[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: 94-7517]


[[Page Unknown]]

[Federal Register: March 30, 1994]


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DEPARTMENT OF THE TREASURY
19 CFR PART 141

RIN 1515-AB39

 

Establishment of Conditional Release Period for Textiles and 
Textile Products

AGENCY: Customs Service, Treasury.

ACTION: Notice of proposed rulemaking.

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SUMMARY: This document proposes to amend the Customs Regulations to 
establish a conditional release period of 180 days on all entries of 
textiles and textile products. This proposed amendment will permit 
Customs to issue notices of redelivery to importers of textiles or 
textile products up to 30 days after the end of the conditional release 
period if investigation or information reveals that the merchandise was 
imported in violation of visa or quota restrictions or other 
requirements of law. Failure to comply with a notice of redelivery will 
render the importer liable for liquidated damages under the terms of 
the basic importation bond.

DATES: 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: Jeremy Baskin, Penalties Branch, 
Office of Regulations and Rulings (202-482-6950).

SUPPLEMENTARY INFORMATION:

Background

    Customs has encountered a significant enforcement problem with 
regard to textiles and textile products that are subject to the 
provisions of section 204, Agricultural Act of 1956, as amended (7 
U.S.C. 1854), and that are imported into the United States in violation 
of quota restrictions or without the appropriate visa from the country 
of origin. This problem involves merchandise that is the product of a 
country to which stringent quotas or visa requirements apply and that 
is transshipped through a second country having less rigorous quota and 
visa standards. Such transshipment operations are often performed in 
order to facilitate the making of a false claim, upon importation into 
the United States, that the merchandise is a product of the country 
through which it was transshipped and therefore subject to the more 
lenient quota and visa entry standards applicable to products of that 
country. Discovery of these violations often occurs only after a 
significant investigative effort that has been concluded well after the 
time of entry and release of the offending merchandise into the 
commerce of the United States.
    While the penalty provisions of section 592 of the Tariff Act of 
1930, as amended (19 U.S.C. 1592), are in principle available for 
assessment against any party who has committed fraud, gross negligence 
or negligence in connection with the entry of such transshipped 
merchandise, it is not always possible to establish the requisite 
culpability. The fact that section 592 penalties may not be 
successfully assessed in each case involving transshipped merchandise 
does not alter the fact that the entry of such merchandise into the 
commerce of the United States in violation of visa and quota 
requirements causes significant harm to domestic industry.
    When penalty liability cannot be readily assessed or quantified, 
claims for liquidated damages may be available to compensate for the 
harm done. Under condition (d) of the Basic Importation and Entry Bond, 
set forth in Sec. 113.62(d) of the Customs Regulations (19 CFR 
113.62(d)), the importer agrees to redeliver timely, on demand by 
Customs, any merchandise which has been conditionally released from 
Customs custody if it fails to comply with the laws or regulations 
governing admission into the United States. Under the last sentence of 
that regulatory provision, any demand for redelivery must be made no 
later than 30 days after the date that the merchandise was released or 
30 days after the end of the conditional release period (whichever is 
later). In C.S.D. 86-21, Customs noted that the end of the conditional 
release period refers to a set time limitation established by 
regulation, e.g., the 180-day period established with regard to Federal 
motor vehicle safety standards in Sec. 12.80(e)(2) of the Customs 
Regulations (19 CFR 12.80(e)(2)).
    Textiles and textile products which exceed quota limits or do not 
conform to visa requirements clearly are not entitled to admission into 
the United States. However, inasmuch as no specific, different 
conditional release period is provided for by regulation with regard to 
such merchandise, under Sec. 113.62(d) Customs may issue a Notice of 
Redelivery only within 30 days after release of the merchandise. In 
view of the lengthy time required to detect violations relating to 
transshipment, Customs often is unable to issue a timely Notice of 
Redelivery and thus is foreclosed from assessing liquidated damages for 
failure to redeliver the merchandise to Customs custody.
    In order to address the problems discussed above, Customs proposes 
in this document to amend Sec. 141.113 of the Customs Regulations (19 
CFR 141.113) by adding a new paragraph (b) to provide for a specific 
conditional release period of 180 days from the date of release for all 
textiles and textile products subject to section 204 of the 
Agricultural Act of 1956. Under Sec. 113.62(d), Customs would then have 
up to 30 days from the end of the conditional release period to issue a 
Notice of Redelivery. Failure to redeliver merchandise within the time 
period specified in the Notice of Redelivery (generally 30 days from 
the date of the notice) will result in the assessment of a claim for 
liquidated damages under the Basic Importation and Entry Bond as 
provided in Sec. 113.62(k) of the regulations. In addition, as a 
consequence of the addition of this new paragraph (b) to Sec. 141.113, 
this document also proposes to redesignate present paragraphs (b)-(g) 
as (c)-(h) and to add within present paragraph (b) (redesignated as 
(c)) a cross-reference to new paragraph (b) to accompany the existing 
cross-reference to paragraph (a).

Comments

    Before adopting the proposed amendments 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.

Executive Order 12866

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

Regulatory Flexibility Act

    Pursuant to the provisions of the Regulatory Flexibility Act (5 
U.S.C. 601 et seq.), it is certified that, if adopted, the proposed 
amendments will not have a significant economic impact on a substantial 
number of small entities. Establishment of a conditional release period 
for textiles and textile products, which is necessary for law 
enforcement purposes, will affect only the relatively small percentage 
of importers who import such merchandise contrary to law. Accordingly, 
the proposed amendments are not subject to the regulatory analysis or 
other requirements of 5 U.S.C. 603 and 604.

List of Subjects in 19 CFR Part 141

    Bonds, Customs duties and inspection, Entry procedures, Imports, 
Release of merchandise.

Proposed Amendments to the Regulations

    Accordingly, for the reasons set forth above, it is proposed to 
amend part 141, Customs Regulations (19 CFR part 141), as set forth 
below.

Part 141--Entry of Merchandise

    1. The authority citation for part 141 continues to read in part as 
follows:

    Authority: 19 U.S.C. 66, 1448, 1484, 1624.
* * * * *
    Section 141.113 also issued under 19 U.S.C. 1499, 1623.

    2. Section 141.113 is amended by redesignating paragraphs (b) 
through (g) as (c) through (h), by adding the words ``or (b)'' after 
the words ``paragraph (a)'' in newly designated paragraph (c), and by 
adding a new paragraph (b) to read as follows:


Sec. 141.113  Recall of merchandise released from Customs custody.

* * * * *
    (b) Textiles and textile products. For purposes of determining the 
admissibility of textiles and textile products subject to the 
provisions of Sec. 12.130 of this chapter, the release from Customs 
custody of any such textile or textile product shall be deemed 
conditional during the 180-day period following the date of release. If 
the district director finds during the conditional release period that 
a textile or textile product is not entitled to admission into the 
commerce of the United States based on quota restrictions or the 
absence of a correct visa or for any other reason, he shall promptly 
demand its return to Customs custody.
* * * * *
    Approved: March 18, 1994.
Samuel H. Banks,
Acting Commissioner of Customs.
John P. Simpson,
Deputy Assistant Secretary of the Treasury.
[FR Doc. 94-7517 Filed 3-29-94; 8:45 am]
BILLING CODE 4820-02-P