[Federal Register Volume 59, Number 61 (Wednesday, March 30, 1994)]
[Unknown Section]
[Page 0]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 94-7516]


[[Page Unknown]]

[Federal Register: March 30, 1994]


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DEPARTMENT OF THE TREASURY

Customs Service

19 CFR Part 171

[T.D. 94-29]

 

Penalty Guidelines Applicable to Transshipped Textiles and 
Textile Products

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

ACTION: Interim rule; solicitation of comments.

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SUMMARY: This document amends the revised penalty guidelines pertaining 
to section 592 of the Tariff Act of 1930, as amended, to add, as an 
example of an aggravating factor in arriving at a final administrative 
penalty decision, violations involving the illegal importation and 
entry of transshipped textiles and textile products. This amendment 
will enhance the U.S. textile import program and other programs or laws 
administered or enforced by Customs which involve a determination of 
the country of origin of imported merchandise.

DATES: Interim rule effective on, and applicable to all textiles and 
textile products entered, or withdrawn from warehouse for consumption, 
on or after, April 1, 1994. Comments must be received on or before May 
31, 1994.

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

FOR FURTHER INFORMATION CONTACT: Robert Pisani, Penalties Branch, 
Office of Regulations and Rulings (202-482-6950).

SUPPLEMENTARY INFORMATION:

Background

    Customs is confronted with a continuing problem involving textiles 
and textile products which, after exportation from their country of 
origin, are transshipped through a second country, thereby facilitating 
a false or otherwise unlawful statement, act, or omission regarding the 
country of origin of the merchandise when ultimately imported and 
entered in the United States. Such statements, acts or omissions may 
impinge on a number of programs or laws administered or enforced by 
Customs, including country of origin marking requirements, textile 
quota limitations and visa requirements under the U.S. textile import 
program, duty assessment and collection, and collection of trade 
statistics. The consequences of such unlawful statements, acts or 
omissions may include interference with the consumer's right to make an 
informed decision regarding a prospective purchase, undermining of 
bilateral and multilateral textile agreements to which the United 
States is a party and with resulting injury to domestic producers of 
textiles and textile products, loss of revenue, and inability to 
maintain proper trade statistics to support overall U.S. trade policy 
and analysis.
    Under section 592 of the Tariff Act of 1930, as amended (19 U.S.C. 
1592), a penalty may be assessed against any party who has committed 
fraud, gross negligence or negligence in connection with the unlawful 
entry of any merchandise in the United States, including textiles and 
textile products that have been transshipped in the circumstances 
described above. Provisions relating to filing of petitions, and action 
upon petitions, for relief from fines, penalties and forfeitures 
incurred under laws administered by Customs, including penalties under 
section 592, are set forth in part 171 of the Customs Regulations (19 
CFR part 171). Appendix B to part 171 sets forth Revised Penalty 
Guidelines under section 592. Although appendix B is not intended to 
have regulatory effect, it represents the official Customs position 
regarding the standards that are generally applicable to the 
administrative review of petitions for remission or mitigation of 
penalties incurred under section 592. Appendix B includes, in section 
(G), certain factors that may be determined by Customs to be 
aggravating factors in arriving at a final administrative penalty 
decision. Appendix B is currently undergoing review within Customs with 
a view to publication of a proposed revision of those guidelines, with 
opportunity for public comment, in the near future.
    Notwithstanding the upcoming revision of appendix B to part 171 and 
the intended solicitation of public comments thereon, Customs has 
determined that immediate action must be taken in a penalty mitigation 
context to address the textile and textile products transshipment 
problem described above. Customs notes that transshipments have 
resulted in material false statements, acts or omissions regarding the 
country of origin of the imported merchandise, including false 
designations of origin. Consequently, it is Customs position that 
transshipment must be susceptible to treatment as an aggravating factor 
in arriving at a final mitigated section 592 penalty decision under 
part 171 of the regulations. For these reasons, this document amends 
section (G) of appendix B to part 171 on an interim basis by adding a 
reference to ``transshipment in the case of textiles and textile 
products affecting a country of origin determination'' as an 
aggravating factor. Although this change is effective for merchandise 
entered, or withdrawn from warehouse for consumption, on or after April 
1, 1994, Customs will consider any comments submitted either in 
response to this document or in response to the solicitation of public 
comments on the overall revision of appendix B referred to above.

Comments

    Before adopting this interim amendment as a final rule, 
consideration will be given to any written comments (preferably in 
triplicate) timely submitted to Customs. Comments submitted will be 
available for public inspection in accordance with the Freedom of 
Information Act (5 U.S.C. 552), Sec. 1.4, Treasury Department 
Regulations (31 CFR 1.4), and Sec. 103.11(b), Customs Regulations (19 
CFR 103.11(b)), on regular business days between the hours of 9 a.m. 
and 4:30 p.m. at the Regulations Branch, Office of Regulations and 
Rulings, Franklin Court, 1099 14th Street, NW., suite 4000, Washington, 
DC.

Inapplicability of Notice and Delayed Effective Date Requirements

    Because this amendment constitutes a general statement of policy, 
the public notice requirements of 5 U.S.C. 553(b)(A) do not apply and, 
for the same reason pursuant to 5 U.S.C. 553(d)(2), a delayed effective 
date is not required.

Executive Order 12866

    This document does not meet the criteria for a ``significant 
regulatory action'' as specified in Executive Order 12866.

Regulatory Flexibility Act

    Because no notice of proposed rulemaking is required for an interim 
action, the provisions of the Regulatory Flexibility Act (5 U.S.C. 601 
et seq.) do not apply.

List of Subjects in 19 CFR Part 171

    Administrative practice and procedure, Customs duties and 
inspection, Law enforcement, Penalties, Seizures and forfeitures.

Amendment to 19 CFR Chapter I

    Part 171, Customs Regulations (19 CFR Part 171), is amended as set 
forth below:

PART 171--FINES, PENALTIES, AND FORFEITURES

    1. The authority citation for part 171 continues to read in part as 
follows:

    Authority: 19 U.S.C. 66, 1592, 1618, 1624.
* * * * *
    2. Appendix B to part 171 is amended by revising section (G) to 
read as follows:

Appendix B to Part 171--Customs Regulations, Revised Penalty 
Guidelines, 19 U.S.C. 1592

* * * * *

(G) Aggravating Factors

    Certain factors may be determined to be aggravating factors in 
arriving at the final administrative penalty decision. Examples of 
aggravating factors include obstructing the investigation, 
withholding evidence, providing misleading information concerning 
the violation, transshipment in the case of textiles and textile 
products affecting a country of origin determination, and prior 
substantive violations of section 592 for which a final 
administrative finding of culpability has been made.
* * * * *
Samuel H. Banks,
Acting Commissioner of Customs.
    Approved: March 18, 1994.
John P. Simpson,
Deputy Assistant Secretary of the Treasury.
[FR Doc. 94-7516 Filed 3-29-94; 8:45 am]
BILLING CODE 4820-02-P