[Federal Register Volume 59, Number 56 (Wednesday, March 23, 1994)]
[Unknown Section]
[Page 0]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 94-6752]


[[Page Unknown]]

[Federal Register: March 23, 1994]


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DEPARTMENT OF THE TREASURY

United States Customs Service

19 CFR Part 24

RIN 1515-AB38

 

Fees Assessed for Defaulted Payments

AGENCY: U.S. Customs Service, Department of the Treasury.

ACTION: Proposed rule.

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SUMMARY: This document proposes to amend the Customs Regulations to 
authorize the assessment of a $30 fee for any defaulted payment 
resulting from a check or other monetary instrument returned unpaid by 
a financial institution, including Automated Clearinghouse defaulted 
payments, which were presented for duties, taxes and other charges 
incurred in connection with any commercial or noncommercial importation 
or other Customs transaction whether or not backed by a Customs bond. 
At present, Customs authority to assess the $30 fee is limited to 
returned checks presented with respect to noncommercial importations 
for which no formal entry was required, and other Customs transactions 
not backed by a Customs bond. The purpose of the proposed change is to 
enable Customs to recoup the administrative costs incurred in 
processing all returned checks and other defaulted payments.

DATES: Comments must be received on or before May 23, 1994.

ADDRESSES: Comments (preferably in triplicate) must be submitted to 
U.S. Customs Service, ATTN: Regulations Branch, Franklin Court, 1301 
Constitution Avenue, NW., Washington, DC 20229, and may be inspected at 
the Regulations Branch, 1099 14th Street, NW., suite 4000, Washington, 
DC.

FOR FURTHER INFORMATION CONTACT: David Baker, Office of the Comptroller 
(202-927-0620).

SUPPLEMENTARY INFORMATION:

Background

    By a document published in the Federal Register as T.D. 92-73 on 
August 10, 1992 (57 FR 35458), Customs amended its regulations to 
establish a $30 charge for each check that is returned by a financial 
institution to Customs unpaid, if that check was presented either for 
payment of duties or other charges incurred on noncommercial 
importations for which a formal entry was not required or for payment 
in connection with any other transaction not backed by a Customs bond 
(Sec. 24.1(e), Customs Regulations; 19 CFR 24.1(e)).
    However, Customs has not been entirely successful at charging the 
$30 fee in part because Customs cannot differentiate in a cost 
effective manner between returned checks made by individuals on 
noncommercial importations, and those made by commercial entities, 
which are usually backed by a Customs bond. Moreover, because Customs 
is only authorized at present to charge the fee in connection with 
noncommercial importations or other transactions not backed by a 
Customs bond, Customs is unable to recoup the administrative costs 
incurred for processing all returned checks and other defaulted 
payments. In particular, Sec. 24.1(e) does not authorize charging the 
fee for processing defaulted payments made through the Automated 
Clearinghouse (ACH) (see Sec. 24.25, Customs Regulations; 19 CFR 
24.25).
    Section 24.1(e) was made applicable only to noncommercial 
importations and other transactions not backed by a Customs bond, 
primarily because of the availability of liquidated damages in cases 
where checks were returned unpaid in connection with commercial 
importations and other transactions which were supported by a bond.
    However, the assessment of liquidated damages does not recoup the 
administrative costs connected with processing defaulted payments. All 
liquidated damages collected by Customs are credited to one of the 
Treasury Department's miscellaneous receipt accounts which cannot be 
used to defray the expense of processing defaulted payments. The $30 
fee provided for in Sec. 24.1(e), on the other hand, is credited to a 
Customs account whose purpose is specifically to recoup the 
administrative costs associated with processing defaulted payments. 
Thus, because the $30 fee is money usable by Customs in this regard 
while liquidated damages are not, the two assessments may not properly 
be considered a duplicate assessment for a single defaulted payment.
    Accordingly, against this backdrop, Customs proposes to amend 
Sec. 24.1(e) so as to permit the application of the $30 fee for all 
returned checks, other monetary instruments, and ACH defaulted 
payments, regardless of whether the maker is commercial and/or bonded.

Comments

    Before adopting this proposal, consideration will be given to any 
written comments (preferably in triplicate) that are timely submitted 
to Customs. All such comments received from the public pursuant to this 
notice of proposed rulemaking will be available for public inspection 
in accordance with the Freedom of Information Act (5 U.S.C. 552), 
Sec. 1.4, Treasury Department Regulations (31 CFR 1.4), and 
Sec. 103.11(b), Customs Regulations (19 CFR 103.11(b)), during regular 
business days between the hours of 9:00 a.m. and 4:30 p.m. at the 
Regulations Branch, 1099 14th Street, NW., Suite 4000, Washington, DC.

Regulatory Flexibility Act and Executive Order 12866

    Pursuant to the provisions of the Regulatory Flexibility Act (5 
U.S.C. 601 et seq.), for the reasons stated in the preamble, it is 
certified that the proposed amendment would not have a significant 
economic impact on a substantial number of small entities. Accordingly, 
it is not subject to the regulatory analysis or other requirements of 5 
U.S.C. 603 or 604. Nor would the proposed amendment result in a 
``significant regulatory action'' under E.O. 12866.

Drafting Information

    The principal author of this document was Russell Berger, 
Regulations Branch, U.S. Customs Service. However, personnel from other 
offices participated in its development.

List of Subjects in 19 CFR Part 24

    Accounting, Claims, Customs duties and inspection, Imports, Taxes, 
Wages.

Proposed Amendment

    It is proposed to amend part 24, Customs Regulations (19 CFR Part 
24), as set forth below.

PART 24--CUSTOMS FINANCIAL AND ACCOUNTING PROCEDURE

    1. The general authority citation for Part 24 and the specific 
sectional authority for Sec. 24.1 would continue to read as follows:

    Authority: 5 U.S.C. 301, 19 U.S.C. 58a-58c, 66, 1202 (General 
Note 8, Harmonized Tariff Schedule of the United States (HTSUS)), 
1624, 31 U.S.C. 9701, unless otherwise noted.
    Section 24.1 also issued under 19 U.S.C. 197, 198, 1648;
* * * * *
    2. It is proposed to amend Sec. 24.1 by revising paragraph (e) to 
read as follows:


Sec. 24.1  Collection of Customs duties, taxes, and other charges.

* * * * *
    (e) Any person or entity, commercial or noncommercial, who pays by 
check, Automated Clearinghouse (ACH), or other monetary instrument, any 
duties, taxes, fees, penalties, or other charges or obligations due 
Customs shall be assessed a charge of $30 for each defaulted payment 
(check or monetary instrument returned unpaid by a financial 
institution for any reason, including ACH defaulted payments), except 
where it can be shown that the maker of the payment (check, monetary 
instrument or ACH payment) was not at fault in connection with the 
defaulted payment. This charge shall be in addition to any unpaid 
duties, taxes, fees, penalties (including liquidated damages), and 
other charges.

    Approved: February 28, 1994.
George J. Weise,
Commissioner of Customs.
John P. Simpson,
Deputy Assistant Secretary of the Treasury.
[FR Doc. 94-6752 Filed 3-22-94; 8:45 am]
BILLING CODE 4820-02-P