[Federal Register Volume 60, Number 208 (Friday, October 27, 1995)]
[Rules and Regulations]
[Pages 54939-54941]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 95-26718]
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DEPARTMENT OF THE TREASURY
19 CFR Part 12
[T.D. 95-87]
RIN 1515-AB44
Enforcement of ITC Exclusion Orders
AGENCY: Customs Service, Department of the Treasury.
ACTION: Final rule.
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SUMMARY: This document amends the Customs Regulations regarding unfair
competition to reflect Customs authority to enforce seizure and
forfeiture orders issued by the United States International Trade
Commission (ITC). These orders would be issued for articles which had
previously been denied entry pursuant to an ITC exclusion order. Such
seizure and forfeiture orders may be issued only when the owner,
importer or consignee of such articles has previously attempted to
import articles subject to an exclusion order into the U.S.; the
articles have previously been denied entry; and the owner, importer or
consignee has been notified in writing of the previous denial of entry.
The amendment sets forth the procedures Customs will follow when
seizures are made for violations of the ITC exclusion orders. It also
describes the appeal rights and procedures available to parties who
have an interest in the seized property.
EFFECTIVE DATE: November 27, 1995.
FOR FURTHER INFORMATION CONTACT: Vicki Allums, Intellectual Property
Rights Branch, U.S. Customs Service, (202) 482-6960.
[[Page 54940]]
SUPPLEMENTARY INFORMATION:
Background
Under section 337 of the Tariff Act of 1930 (19 U.S.C. 1337), the
International Trade Commission applies U.S. statutory law and the
common law of unfair competition to the importation of products into
the United States and their subsequent sale in the United States.
Section 337 declares unlawful unfair methods of competition and unfair
acts in the importation and sale of products in the United States, the
threat or effect of which is to destroy or substantially injure a
domestic industry, prevent establishment of such an industry, or
restrain or monopolize trade and commerce in the United States. Section
337 also declares as unlawful per se infringement of a valid and
enforceable U.S. patent, copyright, registered trademark, or mask work;
no resulting injury need be found. To obtain relief under section 337,
the affected U.S. industry must file a complaint with the United States
International Trade Commission (ITC). A formal hearing before an
administrative law judge will then be conducted in order to determine
whether a violation under section 337 exists. The administrative law
judge then issues an initial determination. The initial determination
is subject to discretionary review by the ITC, which may affirm,
reverse, modify, set aside, or remand the initial determination to the
administrative law judge for further proceedings. If it is determined
that a violation exists, the ITC may order that any articles found to
be in violation of the Act be excluded from entry into the U.S.
Section 1342(a)(5)(B) of the Omnibus Trade and Competitiveness Act
of 1988 amended section 337 of the Tariff Act by inserting a new
subsection (I). That subsection authorizes the ITC to issue an order
providing that any article determined to be imported in violation of
the provisions of the law relating to unfair methods of competition and
unfair acts in the importation of articles into the United States
should be seized and forfeited when certain conditions stated in the
law have been met. Any such order issued is to be enforced by the
Secretary of the Treasury.
For such an order to be valid, the law provides that the following
conditions must be met:
(a) The owner, importer, or consignee of the article must have
previously attempted to import the article into the United States;
(b) The article must have been denied entry into the United States
by reason of an order issued under 19 U.S.C. 1337(d); and
(c) Upon such previous denial of entry, the Secretary of the
Treasury must have provided the owner, importer, or consignee of the
article with written notice of--
(i) Such order, and
(ii) That seizure and forfeiture would result from any further
attempt to import the article into the United States.
Section 12.39, Customs Regulations (19 CFR 12.39) currently
describes the role of the ITC in determining whether an importer has
engaged in unfair methods of competition or practices, and the actions
the ITC can order in response to the finding of such practices. Among
those actions are exclusion from entry and entry under bond of articles
imported in violation of fair trade provisions, both of which are cited
in Sec. 12.39(b). The authority of the ITC to exclude articles from
entry into the United States under section 337 is described in
Sec. 12.39(b)(1). Section 12.39(b)(2) permits excluded articles to be
entered under a single entry bond pending the finalization of the ITC
determination. Finally, Sec. 12.39(b)(3) requires, among other things,
that district directors notify each importer or consignee of articles
entered under bond pursuant to Sec. 12.39(b)(2) when the determination
becomes final, and indicate that the entry of articles is refused.
Customs Notice of Proposed Rulemaking
On May 19, 1994, Customs published a Notice of Proposed Rulemaking
in the Federal Register (59 FR 26151), which solicited comments on a
proposal to amend the Customs Regulations so that they would reflect
Customs authority to enforce seizure and forfeiture orders issued by
the International Trade Commission. No comments were received in
response to the NPRM.
However, in its internal review of the proposed rule, Customs
identified an inconsistency between the proposal and the statute's
legislative history. The legislative history indicates that Congress
intended to include ``like goods'' within the scope of section 337
seizure orders. The addition of this phrase to the final regulation
does not expand the final rule because Customs seizure and forfeiture
authority only extends to articles and like articles which fall within
the scope of the ITC order. The phrase merely serves to clarify the
extent of that authority.
Summary of Amendment
This document amends Sec. 12.39(b), Customs Regulations (19 CFR
12.39(b)) to reflect both the authority of the ITC to issue seizure and
forfeiture orders against articles and like articles for which
exclusion orders have been issued under certain conditions and the
authority of the Secretary of the Treasury to enforce those orders.
The amendment also sets forth the procedures that Customs, on
behalf of the Secretary of the Treasury, will follow when enforcing the
order. The procedures provide that when the three statutory conditions
are met that allow the ITC to issue a seizure and forfeiture order, and
the ITC notifies the Secretary of the Treasury of the issuance of such
order, Customs will notify all ports of entry of the order and identify
both the article subject to the order and the owners, importers or
consignees who are subject to the order.
These seizure orders would be issued by the ITC against specific
importers, or their agents and consignees, and would apply only to
articles and like articles which have been denied entry by reason of an
exclusion order, and for which the importer has been notified in
writing.
The amendment also contains procedures that are to be followed by
parties having an interest in articles which are seized pursuant to ITC
seizure orders and who wish to file a petition for relief.
Regulatory Flexibility Act
For the reasons set forth in the preamble, pursuant to the
provisions of the Regulatory Flexibility Act (5 U.S.C. 601 et seq.), it
is certified that the amendment will 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 and 604.
Executive Order 12866
This amendment does not meet the criteria for a ``significant
regulatory action'' as specified in E.O. 12866.
Drafting Information
The principal author of this document was Peter T. Lynch,
Regulations Branch, Office of Regulations and Rulings, U.S. Customs
Service. However, personnel from other offices participated in its
development.
List of Subjects in 19 CFR Part 12
Customs duties and inspection, Imports.
Amendment to the Regulations
Accordingly, part 12, Customs Regulations (19 CFR part 12), is
amended as set forth below:
[[Page 54941]]
PART 12--SPECIAL CLASSES OF MERCHANDISE
1. The general and relevant specific authority citations for part
12 continue to read as follows:
Authority: 5 U.S.C. 301, 19 U.S.C. 66, 1202 (General Note 20,
Harmonized Tariff Schedule of the United States (HTSUS)), 1624;
* * * * *
Section 12.39 also issued under 19 U.S.C. 1337, 1623;
* * * * *
2. Section 12.39 is amended by revising the heading of paragraph
(b); by adding a new paragraph (b)(4); by redesignating paragraphs (c)
and (d) as paragraphs (d) and (e); and by adding a new paragraph (c) to
read as follows:
Sec. 12.39 Imported articles involving unfair methods of competition
or practices.
* * * * *
(b) Exclusion from entry; entry under bond; notice of exclusion
order. * * *
(4) In addition to the notice given to importers or consignees of
articles released under bond, port directors shall provide written
notice to all owners, importers or consignees of articles which are
denied entry into the United States pursuant to an exclusion order that
any future attempt to import such articles may result in the articles
being seized and forfeited. Copies of all such notices are to be
forwarded to the Commercial Enforcement, Trade Compliance Division, at
Customs Headquarters, and to the Office of The General Counsel, USITC,
500 E Street, SW., Washington, DC 20436 by the district directors.
(c) Seizure and Forfeiture Orders. (1) In addition to issuing an
exclusion order under paragraph (b)(1) of this section, the Commission
may issue an order providing that any article determined to be in
violation of Sec. 337 be seized and forfeited to the United States.
Such order may be issued if:
(i) The owner, importer, or consignee of the article previously
attempted to import the article or like articles into the United
States;
(ii) The article or like articles were previously denied entry into
the United States by reason of an exclusion order issued under
paragraph (b)(1) of this section; and
(iii) Upon such previous denial of entry, the port director of the
port in which the entry was attempted had notified the owner, importer,
or consignee of the article in writing of both the exclusion order and
that seizure and forfeiture would result from any further attempt to
import the article or like articles into the United States.
(2) Upon receipt of any seizure order issued by the Commission in
accordance with this paragraph, Customs shall immediately notify all
ports of entry of the property subject to the seizure order and
identify the persons notified under paragraph (b)(4) of this section.
(3) The port director in the port in which the article was seized
shall issue a notice of seizure to parties known to have an interest in
the seized property. All interested parties to the property shall have
an opportunity to petition for relief under the provisions of 19 CFR
part 171. All petitions must be filed within 30 days of the date of
issuance of the notice of seizure, and failure of a claimant to
petition will result in the commencement of administrative forfeiture
proceedings. All petitions will be decided by the appropriate Customs
officer, based upon the value of the articles under seizure.
(4) If seized articles are found to be not includable in an order
for seizure and forfeiture, then the seizure and the forfeiture shall
be remitted in accordance with standard Customs procedures.
(5) Forfeited merchandise shall be disposed of in accordance with
the Customs laws.
* * * * *
George J. Weise,
Commissioner of Customs.
Approved: October 10, 1995.
John P. Simpson,
Deputy Assistant Secretary of the Treasury.
[FR Doc. 95-26718 Filed 10-26-95; 8:45 am]
BILLING CODE 4820-02-P