the 30-day period after the date of such publication, comments
on the correctness of the proposed ruling or decision. After consider-
ation of any comments received, the Secretary shall publish a
final ruling or decision in the Customs Bulletin within 30 days
after the closing 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 opportunity for public comment thereon prior to
a final decision.
‘‘(e) PUBLIC INFORMATION.—The Secretary may make available
in writing or through electronic media, in an efficient, comprehen-
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H. R. 3450—131
sive and timely manner, all information, including directives, memo-
randa, electronic messages and telexes which contain instructions,
requirements, methods or advice necessary for importers and
exporters to comply with the Customs laws and regulations. All
information which may be made available pursuant to this sub-
section shall be subject to any exemption from disclosure 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 fol-
lows:
‘‘(c) Merchandise which is introduced or attempted to be intro-
duced into the United States contrary to law shall be treated
as follows:
‘‘(1) The merchandise shall be seized and forfeited if it—
‘‘(A) is stolen, smuggled, or clandestinely imported or
introduced;
‘‘(B) is a controlled substance, as defined in the Con-
trolled Substances Act (21 U.S.C. 801 et seq.), and is not
imported in accordance with applicable law; or
‘‘(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 forfeited if—
‘‘(A) its importation or entry is subject to any restriction
or prohibition which is imposed by law relating to health,
safety, or conservation and the merchandise is not in
compliance with the applicable rule, regulation, or statute;
‘‘(B) its importation or entry requires a license, permit
or other authorization of an agency of the United States
Government and the merchandise is not accompanied by
such license, permit, or authorization;
‘‘(C) it is merchandise or packaging in which copyright,
trademark, or trade name protection 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 viola-
tion of a court order citing section 43 of such Act of July
5, 1946 (15 U.S.C. 1125);
‘‘(E) it is merchandise which is marked intentionally
in violation of section 304; or
‘‘(F) it is merchandise for which the importer has
received written notices that previous importations of iden-
tical merchandise from the same supplier were found to
have been marked in violation of section 304.
‘‘(3) If the importation or entry of the merchandise is subject
to quantitative restrictions requiring a visa, permit, license,
or other similar document, or stamp from the United States
Government or from a foreign government or issuing authority
pursuant to a bilateral or multilateral agreement, the merchan-
dise shall be subject to detention in accordance 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
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H. R. 3450—132
the merchandise is counterfeit, the merchandise may be seized
and forfeited.
‘‘(4) If the merchandise is imported or introduced contrary
to a provision of law which governs the classification or value
of merchandise and there are no issues as to the admissibility
of the merchandise into the United States, it shall not be
seized except in accordance with section 592.
‘‘(5) In any case where the seizure and forfeiture of mer-
chandise are required or authorized by this section, the Sec-
retary may—
‘‘(A) remit the forfeiture under section 618, or
‘‘(B) permit the exportation of the merchandise, unless
its release would adversely affect health, safety, or con-
servation or be in contravention of a bilateral or multilat-
eral agreement 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
(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 establish the
National Customs Automation Program (hereinafter 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 required informa-
tion.
‘‘(C) The electronic transmission of invoice information.
‘‘(D) The electronic transmission of manifest informa-
tion.
‘‘(E) Electronic payments of duties, fees, and taxes.
‘‘(F) The electronic status of liquidation and reliquida-
tion.
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