[Federal Register Volume 61, Number 145 (Friday, July 26, 1996)]
[Rules and Regulations]
[Pages 39070-39071]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-18894]
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DEPARTMENT OF THE TREASURY
Customs Service
19 CFR Part 118
[T.D. 96-57]
RIN 1515-AB83
Centralized Examination Stations; Immediate Suspension or
Permanent Revocation as Operator Upon Indictment for any Felony
AGENCY: Customs Service, Treasury.
ACTION: Final rule.
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SUMMARY: This document amends the Customs Regulations to enable Customs
port directors to suspend immediately operations at a Centralized
Examination Station (CES) whenever the operator, entity, or other
person exercising substantial ownership or control over the operator is
indicted for, convicted of, or has committed acts which would
constitute any felony. This document also makes it more specific that a
CES operator's failure to follow the terms of the CES written agreement
constitutes a ground for proposed permanent revocation of the CES and
cancellation of the written agreement to operate the facility. This
action is taken in order to protect the public interest and to promote
public confidence concerning the integrity of the CES program.
EFFECTIVE DATE: August 26, 1996.
FOR FURTHER INFORMATION CONTACT: Linda Walfish, Office of Field
Operations, Trade Compliance (202) 927-1167.
SUPPLEMENTARY INFORMATION:
Background
In T.D. 93-6 (58 FR 5596) Customs amended the Customs Regulations
(19 CFR Chapter 1) to create a new Part 118 that set forth the
regulatory framework for the establishment, operation, and termination
of Centralized Examination Stations (CESs). A CES is a privately-
operated facility, not in the charge of a Customs officer, at which
imported merchandise is made available to Customs officers for physical
examination. Regarding the termination of CESs, Customs stated in T.D.
93-6 that while immediate revocation and cancellation for a criminal
act should not be limited to cases involving an actual conviction or
admission, the only criminal offenses which should result in an
immediate revocation and cancellation would be those which involved
theft, smuggling, or a theft-connected crime.
On further consideration of this issue, Customs published a
document in the Federal Register (61 FR 1877) on January 24, 1996,
proposing to amend the Customs Regulations to enable Customs port
directors to immediately suspend operations at a CES whenever the
operator, entity, or other person exercising substantial ownership or
control over the operator is indicted for, convicted of, or has
committed acts which would constitute any felony. The notice of
proposed rulemaking also sought to make it more specific that a CES
operator's failure to follow the terms of the CES written agreement
constitutes a ground for proposed permanent revocation of the CES and
cancellation of the written agreement to operate the facility. The
regulatory amendments proposed were promulgated in order to protect the
public interest and to promote public confidence concerning the
integrity of the CES program. The notice proposed to amend Sec. 118.21,
which provides for the revocation of selection and cancellation of the
written agreement to operate a CES. Additional, conforming changes were
also proposed to Secs. 118.0, 118.22, and 118.23. The document
solicited comments concerning these changes.
The comment period closed on March 25, 1996. Only one comment was
received and it was from a Customs field office. Because the comment is
beyond the scope of the proposal, it will not be discussed in this
document and will be addressed through another forum. After further
consideration of the proposal, Customs has decided to adopt the
proposed regulatory amendments as a final rule without substantive
change.
Regulatory Flexibility Act
Pursuant to provisions of the Regulatory Flexibility Act (5 U.S.C.
601 et seq.), it is certified that the amendments will not have a
significant economic impact on a substantial number of small entities,
as the current number of centralized examination station operators is
small, i.e., less than 200, and the regulation only will affect those
who commit felonies or fail to follow the terms of their agreement.
Accordingly, the amendments are not subject to the regulatory analysis
or other requirements of 5 U.S.C. 603 and 604.
Executive Order 12866
This document does not meet the criteria for a ``significant
regulatory action'' as defined in E.O. 12866.
Drafting Information
The principal author of this document was Gregory R. Vilders,
Attorney, Regulations Branch, U.S. Customs Service. However, personnel
from other offices participated in its development.
List of Subjects in 19 CFR Part 118
Administrative practice and procedure, Customs duties and
inspection, Examination stations, Imports, Licensing, Reporting and
recordkeeping requirements.
Amendment to the Regulations
For the reasons stated above, part 118, Customs Regulations (19 CFR
part 118), is amended as set forth below:
PART 118--CENTRALIZED EXAMINATION STATIONS
1. The authority citation for part 118 continues to read as
follows:
Authority: 19 U.S.C. 66, 1499, 1623, 1624.
2. In Sec. 118.0, the second sentence is revised to read as
follows:
Sec. 118.0 Scope.
* * * It covers the application process, the responsibilities of
the
[[Page 39071]]
person or entity selected to be a CES operator, the written agreement
to operate a CES facility, the port director's discretion to
immediately suspend a CES operator's or entity's selection and the
written agreement to operate the CES or to propose the permanent
revocation of a CES operator's or entity's selection and cancellation
of the written agreement for specified conduct, and the appeal
procedures to challenge an immediate suspension or proposed revocation
and cancellation action. * * *.
3. In Sec. 118.21:
(a) The heading is revised and introductory text is added;
(b) Paragraph (a) is revised;
(c) Paragraph (b)(1) is amended by adding the words ``to comply
with any of'' before the words ``the provisions of'';
(d) A new paragraph (b)(6) is added; and
(e) A new paragraph (c) is added.
The revisions and additions read as follows:
Sec. 118.21 Temporary suspension; permanent revocation of selection
and cancellation of agreement to operate a CES.
The port director may immediately suspend or propose permanent
revocation and cancellation of CES operations for cause as provided in
this section.
(a) Immediate suspension. The port director may immediately
suspend, for a temporary period of time or until revocation and
cancellation proceedings are concluded pursuant to Sec. 118.23, a CES
operator's or entity's selection and the written agreement to operate
the CES if:
(1) The selection and written agreement were obtained through fraud
or the misstatement of a material fact; or
(2) The CES operator or an officer of a corporation which is a CES
operator or a person the port director determines is exercising
substantial ownership or control over such operator or officer is
indicted for, convicted of, or has committed acts, which would
constitute a felony, or a misdemeanor involving theft or a theft-
connected crime. In the absence of an indictment or conviction, the
port director must have probable cause to believe the proscribed acts
occurred.
(b) * * *
(6) The CES operator or an officer of a corporation which is a CES
operator or a person the port director determines is exercising
substantial ownership or control over such operator or officer is
indicted for, convicted of, or has committed acts, which would
constitute any of the offenses listed under paragraph (a) of this
section. Where adverse action is initiated by the port director
pursuant to paragraph (a) of this section and continued under this
paragraph, the suspension of CES activities remains in effect through
the appeal procedures provided under Sec. 118.23.
(c) Circumstance of change in employment not a bar to adverse
action. Any change in the employment status of a corporate officer
(for example, discharge, resignation, demotion, or promotion) prior to
indictment or conviction or after committing any acts which would
constitute the culpable behavior described under paragraph (a) of this
section, will not preclude application of this section, but may be
taken into account by the port director in exercising discretion to
take adverse action. If the person whose employment status changed
remains in a substantial ownership, control, or beneficial relationship
with the CES operator, this factor will also be considered in
exercising discretion under this section.
4. Section 118.22 is revised to read as follows:
Sec. 118.22 Notice of immediate suspension or proposed revocation and
cancellation action.
Adverse action pursuant to the provisions of Sec. 118.21(a) or (b)
is initiated when the port director serves written notice on the
operator or entity selected to operate the CES. The notice shall be in
the form of a statement specifically setting forth the grounds for the
adverse action and shall inform the operator of the appeal procedures
under Sec. 118.23 of this part.
5. Section 118.23 is revised to read as follows:
Sec. 118.23 Appeal to the Assistant Commissioner; procedure; status of
CES operations.
(a) Appeal to the Assistant Commissioner. Appeal of a port
director's decision under Sec. 118.21(a) or (b) must be filed with the
Assistant Commissioner, Office of Field Operations, within 10 calendar
days of receipt of the written notice of the adverse action. The appeal
shall be filed in duplicate and shall set forth the CES operator's or
entity's responses to the grounds specified by the port director in his
written notice letter for the adverse action initiated. The Assistant
Commissioner, Office of Field Operations, or his designee, shall render
a written decision to the CES operator or entity, stating the reasons
for the decision, by letter mailed within 30 working days following
receipt of the appeal, unless the period for decision is extended with
due notification to the CES operator or entity.
(b) Status of CES operations during appeal. During this appeal
period, an immediate suspension of a CES operator's or entity's
selection and written agreement pursuant to Sec. 118.21(a) of this part
shall remain in effect. A proposed revocation of a CES operator's or
entity's selection and cancellation of the written agreement pursuant
to Sec. 118.21(b)(1) through (5) of this part shall not take effect
unless the appeal process under this paragraph has been concluded with
a decision adverse to the operator.
(c) Effect of suspension or revocation. Once a suspension or
revocation action takes effect, the CES operator must cease CES
operations. However, when CES operations are suspended or revoked and
cancelled by Customs, it is the CES operator's responsibility to ensure
that merchandise already at the CES is properly consigned to another
location for inspection, as directed by the importer and approved by
the port director.
George J. Weise,
Commissioner of Customs.
Approved: June 8, 1996.
John P. Simpson,
Deputy Assistant Secretary of the Treasury.
[FR Doc. 96-18894 Filed 7-25-96; 8:45 am]
BILLING CODE 4820-02-P