[Federal Register Volume 61, Number 97 (Friday, May 17, 1996)]
[Rules and Regulations]
[Pages 24888-24889]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-12373]



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DEPARTMENT OF THE TREASURY
19 CFR Parts 12, 145, and 161

[T.D. 96-42]
RIN 1515-AB91


Prohibited/Restricted Merchandise; Enforcement of Foreign Assets 
Control Regulations

AGENCY: Customs Service, Treasury.

ACTION: Final rule.

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SUMMARY: This document amends the Customs Regulations to more clearly 
provide that Customs enforces the laws and regulations of the Office of 
Foreign Assets Control (OFAC) of the Department of the Treasury 
regarding economic sanctions applicable to those countries that have 
been designated by the President as constituting a threat to the 
national security, foreign policy, or economy of the United States. 
Currently, the Customs Regulations refer to OFAC regulations only in 
the context of merchandise arriving by mail. This document clarifies 
that Customs enforces the laws and regulations administered by OFAC 
regardless of how subject merchandise, services, and technology arrive 
in or depart from the U.S.

EFFECTIVE DATE: May 17, 1996.

FOR FURTHER INFORMATION CONTACT: Louis Alfano, Office of Field 
Operations, Commercial Enforcement Branch, (202) 927-0005.

SUPPLEMENTARY INFORMATION:

Background

    As part of Customs continuing effort to ensure that its regulations 
are informative and up-to-date, Customs has determined that its 
regulations do not clearly set forth the fact that Customs enforces the 
laws and regulations administered by the Office of Foreign Assets 
Control (OFAC) of the Department of the Treasury (31 CFR Chapter V). 
These laws include the Trading With the Enemy Act (50 U.S.C. App. 1-
44), the National Emergencies Act (50 U.S.C. 1641 et seq.), the 
International Emergency Economic Powers Act (50 U.S.C. 1701-1706), and 
the International Security and Development Cooperation Act (22 U.S.C. 
2349aa8-9); the regulations are found at Chapter V of Title 31 of the 
Code of Federal Regulations (Money and Finance) (31 CFR Chapter V). 
These laws and regulations impose prohibitions or restrictions on 
importations, exportations, and other transactions involving funds, 
merchandise, services, and technology with and of those countries that 
have been designated by the President, pursuant to applicable statutory 
provisions. Currently, the Customs Regulations refer to OFAC 
regulations only in part 145 of the Customs Regulations (19 CFR Part 
145), the provisions of which apply only to merchandise arriving by 
mail. This document clarifies that Customs enforces the laws and 
regulations administered by OFAC regardless of how the subject 
merchandise, services, and technology arrive in or depart from the U.S. 
by amending three sections in as many parts to provide further notice 
to the public of Customs enforcement obligations concerning the 
application of economic sanctions to designated countries.
    In reviewing Sec. 145.56 of the Customs Regulations (19 CFR 
145.56), which concerns the applicability of OFAC controls on 
merchandise arriving by mail, Customs has determined that the listing 
of countries subject to controls administered by OFAC is not up-to-
date. (The list of countries in the section has not been updated since 
the section was promulgated in 1973 and is outdated and inconsistent 
with OFAC regulations: two of the four countries currently listed are 
no longer subject to OFAC's controls (North Vietnam (now Vietnam) and 
Rhodesia (now Zimbabwe)) and other countries that have since been 
designated by the President as subject to sanctions have not been added 
to the list). Each time the President sanctions and lifts sanctions on 
designated countries, OFAC amends its regulations accordingly. 
Repeating the list of sanctioned countries in the Customs Regulations 
merely duplicates the efforts of OFAC and, if not done timely, could 
result in future inconsistencies between OFAC and Customs Regulations. 
Accordingly, Customs has determined that to avoid the possibility of 
future inconsistencies between OFAC and Customs Regulations in the 
listing of sanctioned countries, Customs will no longer set forth such 
a list in its regulations, but will simply refer readers to the OFAC 
regulations. Thus, in amending Sec. 145.56, this document retains the 
procedural provisions, but removes the listing of countries subject to 
economic sanctions.
    This document also clarifies the extent of Customs responsibility 
in enforcing OFAC controls by adding sections regarding OFAC controls 
in both Part 12, which concerns regulations of various Federal agencies 
which Customs enforces and special classes of merchandise, and in Part 
161, which concerns general enforcement provisions. A new Sec. 12.150 
is added to Part 12, which cross-references OFAC regulations at 31 CFR 
Chapter V, explains how OFAC regulations work, and provides an address 
for further information from OFAC. Also, a specific authority citation 
is added to account for Customs import (19 U.S.C. 1595a(c)) and export 
(22 U.S.C 401) seizure authority and to account for the terms and 
conditions for release (19 U.S.C. 1618). Section 161.2 is amended to 
list OFAC as an agency whose laws are enforced by Customs. Also, the 
parenthetical legal authority citations at the end of Sec. 161.2 are 
amended to account for changes in the law since 1972, when the 
citations were first provided, and are placed under the general 
authority citation at the beginning of Part 161.

Inapplicability of Public Notice and Comment Requirements, Delayed 
Effective Date Requirements, the Regulatory Flexibility Act, and 
Executive Order 12866

    Because this amendment merely provides further notice to the public 
that Customs enforces the laws and regulations administered by the 
Office of Foreign Assets Control of the Department of the Treasury, 
pursuant to 5 U.S.C. 553(b)(B), good cause exists for dispensing with 
notice and public procedure thereon as unnecessary. For the same 
reasons, good cause exists for dispensing with a delayed effective date 
under 5 U.S.C. 553(d)(1) and (d)(3). Since this document is not subject 
to the notice and public procedure requirements of 5 U.S.C. 553, it is 
not subject to provisions of the Regulatory Flexibility Act (5 U.S.C. 
601 et seq.). This document does not meet the criteria for a 
``significant regulatory action'' as specified in E.O. 12866.

List of Subjects

19 CFR Part 12

    Customs duties and inspection, Economic sanctions, Imports, 
Licensing, Prohibited merchandise, Restricted merchandise, Reporting 
and recordkeeping requirements, Sanctions, Seizure and forfeiture.

[[Page 24889]]

19 CFR Part 145

    Customs duties and inspection, Imports, Mail, Postal service, 
Prohibited merchandise, Restricted merchandise, Reporting and 
recordkeeping requirements, Seizure and forfeiture.

19 CFR Part 161

    Customs duties and inspection, Imports, Law enforcement.

Amendments to the Regulations

    For the reasons stated above, parts 12, 145, and 161 of the Customs 
Regulations (19 CFR parts 12, 145, and 161), are amended as set forth 
below:

PART 12--SPECIAL CLASSES OF MERCHANDISE

    1. The general authority citation for Part 12 continues and a 
specific authority citation for new Sec. 12.150 is added 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 12.150 also issued under 19 U.S.C. 1595a and 1618; 22 
U.S.C. 401.

    2. Part 12 is amended by adding a centerheading and new Sec. 12.150 
to read as follows:

Merchandise Subject to Economic Sanctions


Sec. 12.150  Merchandise prohibited by economic sanctions; detention; 
seizure or other disposition; blocked property.

    (a) Generally. Merchandise from certain countries designated by the 
President as constituting a threat to the national security, foreign 
policy, or economy of the United States shall be detained until the 
question of its release, seizure, or other disposition has been 
determined under law and regulations issued by the Treasury 
Department's Office of Foreign Assets Control (OFAC) (31 CFR Chapter 
V).
    (b) Seizure. When an unlicensed importation of merchandise subject 
to OFAC's regulations is determined to be prohibited, no entry for any 
purpose shall be permitted and, unless the immediate reexportation or 
other disposition of such merchandise under Customs supervision has 
previously been authorized by OFAC, the merchandise shall be seized.
    (c) Licenses. OFAC's regulations may authorize OFAC to issue 
licenses on a case-by-case basis authorizing the importation of 
otherwise prohibited merchandise under certain conditions. If such a 
license is issued subsequent to the attempted entry and seizure of the 
merchandise, importation shall be conditioned upon the importer:
    (1) Agreeing in writing to hold the Government harmless, and
    (2) Paying any storage and other Customs fees, costs, or expenses, 
as well as any mitigated forfeiture amount or monetary penalty imposed 
or assessed by Customs or OFAC, or both.
    (d) Blocked property. Merchandise which constitutes property in 
which the government or any national of certain designated countries 
has an interest may be blocked (frozen) pursuant to OFAC's regulations 
and may not be transferred, sold, or otherwise disposed of without an 
OFAC license.
    (e) Additional information. For further information concerning 
importing merchandise prohibited under economic sanctions programs 
currently in effect, the Office of Foreign Assets Control of the 
Department of the Treasury should be contacted. The address of that 
office is 1500 Pennsylvania Ave., N.W., Annex 2nd Floor, Washington, 
D.C. 20220.

PART 145--MAIL IMPORTATIONS

    1. The general authority citation for Part 145 is revised to read 
as follows:

    Authority: 19 U.S.C. 66, 1202 (General Note 20, Harmonized 
Tariff Schedule of the United States), 1624;
* * * * *


Sec. 145.56  [Amended]

    2. Section 145.56 is amended by removing the words ``North Korea, 
North Vietnam, Cuba, or Rhodesia'' and adding, in their place, the 
words ``certain designated countries''; and by adding the parenthetical 
words ``(See also 19 CFR 12.150)'' at the end of the section before the 
period.

PART 161--GENERAL ENFORCEMENT PROVISIONS

    1. The general authority citation for Part 161 is revised, and a 
specific authority citation for section 161.2 is added, to read as 
follows:

    Authority: 5 U.S.C. 301; 19 U.S.C. 66, 1600, 1619, 1624, 1646a;
    Section 161.2 also issued under 12 U.S.C. 95a; 18 U.S.C. 545; 19 
U.S.C. 1595(a); 22 U.S.C. 401, 1934, 2349aa8-9;
    42 U.S.C. 1804, 1807; 50 U.S.C. 1641 et seq., 1701 et seq.;
    50 U.S.C. App. 1-44, 2411.
* * * * *
    2. Section 161.2 is amended by adding paragraph (a)(3) and removing 
the parenthetical authority citations at the end of the section. The 
revision reads as follows:


Sec. 161.2  Enforcement for other agencies.

    (a) * * *
    (1) * * *
    (2) * * *
    (3) Importations, exportations, and transactions involving 
identified goods, services, and technology with any of those countries 
designated as subject to economic sanctions under the laws and 
regulations administered by the Office of Foreign Assets Control of the 
Department of the Treasury.
* * * * *
Michael H. Lane,
Acting Commissioner of Customs.
    Approved: April 8, 1996.
John P. Simpson,
Deputy Assistant Secretary of the Treasury.
[FR Doc. 96-12373 Filed 5-16-96; 8:45 am]
BILLING CODE 4820-02-P