Source: https://regulations.justia.com/regulations/fedreg/2007/01/31/07-408.html
Timestamp: 2019-08-20 17:25:53
Document Index: 24765775

Matched Legal Cases: ['§ 39', 'art 51', 'arts 113', 'art 113', 'art 141', 'art 151', 'arts 113', 'arts 141', 'ART 113', 'art 113', '§ 113', '§ 141', 'ART 141', 'art 141', '§ 141', '§ 12', 'ART 151', 'art 151', '§ 151', '§ 151', 'art 402', '§ 402', '§ 402', 'arts 113', 'arts 113', 'arts 141', 'ART 113', 'art 113', 'art 141', 'art 151']

Conditional Release Period and CBP Bond Obligations for Food, Drugs, Devices, and Cosmetics, 4423-4430 [07-408] :: Customs And Border Protection Bureau :: Department Of Homeland Security :: Regulation Tracker :: Justia
Justia Regulation Tracker Department Of Homeland Security Customs And Border Protection Bureau Conditional Release Period and CBP Bond Obligations for Food, Drugs, Devices, and Cosmetics, 4423-4430 [07-408]
Conditional Release Period and CBP Bond Obligations for Food, Drugs, Devices, and Cosmetics, 4423-4430 [07-408]
Download as PDF Federal Register / Vol. 72, No. 20 / Wednesday, January 31, 2007 / Rules and Regulations 4423 TABLE 1.—COMPLIANCE TIMES For airplanes on which— Inspect— And repeat the HFEC and detailed inspections thereafter at— (1) An HFEC or a detailed inspection specified in Boeing Service Bulletin 737–53A1225, dated October 19, 2000, has not been done as of the effective date of this AD. (2) An HFEC or detailed inspection specified in Boeing Service Bulletin 737–53A1225, dated October 19, 2000, has been done before the effective date of this AD. Before the accumulation of 15,000 total flight cycles, or within 4,500 flight cycles after the effective date of this AD, whichever occurs later. Within 6,000 flight cycles since the last HFEC inspection, within 1,200 flight cycles since the last detailed inspection, or within 4,500 flight cycles after the effective date of this AD, whichever occurs later. Intervals not to exceed 6,000 flight cycles. Corrective Actions (g) If any crack is detected during any inspection required by paragraph (f) of this AD, before further flight, repair or replace the vertical beam web and associated parts with a new vertical beam web, in accordance with the Accomplishment Instructions of Boeing Service Bulletin 737–53A1225, Revision 1, dated April 14, 2005, except as provided by paragraph (h) of this AD. (h) If any damage is beyond the scope of the service bulletin or structural repair manual, before further flight, repair the damaged vertical beam web in accordance with a method approved by the Manager, Seattle Aircraft Certification Office (ACO), FAA; or using a method approved in accordance with paragraph (m) of this AD. mstockstill on PROD1PC62 with RULES Terminating Preventative Modification (i) Before the accumulation of 50,000 total flight cycles, or within 25,000 flight cycles after the effective date of this AD, whichever occurs later, replace the vertical beams at buttock lines (BL) 5.7 and 17.0 of the BS 178 bulkhead, in accordance with the Accomplishment Instructions of Boeing Service Bulletin 737–53A1225, Revision 1, dated April 14, 2005. Accomplishing the replacement ends the repetitive inspections required by paragraph (f) of this AD. (j) Actions done before the effective date of this AD in accordance with Boeing BOECOM M–7200–01–00546, dated March 1, 2001, are acceptable for compliance with the requirements of paragraph (i) of this AD. Prior to or Concurrent Requirements (k) For Group 1 airplanes identified in Boeing Service Bulletin 737–53A1225, Revision 1, dated April 14, 2005: Before or concurrently with the requirements of paragraph (i) of this AD, do the preventative modifications of the center web, vertical chords, and side chord areas, including the side chord areas at water line 207, of the forward pressure bulkhead, specified in paragraph (c) of AD 2000–05–29, amendment 39–11639 (reference Boeing Alert Service Bulletin 737–53A1173, Revision 3, dated May 6, 1999). (l) For Group 2 airplanes identified in Boeing Service Bulletin 737–53A1225, Revision 1, dated April 14, 2005: Before or concurrently with the requirements of paragraph (i) of this AD, but no later than the time specified in AD 2001–02–01, amendment 39–12085, do the preventative modifications of the vertical and side chord VerDate Aug<31>2005 15:06 Jan 30, 2007 Jkt 211001 areas of the forward pressure bulkhead required by paragraph (c) of AD 2001–02–01 (reference Boeing Alert Service Bulletin 737– 53A1208, dated May 6, 1999). Alternative Methods of Compliance (AMOCs) (m)(1) The Manager, Seattle ACO, FAA, has the authority to approve AMOCs for this AD, if requested in accordance with the procedures found in 14 CFR 39.19. (2) Before using any AMOC approved in accordance with § 39.19 on any airplane to which the AMOC applies, notify the appropriate principal inspector in the FAA Flight Standards Certificate Holding District Office. (3) An AMOC that provides an acceptable level of safety may be used for any replacement or repair required by this AD, if it is approved by an Authorized Representative for the Boeing Commercial Airplanes Delegation Option Authorization Organization who has been authorized by the Manager, Seattle ACO, to make those findings. For a replacement or repair method to be approved, the replacement or repair must meet the certification basis of the airplane, and the approval must specifically refer to this AD. (4) Approved AMOCs to paragraph (c) of AD 2000–05–29 done before or concurrently with the requirements of paragraph (i) of this AD are approved as AMOCs for the corresponding provisions of paragraph (k) of this AD. (5) Approved AMOCs to paragraph (c) of AD 2001–02–01 done before or concurrently with the requirements of paragraph (i) of this AD are approved as AMOCs for the corresponding provisions of paragraph (l) of this AD. Material Incorporated by Reference (n) You must use Boeing Service Bulletin 737–53A1225, Revision 1, dated April 14, 2005, to perform the actions that are required by this AD, unless the AD specifies otherwise. The Director of the Federal Register approved the incorporation by reference of this document in accordance with 5 U.S.C. 552(a) and 1 CFR part 51. Contact Boeing Commercial Airplanes, P.O. Box 3707, Seattle, Washington 98124–2207, for a copy of this service information. You may review copies at the Docket Management Facility, U.S. Department of Transportation, 400 Seventh Street SW., Room PL–401, Nassif Building, Washington, DC; on the Internet at http://dms.dot.gov; or at the PO 00000 Frm 00013 Fmt 4700 Sfmt 4700 Intervals not to exceed 6,000 flight cycles. National Archives and Records Administration (NARA). For information on the availability of this material at the NARA, call (202) 741–6030, or go to http:// www.archives.gov/federal_register/ code_of_federal_regulations/ ibr_locations.html. Issued in Renton, Washington, on January 19, 2007. Ali Bahrami, Manager, Transport Airplane Directorate, Aircraft Certification Service. [FR Doc. E7–1396 Filed 1–30–07; 8:45 am] BILLING CODE 4910–13–P DEPARTMENT OF HOMELAND SECURITY Bureau of Customs and Border Protection DEPARTMENT OF THE TREASURY 19 CFR Parts 113, 141, and 151 [CBP Dec. 07–02] RIN 1505–AB57 Conditional Release Period and CBP Bond Obligations for Food, Drugs, Devices, and Cosmetics Customs and Border Protection, Department of Homeland Security; Department of the Treasury. ACTION: Final rule. AGENCIES: SUMMARY: This document amends the Customs and Border Protection (CBP) regulations to clarify the responsibilities of importers of food, drugs, devices, and cosmetics under the basic CBP importation bond and to provide a reasonable period of time to allow the Food and Drug Administration (FDA) to perform its enforcement functions with respect to these covered articles. The amendments include a provision for a specific conditional release period of 30 days for any food, drug, device, or cosmetic which has been released under bond and for which admissibility is to be determined under the provisions of E:\FR\FM\31JAR1.SGM 31JAR1 4424 Federal Register / Vol. 72, No. 20 / Wednesday, January 31, 2007 / Rules and Regulations the Federal Food, Drug, and Cosmetic Act (the Act). The amendments also clarify the amount of liquidated damages that may be assessed when there is a breach of the terms and conditions of the bond and authorize any representative of FDA to obtain a sample of any imported article subject to section 801 of the Act, as amended. DATES: Effective Date: The amendments set forth in this document are effective on May 1, 2007. FOR FURTHER INFORMATION CONTACT: Wende Schuster, Office of International Trade, (202–572–8761). SUPPLEMENTARY INFORMATION: Background mstockstill on PROD1PC62 with RULES Federal Food, Drug, and Cosmetic Act Section 801 of the Federal Food, Drug, and Cosmetic Act, as amended (21 U.S.C. 381 referred to herein as section 381), and the regulations promulgated under that statute, provide the basic legal framework governing the importation of food, drugs, devices, and cosmetics into the United States. Under 21 U.S.C. 381(a), the Secretary of the Treasury shall deliver to the Secretary of Health and Human Services, upon request, samples of food, drugs, devices, and cosmetics which are being imported or offered for import. The Secretary of Health and Human Services is authorized under section 381(a) to refuse admission of, among other things, any article that appears from the examination or otherwise to be adulterated or misbranded or to have been manufactured, processed, or packed under insanitary conditions. In addition, the Secretary of the Treasury is required by section 381(a) to cause the destruction of any article refused admission unless the article is exported, under regulations prescribed by the Secretary of the Treasury, within 90 days of the date of notice of the refusal or within such additional time as may be permitted pursuant to those regulations. Under 21 U.S.C. 381(b), pending decision (by FDA) as to the admission of an article being imported or offered for import, the Secretary of the Treasury may authorize delivery of that article to the owner or consignee upon the execution by him of a good and sufficient bond providing for the payment of liquidated damages in the event of default, as may be required pursuant to regulation. In addition, section 381(b) allows the owner or consignee in certain circumstances to take action to bring an imported article into compliance for admission purposes under such bonding requirements as the VerDate Aug<31>2005 15:06 Jan 30, 2007 Jkt 211001 Secretary of the Treasury may prescribe by regulation. Authority Delegation On November 25, 2002, the President signed into law the Homeland Security Act of 2002, Public Law 107–296, 116 Stat. 2135 (referred to in this document as ‘‘the HS Act’’), which involved, among other things, the creation of a new cabinet-level department, the Department of Homeland Security (DHS), and the transfer or reorganization of a number of executive branch agencies and offices within existing cabinet-level departments. This legislation and subsequent reorganization plans affected the organization and operation of the Customs Service. Section 402 of the HS Act provides that the Secretary of Homeland Security shall be responsible for administering the customs laws of the United States. With regard to the Customs Service, section 403(1) of the HS Act transferred the functions, personnel, assets, and liabilities of the Customs Service, including the functions of the Secretary of the Treasury relating to the Customs Service, to the Secretary of Homeland Security. However, notwithstanding the transfer of the Customs Service to DHS, section 412 of the HS Act provides that the legal authority vested in the Secretary of the Treasury over customs revenue functions is to be retained by the Secretary of the Treasury. Section 412 also authorizes the Secretary of the Treasury to delegate any of the retained legal authorities over the customs revenue functions to the Secretary of Homeland Security. By Treasury Order 100–16, dated May 15, 2003, the Secretary of the Treasury, by virtue of authority vested in him/her by 31 U.S.C. 321(b) and section 412 of the Homeland Security Act of 2002, delegated to the Secretary of Homeland Security authority for customs revenue functions with certain exceptions, including that contained in paragraph (1)(a)(i) of the Order by which the Secretary of the Treasury retains the sole authority to approve regulations concerning import quotas or trade bans, user fees, marking, labeling, copyright and trademark enforcement, and the completion of entry or substance of entry summary including duty assessment and collection, classification, valuation, application of the U.S. Harmonized Tariff Schedules, eligibility or requirements for preferential trade programs, and establishment of related recordkeeping requirements. As this final rule concerns activities involving both the completion of entry and the substance PO 00000 Frm 00014 Fmt 4700 Sfmt 4700 of the entry summary focusing on bond obligations and consequences that might arise as a result of post-entry and postsummary determinations of admissibility of merchandise, its subject matter is excepted from the delegation of authority to the Secretary of Homeland Security. Thus, the responsibility for this regulation rests with the Secretary of the Treasury. Applicable Regulations Based upon the above Federal Food, Drug, and Cosmetic Act statutory provisions, imported foods, drugs, devices, and cosmetics are conditionally released under bond while determinations as to admissibility are made; see 19 CFR 12.3. Under current 19 CFR 141.113(c), CBP may demand the return to CBP custody of most types of merchandise that fail to comply with the laws or regulations governing their admission into the United States (also referred to as the redelivery procedure). The condition of the basic importation and entry bond contained in 19 CFR 113.62(d) sets forth the obligation of the importer of record to timely redeliver released merchandise to CBP on demand and provides that a demand for redelivery will be made no later than 30 days after the date of release of the merchandise or 30 days after the end of the conditional release period, whichever is later. Under current procedures, when imported merchandise is refused admission by the Food and Drug Administration (FDA), CBP issues a notice of redelivery in order to establish a claim for liquidated damages if the importer of record fails to export, destroy, or redeliver the refused merchandise in the time period prescribed in that notice of redelivery. CBP has taken the position in C.S.D. 86–21 that the term ‘‘end of the conditional release period’’ in 19 CFR 113.62(d) has reference to a set time limitation that is either established by regulation (see, for example, 19 CFR 141.113(b) which prescribes a 180-day conditional release period for purposes of determining the correct country of origin of imported textiles and textile products) or by express notification to the importer of record. The end of the conditional release period does not refer to the liquidation of the entry covering the imported merchandise. Proposed Regulatory Changes On June 7, 2002, a Notice of Proposed Rulemaking was published in the Federal Register (67 FR 39322; the NPRM) that proposed to amend the regulations to provide for a specific conditional release period for E:\FR\FM\31JAR1.SGM 31JAR1 Federal Register / Vol. 72, No. 20 / Wednesday, January 31, 2007 / Rules and Regulations merchandise for which the FDA is authorized to determine admissibility. The changes proposed were intended to clarify importers’ responsibilities under the bond, provide a defined period of time to allow the FDA to perform its enforcement functions, and provide finality to the process. The NPRM proposed to make the following specific changes to what were then referred to as the Customs regulations (now the CBP regulations): 1. To redesignate some paragraphs in 19 CFR 141.113 due to the addition of a new paragraph (c), which provided for a specific conditional release period of 180 days for any food, drug, device, or cosmetic. The FDA would have this time period to make its determination of admissibility. Similar to the case of textiles and textile products mentioned above, the proposed amendment specified a 180-day conditional release period but also provided for a shorter period if FDA made a determination of inadmissibility before the expiration of that 180-day period. It is noted that under the proposed regulatory text, a demand for redelivery under 19 CFR 113.62(d) could be made up to 210 days (that is, 180 days plus 30 days) after the date of release of the merchandise. (The standard CBP bond condition states that redelivery may be demanded within 30 days after release or 30 days after the end of any applicable conditional release period, whichever is later.) The proposed regulation also made clear that the failure to redeliver merchandise would result in the assessment of liquidated damages equal to three times the value of the merchandise or equal to the domestic value of the merchandise in those instances where the port director has required a bond equal to the domestic value as permitted by current 19 CFR 12.3. 2. To amend 19 CFR 151.11 to authorize a representative of the FDA to obtain samples of food, drugs, devices, and cosmetic products covered by the Federal Food, Drug, and Cosmetic Act. mstockstill on PROD1PC62 with RULES Comments One hundred and forty (140) comments were received from importers, brokers, sureties, freight forwarders, express consignment operators, and trade associations. All commenters were opposed to the length of time of the proposed conditional release period. An analysis of those comments follows. Comment The vast majority of commenters stated that, as importers of food and health and beauty aid products, having a conditional release period of 180 days VerDate Aug<31>2005 15:06 Jan 30, 2007 Jkt 211001 would effectively put them out of business. The costs involved in warehousing the goods would make their businesses unmanageable. Additionally, the long waiting period could cause products to fall out of specification, lose effectiveness, or become obsolete or unusable. These comments assume that any FDAregulated merchandise must be held intact for 180 days after entry. Other commenters who stated that the 180-day period is too long recognize that the intent of the regulation was not to require that all this merchandise be held during the pendency of the conditional release period, but rather that it only apply to merchandise for which an admissibility decision by FDA is not made. Many of these commenters specifically recommended that the conditional release period end upon issuance of a notice from FDA providing that the goods may proceed (a may proceed notice) or issuance of a notice of refusal if those acts occur before the end of the 180-day conditional release period. Various other commenters noted that under FDA’s own Regulatory Procedures Manual, articles which have been released by FDA are no longer considered to be in import status by that agency. Response After review of all the comments, CBP concurs that the 180-day conditional release period is too long. Thus, the regulatory text of this final rule is amended to provide that the conditional release period ends upon the soonest occurring of the following events: issuance by the FDA that the merchandise may proceed, issuance of a notice of refusal of admission, or expiration of the 30-day period after release of the goods. It was not the intention of the proposed regulation to require that all goods regulated by the FDA be warehoused for 6 months while the conditional release period runs its course. When FDA issues a notice that the merchandise may proceed (which is the case on the vast majority of entries that come under FDA scrutiny), that act will serve to end the conditional release period. Accordingly, we concur with the commenter who recommended amendment of the proposed rule to indicate that the conditional release period ends upon issuance of the notice by FDA that the merchandise may proceed. In addition, the issuance of a notice of refusal of admission would end the conditional release period. There may be some situations where FDA will need additional time to determine admissibility. Accordingly, PO 00000 Frm 00015 Fmt 4700 Sfmt 4700 4425 the final rule also includes regulatory language that would permit FDA to extend the general 30-day conditional release period through express notification to the importer identifying the necessary testing requiring this extension. Comment Many commenters opposed the 180day conditional release period for the reason that it extends the current conditional release period of 30 days. Response Under the conditions of the basic importation bond, in order to establish a valid claim for liquidated damages for failure to redeliver merchandise into CBP custody, CBP must issue a notice of redelivery within 30 days of CBP release of merchandise or within 30 days after the end of the conditional release period, whichever is later. As stated in the notice of proposed rulemaking, there currently exists no conditional release period created by regulation for merchandise the admissibility of which is determined by the FDA. Therefore, neither the proposed rulemaking nor this final rule extends the conditional release period from 30 to 180 days because no express conditional release period for FDA contexts has ever been created by regulation. The commenters were apparently confusing the conditional release period with the 30-day period, after the conditional release period, during which CBP may still demand redelivery. Comment One commenter suggested that the proposed sampling procedures would result in the compromising of its packaging between manufacturing sites and customers’ facilities. The commenter proposed a process whereby it and other manufacturers could provide dedicated samples of present and proposed imported products, and CBP could maintain a data bank of importers and known imported products covered by these regulations. Response The commenter’s suggestion is outside the scope of the regulation because it proposes an examination procedure that is not done on a shipment-by-shipment basis. Under the provisions of 21 U.S.C. 381, CBP delivers to the Secretary of Health and Human Services such samples of food, drugs, devices, and cosmetics that are being imported or offered for import into the United States. Through these regulations, this sampling authority is E:\FR\FM\31JAR1.SGM 31JAR1 4426 Federal Register / Vol. 72, No. 20 / Wednesday, January 31, 2007 / Rules and Regulations delegated to the FDA in recognition of the practicalities of merchandise inspection. This will clarify that FDA inspectors may, under section 381(a), pull samples of imports of food, drugs, devices, and cosmetics. engaged in the importation of FDAregulated products. It is also stated that the proposed rulemaking represents a radical departure from current CBP policy with regard to redelivery of FDAregulated products. Comment One commenter asked whether CBP contemplates changing line release (otherwise known as Border Release Advanced Screening and Selectivity (BRASS)) procedures to accommodate the exchange of information necessary for providing notices of sampling. Response CBP does not agree because the rule is not a radical departure from current CBP policy. Additionally, in response to the comments to the proposed rule, the final rule reduces the conditional release period time from 180 days to 30 days, and potential costs that could be incurred should now be substantially less. The rule should not affect small entities that are compliant with redelivery requirements, and the rule does not impose further entry requirements or additional paperwork burden. Response Contemplated changes to line release (otherwise known as BRASS release) systems are operational in nature and are, thus, outside the scope of this rulemaking. Comment One commenter suggested that the rule must be rescinded in order to comply with Executive Order (E.O.) 12866. The commenter stated that given the huge volume of imports involved, the storage costs alone would almost certainly exceed the $100 million threshold or would, at the very least, adversely affect in a material way the economy, a sector of the economy, productivity, competition, or jobs. mstockstill on PROD1PC62 with RULES Response The commenter did not provide detail or justification for these comments, but CBP does not believe that storage costs of this magnitude would be incurred as a result of the rule now being promulgated. As noted above, CBP does believe that the 180-day conditional release period originally proposed is too long and realizes that this time period could negatively affect importers. To that end, CBP has modified the conditional release period from 180 days to 30 days in the final rule to reduce potential negative impacts to imports and corresponding storage costs. Comment Various commenters state that CBP has failed to comply with the Regulatory Flexibility Act, disagreeing with the statement in the proposed rulemaking that the proposed amendments, if adopted, will not have a significant impact on a substantial number of small entities. The commenters claim that, contrary to the assertion in the notice of proposed rulemaking, assessment of liquidated damages of three times the value of imported merchandise could have a devastating impact upon the many thousands of small companies VerDate Aug<31>2005 15:06 Jan 30, 2007 Jkt 211001 Comment Various commenters suggested that CBP rescind or place a stay on consideration of the proposed rulemaking until the implications of recently passed legislation governing port security can be considered in relation to FDA’s inspection protocol and CBP’s release procedures. The commenters indicated that the new law requires that importers provide CBP and FDA with advance notice of their intent to import food products—a procedure that should enhance FDA’s ability to promptly identify shipments that pose a safety concern. Those commenters also stated that the proposed rule should be rescinded in order to allow CBP and FDA to examine and discuss standardization of FDA notifications to importers and to take into account the commercial needs of the importing community. Response CBP disagrees. We are unaware of legislation governing port security that impinges upon or supplants FDA’s authority to refuse merchandise pursuant to the provisions of 21 U.S.C. 381(a). That provision allows for the release of merchandise under bond while the determination as to admissibility is made. This rulemaking simply provides for the creation of a conditional release period for FDA contexts that is more clearly defined than the practice that currently exists. Furthermore, the Bioterrorism Act creates a new section 21 U.S.C. 381(m), which specifically indicates that FDAregulated food and food products for which prior notice of arrival is not received shall not be released under a bond authorized by section 381(b). As set out in implementing regulations PO 00000 Frm 00016 Fmt 4700 Sfmt 4700 issued by FDA and CBP (see 68 FR 58974), decisions regarding compliance with new prior notice requirements are different from, and may precede, determinations of admissibility under other sections of the Federal Food, Drug, and Cosmetic Act or other laws. (See 21 CFR 1.283(g).) While CBP believes that the Bioterrorism Act will affect the importation of FDA-regulated products, it does not serve to overrule regulations concerning longstanding FDA and CBP authorities. Effect must be given to all of the substantive provisions of 21 U.S.C. 381, not part of them. Further, since the FDA-regulated food or food products for which prior notice of arrival is not received will not be released under a bond authorized by section 381(b), any issues arising concerning a conditional release period for merchandise released under bond are moot. Comment One commenter suggested that the time period to comment on the proposed rule be extended because of the complex underlying issues involved. Response CBP disagrees that the comment period needed to be extended. CBP received 140 comments to the proposed rule, and a wide variety of issues were presented in these comments. The primary concern, which was raised by all commenters to the proposed rule, was the length of the conditional release period. In response to this concern CBP has reduced the conditional release period from 180 to 30 days. Comment Many commenters conceded that it may be appropriate to clearly define a conditional release period, but they also suggested that 30 days would be a reasonable conditional release period for these products. Those same commenters also stated that CBP must further clarify and limit the scope of the proposed rule. Clarification is needed that clearly exempts from the conditional release period shipments that have been issued a may proceed notice. The commenters also suggested that FDA should notify importers when an entry is deemed conditional. As proposed, the commenters claimed that the rule represents a radical departure from current practices when the release of imported product is only rendered conditional through FDA’s timely notification of its intent to examine or sample the product. E:\FR\FM\31JAR1.SGM 31JAR1 Federal Register / Vol. 72, No. 20 / Wednesday, January 31, 2007 / Rules and Regulations Response CBP agrees that the rule should make clear that a conditional release period ends when FDA provides a may proceed notice. The final rule has been amended accordingly. CBP also agrees that a conditional release period shorter than 180 days is appropriate and has amended the rule to provide for a conditional release period of 30 days after the release of the merchandise unless FDA issues a may proceed notice or a notice of refusal which would immediately end the conditional period as provided for in the final rule. However, shipments that have been issued a may proceed notice are still subject to demands for redelivery for 30 days from the issuance of the may proceed notice. The regulation confirms that all FDA-regulated products under the Federal Food, Drug, and Cosmetic Act are conditionally released pending FDA’s determination of admissibility. In the vast majority of cases the conditional release period will end when the may proceed notice is provided before the end of the time provided in the regulation. Comment Various commenters contended that CBP seeks to modify its regulations in order to reverse the result of the court decision in United States v. So’s USA Company, Inc., 23 CIT 605 (1999). These commenters stated that the So’s court indicated that an importer must have affirmative notice that goods are released conditionally in order to extend the redelivery period beyond the 30 days from the date of release. Another stated that under the proposed regulation, FDA would no longer be required to advise an importer why its product is on hold, or even that it is on hold, within the first 30 days of entry. Response CBP disagrees. The final rule is entirely consistent with the So’s opinion and it does not conflict with that opinion in any respect. Further, this regulation does not affect any notice that FDA provides to an importer under its authorities. mstockstill on PROD1PC62 with RULES Comment One commenter stated that the proposal is arbitrary because the Government has not explained the need for a 180-day period to render a decision on admissibility. The statement in the proposed rule that the 180-day period is a reasonable period of time to allow the FDA to perform its enforcement functions is not supported by any explanation. VerDate Aug<31>2005 15:06 Jan 30, 2007 Jkt 211001 Response Again, CBP agrees that the 180-day period is too long a time period to have this merchandise conditionally released by regulation. Accordingly, the conditional release period has been reduced to 30 days in the final regulation. The 30-day release period can be shortened by the earlier issuance of a may proceed notice or a notice of refusal of admission. It also can be extended by an express notification from FDA to the importer. Comment One commenter suggested that FDA import inspectors issue a notice of review with regard to any shipment for which a may proceed notice is not provided. The commenter stated that the conditional release period could be established from the issuance date of the notice of review. That same commenter stated that for perishable products, the conditional release period should not exceed 5 days. For non-perishable products, the conditional release period should not exceed 30 days. Response Issuance of a new FDA form of notice that a shipment is under review is beyond the scope of this regulation. CBP disagrees that a conditional release period should be for as little as 5 days. The taking of samples and testing of merchandise could exceed that 5-day time period. Comment Some commenters stated that the 180day conditional release period is not consistent with the Customs-Trade Partnership Against Terrorism (C-TPAT) in that homeland security efforts are focused on increased review of imports at the time of admission. The proposed 180-day period would provide no potential homeland security benefits since the materials would already be conditionally released to importers. Response CBP acknowledges that the proposed 180-day conditional release period is too long and has revised the regulation accordingly. Review of cargo for terrorism concerns preferably is performed earlier than the time of admission of merchandise. In fact, review for terrorism concerns is performed in the information transmission or presentation process, which is in advance of arrival. For example, the FDA’s prior notice regulations (21 CFR 1.276 et seq.) require notice of food being imported or offered for import into the United States in advance of the foods’ arrival, and PO 00000 Frm 00017 Fmt 4700 Sfmt 4700 4427 CBP’s advance electronic cargo information regulations (set forth in 68 FR 68140) require information concerning cargo before the cargo is brought into the United States by any mode of transportation, so that CBP can pre-screen all cargo based on advance data transmission. CBP’s enforcement of these requirements is consistent with CTPAT. The conditional release period is meant to address the longstanding application of the provisions of the Federal Food, Drug, and Cosmetic Act, which allow for the release of merchandise under good and sufficient bond pending an admissibility determination and therefore is in addition to the prior notice and advance cargo information requirements that implement border security measures. Comment Many commenters stated that a 180 day conditional release period is contrary to public policy in that merchandise which causes a public health or safety issue should be identified and refused by FDA as quickly as possible. A 180-day period raises an unreasonable risk. Response CBP has revised the regulation to provide for a 30-day conditional release period in order to address this concern. Comment Many commenters indicated that if the redelivery period was shorter than the 180-days prescribed, companies would hold merchandise pending such a period and there would be more chance for a successful recall for safety concerns, since there is less chance that the goods would have been used or consumed. Response CBP agrees and has revised the final rule to provide for a 30-day conditional release period in order to address this concern. Comment One commenter suggested that CBP should strive to allow unconditional release of FDA-regulated merchandise with the filing of the CF–3461 (CBP entry document) as long as the entry summary and carrier manifest data are consistent with information contained within the FDA approved product listings. Response CBP disagrees because this would have CBP making decisions as to admissibility under the Federal Food, Drug, and Cosmetic Act when this E:\FR\FM\31JAR1.SGM 31JAR1 4428 Federal Register / Vol. 72, No. 20 / Wednesday, January 31, 2007 / Rules and Regulations decision-making authority clearly resides with the Secretary of Health and Human Services. Comment Many commenters stated that the proposed amendment to 19 CFR 151.10 of the CBP regulations regarding the collection of samples is not necessary. The commenters noted that the provisions of section 702(a) of the Federal Food, Drug, and Cosmetic Act (21 U.S.C. 372) already allow for the taking of samples by representatives of FDA. Response Under the provisions of 21 U.S.C. 381(a), CBP delivers samples of food, drugs, devices, and cosmetics that are being imported or offered for import into the United States, to the Secretary of Health and Human Services upon his request. The proposed amendment simply clarifies that such delivery authority is delegated to representatives of FDA and is not intended to intrude on any other authority that the Secretary of Health and Human Services may already have. Comment A group of commenters suggested the adoption of regulatory language that would preclude the issuance of fines or penalties against an importer who distributes articles after having received an FDA may proceed notice. mstockstill on PROD1PC62 with RULES Response CBP disagrees with this proposed language. CBP cannot by regulatory amendment exempt an importer from incurring fines or penalties that may otherwise be imposed for violation of a statute. Comment Various commenters stated that imposition of a 180-day conditional release period is violative of U.S. international obligations under the GATT 1994, and one commenter indicated that the proposed rule is violative of the Agreement on the Application of Sanitary and Phytosanitary Measures. While conceding that some additional controls at the border are acceptable, these commenters asserted that extending CBP control over imports for a sevenmonth period after importation would not stand scrutiny. Additionally, it was noted that sanitary and phytosanitary procedures must be undertaken and completed without undue delay (commenter’s emphasis) and in no less favorable a manner for imported products than for like domestic VerDate Aug<31>2005 15:06 Jan 30, 2007 Jkt 211001 products. Imposition of a conditional release period of 180 days is claimed to be violative of this ‘‘undue delay’’ proscription. Response Again, CBP has reduced the conditional release period from 180 to 30 days in the final rule. Comment Some commenters indicated that continuation of a conditional release period after FDA admits goods into commerce is inconsistent with the provisions of the Federal Food, Drug, and Cosmetic Act. The commenters stated that conditional delivery of the merchandise to the owner is made pending a decision as to admission generally, and not solely a decision to deny admission. It is argued that conditional release also ends upon admission of the article and, as such, CBP’s proposal to extend the conditional release period to 180 days without concern as to whether the merchandise has been admitted defeats the statutory intent of the Act. In contrast, another commenter stated that once a positive determination as to admissibility is made, the importer should not have to be subjected to the possibility of a redelivery demand for sampling or testing of the product. The latter commenter further contended that even after receiving a may proceed notice, an importer is left in the dark as to the status of goods that are apparently admitted into the commerce. Response CBP agrees that issuance of a notice from FDA that the merchandise may proceed would usually make it unnecessary to issue a redelivery notice in order to establish liability under the bond. For purposes of clarity, CBP is amending the language in the final rule to indicate that one of three acts occurring first in time—issuance of a notice of refusal, issuance of a may proceed notice or passage of 30 days from the date of conditional release— will end the conditional release period. However, it should be understood that issuance of a may proceed notice does not mean that CBP is precluded from issuing a subsequent demand to redeliver within 30 days from the end of that conditional release period. Comment Two commenters suggested that sureties be given the earliest possible notice (preferably in electronic form) that goods they have secured are subject to detention, refusal, and/or redelivery in order that immediate action can be PO 00000 Frm 00018 Fmt 4700 Sfmt 4700 taken with regard to pending and future importations. Also, mitigation guidelines should be adopted that provide extraordinary mitigation to sureties for efforts to locate, redeliver, and/or rehabilitate goods which are subject to liquidated damages for failure to redeliver into CBP custody. Response Mitigation guidelines for claims for liquidated damages are outside the scope of this rulemaking. Issuance of notices of detention and refusal are governed by FDA statute and regulation and any changes to issuance of those documents are also outside the scope of this regulation. Notices of redelivery may include private or confidential business information that would not be releasable to a surety unless a demand for payment was made against its bond. Comment One commenter proposed that the regulation require that all demands for redelivery be made contemporaneously with the notice of refusal issued by FDA. The commenter contended that this change would promote cooperation between FDA and CBP and encourage compliance through the more efficient issuance of required notices. Response CBP does not agree because, for operational reasons, it may not always be possible for notices to be issued contemporaneously. Conclusion In accordance with the foregoing analysis of the comments and further consideration of the matter, CBP has determined that the amendments of the proposed rule should be adopted as final with the sole major change being a reduction in the conditional release period from 180 days to 30 days, as set forth in the regulatory text further below. In addition, cross-references to the section of the regulations involving conditional release periods are being added to the relevant portion of the section on basic importer and entry bond conditions in 19 CFR 113.62. Executive Order 12866 and the Regulatory Flexibility Act This rule is not considered to be a significant regulatory action under Executive Order 12866. Accordingly, a regulatory assessment is not required. It is certified, pursuant to the provisions of the Regulatory Flexibility Act (5 U.S.C. 601 et seq.), that the regulatory amendments set forth in this final rule will not have a significant economic impact on a substantial E:\FR\FM\31JAR1.SGM 31JAR1 Federal Register / Vol. 72, No. 20 / Wednesday, January 31, 2007 / Rules and Regulations number of small entities. The rule should not affect small entities that are compliant with redelivery requirements, and the rule does not impose further entry requirements or additional paperwork burdens. A review of data for FY2004 indicates actual CBP liquidated damage collections for FDA jurisdiction goods are comparatively rare and of modest amounts. The total amount of liquidated damages collected in FY2004 for these goods was approximately $4 million. The total revenue (including those liquidated damages) collected for all imports was $27 billion. This amount reflects 6,000 liquidated damage cases, compared to 28.1 million entries of all goods worth $1.41 trillion. Pertinent cases and liquidated damage amounts are a tiny fraction (less than 1 percent) of overall revenue collected and import value. The value of liquidated damages collected changes minimally from year to year based on the number of importers, the number of bonds, and the number of violations. CBP does not expect this amount to change as a result of this rule. Additionally, the conditional release period should help importers, regardless of size, by clarifying that CBP must issue a redelivery notice within 30 days if it wishes to collect liquidated damages. As noted previously, there is currently no set date to issue a redelivery notice. The rule will compel CBP to act more quickly to provide notice to importers that violate the conditions of their bond. If CBP cannot act within the 30 days, it then foregoes collecting any liquidated damages. List of Subjects 19 CFR Part 113 Customs bond conditions. 19 CFR Part 141 Bonds, Customs duties and inspection, Entry procedures, Imports, Prohibited merchandise, Release of merchandise. 19 CFR Part 151 mstockstill on PROD1PC62 with RULES Customs duties and inspection, Examination, Sampling and testing, Imports, Laboratories, Penalties, Reporting and recordkeeping requirements. Amendments to the Regulations For the reasons stated above, parts 113, 141, and 151 of the CBP regulations (19 CFR Parts 141 and 151) are amended as set forth below. I VerDate Aug<31>2005 15:06 Jan 30, 2007 Jkt 211001 The revisions read as follows: PART 113—CUSTOMS BOND CONDITIONS 1. The authority citation for part 113 continues to read in part as follows: I Authority: 19 U.S.C. 66, 1623, 1624. * * § 113.62 * * * [Amended] 2. Section 113.62(d) is amended by adding a sentence at the end to read as follows: ‘‘(See §§ 141.113(b), 12.73(b)(2), and 12.80 of this chapter.)’’ I PART 141—ENTRY OF MERCHANDISE 3. The authority citation for part 141 continues to read in part as follows: I Authority: 19 U.S.C. 66, 1448, 1484, 1624. * * * * * Section 141.113 also issued under 19 U.S.C. 1499, 1623. 4. Section 141.113 is amended as follows: I a. The heading of the section is revised to read as set forth below; I b. Paragraph (a) is amended by, after the heading, designating the introductory text of paragraph (a) as paragraph (a)(1), redesignating current paragraphs (1) through (5) as paragraphs (a)(1)(i) through (v), and designating the remaining text, after redesignated paragraph (a)(1)(v), as paragraph (a)(2); I c. In redesignated paragraph (a)(2), first sentence, the words ‘‘Customs custody’’ are removed and replaced with the words ‘‘CBP custody’’; I d. In paragraph (b), the two references to ‘‘Customs’’ are replaced with reference to ‘‘CBP’’ and the three references to ‘‘Customs custody’’ are replaced with reference to ‘‘CBP custody’’; I e. Current paragraphs (c) through (h) are redesignated as paragraphs (d) through (i); I f. New paragraph (c) is added; I g. In redesignated paragraph (d), the words ‘‘in paragraph (a) or (b) of this section’’ are removed and replaced with the words ‘‘in paragraph (a), (b), or (c) of this section’’, and the words ‘‘Customs custody’’ are removed and replaced with the words ‘‘CBP custody’’; I h. In redesignated paragraphs (e) and (f), the words ‘‘Customs custody’’ are removed and replaced with the words ‘‘CBP custody’’; I i. In redesignated paragraph (g), first sentence, the words ‘‘Customs custody’’ are removed and replaced with the words ‘‘CBP custody’’; and I j. In redesignated paragraph (h) and in the first sentence of redesignated paragraph (i), the words ‘‘Customs custody’’ are removed and replaced with the words ‘‘CBP custody’’. I PO 00000 Frm 00019 Fmt 4700 Sfmt 4700 4429 § 141.113 Recall of merchandise released from Customs and Border Protection custody. * * * * * (c) Food, drugs, devices, and cosmetics—(1) Conditional release period. For purposes of determining the admissibility of any food, drug, device, or cosmetic imported pursuant to section 801(a) of the Federal Food, Drug, and Cosmetic Act (21 U.S.C. 381(a)), as amended, the release from CBP custody of any such product will be deemed conditional. Unless extended in accordance with paragraph (c)(2) of this section, the conditional release period will terminate upon the earliest occurring of the following events: (i) The date that FDA issues a notice of refusal of admission; (ii) The date that FDA issues a notice that the merchandise may proceed; or (iii) Upon the end of the 30-day period following the date of release. (2) Extension of conditional release period. The conditional release period provided under this paragraph (c) may be extended. The FDA must issue a written or electronic notice of sampling, detention, or other FDA action to the bond principal (i.e., importer of record) within 30 days of the release of the merchandise in order for the extension of the conditional release period to be valid. (3) Issuance of a redelivery notice. If FDA refuses admission of a food, drug, device or cosmetic into the United States, or if any notice of sampling or other request is not complied with, FDA will communicate that fact to the CBP port director who will demand the redelivery of the product to CBP custody. CBP will issue a notice of redelivery within 30 days from the date the product was refused admission by the FDA or from the date FDA determined the noncompliance with a notice of sampling or other request. The demand for redelivery may be made contemporaneously with the notice of refusal issued by the FDA. Notwithstanding the provisions of paragraph (i) of this section, a failure to comply with a demand for redelivery made under this paragraph (c) will result in the assessment of liquidated damages equal to three times the value of the merchandise involved unless the port director has prescribed a bond equal to the domestic value of the merchandise pursuant to § 12.3(b) of this Chapter. * * * * * E:\FR\FM\31JAR1.SGM 31JAR1 4430 Federal Register / Vol. 72, No. 20 / Wednesday, January 31, 2007 / Rules and Regulations PART 151—EXAMINATION, SAMPLING, AND TESTING OF MERCHANDISE 5. The general authority citation for part 151 continues to read, and a specific authority citation for § 151.11 is added to read, as follows: I Authority: 19 U.S.C. 66, 1202 (General Notes 3(i) and 3(j), Harmonized Tariff Schedule of the United States (HTSUS)), 1624. Section 151.11 also issued under 21 U.S.C. 381; * * * * * 6. Section 151.11 is amended as follows: I a. In the first sentence, the words ‘‘Customs custody’’ are removed and replaced with the words ‘‘CBP custody’’; I b. In the second sentence, the words ‘‘Customs custody’’ are replaced with the words ‘‘CBP custody’’; and I c. After the second sentence, a third sentence is added, to read as follows: I § 151.11 Request for samples or additional examination packages after release of merchandise. * * * For purposes of determining admissibility, representatives of the Food and Drug Administration may obtain samples of any food, drug, device, or cosmetic, the importation of which is governed by section 801 of the Federal Food, Drug, and Cosmetic Act, as amended (21 U.S.C. 381). Deborah J. Spero, Acting Commissioner, Customs and Border Protection. Approved: January 25, 2007. Timothy E. Skud, Deputy Assistant Secretary of the Treasury. [FR Doc. 07–408 Filed 1–30–07; 8:45 am] BILLING CODE 9111–14–P DEPARTMENT OF TRANSPORTATION Saint Lawrence Seaway Development Corporation 33 CFR Part 402 [Docket No. SLSDC 2006–26584] RIN 2135–AA25 Tariff of Tolls Saint Lawrence Seaway Development Corporation, DOT. ACTION: Final rule. mstockstill on PROD1PC62 with RULES AGENCY: SUMMARY: The Saint Lawrence Seaway Development Corporation (SLSDC) and the St. Lawrence Seaway Management Corporation (SLSMC) of Canada, under international agreement, jointly publish VerDate Aug<31>2005 15:06 Jan 30, 2007 Jkt 211001 and presently administer the St. Lawrence Seaway Tariff of Tolls in their respective jurisdictions. The Tariff sets forth the level of tolls assessed on all commodities and vessels transiting the facilities operated by the SLSDC and the SLSMC. The SLSDC is revising its regulations to reflect the fees and charges levied by the SLSMC in Canada starting in the 2007 navigation season, which are effective only in Canada. An amendment to increase the minimum charge per lock for those vessels that are not pleasure craft or subject in Canada to tolls under items 1 and 2 of the Tariff for full or partial transit of the Seaway will apply in the U.S. Also, the SLSDC is changing the toll charged per pleasure craft using the U.S. locks from $25 U.S. or $30 Canadian to $30 U.S. or $30 Canadian. Several minor editorial corrections are being made in § 402.3, ‘‘Interpretation.’’ and § 402.6, ‘‘Description and weight of cargo.’’ (See SUPPLEMENTARY INFORMATION.) DATES: This rule is effective March 2, 2007. FOR FURTHER INFORMATION CONTACT: Craig H. Middlebrook, Acting Chief Counsel, Saint Lawrence Seaway Development Corporation, 400 Seventh Street, SW., Washington, DC 20590, (202) 366–0091. SUPPLEMENTARY INFORMATION: The Saint Lawrence Seaway Development Corporation (SLSDC) and the St. Lawrence Seaway Management Corporation (SLSMC) of Canada, under international agreement, jointly publish and presently administer the St. Lawrence Seaway Tariff of Tolls (Schedule of Fees and Charges in Canada) in their respective jurisdictions. The Tariff sets forth the level of tolls assessed on all commodities and vessels transiting the facilities operated by the SLSDC and the SLSMC. The SLSDC is revising 33 CFR 402.8, ‘‘Schedule of tolls’’, to reflect the fees and charges levied by the SLSMC in Canada beginning in the 2007 navigation season. With one exception, the changes affect the tolls for commercial vessels and are applicable only in Canada. The collection of tolls by the SLSDC on commercial vessels transiting the U.S. locks is waived by law (33 U.S.C. 988a(a)). Accordingly, no notice or comment was necessary on these amendments. The SLSDC is amending 33 CFR 402.8, ‘‘Schedule of tolls’’, to increase the minimum charge per vessel per lock for full or partial transit of the Seaway from $20.40 to $25.00. This charge is for vessels that are not pleasure craft or subject in Canada to the tolls under items 1 and 2 of the Tariff. This increase PO 00000 Frm 00020 Fmt 4700 Sfmt 4700 is due to higher operating costs at the locks. The SLSDC is modifying its practice regarding the collection of pleasure craft tolls by allowing pleasure craft operators to pay the toll for transiting the U.S. locks, Eisenhower and Snell, in either $30 U.S. or $30 Canadian. Currently the toll is payable in $25 U.S. or $30 Canadian; however, this has resulted in confusion to pleasure craft operators when transiting both Canadian and U.S. locks. With almost eighty (80) percent of the tolls for pleasure crafts being paid in Canadian dollars and little disparity between the U.S. and Canadian exchange rates, the SLSDC is streamlining the pleasure craft toll collection process by allowing for payment in either $30 U.S. or $30 Canadian. Additionally, the SLSDC is making several minor editorial changes to 33 CFR402.3 and 33 CFR 402.5. Interested parties have been afforded an opportunity to comment; however no comments were received. Regulatory Notices: Privacy Act: Anyone is able to search the electronic form of all comments received into any of our dockets by the name of the individual submitting the comment (or signing the comment, if submitted on behalf of an association, business, labor union, etc.). You may review DOT’s complete Privacy Act Statement in the Federal Register published on April 11, 2000 (Volume 65, Number 70; Pages 19477–78) or you may visit http:// dms.dot.gov. Regulatory Evaluation This regulation involves a foreign affairs function of the United States and therefore Executive Order 12866 does not apply and evaluation under the Department of Transportation’s Regulatory Policies and Procedures is not required. Regulatory Flexibility Act Determination I certify this regulation will not have a significant economic impact on a substantial number of small entities. The St. Lawrence Seaway Tariff of Tolls primarily relate to commercial users of the Seaway, the vast majority of whom are foreign vessel operators. Therefore, any resulting costs will be borne mostly by foreign vessels. Environmental Impact This regulation does not require an environmental impact statement under the National Environmental Policy Act (49 U.S.C. 4321, et reg.) because it is not a major federal action significantly affecting the quality of the human environment. E:\FR\FM\31JAR1.SGM 31JAR1
[Pages 4423-4430]
[FR Doc No: 07-408]
19 CFR Parts 113, 141, and 151
[CBP Dec. 07-02]
RIN 1505-AB57
Conditional Release Period and CBP Bond Obligations for Food,
regulations to clarify the responsibilities of importers of food,
drugs, devices, and cosmetics under the basic CBP importation bond and
to provide a reasonable period of time to allow the Food and Drug
Administration (FDA) to perform its enforcement functions with respect
to these covered articles. The amendments include a provision for a
specific conditional release period of 30 days for any food, drug,
device, or cosmetic which has been released under bond and for which
admissibility is to be determined under the provisions of
the Federal Food, Drug, and Cosmetic Act (the Act). The amendments also
clarify the amount of liquidated damages that may be assessed when
there is a breach of the terms and conditions of the bond and authorize
any representative of FDA to obtain a sample of any imported article
subject to section 801 of the Act, as amended.
DATES: Effective Date: The amendments set forth in this document are
effective on May 1, 2007.
FOR FURTHER INFORMATION CONTACT: Wende Schuster, Office of
International Trade, (202-572-8761).
Section 801 of the Federal Food, Drug, and Cosmetic Act, as amended
(21 U.S.C. 381 referred to herein as section 381), and the regulations
promulgated under that statute, provide the basic legal framework
governing the importation of food, drugs, devices, and cosmetics into
the United States. Under 21 U.S.C. 381(a), the Secretary of the
Treasury shall deliver to the Secretary of Health and Human Services,
upon request, samples of food, drugs, devices, and cosmetics which are
being imported or offered for import. The Secretary of Health and Human
Services is authorized under section 381(a) to refuse admission of,
among other things, any article that appears from the examination or
otherwise to be adulterated or misbranded or to have been manufactured,
processed, or packed under insanitary conditions. In addition, the
Secretary of the Treasury is required by section 381(a) to cause the
destruction of any article refused admission unless the article is
exported, under regulations prescribed by the Secretary of the
Treasury, within 90 days of the date of notice of the refusal or within
such additional time as may be permitted pursuant to those regulations.
Under 21 U.S.C. 381(b), pending decision (by FDA) as to the
admission of an article being imported or offered for import, the
Secretary of the Treasury may authorize delivery of that article to the
owner or consignee upon the execution by him of a good and sufficient
bond providing for the payment of liquidated damages in the event of
default, as may be required pursuant to regulation. In addition,
section 381(b) allows the owner or consignee in certain circumstances
to take action to bring an imported article into compliance for
admission purposes under such bonding requirements as the Secretary of
the Treasury may prescribe by regulation.
Security Act of 2002, Public Law 107-296, 116 Stat. 2135 (referred to
in this document as ``the HS Act''), which involved, among other
things, the creation of a new cabinet-level department, the Department
of Homeland Security (DHS), and the transfer or reorganization of a
number of executive branch agencies and offices within existing
cabinet-level departments. This legislation and subsequent
reorganization plans affected the organization and operation of the
Section 402 of the HS Act provides that the Secretary of Homeland
Security shall be responsible for administering the customs laws of the
United States. With regard to the Customs Service, section 403(1) of
the HS Act transferred the functions, personnel, assets, and
liabilities of the Customs Service, including the functions of the
Secretary of the Treasury relating to the Customs Service, to the
Secretary of Homeland Security. However, notwithstanding the transfer
of the Customs Service to DHS, section 412 of the HS Act provides that
the legal authority vested in the Secretary of the Treasury over
customs revenue functions is to be retained by the Secretary of the
Treasury. Section 412 also authorizes the Secretary of the Treasury to
delegate any of the retained legal authorities over the customs revenue
functions to the Secretary of Homeland Security.
By Treasury Order 100-16, dated May 15, 2003, the Secretary of the
Treasury, by virtue of authority vested in him/her by 31 U.S.C. 321(b)
and section 412 of the Homeland Security Act of 2002, delegated to the
Secretary of Homeland Security authority for customs revenue functions
with certain exceptions, including that contained in paragraph
(1)(a)(i) of the Order by which the Secretary of the Treasury retains
the sole authority to approve regulations concerning import quotas or
trade bans, user fees, marking, labeling, copyright and trademark
enforcement, and the completion of entry or substance of entry summary
including duty assessment and collection, classification, valuation,
application of the U.S. Harmonized Tariff Schedules, eligibility or
requirements for preferential trade programs, and establishment of
related recordkeeping requirements. As this final rule concerns
activities involving both the completion of entry and the substance of
the entry summary focusing on bond obligations and consequences that
might arise as a result of post-entry and post-summary determinations
of admissibility of merchandise, its subject matter is excepted from
the delegation of authority to the Secretary of Homeland Security.
Thus, the responsibility for this regulation rests with the Secretary
Based upon the above Federal Food, Drug, and Cosmetic Act statutory
provisions, imported foods, drugs, devices, and cosmetics are
conditionally released under bond while determinations as to
admissibility are made; see 19 CFR 12.3. Under current 19 CFR
141.113(c), CBP may demand the return to CBP custody of most types of
merchandise that fail to comply with the laws or regulations governing
their admission into the United States (also referred to as the
redelivery procedure).
The condition of the basic importation and entry bond contained in
19 CFR 113.62(d) sets forth the obligation of the importer of record to
timely redeliver released merchandise to CBP on demand and provides
that a demand for redelivery will be made no later than 30 days after
the date of release of the merchandise or 30 days after the end of the
conditional release period, whichever is later. Under current
procedures, when imported merchandise is refused admission by the Food
and Drug Administration (FDA), CBP issues a notice of redelivery in
order to establish a claim for liquidated damages if the importer of
record fails to export, destroy, or redeliver the refused merchandise
in the time period prescribed in that notice of redelivery.
CBP has taken the position in C.S.D. 86-21 that the term ``end of
the conditional release period'' in 19 CFR 113.62(d) has reference to a
set time limitation that is either established by regulation (see, for
example, 19 CFR 141.113(b) which prescribes a 180-day conditional
release period for purposes of determining the correct country of
origin of imported textiles and textile products) or by express
notification to the importer of record. The end of the conditional
release period does not refer to the liquidation of the entry covering
the imported merchandise.
On June 7, 2002, a Notice of Proposed Rulemaking was published in
the Federal Register (67 FR 39322; the NPRM) that proposed to amend the
regulations to provide for a specific conditional release period for
merchandise for which the FDA is authorized to determine admissibility.
The changes proposed were intended to clarify importers'
responsibilities under the bond, provide a defined period of time to
allow the FDA to perform its enforcement functions, and provide
finality to the process.
The NPRM proposed to make the following specific changes to what
were then referred to as the Customs regulations (now the CBP
1. To redesignate some paragraphs in 19 CFR 141.113 due to the
addition of a new paragraph (c), which provided for a specific
conditional release period of 180 days for any food, drug, device, or
cosmetic. The FDA would have this time period to make its determination
of admissibility. Similar to the case of textiles and textile products
mentioned above, the proposed amendment specified a 180-day conditional
release period but also provided for a shorter period if FDA made a
determination of inadmissibility before the expiration of that 180-day
period. It is noted that under the proposed regulatory text, a demand
for redelivery under 19 CFR 113.62(d) could be made up to 210 days
(that is, 180 days plus 30 days) after the date of release of the
merchandise. (The standard CBP bond condition states that redelivery
may be demanded within 30 days after release or 30 days after the end
of any applicable conditional release period, whichever is later.) The
proposed regulation also made clear that the failure to redeliver
merchandise would result in the assessment of liquidated damages equal
to three times the value of the merchandise or equal to the domestic
value of the merchandise in those instances where the port director has
required a bond equal to the domestic value as permitted by current 19
CFR 12.3.
2. To amend 19 CFR 151.11 to authorize a representative of the FDA
to obtain samples of food, drugs, devices, and cosmetic products
covered by the Federal Food, Drug, and Cosmetic Act.
One hundred and forty (140) comments were received from importers,
brokers, sureties, freight forwarders, express consignment operators,
and trade associations. All commenters were opposed to the length of
time of the proposed conditional release period. An analysis of those
The vast majority of commenters stated that, as importers of food
and health and beauty aid products, having a conditional release period
of 180 days would effectively put them out of business. The costs
involved in warehousing the goods would make their businesses
unmanageable. Additionally, the long waiting period could cause
products to fall out of specification, lose effectiveness, or become
obsolete or unusable. These comments assume that any FDA-regulated
merchandise must be held intact for 180 days after entry. Other
commenters who stated that the 180-day period is too long recognize
that the intent of the regulation was not to require that all this
merchandise be held during the pendency of the conditional release
period, but rather that it only apply to merchandise for which an
admissibility decision by FDA is not made. Many of these commenters
specifically recommended that the conditional release period end upon
issuance of a notice from FDA providing that the goods may proceed (a
may proceed notice) or issuance of a notice of refusal if those acts
occur before the end of the 180-day conditional release period. Various
other commenters noted that under FDA's own Regulatory Procedures
Manual, articles which have been released by FDA are no longer
considered to be in import status by that agency.
After review of all the comments, CBP concurs that the 180-day
conditional release period is too long. Thus, the regulatory text of
this final rule is amended to provide that the conditional release
period ends upon the soonest occurring of the following events:
issuance by the FDA that the merchandise may proceed, issuance of a
notice of refusal of admission, or expiration of the 30-day period
after release of the goods.
It was not the intention of the proposed regulation to require that
all goods regulated by the FDA be warehoused for 6 months while the
conditional release period runs its course. When FDA issues a notice
that the merchandise may proceed (which is the case on the vast
majority of entries that come under FDA scrutiny), that act will serve
to end the conditional release period. Accordingly, we concur with the
commenter who recommended amendment of the proposed rule to indicate
that the conditional release period ends upon issuance of the notice by
FDA that the merchandise may proceed. In addition, the issuance of a
notice of refusal of admission would end the conditional release
There may be some situations where FDA will need additional time to
determine admissibility. Accordingly, the final rule also includes
regulatory language that would permit FDA to extend the general 30-day
conditional release period through express notification to the importer
identifying the necessary testing requiring this extension.
Many commenters opposed the 180-day conditional release period for
the reason that it extends the current conditional release period of 30
Under the conditions of the basic importation bond, in order to
establish a valid claim for liquidated damages for failure to redeliver
merchandise into CBP custody, CBP must issue a notice of redelivery
within 30 days of CBP release of merchandise or within 30 days after
the end of the conditional release period, whichever is later. As
stated in the notice of proposed rulemaking, there currently exists no
conditional release period created by regulation for merchandise the
admissibility of which is determined by the FDA. Therefore, neither the
proposed rulemaking nor this final rule extends the conditional release
period from 30 to 180 days because no express conditional release
period for FDA contexts has ever been created by regulation. The
commenters were apparently confusing the conditional release period
with the 30-day period, after the conditional release period, during
which CBP may still demand redelivery.
One commenter suggested that the proposed sampling procedures would
result in the compromising of its packaging between manufacturing sites
and customers' facilities. The commenter proposed a process whereby it
and other manufacturers could provide dedicated samples of present and
proposed imported products, and CBP could maintain a data bank of
importers and known imported products covered by these regulations.
The commenter's suggestion is outside the scope of the regulation
because it proposes an examination procedure that is not done on a
shipment-by-shipment basis. Under the provisions of 21 U.S.C. 381, CBP
delivers to the Secretary of Health and Human Services such samples of
food, drugs, devices, and cosmetics that are being imported or offered
for import into the United States. Through these regulations, this
sampling authority is
delegated to the FDA in recognition of the practicalities of
merchandise inspection. This will clarify that FDA inspectors may,
under section 381(a), pull samples of imports of food, drugs, devices,
One commenter asked whether CBP contemplates changing line release
(otherwise known as Border Release Advanced Screening and Selectivity
(BRASS)) procedures to accommodate the exchange of information
necessary for providing notices of sampling.
Contemplated changes to line release (otherwise known as BRASS
release) systems are operational in nature and are, thus, outside the
One commenter suggested that the rule must be rescinded in order to
comply with Executive Order (E.O.) 12866. The commenter stated that
given the huge volume of imports involved, the storage costs alone
would almost certainly exceed the $100 million threshold or would, at
the very least, adversely affect in a material way the economy, a
sector of the economy, productivity, competition, or jobs.
The commenter did not provide detail or justification for these
comments, but CBP does not believe that storage costs of this magnitude
would be incurred as a result of the rule now being promulgated. As
noted above, CBP does believe that the 180-day conditional release
period originally proposed is too long and realizes that this time
period could negatively affect importers. To that end, CBP has modified
the conditional release period from 180 days to 30 days in the final
rule to reduce potential negative impacts to imports and corresponding
Various commenters state that CBP has failed to comply with the
Regulatory Flexibility Act, disagreeing with the statement in the
proposed rulemaking that the proposed amendments, if adopted, will not
The commenters claim that, contrary to the assertion in the notice of
proposed rulemaking, assessment of liquidated damages of three times
the value of imported merchandise could have a devastating impact upon
the many thousands of small companies engaged in the importation of
FDA-regulated products. It is also stated that the proposed rulemaking
represents a radical departure from current CBP policy with regard to
redelivery of FDA-regulated products.
CBP does not agree because the rule is not a radical departure from
current CBP policy. Additionally, in response to the comments to the
proposed rule, the final rule reduces the conditional release period
time from 180 days to 30 days, and potential costs that could be
incurred should now be substantially less. The rule should not affect
small entities that are compliant with redelivery requirements, and the
rule does not impose further entry requirements or additional paperwork
Various commenters suggested that CBP rescind or place a stay on
consideration of the proposed rulemaking until the implications of
recently passed legislation governing port security can be considered
in relation to FDA's inspection protocol and CBP's release procedures.
The commenters indicated that the new law requires that importers
provide CBP and FDA with advance notice of their intent to import food
products--a procedure that should enhance FDA's ability to promptly
identify shipments that pose a safety concern. Those commenters also
stated that the proposed rule should be rescinded in order to allow CBP
and FDA to examine and discuss standardization of FDA notifications to
importers and to take into account the commercial needs of the
importing community.
CBP disagrees. We are unaware of legislation governing port
security that impinges upon or supplants FDA's authority to refuse
merchandise pursuant to the provisions of 21 U.S.C. 381(a). That
provision allows for the release of merchandise under bond while the
determination as to admissibility is made. This rulemaking simply
provides for the creation of a conditional release period for FDA
contexts that is more clearly defined than the practice that currently
exists. Furthermore, the Bioterrorism Act creates a new section 21
U.S.C. 381(m), which specifically indicates that FDA-regulated food and
food products for which prior notice of arrival is not received shall
not be released under a bond authorized by section 381(b). As set out
in implementing regulations issued by FDA and CBP (see 68 FR 58974),
decisions regarding compliance with new prior notice requirements are
different from, and may precede, determinations of admissibility under
other sections of the Federal Food, Drug, and Cosmetic Act or other
laws. (See 21 CFR 1.283(g).) While CBP believes that the Bioterrorism
Act will affect the importation of FDA-regulated products, it does not
serve to overrule regulations concerning longstanding FDA and CBP
authorities. Effect must be given to all of the substantive provisions
of 21 U.S.C. 381, not part of them. Further, since the FDA-regulated
food or food products for which prior notice of arrival is not received
will not be released under a bond authorized by section 381(b), any
issues arising concerning a conditional release period for merchandise
released under bond are moot.
One commenter suggested that the time period to comment on the
proposed rule be extended because of the complex underlying issues
CBP disagrees that the comment period needed to be extended. CBP
received 140 comments to the proposed rule, and a wide variety of
issues were presented in these comments. The primary concern, which was
raised by all commenters to the proposed rule, was the length of the
conditional release period. In response to this concern CBP has reduced
the conditional release period from 180 to 30 days.
Many commenters conceded that it may be appropriate to clearly
define a conditional release period, but they also suggested that 30
days would be a reasonable conditional release period for these
products. Those same commenters also stated that CBP must further
clarify and limit the scope of the proposed rule. Clarification is
needed that clearly exempts from the conditional release period
shipments that have been issued a may proceed notice. The commenters
also suggested that FDA should notify importers when an entry is deemed
conditional. As proposed, the commenters claimed that the rule
represents a radical departure from current practices when the release
of imported product is only rendered conditional through FDA's timely
notification of its intent to examine or sample the product.
CBP agrees that the rule should make clear that a conditional
release period ends when FDA provides a may proceed notice. The final
rule has been amended accordingly. CBP also agrees that a conditional
release period shorter than 180 days is appropriate and has amended the
rule to provide for a conditional release period of 30 days after the
release of the merchandise unless FDA issues a may proceed notice or a
notice of refusal which would immediately end the conditional period as
provided for in the final rule. However, shipments that have been
issued a may proceed notice are still subject to demands for redelivery
for 30 days from the issuance of the may proceed notice. The regulation
confirms that all FDA-regulated products under the Federal Food, Drug,
and Cosmetic Act are conditionally released pending FDA's determination
of admissibility. In the vast majority of cases the conditional release
period will end when the may proceed notice is provided before the end
of the time provided in the regulation.
Various commenters contended that CBP seeks to modify its
regulations in order to reverse the result of the court decision in
United States v. So's USA Company, Inc., 23 CIT 605 (1999). These
commenters stated that the So's court indicated that an importer must
have affirmative notice that goods are released conditionally in order
to extend the redelivery period beyond the 30 days from the date of
release. Another stated that under the proposed regulation, FDA would
no longer be required to advise an importer why its product is on hold,
or even that it is on hold, within the first 30 days of entry.
CBP disagrees. The final rule is entirely consistent with the So's
opinion and it does not conflict with that opinion in any respect.
Further, this regulation does not affect any notice that FDA provides
to an importer under its authorities.
One commenter stated that the proposal is arbitrary because the
Government has not explained the need for a 180-day period to render a
decision on admissibility. The statement in the proposed rule that the
180-day period is a reasonable period of time to allow the FDA to
perform its enforcement functions is not supported by any explanation.
Again, CBP agrees that the 180-day period is too long a time period
to have this merchandise conditionally released by regulation.
Accordingly, the conditional release period has been reduced to 30 days
in the final regulation. The 30-day release period can be shortened by
the earlier issuance of a may proceed notice or a notice of refusal of
admission. It also can be extended by an express notification from FDA
One commenter suggested that FDA import inspectors issue a notice
of review with regard to any shipment for which a may proceed notice is
not provided. The commenter stated that the conditional release period
could be established from the issuance date of the notice of review.
That same commenter stated that for perishable products, the
conditional release period should not exceed 5 days. For non-perishable
products, the conditional release period should not exceed 30 days.
Issuance of a new FDA form of notice that a shipment is under
review is beyond the scope of this regulation. CBP disagrees that a
conditional release period should be for as little as 5 days. The
taking of samples and testing of merchandise could exceed that 5-day
Some commenters stated that the 180-day conditional release period
is not consistent with the Customs-Trade Partnership Against Terrorism
(C-TPAT) in that homeland security efforts are focused on increased
review of imports at the time of admission. The proposed 180-day period
would provide no potential homeland security benefits since the
materials would already be conditionally released to importers.
CBP acknowledges that the proposed 180-day conditional release
period is too long and has revised the regulation accordingly. Review
of cargo for terrorism concerns preferably is performed earlier than
the time of admission of merchandise. In fact, review for terrorism
concerns is performed in the information transmission or presentation
process, which is in advance of arrival. For example, the FDA's prior
notice regulations (21 CFR 1.276 et seq.) require notice of food being
imported or offered for import into the United States in advance of the
foods' arrival, and CBP's advance electronic cargo information
regulations (set forth in 68 FR 68140) require information concerning
cargo before the cargo is brought into the United States by any mode of
transportation, so that CBP can pre-screen all cargo based on advance
data transmission. CBP's enforcement of these requirements is
consistent with C-TPAT. The conditional release period is meant to
address the longstanding application of the provisions of the Federal
Food, Drug, and Cosmetic Act, which allow for the release of
merchandise under good and sufficient bond pending an admissibility
determination and therefore is in addition to the prior notice and
advance cargo information requirements that implement border security
Many commenters stated that a 180 day conditional release period is
contrary to public policy in that merchandise which causes a public
health or safety issue should be identified and refused by FDA as
quickly as possible. A 180-day period raises an unreasonable risk.
CBP has revised the regulation to provide for a 30-day conditional
release period in order to address this concern.
Many commenters indicated that if the redelivery period was shorter
than the 180-days prescribed, companies would hold merchandise pending
such a period and there would be more chance for a successful recall
for safety concerns, since there is less chance that the goods would
have been used or consumed.
CBP agrees and has revised the final rule to provide for a 30-day
conditional release period in order to address this concern.
One commenter suggested that CBP should strive to allow
unconditional release of FDA-regulated merchandise with the filing of
the CF-3461 (CBP entry document) as long as the entry summary and
carrier manifest data are consistent with information contained within
the FDA approved product listings.
CBP disagrees because this would have CBP making decisions as to
admissibility under the Federal Food, Drug, and Cosmetic Act when this
decision-making authority clearly resides with the Secretary of Health
Many commenters stated that the proposed amendment to 19 CFR 151.10
of the CBP regulations regarding the collection of samples is not
necessary. The commenters noted that the provisions of section 702(a)
of the Federal Food, Drug, and Cosmetic Act (21 U.S.C. 372) already
allow for the taking of samples by representatives of FDA.
Under the provisions of 21 U.S.C. 381(a), CBP delivers samples of
for import into the United States, to the Secretary of Health and Human
Services upon his request. The proposed amendment simply clarifies that
such delivery authority is delegated to representatives of FDA and is
not intended to intrude on any other authority that the Secretary of
Health and Human Services may already have.
A group of commenters suggested the adoption of regulatory language
that would preclude the issuance of fines or penalties against an
importer who distributes articles after having received an FDA may
proceed notice.
CBP disagrees with this proposed language. CBP cannot by regulatory
amendment exempt an importer from incurring fines or penalties that may
otherwise be imposed for violation of a statute.
Various commenters stated that imposition of a 180-day conditional
release period is violative of U.S. international obligations under the
GATT 1994, and one commenter indicated that the proposed rule is
violative of the Agreement on the Application of Sanitary and
Phytosanitary Measures. While conceding that some additional controls
at the border are acceptable, these commenters asserted that extending
CBP control over imports for a seven-month period after importation
would not stand scrutiny. Additionally, it was noted that sanitary and
phytosanitary procedures must be undertaken and completed without undue
delay (commenter's emphasis) and in no less favorable a manner for
imported products than for like domestic products. Imposition of a
conditional release period of 180 days is claimed to be violative of
this ``undue delay'' proscription.
Again, CBP has reduced the conditional release period from 180 to
30 days in the final rule.
Some commenters indicated that continuation of a conditional
release period after FDA admits goods into commerce is inconsistent
with the provisions of the Federal Food, Drug, and Cosmetic Act. The
commenters stated that conditional delivery of the merchandise to the
owner is made pending a decision as to admission generally, and not
solely a decision to deny admission. It is argued that conditional
release also ends upon admission of the article and, as such, CBP's
proposal to extend the conditional release period to 180 days without
concern as to whether the merchandise has been admitted defeats the
statutory intent of the Act. In contrast, another commenter stated that
once a positive determination as to admissibility is made, the importer
should not have to be subjected to the possibility of a redelivery
demand for sampling or testing of the product. The latter commenter
further contended that even after receiving a may proceed notice, an
importer is left in the dark as to the status of goods that are
apparently admitted into the commerce.
CBP agrees that issuance of a notice from FDA that the merchandise
may proceed would usually make it unnecessary to issue a redelivery
notice in order to establish liability under the bond. For purposes of
clarity, CBP is amending the language in the final rule to indicate
that one of three acts occurring first in time--issuance of a notice of
refusal, issuance of a may proceed notice or passage of 30 days from
the date of conditional release--will end the conditional release
period. However, it should be understood that issuance of a may proceed
notice does not mean that CBP is precluded from issuing a subsequent
demand to redeliver within 30 days from the end of that conditional
release period.
Two commenters suggested that sureties be given the earliest
possible notice (preferably in electronic form) that goods they have
secured are subject to detention, refusal, and/or redelivery in order
that immediate action can be taken with regard to pending and future
importations. Also, mitigation guidelines should be adopted that
provide extraordinary mitigation to sureties for efforts to locate,
redeliver, and/or rehabilitate goods which are subject to liquidated
damages for failure to redeliver into CBP custody.
Mitigation guidelines for claims for liquidated damages are outside
the scope of this rulemaking. Issuance of notices of detention and
refusal are governed by FDA statute and regulation and any changes to
issuance of those documents are also outside the scope of this
regulation. Notices of redelivery may include private or confidential
business information that would not be releasable to a surety unless a
demand for payment was made against its bond.
One commenter proposed that the regulation require that all demands
for redelivery be made contemporaneously with the notice of refusal
issued by FDA. The commenter contended that this change would promote
cooperation between FDA and CBP and encourage compliance through the
more efficient issuance of required notices.
CBP does not agree because, for operational reasons, it may not
always be possible for notices to be issued contemporaneously.
In accordance with the foregoing analysis of the comments and
further consideration of the matter, CBP has determined that the
amendments of the proposed rule should be adopted as final with the
sole major change being a reduction in the conditional release period
from 180 days to 30 days, as set forth in the regulatory text further
below. In addition, cross-references to the section of the regulations
involving conditional release periods are being added to the relevant
portion of the section on basic importer and entry bond conditions in
19 CFR 113.62.
This rule is not considered to be a significant regulatory action
under Executive Order 12866. Accordingly, a regulatory assessment is
It is certified, pursuant to the provisions of the Regulatory
Flexibility Act (5 U.S.C. 601 et seq.), that the regulatory amendments
set forth in this final rule will not have a significant economic
number of small entities. The rule should not affect small entities
that are compliant with redelivery requirements, and the rule does not
impose further entry requirements or additional paperwork burdens.
A review of data for FY2004 indicates actual CBP liquidated damage
collections for FDA jurisdiction goods are comparatively rare and of
modest amounts. The total amount of liquidated damages collected in
FY2004 for these goods was approximately $4 million. The total revenue
(including those liquidated damages) collected for all imports was $27
billion. This amount reflects 6,000 liquidated damage cases, compared
to 28.1 million entries of all goods worth $1.41 trillion. Pertinent
cases and liquidated damage amounts are a tiny fraction (less than 1
percent) of overall revenue collected and import value. The value of
liquidated damages collected changes minimally from year to year based
on the number of importers, the number of bonds, and the number of
violations. CBP does not expect this amount to change as a result of
Additionally, the conditional release period should help importers,
regardless of size, by clarifying that CBP must issue a redelivery
notice within 30 days if it wishes to collect liquidated damages. As
noted previously, there is currently no set date to issue a redelivery
notice. The rule will compel CBP to act more quickly to provide notice
to importers that violate the conditions of their bond. If CBP cannot
act within the 30 days, it then foregoes collecting any liquidated
Customs bond conditions.
Bonds, Customs duties and inspection, Entry procedures, Imports,
Prohibited merchandise, Release of merchandise.
Customs duties and inspection, Examination, Sampling and testing,
Imports, Laboratories, Penalties, Reporting and recordkeeping
For the reasons stated above, parts 113, 141, and 151 of the CBP
regulations (19 CFR Parts 141 and 151) are amended as set forth below.
PART 113--CUSTOMS BOND CONDITIONS
1. The authority citation for part 113 continues to read in part as
Sec.  113.62  [Amended]
2. Section 113.62(d) is amended by adding a sentence at the end to read
as follows: ``(See Sec. Sec.  141.113(b), 12.73(b)(2), and 12.80 of
this chapter.)''
3. The authority citation for part 141 continues to read in part as
b. Paragraph (a) is amended by, after the heading, designating the
introductory text of paragraph (a) as paragraph (a)(1), redesignating
current paragraphs (1) through (5) as paragraphs (a)(1)(i) through (v),
and designating the remaining text, after redesignated paragraph
(a)(1)(v), as paragraph (a)(2);
c. In redesignated paragraph (a)(2), first sentence, the words
``Customs custody'' are removed and replaced with the words ``CBP
custody'';
d. In paragraph (b), the two references to ``Customs'' are replaced
with reference to ``CBP'' and the three references to ``Customs
custody'' are replaced with reference to ``CBP custody'';
e. Current paragraphs (c) through (h) are redesignated as paragraphs
(d) through (i);
g. In redesignated paragraph (d), the words ``in paragraph (a) or (b)
of this section'' are removed and replaced with the words ``in
paragraph (a), (b), or (c) of this section'', and the words ``Customs
custody'' are removed and replaced with the words ``CBP custody'';
h. In redesignated paragraphs (e) and (f), the words ``Customs
i. In redesignated paragraph (g), first sentence, the words ``Customs
custody'' are removed and replaced with the words ``CBP custody''; and
j. In redesignated paragraph (h) and in the first sentence of
redesignated paragraph (i), the words ``Customs custody'' are removed
and replaced with the words ``CBP custody''.
Sec.  141.113  Recall of merchandise released from Customs and Border
Protection custody.
(c) Food, drugs, devices, and cosmetics--(1) Conditional release
period. For purposes of determining the admissibility of any food,
drug, device, or cosmetic imported pursuant to section 801(a) of the
Federal Food, Drug, and Cosmetic Act (21 U.S.C. 381(a)), as amended,
the release from CBP custody of any such product will be deemed
conditional. Unless extended in accordance with paragraph (c)(2) of
this section, the conditional release period will terminate upon the
earliest occurring of the following events:
(ii) The date that FDA issues a notice that the merchandise may
(iii) Upon the end of the 30-day period following the date of
(2) Extension of conditional release period. The conditional
release period provided under this paragraph (c) may be extended. The
FDA must issue a written or electronic notice of sampling, detention,
or other FDA action to the bond principal (i.e., importer of record)
within 30 days of the release of the merchandise in order for the
extension of the conditional release period to be valid.
(3) Issuance of a redelivery notice. If FDA refuses admission of a
food, drug, device or cosmetic into the United States, or if any notice
of sampling or other request is not complied with, FDA will communicate
that fact to the CBP port director who will demand the redelivery of
the product to CBP custody. CBP will issue a notice of redelivery
within 30 days from the date the product was refused admission by the
FDA or from the date FDA determined the noncompliance with a notice of
sampling or other request. The demand for redelivery may be made
contemporaneously with the notice of refusal issued by the FDA.
Notwithstanding the provisions of paragraph (i) of this section, a
failure to comply with a demand for redelivery made under this
paragraph (c) will result in the assessment of liquidated damages equal
to three times the value of the merchandise involved unless the port
director has prescribed a bond equal to the domestic value of the
merchandise pursuant to Sec.  12.3(b) of this Chapter.
5. The general authority citation for part 151 continues to read, and a
specific authority citation for Sec.  151.11 is added to read, as
Authority: 19 U.S.C. 66, 1202 (General Notes 3(i) and 3(j),
a. In the first sentence, the words ``Customs custody'' are removed and
replaced with the words ``CBP custody'';
b. In the second sentence, the words ``Customs custody'' are replaced
with the words ``CBP custody''; and
c. After the second sentence, a third sentence is added, to read as
Sec.  151.11  Request for samples or additional examination packages
after release of merchandise.
* * * For purposes of determining admissibility, representatives of
the Food and Drug Administration may obtain samples of any food, drug,
device, or cosmetic, the importation of which is governed by section
801 of the Federal Food, Drug, and Cosmetic Act, as amended (21 U.S.C.