[Federal Register Volume 63, Number 21 (Monday, February 2, 1998)]
[Proposed Rules]
[Pages 5329-5338]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 98-2250]


=======================================================================
-----------------------------------------------------------------------

DEPARTMENT OF THE TREASURY

Customs Service

19 CFR Parts 10, 12, 18, 24, 111, 113, 114, 125, 134, 145, 162, 
171, and 172

RIN 1515-AC01


Petitions for Relief; Seizures, Penalties, and Liquidated Damages

AGENCY: Customs Service, Treasury.

ACTION: Notice of proposed rulemaking.

-----------------------------------------------------------------------

SUMMARY: This document proposes significant amendments to parts 171 and 
172 of the Customs Regulations relating to the filing of petitions in 
penalty, liquidated damages, and seizure cases. The proposed 
regulations are briefer and are designed to allow more flexibility and 
useful contact with Government officials in an effort to administer 
cases in the most efficient way possible. These proposed regulations 
promote a more customer-friendly atmosphere and eliminate needless or 
redundant provisions. The affected parts are recrafted to include 
petition processing in seizure and unsecured penalty cases under part 
171 and liquidated damages and secured penalty petition processing 
under part 172.

DATES: Comments must be received on or before April 3, 1998.

ADDRESSES: Comments (preferably in triplicate) may be submitted to the 
Office of Regulations and Rulings, Regulations Branch, Ronald Reagan 
Building, 1300 Pennsylvania Avenue, NW., Washington, D.C. 20229, and 
inspected at the Regulations Branch, Ronald Reagan Building, Suite 
3000, 1300 Pennsylvania Avenue, NW., Washington, D.C.

FOR FURTHER INFORMATION CONTACT: Jeremy Baskin, Penalties Branch, 
Office of Regulations and Rulings, 202-927-2344.


[[Page 5330]]



SUPPLEMENTARY INFORMATION:

Background

    Under the provisions of sections 618 and 623 of the Tariff Act of 
1930, as amended (19 U.S.C. 1618 and 1623), and sections 320 of title 
46, United States Code App. (46 U.S.C.App. 320), and section 5321 of 
title 31, United States Code (31 U.S.C. 5321), the Secretary of the 
Treasury is empowered to remit forfeitures, mitigate penalties, or 
cancel claims arising from violation of Customs bonds upon terms and 
conditions that he deems appropriate. Under general rulemaking 
authority as provided by sections 66 and 624 of the Tariff Act of 1930, 
as amended (19 U.S.C. 66 and 1624), the Secretary is authorized to make 
such regulations necessary to carry out the provisions of the Tariff 
Act. Consistent with that authority, Parts 171 (relating to seizures 
and penalties) and 172 (relating to liquidated damages) of the Customs 
Regulations (19 CFR parts 171 and 172) were promulgated to provide for 
the petitioning process in order to allow for the orderly remission of 
forfeitures, mitigation of penalties, and cancellation of claims for 
liquidated damages.
    Customs is proposing significant amendments to Parts 171 and 172 of 
the Customs Regulations relating to the filing of petitions in penalty, 
liquidated damages, and seizure cases. The new regulations will be 
briefer and will allow more flexibility and useful contact with 
Government officials in an effort to administer cases in the most 
efficient way possible. These regulations will promote a more customer-
friendly atmosphere and will eliminate needless or redundant 
provisions.
    The scope of Parts 171 and 172 has been changed. Inasmuch as 
certain penalties are guaranteed by the conditions of the International 
Carrier Bond, and, therefore involve surety participation, the 
provisions of Part 172 will relate to all claims for liquidated damages 
and penalties secured by a bond. This will mean that all claims against 
surety will be handled in a consistent manner. Part 171 will relate to 
unsecured fines and penalties and all seizure and forfeiture cases.
    The proposed regulations anticipate that electronic filing of 
petitions is an inevitability even though Customs does not currently 
have, on a nationwide basis, the capabilities to accept petitions 
electronically. Accordingly, the regulations reflect the acceptance of 
electronic signatures and eliminate the requirement of duplicate copies 
if an electronic petition is filed.
    The proposed regulations require that petitions for relief must be 
signed by the petitioner, his attorney-at-law or a Customs broker, but 
will allow others, in certain non-commercial violations (such as 
passenger/baggage violations), to file petitions on behalf of non-
English speaking claimants to property or other petitioners who have 
some disability that may impede the ability to file a petition. 
Instances have occurred where these petitions have been rejected 
because they did not meet the signature requirements of the old 
regulations. A strict reading of the current regulations would bar 
Customs from considering those petitions. This position causes needless 
delay in administrative processing of cases. The new proposed provision 
will open the process in these situations and promote efficiency by 
allowing, in non-commercial violations, a non-English speaking 
petitioner or petitioner who has a disability which may impede his 
ability to file a petition to enlist a family member or other 
representative to file a petition on his behalf.
    Under current regulation, Customs may limit the petitioning period 
to 7 days in cases involving violations of 19 U.S.C. 1592 when the 
running of the statute of limitations is imminent. Customs finds no 
reason to limit the 7-day petitioning period option to just 1592 cases. 
The proposed regulations extend the 7-day rule to all cases and clarify 
that it is 7 working days, rather than calendar days.
    The current regulatory section entitled ``Additional evidence 
required with certain petitions'' is proposed to be eliminated as 
unnecessary. The provisions of proposed new Sec. 171.2 indicate that 
the claimant or petitioner must establish a petitionable interest in 
seized property. How that proof is presented is not a subject that need 
be controlled by regulation.
    Oral presentations will continue to be afforded as a matter of 
right in 1592 cases and only as a matter of discretion in other cases. 
The proposed regulations simply remove the reference to cases commenced 
subsequent to December 31, 1978. This provision has become obsolete 
with the passage of time.
    Title VI of the North American Free Trade Agreement Implementation 
Act (known commonly as the Customs Modernization Act) (Pub.L. 103-182, 
107 Stat. 2057) amended the provisions of 19 U.S.C. 1595a(c) to provide 
for the seizure and forfeiture of stolen property. Implementing 
regulations for this amendment were promulgated by Treasury Decision 
96-2 (T.D. 96-2). This amendment has rendered Sec. 171.22(c) obsolete, 
as those provisions of the new statute are applicable to any stolen 
property, not only that stolen in Canada and brought into the United 
States. Accordingly, it is proposed to no longer include that provision 
in the regulations.
    Mitigation guidelines for monetary penalties assessed pursuant to 
19 U.S.C. 1592 are currently published as Appendix B to Part 171 of the 
Regulations. Accordingly, the provisions of Sec. 171.23 of the current 
regulations, making these guidelines available upon request, are 
obsolete and it is proposed that this section be eliminated.
    The offices of Regional Commissioner and District Director were 
eliminated under Customs reorganization; therefore, all references to 
those offices and delegations of authority to those individuals to 
decide petitions and supplemental petitions for relief are obsolete. 
Through Treasury Decision 95-78 (T.D. 95-78), Customs published an 
Interim Rule which amended the regulations and authorized Fines, 
Penalties, and Forfeitures Officers to decide petitions for relief and 
certain designated Headquarters officials assigned to field locations 
to decide supplemental and second supplemental petitions for relief in 
certain cases (although this document proposes to eliminate second 
supplemental petitions, as discussed later herein). Those changes are 
reflected in this document.
    Consistent with the reorganization and Customs policy of empowering 
employees, the proposed regulations remove specific delegations of 
mitigation authority from the body of regulatory text with the 
intention of affording the Secretary of the Treasury and the 
Commissioner of Customs the opportunity to delegate authority to decide 
petitions and supplemental petitions to the field through delegation 
orders, without the necessity of amending the regulations. A separate 
document will be published in the Federal Register detailing the new 
delegations.
    The document proposes that the provisions of Part 111 be amended to 
eliminate the requirement of Headquarters approval of broker penalty 
cases assessed in excess of $10,000.
    Novel or complex issues often arise concerning Customs policy with 
regard to Customs actions or potential actions relating to seizures and 
forfeitures, penalties (including penalty-based demands for duty), 
liquidated damages or case assessment or mitigation in cases that are 
otherwise within field jurisdiction because of the value of the 
property or the amount of the penalty or claim for liquidated damages. 
In those instances, Headquarters advice may need to be sought. 
Accordingly, the

[[Page 5331]]

proposed regulations include a section in both Parts 171 and 172 to 
allow any Customs officer or an alleged violator to initiate a request 
for advice to be submitted to the Fines, Penalties, and Forfeitures 
Officer for forwarding to the Chief, Penalties Branch, Office of 
Regulations and Rulings. The Fines, Penalties, and Forfeitures Officer 
will retain the authority to refuse to forward any request that fails 
to raise a qualifying issue.
    Under current policy, Customs officers are empowered to accept 
petitions filed untimely in response to claims for liquidated damages. 
Those petitions can be accepted at any time prior to determination that 
a claim is eligible to be placed on a surety sanction list. The 
proposed regulations will permit Customs to accept late petitions in 
penalty cases as well, but, as articulated in guidelines published for 
cancellation of bond charges (see T.D. 94-38), lateness in filing a 
petition may be considered when considering remission or mitigation of 
a claim and less generous relief, if otherwise merited, may be afforded 
to the petitioner who files in an untimely manner.
    The courts have consistently held that a claim for liquidated 
damages is not a ``charge or exaction'' which is properly the subject 
of a protest filed pursuant to the authority of 19 U.S.C. 1514. See 
United States v. Toshoku America, Inc., 879 F.2d 815 (Fed.Cir. 1989); 
Halperin Shipping Co., Inc. v. United States, 14 CIT 438, 742 F.Supp. 
1163 (1990). In light of these decisions, the proposed regulations 
indicate that claims for liquidated damages and decisions on petitions 
are not properly the subject of a protest filed pursuant to 19 U.S.C. 
1514.
    In Trayco, Inc. v. United States, ---- Fed.Cir.(T) ------, 994 F.2d 
832 (1993), the Court permitted a company that had petitioned for 
relief, received a decision on the petition and, although unhappy with 
the mitigation offered, paid that mitigated amount ``under protest'', 
to file suit to recover the amount paid. The Court noted that as ``* * 
* nothing in the statute or regulations gives notice that a party may 
relinquish its rights to judicial review by paying a mitigated penalty 
and filing a second supplemental petition, we decline to hold that 
Trayco is estopped where it accompanied its payment with a statement 
expressly reserving its rights to judicial review.'' See Id. at 839. 
Customs proposes to amend the regulations to provide that any payment 
made in compliance with a mitigation decision will act as an accord and 
satisfaction whereby the paying party has elected to resolve the case 
through the administrative process and has waived the right to sue for 
a refund. This express statement will also be included in all 
mitigation decisions offered to petitioners in order to provide full 
disclosure as to their administrative or judicial rights. Customs will 
not accept payments ``under protest.''
    Additionally, in the proposed regulations, second supplemental 
petitions are eliminated. Therefore, payment of a mitigated amount will 
never be necessary to receive original or appellate administrative 
review and a petitioner will not be required to later sue for a refund 
of monies paid if he believes the underlying penalty was incorrectly 
assessed or the claim improperly mitigated.
    The proposed regulations include a provision whereby the deciding 
Customs official reserves the right to require a waiver of the statute 
of limitations executed by the claimants to the property or charged 
party or parties as a condition precedent before accepting a 
supplemental petition in any case where the statute will be available 
as a defense to all or part of that case within one year from the date 
of decision on the original petition for relief. Upon receipt of such a 
waiver, any reduced time period for acceptance of a petition would not 
be necessary. The proposed regulations remove a restriction on the 
filing of supplemental petitions in broker penalty cases. Under current 
Sec. 111.95, Customs Regulations, a final determination of $1,000 or 
less in response to a petition for relief in a case involving 
assessment of a penalty for violation of the provisions of 19 U.S.C. 
1641 may not be the subject of a supplemental petition. There is no 
basis to single out this particular violation as not being worthy of a 
supplemental petition for relief. All parties should have the same 
administrative rights.
    It is noted that no changes are proposed to Subpart F, Part 171, of 
the current regulations relating to expedited procedures promulgated as 
a result of passage of the Anti-Drug Abuse Act of 1988 and applicable 
to certain administrative forfeiture proceedings.
    Sections 10.39(e) and (f) of the current regulations, relating to 
the filing of petitions in cases involving breaches of the terms and 
conditions of temporary importation bonds (TIBs), provide for different 
standards of review if there has been a default with respect to all of 
the articles entered under bond or if there has been a default with 
respect to part, but not all, of the articles entered under bond. This 
bifurcation is unnecessary. The proposed regulations combine the 
provisions of Secs. 10.39(e) and (f) to provide a single standard for 
review of TIB petitions without regard to whether all or part of the 
merchandise entered under the TIB are in breach.
    Current Sec. 162.48, Customs Regulations, relating to the 
disposition of perishable and low-value property, permits Customs, by 
the authority granted in section 612 of the Tariff Act of 1930, as 
amended (19 U.S.C. 1612), to destroy summarily low-value seized 
property (less than $1,000) when the costs of storing and maintaining 
such property are disproportionate to its value. Customs would then 
reimburse any successful petitioning claimant from the Forfeiture Fund. 
The provisions of section 667 of the Customs Modernization Act remove 
this $1,000 cap and permit the summary destruction of any seized 
property, without regard to value, if the costs of maintaining such 
property are disproportionate to its value. The proposed amendment is 
consistent with this legislative change.
    Finally, the provisions of Part 162 are proposed to be amended to 
specifically empower Fines, Penalties, and Forfeitures Officers to 
accept waivers of the statute of limitations with regard to actual or 
potential violations arising in ports over which they have 
jurisdiction. The Office of Regulations and Rulings would retain 
authority to accept waivers in established actual cases over which it 
has monetary jurisdiction and a petition for relief has been filed.
    Proposed conforming amendments to Parts 10, 12, 18, 24, 111, 113, 
114, 125, 134, 145, and 162 are also set forth in this document.

Comments

    Before making a determination in this matter, Customs will consider 
any written comments timely submitted. Comments 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)), during 
regular business hours of 9:00 a.m. to 4:30 p.m. at the Regulations 
Branch, Office of Regulations and Rulings, Ronald Reagan Building, 1300 
Pennsylvania Avenue, NW., Washington, D.C.

Regulatory Flexibility and Executive Order 12866

    Inasmuch as small business entities are rarely repeat violators of 
Customs laws, and, therefore, will seldom need to avail themselves of 
these regulatory provisions and file petitions for relief on a regular 
basis, it is certified, pursuant to the provisions of the Regulatory

[[Page 5332]]

Flexibility Act (5 U.S.C. 601 et seq.), that the proposed amendments, 
if adopted, will not have a significant economic impact on a 
substantial number of small entities. Accordingly, the amendments are 
not subject to the regulatory analysis requirements of 5 U.S.C. 603 and 
604. The document does not meet the criteria for a ``significant 
regulatory action'' under E.O. 12866.

List of Subjects

19 CFR Part 10

    Alterations, Bonds, Customs duties and inspection, Exports, 
Imports, Preference programs, Repairs, Reporting and recordkeeping 
requirements, Trade agreements.

19 CFR Part 12

    Bonds, Customs duties and inspection, Labeling, Marking, Prohibited 
merchandise, Reporting and recordkeeping requirements, Restricted 
merchandise, Seizure and forfeiture, Trade agreements.

19 CFR Part 18

    Bonds, Customs duties and inspection, Penalties, Prohibited 
merchandise, Reporting and recordkeeping requirements.

19 CFR Part 24

    Accounting, Claims, Customs duties and inspection, Financial and 
accounting procedures, Harbors, Reporting and recordkeeping 
requirements, Trade agreements.

19 CFR Part 111

    Administrative practice and procedure, Bonds, Brokers, Customs 
duties and inspection, Imports, Licensing, Penalties, Reporting and 
recordkeeping requirements.

19 CFR Part 113

    Bonds, Customs duties and inspection, Exports, Foreign commerce and 
trade statistics, Freight, Imports, Reporting and recordkeeping 
requirements.

19 CFR Part 114

    Carnets, Customs duties and inspection.

19 CFR Part 125

    Bonds, Customs duties and inspection, Freight, Reporting and 
recordkeeping requirements.

19 CFR Part 134

    Country of origin, Customs duties and inspection, Imports, 
Labeling, Marking, Packaging and containers, Reporting and 
recordkeeping requirements.

19 CFR Part 145

    Customs duties and inspection, Imports, Mail, Postal service, 
Reporting and recordkeeping requirements.

19 CFR Part 162

    Administrative practice and procedure, Customs duties and 
inspection, Law enforcement, Penalties, Prohibited merchandise, 
Reporting and recordkeeping requirements, Seizures and forfeitures.

19 CFR Part 171

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

19 CFR Part 172

    Administrative practice and procedure, Customs duties and 
inspection, Penalties.

Proposed Amendments to the Regulations

    For the reasons stated above, it is proposed to amend parts 10, 12, 
18, 24, 111, 113, 114, 125, 134, 145, 162, 171, and 172, Customs 
Regulations (19 CFR parts 10, 12, 18, 24, 111, 113, 114, 125, 134, 145, 
162, 171, and 172), as set forth below.

PART 10--ARTICLES CONDITIONALLY FREE, SUBJECT TO A REDUCED RATE, 
ETC.

    1. The general authority citation for part 10 continues to read as 
follows:

    Authority: 19 U.S.C. 66, 1202 (General Note 20, Harmonized 
Tariff Schedule of the United States), 1321, 1481, 1484, 1498, 1508, 
1623, 1624, 3314.

    2. It is proposed to revise the introductory paragraph of 
Sec. 10.39(e) to read as follows:


Sec. 10.39  Cancellation of bond charges.

* * * * *
    (e) If there has been a default with respect to any or all of the 
articles covered by the bond and a written petition for relief is filed 
as provided in part 172 of this chapter, it shall be reviewed by the 
Fines, Penalties, and Forfeitures Officer having jurisdiction in the 
port where the entry was filed. If the Fines, Penalties, and 
Forfeitures Officer is satisfied that the importation was properly 
entered under Chapter 98, subchapter XIII, and that there was no intent 
to defraud the revenue or delay the payment of duty, the Fines, 
Penalties, and Forfeitures Officer may cancel the liability for the 
payment of liquidated damages as follows:
* * * * *
    3. It is proposed to amend Sec. 10.39 by removing paragraph (f) and 
redesignating current paragraphs (g) and (h) respectively as paragraphs 
(f) and (g).

PART 12--SPECIAL CLASSES OF MERCHANDISE

    1. The general authority citation 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.
* * * * *
    Sections 12.95 through 12.103 also issued under 15 U.S.C. 1241-
1245;
* * * * *
    2. It is proposed to amend Sec. 12.102 by removing the number 
``6O'' and adding in its place the number ``3O'.

PART 18--TRANSPORTATION IN BOND AND MERCHANDISE IN TRANSIT

    1. The general authority citation and relevant specific authority 
citations for part 18 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), 1551, 1552, 1553, 
1624.
* * * * *
    Section 18.8 also issued under 19 U.S.C. 1623;
* * * * *
    2. It is proposed to revise Sec. 18.8(d) to read as follows:


Sec. 18.8  Liability for shortage, irregular delivery, or nondelivery; 
penalties.

* * * * *
    (d) In any case in which liquidated damages are imposed in 
accordance with this section and the Fines, Penalties, and Forfeitures 
Officer is satisfied by evidence submitted to him with a petition for 
relief filed in accordance with the provisions of part 172 of this 
chapter that any violation of the terms and conditions of the bond 
occurred without any intent to evade any law or regulation, the Fines, 
Penalties, and Forfeitures Officer, in accordance with delegated 
authority, may cancel such claim upon the payment of any lesser amount 
or without the payment of any amount as may be deemed appropriate under 
the law and in view of the circumstances.
* * * * *

PART 24--CUSTOMS FINANCIAL AND ACCOUNTING PROCEDURE

    1. The general authority citation and relevant specific authority 
citations for part 24 continue to read as follows:


[[Page 5333]]


    Authority: 5 U.S.C. 301; 19 U.S.C. 58a-58c, 66, 1202 (General 
Note 20, Harmonized Tariff Schedule of the United States), 1624; 31 
U.S.C. 9701;
* * * * *
    Section 24.24 also issued under 26 U.S.C. 4461, 4462;
* * * * *
    2. It is proposed to amend the first sentence of Sec. 24.24(h)(3) 
by removing the phrase ``published pursuant to the provisions of 
Sec. 172.22(d)(1) of this chapter''.

PART 111--CUSTOMS BROKERS

    1. The general authority citation for part 111 continues to read as 
follows:

    Authority: 19 U.S.C. 66, 1202 (General Note 20, Harmonized 
Tariff Schedule of the United States), 1624, 1641.

    2. It is proposed to amend Sec. 111.92 by removing the last 
sentence.
    3. It is proposed to revise Sec. 111.95 to read as follows:


Sec. 111.95  Supplemental petition for relief.

    A decision of the Fines, Penalties, and Forfeitures Officer with 
regard to any petition filed in accordance with part 171 of this 
chapter may be the subject of a supplemental petition for relief. Any 
supplemental petition also must be filed in accordance with the 
provisions of part 171 of this chapter.

PART 113--CUSTOMS BONDS

    1. The general authority citation and relevant specific authority 
citation for part 113 continue to read as follows:

    Authority: 19 U.S.C. 66, 1623, 1624.
    Subpart E also issued under 19 U.S.C. 1484, 1551, 1565.

    2. It is proposed to revise Sec. 113.46 to read as follows:


Sec. 113.46  Cancellation of bond charges resulting from failure to 
produce documents.

    Guidelines published by the Commissioner of Customs set forth 
provisions relating to cancellation of bond charges resulting from 
failure to produce documents.
    3. It is proposed to amend Sec. 113.52 by removing the words ``and 
172.22(c)'' from the parenthetical phrase contained therein.
    4. It is proposed to amend Sec. 113.54(a) by removing ``172.31'' 
and adding in its place ``172.11(b)''.

PART 114--CARNETS

    1. The general authority citation for part 114 continues to read as 
follows:

    Authority: 19 U.S.C. 66, 1202 (General Note 20, Harmonized 
Tariff Schedule of the United States), 1623, 1624.

    2. It is proposed to amend Sec. 114.34(c) by removing the final 
non-parenthetical sentence and the final parenthetical sentence.

PART 125--CARTAGE AND LIGHTERAGE OF MERCHANDISE

    1. The general authority citation and relevant specific authority 
citation for part 125 continue to read as follows:

    Authority: 19 U.S.C. 66, 1565, 1624.
* * * * *
    Sections 125.41 and 125.42 also issued under 19 U.S.C. 1623.

    2. It is proposed to revise Sec. 125.42 to read as follows:


Sec. 125.42  Cancellation of liability.

    The Fines, Penalties, and Forfeitures Officer, in accordance with 
delegated authority, may cancel liquidated damages incurred under the 
bond of the foreign trade zone operator, containing the bond conditions 
set forth in Sec. 113.73 of this chapter, or under the bond of the 
cartman, lighterman, bonded carrier, bonded warehouse operator, 
container station operator or centralized examination station operator 
on Customs Form 301, containing the bond conditions set forth in 
Sec. 113.63 of this chapter, upon the payment of such lesser amount, or 
without the payment of any amount, as the Fines, Penalties, and 
Forfeitures Officer may deem appropriate under the circumstances. 
Application for cancellation of liquidated damages incurred shall be 
made in accordance with the provisions of part 172 of this chapter.

PART 134--COUNTRY OF ORIGIN MARKING

    1. The general authority citation for part 134 continues 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), 1304, 1624.

    2. It is proposed to amend Sec. 134.54(a) by removing the phrase 
``plus any estimated duty thereon as determined at the time of entry.''
    3. It is proposed to amend Sec. 134.54(b) by removing the second 
sentence.

PART 145--MAIL IMPORTATIONS

    1. The general authority citation and relevant specific authority 
citation for part 145 continue to read as follows:

    Authority: 19 U.S.C. 66, 1202 (General Note 20, Harmonized 
Tariff Schedule of the United States), 1624.
    Section 145.4 also issued under 18 U.S.C. 545, 19 U.S.C. 1618.
* * * * *
    2. It is proposed to revise Sec. 145.4(b) to read as follows:


Sec. 145.4  Dutiable merchandise without declaration or invoice, 
prohibited merchandise, and merchandise imported contrary to law.

* * * * *
    (b) Mitigation of forfeiture. Any claimant incurring a forfeiture 
of merchandise for violation of this section may file a petition for 
relief pursuant to part 171 of this chapter. Mitigation of that 
forfeiture may occur consistent with mitigation guidelines.
* * * * *

PART 162--RECORDKEEPING, INSPECTION, SEARCH AND SEIZURE

    1. The general authority citation and relevant specific authority 
citation for part 162 continue to read as follows:

    Authority: 5 U.S.C. 301; 19 U.S.C. 66, 1624.
* * * * *
    Section 162.48 also issued under 19 U.S.C. 1606, 1607, 1608, 
1612, 1613b, 1618;
* * * * *
    2. It is proposed to amend Sec. 162.48 by revising the heading to 
read as follows:


Sec. 162.48  Disposition of perishable and other seized property.

    3. It is proposed to amend paragraph (b) of Sec. 162.48 by removing 
from the first sentence the phrase ``and such value is less than 
$1,000,''.
    4. It is proposed to amend Sec. 162.79b by removing the last 
sentence.
    5. It is proposed to amend subpart G, part 162 by adding a new 
Sec. 162.81 to read as follows:


Sec. 162.81  Statute of limitation waivers.

    Waivers of the statute of limitations in any matter relating to any 
actual or potential penalty, seizure or claim for liquidated damages 
may be accepted by any Fines, Penalties, and Forfeitures Officer except 
that waivers of the statute of limitations submitted with regard to any 
penalty, seizure or liquidated damages case in which a petition has 
been filed and is under review by the Chief, Penalties Branch, Office 
of Regulations and Rulings, or the Secretary of the Treasury or his 
designee, shall be accepted by the Chief, Penalties Branch, Office of 
Regulations and Rulings.

PART 171--FINES, PENALTIES, AND FORFEITURES

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

    Authority: 19 U.S.C. 66, 1592, 1618, 1624. The provisions of 
subpart C also issued under 22 U.S.C. 401; 46 U.S.C. App. 320 unless 
otherwise noted.
    Subpart F also issued under 19 U.S.C. 1595a, 1605, 1624; 21 
U.S.C. 881 note.


[[Page 5334]]


    2. It is proposed to revise Sec. 171.0 to read as follows:


Sec. 171.0  Scope.

    This part contains provisions relating to petitions for relief from 
fines, forfeitures, and certain penalties incurred, and petitions for 
the restoration of proceeds from sale of seized and forfeited property. 
This part does not relate to petitions on claims for liquidated damages 
or penalties which are guaranteed by the conditions of the 
International Carrier Bond (see Sec. 113.64 of this chapter).
    3. It is proposed to revise subparts A through E of part 171 to 
read as follows:

Subpart A--Application for Relief


Sec. 171.1  Petition for relief.

    (a) To whom addressed. Petitions for the remission or mitigation of 
a fine, penalty, or forfeiture incurred under any law administered by 
Customs shall be addressed to the Fines, Penalties, and Forfeitures 
Officer designated in the notice of claim.
    (b) Signature. The petition for remission or mitigation shall be 
signed by the petitioner, his attorney-at-law or a Customs broker. If 
the petitioner is a corporation, the petition may be signed by an 
officer or responsible supervisory official of the corporation, or a 
representative of the corporation. Electronic signatures are 
acceptable. In non-commercial violations, a non-English speaking 
petitioner or petitioner who has a disability which may impede his 
ability to file a petition may enlist a family member or other 
representative to file a petition on his behalf. The deciding officer 
may, in his or her discretion, require proof of representation before 
consideration of any petition.
    (c) Form. The petition for remission or mitigation need not be in 
any particular form. It shall set forth the following:
    (1) A description of the property involved (if a seizure);
    (2) The date and place of the violation or seizure;
    (3) The facts and circumstances relied upon by the petitioner to 
justify remission or mitigation; and
    (4) If a seizure case, proof of a petitionable interest in the 
seized property.
    (d) False statement in petition. A false statement contained in a 
petition may subject the petitioner to prosecution under the provisions 
of 18 U.S.C. 1001.


Sec. 171.2  Filing a petition.

    (a) Where filed. A petition for relief shall be filed with the 
Fines, Penalties, and Forfeitures office whose address is given in the 
notice.
    (b) When filed. (1) Seizures. Petitions for relief from seizures 
shall be filed within 30 days from the date of mailing of the notice of 
seizure.
    (2) Penalties. Petitions for relief from penalties shall be filed 
within 60 days of the mailing of the notice of penalty incurred.
    (c) Extensions. The Fines, Penalties, and Forfeitures Officer is 
empowered to grant extensions of time to file petitions when the 
circumstances so warrant.
    (d) Number of copies. The petition shall be filed in duplicate 
unless filed electronically.
    (e) Exception for certain cases. If a penalty is assessed or a 
seizure is made and fewer than 180 days remain from the date of penalty 
notice or seizure before the statute of limitations may be asserted as 
a defense, the Fines, Penalties, and Forfeitures Officer may specify in 
the notice a reasonable period of time, but not less than 7 working 
days, for the filing of a petition for relief. If a petition is not 
filed within the time specified, the matter shall be transmitted 
promptly to the appropriate Office of the Chief Counsel for referral to 
the Department of Justice.


Sec. 171.3  Oral presentations seeking relief.

    (a) For violation of section 592. If the penalty incurred is for a 
violation of section 592, Tariff Act of 1930, as amended (19 U.S.C. 
1592), the person named in the notice, in addition to filing a 
petition, may make an oral presentation seeking relief in accordance 
with this paragraph. For purposes of this paragraph, a proceeding 
commences with the issuance of a prepenalty notice or, if no prepenalty 
notice is issued, with the issuance of a notice of claim or a monetary 
penalty.
    (b) Other oral presentations. Oral presentations other than those 
provided in paragraph (a) of this section may be allowed in the 
discretion of any official of the Customs Service or Department of the 
Treasury authorized to act on a petition or supplemental petition.

Subpart B--Actions on Petitions


Sec. 171.11  Petitions acted on by Fines, Penalties, and Forfeitures 
Officer.

    (a) Remission or mitigation authority. Upon receipt of a petition 
for relief submitted pursuant to the provisions of section 618 of the 
Tariff Act of 1930, as amended (19 U.S.C. 1618), or section 5321(c) of 
title 31, United States Code (31 U.S.C. 5321(c)), or section 320 of 
title 46, United States Code App. (46 U.S.C. App. 320), the Fines, 
Penalties, and Forfeitures Officer is empowered to remit or mitigate on 
such terms and conditions as, under law and in view of the 
circumstances, he or she shall deem appropriate in accordance with 
appropriate delegations of authority.
    (b) When violation did not occur. Notwithstanding any other 
delegation of authority, the Fines, Penalties, and Forfeitures Officer 
is always empowered to cancel any claim when he or she definitely 
determines that the act or omission forming the basis of any claim of 
penalty or forfeiture did not occur.
    (c) When violation is result of vessel in distress. The Fines, 
Penalties, and Forfeitures Officer may remit without payment any 
penalty which arises for violation of the coastwise laws if he or she 
is satisfied that the violation occurred as a direct result of an 
arrival of the transporting vessel in distress.


Sec. 171.12  Petitions referred to Customs Headquarters.

    Upon receipt of a petition for relief filed pursuant to the 
provisions of section 618 of the Tariff Act of 1930, as amended (19 
U.S.C. 1618), section 5321(c) of title 31, United States Code (31 
U.S.C. 5321(c)), or section 320 of title 46, United States Code App. 
(46 U.S.C. App. 320), involving fines, penalties, and forfeitures which 
are outside of his or her delegated authority, the Fines, Penalties, 
and Forfeitures Officer shall refer that petition to the Chief, 
Penalties Branch, Office of Regulations and Rulings, Customs 
Headquarters, who is empowered to remit or mitigate on such terms and 
conditions as, under law and in view of the circumstances, he or she 
shall deem appropriate, unless there has been no delegation of 
authority to act by the Secretary of the Treasury or his designee. In 
those cases where there has been no delegation to act by the Secretary 
or his designee, the Chief, Penalties Branch, shall forward the matter 
to the Department with a recommendation.


Sec. 171.13  Limitations on consideration of petitions.

    (a) Late petitions. Petitions filed after the expiration of the 30- 
or 60-day petitioning period may be considered by the deciding official 
if, in his or her discretion, the efficient administration of justice 
would be met.
    (b) Cases referred for institution of legal proceedings. No action 
shall be taken on any petition after the case has been referred to the 
Department of Justice for institution of legal proceedings. The 
petition shall be forwarded to the Department of Justice.
    (c) Conveyance awarded for official use. No petition for remission 
of forfeiture of a seized conveyance which has been forfeited and 
retained for

[[Page 5335]]

official use shall be considered unless it is filed before final 
disposition of the property is made. This does not affect petitions for 
restoration of proceeds of sale filed pursuant to the provisions of 
section 613 of the Tariff Act of 1930, as amended (19 U.S.C. 1613).


Sec. 171.14  Headquarters advice.

    The advice of the Director, International Trade Compliance 
Division, Office of Regulations and Rulings, Customs Headquarters, may 
be sought in any case, without regard to delegated authority to act on 
a petition or offer, when a novel or complex issue concerning a ruling, 
policy, or procedure is presented concerning a Customs action(s) or 
potential Customs action(s) relating to seizures and forfeitures, 
penalties (including penalty-based demands for duty), or mitigating or 
remitting any claim. The request for advice may be initiated by the 
alleged violator or any Customs officer, but must be submitted to the 
Fines, Penalties, and Forfeitures Officer. The Fines, Penalties, and 
Forfeitures Officer retains the authority to refuse to forward any 
request that fails to raise a qualifying issue and to seek legal advice 
from the appropriate Associate or Assistant Chief Counsel in such 
cases.

Subpart C--Disposition of Petitions


Sec. 171.21  Written decisions.

    If a petition for relief relates to a violation of sections 592 or 
641, Tariff Act of 1930, as amended (19 U.S.C. 1592 or 19 U.S.C. 1641), 
the petitioner shall be provided with a written statement setting forth 
the decision on the matter and the findings of fact and conclusions of 
law upon which the decision is based.


Sec. 171.22  Limitation on time decision effective.

    A decision to mitigate a penalty or to remit a forfeiture upon 
condition that a stated amount is paid shall be effective for not more 
than 60 days from the date of notice to the petitioner of such decision 
unless the decision itself prescribes a different effective period. If 
payment of the stated amount or arrangements for such payment are not 
made, or a supplemental petition is not filed in accordance with 
regulation, the full penalty or claim for forfeiture shall be deemed 
applicable and shall be enforced by promptly referring the matter, 
after required collection action, if appropriate, to the appropriate 
Office of the Chief Counsel for preparation for referral to the 
Department of Justice unless other action has been directed by the 
Commissioner of Customs.


Sec. 171.23  Decisions not protestable.

    (a) Mitigation decision not subject to protest. Any decision to 
remit a forfeiture or mitigate a penalty is not a protestable decision 
as defined under the provisions of 19 U.S.C. 1514. Any payment made in 
compliance with any decision to remit a forfeiture or mitigate a 
penalty is not a charge or exaction and therefore is not a protestable 
action as defined under the provisions of 19 U.S.C. 1514.
    (b) Payment of mitigated amount as accord and satisfaction. Payment 
of a mitigated amount in compliance with an administrative decision on 
a petition or supplemental petition for relief shall be considered an 
election of administrative proceedings and full disposition of the 
case. Payment of a mitigated amount will act as an accord and 
satisfaction of the Government claim. Payment of a mitigated amount 
will never serve as a bar to filing a supplemental petition for relief.

Subpart D--Offers in Compromise


Sec. 171.31  Form of offers.

    Offers in compromise submitted pursuant to the provisions of 
section 617 of the Tariff Act of 1930, as amended (19 U.S.C. 1617), 
must expressly state that they are being submitted in accordance with 
the provisions of that section. The amount of the offer must be 
deposited with Customs in accordance with the provisions of Sec. 161.5 
of this chapter.


Sec. 171.32  Authority to accept offers.

    The authority to accept offers in compromise, when recommended by 
the General Counsel of the Treasury or his designee, resides with the 
official having authority to decide a petition for relief.


Sec. 171.33  Acceptance of offers in compromise.

    An offer in compromise shall be considered accepted only when the 
offeror is so notified in writing. As a condition to accepting an offer 
in compromise, the offeror may be required to enter into any collateral 
agreement or to post any security which is deemed necessary for the 
protection of the interest of the United States.

Subpart E--Restoration of Proceeds of Sale


Sec. 171.41  Application of provisions for petitions for relief.

    The general provisions of subpart B of this part on filing and 
content of petitions for relief apply to petitions for restoration of 
proceeds of sale except insofar as modified by this subpart.


Sec. 171.42  Time limit for filing petition for restoration.

    A petition for the restoration of proceeds of sale under section 
613, Tariff Act of 1930, as amended (19 U.S.C. 1613) shall be filed 
within 3 months after the date of the sale.


Sec. 171.43  Evidence required.

    In addition to such other evidence as may be required under the 
provisions of subpart B of this part, the petition for restoration of 
proceeds of sale under section 613, Tariff Act of 1930, as amended (19 
U.S.C. 1613), shall show the interest of the petitioner in the 
property. The petition shall be supported by satisfactory proof that 
the petitioner did not know of the seizure prior to the declaration or 
decree of forfeiture and was in such circumstances as prevented him 
from knowing of it.


Sec. 171.44  Forfeited property authorized for official use.

    If forfeited property which is the subject of a claim under section 
613, Tariff Act of 1930, as amended (19 U.S.C. 1613) has been 
authorized for official use, retention or delivery shall be regarded as 
the sale thereof for the purposes of section 613. The appropriation 
available to the receiving agency for the purchase, hire, operation, 
maintenance and repair of property of the kind so received is available 
for the granting of relief to the claimant and for the satisfaction of 
liens for freight, charges and contributions in general average that 
may have been filed.
    4. It is proposed to amend part 171 by adding a new subpart G to 
read as follows:

Subpart G--Supplemental Petitions for Relief


Sec. 171.61  Time and place of filing.

    If the petitioner is not satisfied with a decision of the deciding 
official on an original petition for relief, a supplemental petition 
may be filed with the Fines, Penalties, and Forfeitures Officer having 
jurisdiction in the port where the violation occurred. Such 
supplemental petition shall be filed within 60 days from the date of 
notice to the petitioner of the decision from which further relief is 
requested unless another time to file such a supplemental petition is 
prescribed in the decision. A supplemental petition may be filed 
whether or not the mitigated penalty or forfeiture remission amount 
designated in the decision on the original petition is paid.

[[Page 5336]]

Sec. 171.62  Supplemental petition decision authority.

    (a) Decisions of Fines, Penalties, and Forfeitures Officer. 
Supplemental petitions filed on cases where the original decision was 
made by the Fines, Penalties, and Forfeitures Officer shall be 
initially reviewed by that official. The Fines, Penalties, and 
Forfeitures Officer may choose to grant more relief and issue a 
decision indicating same to the petitioner. If the petitioner is 
dissatisfied with the further relief granted or if the Fines, 
Penalties, and Forfeitures Officer decides to grant no further relief, 
the supplemental petition shall be forwarded to a designated 
Headquarters official assigned to a field location for review and 
decision, except that supplemental petitions filed in cases involving 
violations of 19 U.S.C. 1641 where the amount of the penalty assessed 
exceeds $10,000 shall be forwarded to the Chief, Penalties Branch, 
Office of Regulations and Rulings.
    (b) Decisions of Customs Headquarters. Supplemental petitions filed 
on cases where the original decision was made by the Chief, Penalties 
Branch, Office of Regulations and Rulings, Customs Headquarters, shall 
be forwarded to the Director, International Trade Compliance Division, 
Customs Headquarters, for review and decision.
    (c) Decisions of Treasury Department. Supplemental petitions filed 
on cases where the original decision was made in the Treasury 
Department, shall be referred to the Chief, Penalties Branch, Office of 
Regulations and Rulings, Customs Headquarters, who shall forward the 
supplemental petitions to the Department with a recommendation.
    (d) Authority of Assistant Commissioner. Any authority given to any 
Headquarters official by this part may also be exercised by the 
Assistant Commissioner, Office of Regulations and Rulings, or his 
designee.


Sec. 171.63  Appeals to the Secretary of the Treasury in certain 1592 
cases.

    A petitioner filing a supplemental petition pursuant to this 
subpart from a decision of the Chief, Penalties Branch, Office of 
Regulations and Rulings, with respect to any liability assessed under 
19 U.S.C. 1592 may request that the petition be accepted as an appeal 
to the Secretary of the Treasury. The Secretary or his designee will 
accept for decision any such supplemental petition when in his 
discretion he determines that such petition raises a question of fact, 
law or policy of such importance as to require a decision by the 
Secretary. If the Secretary or his designee declines to accept an 
appeal for decision, the petitioner will be so informed. In such a 
case, a decision will be issued thereon by the Director, International 
Trade Compliance Division.


Sec. 171.64  Waiver of statute of limitations.

    The deciding official always reserves the right to require a waiver 
of the statute of limitations executed by the claimants to the property 
or charged party or parties as a condition precedent before accepting a 
petition for relief or a supplemental petition in any case where the 
statute will be available as a defense to all or part of that case 
within one year from the date of decision on the original petition for 
relief.

PART 172--CLAIMS FOR LIQUIDATED DAMAGES; PENALTIES SECURED BY BONDS

    1. The authority citation for Part 172 is revised to read as 
follows:

    Authority: 19 U.S.C. 66, 1618, 1623, 1624.

PART 172--[REVISED]

    2. It is proposed to revise part 172 to read as follows:

PART 172--CLAIMS FOR LIQUIDATED DAMAGES; PENALTIES SECURED BY BONDS


Sec. 172.0  Scope.

    This part contains provisions relating to petitions for relief from 
claims for liquidated damages arising under any Customs bond and 
penalties incurred which are secured by the conditions of the 
International Carrier Bond (See Sec. 113.64 of this chapter). This part 
does not relate to petitions on unsecured fines or penalties or 
seizures and forfeitures, nor does it relate to petitions for the 
restoration of proceeds of sale pursuant to 19 U.S.C. 1613.

Subpart A--Notice of Claim and Application for Relief


Sec. 172.1  Notice of liquidated damages or penalty incurred and right 
to petition for relief.

    (a) Notice of liquidated damages or penalty incurred. When there is 
a failure to meet the conditions of any bond posted with Customs or 
when a violation occurs which results in assessment of a penalty which 
is secured by a Customs bond, the principal shall be notified in 
writing of any liability for liquidated damages or penalty incurred and 
a demand shall be made for payment. The sureties on such bond shall 
also be notified in writing of any such liability at the same time.
    (b) Notice of right to petition for relief. The notice shall inform 
the principal that application may be made for relief from payment of 
liquidated damages or penalty.


Sec. 172.2  Petition for relief.

    (a) To whom addressed. Petitions for the cancellation of any claim 
for liquidated damages or remission or mitigation of a fine or penalty 
secured by a Customs bond incurred under any law or regulation 
administered by Customs shall be addressed to the Fines, Penalties, and 
Forfeitures Officer designated in the notice of claim.
    (b) Signature. The petition for remission or mitigation shall be 
signed by the petitioner, his attorney-at-law or a Customs broker. If 
the petitioner is a corporation, the petition may be signed by an 
officer or responsible supervisory official of the corporation, or a 
representative of the corporation. Electronic signatures are 
acceptable. The deciding officer may, in his or her discretion, require 
proof of representation before consideration of any petition.
    (c) Form. The petition for cancellation, remission or mitigation 
need not be in any particular form. It shall set forth the following:
    (1) The date and place of the violation; and
    (2) The facts and circumstances relied upon by the petitioner to 
justify cancellation, remission or mitigation.
    (d) False statement in petition. A false statement contained in a 
petition may subject the petitioner to prosecution under the provisions 
of 18 U.S.C. 1001.


Sec. 172.3  Filing a petition.

    (a) Where filed. A petition for relief shall be filed by the bond 
principal with the Fines, Penalties, and Forfeitures office whose 
address is given in the notice.
    (b) When filed. Petitions for relief shall be filed within 60 days 
from the date of mailing to the bond principal the notice of claim for 
liquidated damages or penalty secured by a bond.
    (c) Extensions. The Fines, Penalties, and Forfeitures Officer is 
empowered to grant extensions of time to file petitions when the 
circumstances so warrant.
    (d) Number of copies. The petition shall be filed in duplicate 
unless filed electronically.
    (e) Exception for certain cases. If a penalty or claim for 
liquidated damages is assessed and fewer than 180 days remain from the 
date of penalty or liquidated damages notice before the statute of 
limitations may be asserted as a defense, the Fines, Penalties, and 
Forfeitures Officer may specify in the notice a reasonable period of 
time, but not less than 7 working days, for the

[[Page 5337]]

filing of a petition for relief. If a petition is not filed within the 
time specified, the matter shall be transmitted promptly to the 
appropriate Office of the Chief Counsel for referral to the Department 
of Justice.


172.4  Demand on surety.

    If the principal fails to file a petition for relief or fails to 
comply in the prescribed time with a decision to mitigate a penalty or 
cancel a claim for liquidated damages issued with regard to a petition 
for relief, Customs shall make a demand for payment on surety. Surety 
will then have 60 days from the date of the demand to file a petition 
for relief.

Subpart B--Actions on Petitions


Sec. 172.11  Petitions acted on by Fines, Penalties, and Forfeitures 
Officer.

    (a) Mitigation or cancellation authority. Upon receipt of a 
petition for relief submitted pursuant to the provisions of section 618 
or 623 of the Tariff Act of 1930, as amended (19 U.S.C. 1618 or 19 
U.S.C. 1623), or section 320 of title 46, United States Code App. (46 
U.S.C. App. 320), the Fines, Penalties, and Forfeitures Officer, 
notwithstanding any other regulation, is empowered to mitigate any 
penalty or cancel any claim for liquidated damages on such terms and 
conditions as, under law and in view of the circumstances, he or she 
shall deem appropriate in accordance with appropriate delegations of 
authority.
    (b) When violation did not occur. Notwithstanding any other 
delegation of authority, the Fines, Penalties, and Forfeitures Officer 
is always empowered to cancel any case without payment of a mitigated 
or cancellation amount when he or she definitely determines that the 
act or omission forming the basis of any claim of penalty or claim for 
liquidated damages did not occur.


Sec. 172.12  Petitions acted on at Customs Headquarters.

    Upon receipt of a petition for relief filed pursuant to the 
provisions of section 618 or 623 of the Tariff Act of 1930, as amended 
(19 U.S.C. 1618 or 19 U.S.C. 1623), or section 320 of title 46, United 
States Code App. (46 U.S.C. App. 320), involving fines, penalties, and 
claims for liquidated damages which are outside of his or her 
jurisdiction, the Fines, Penalties, and Forfeitures Officer shall refer 
that petition to the Chief, Penalties Branch, Office of Regulations and 
Rulings, Customs Headquarters, who is empowered, notwithstanding any 
other regulation, to mitigate penalties or cancel bond claims on such 
terms and conditions as, under law and in view of the circumstances, he 
or she shall deem appropriate.


Sec. 172.13  Limitations on consideration of petitions.

    (a) Late petitions. Petitions filed after the expiration of the 60-
day petitioning period may be considered by the deciding official if, 
in his or her discretion, the efficient administration of justice would 
be met.
    (b) Cases referred for institution of legal proceedings. No action 
shall be taken on any petition if the civil liability has been referred 
to the Department of Justice for institution of legal proceedings. The 
petition shall be forwarded to the Department of Justice.
    (c) Delinquent sureties. No action shall be taken on any petition 
from a principal or surety if received after the issuance to surety of 
a notice to show cause pursuant to the provisions of Sec. 113.38(c)(3) 
of this chapter.


Sec. 172.14  Headquarters advice.

    The advice of the Director, International Trade Compliance 
Division, Office of Regulations and Rulings, Customs Headquarters, may 
be sought in any case, without regard to jurisdictional amount, when a 
novel or complex issue concerning a ruling, policy, or procedure is 
presented concerning a Customs action(s) or potential Customs action(s) 
relating to penalties secured by bonds (including penalty-based demands 
for duty), claims for liquidated damages or mitigating any claim. The 
request for advice may be initiated by the bond principal, surety or 
any Customs officer, but must be submitted to the Fines, Penalties, and 
Forfeitures Officer. The Fines, Penalties, and Forfeitures Officer 
retains the authority to refuse to forward any request that fails to 
raise a qualifying issue and to seek legal advice from the appropriate 
Associate or Assistant Chief Counsel in such cases.

Subpart C--Disposition of Petitions


Sec. 172.21  Limitation on time decision effective.

    A decision to mitigate a penalty or to cancel a claim for 
liquidated damages upon condition that a stated amount is paid shall be 
effective for not more than 60 days from the date of notice to the 
petitioner of such decision unless the decision itself prescribes a 
different effective period. If payment of the stated amount is not made 
or a petition or a supplemental petition is not filed in accordance 
with regulation, the full penalty or claim for liquidated damages shall 
be deemed applicable and shall be enforced by promptly transmitting the 
matter, after required collection action, if appropriate, to the 
appropriate office of the Chief Counsel for preparation for referral to 
the Department of Justice unless other action has been directed by the 
Commissioner of Customs. Any such case may also be the basis for a 
sanction action commenced in accordance with regulations in this 
Chapter.


Sec. 172.22  Decisions not protestable.

    (a) Mitigation decision not subject to protest. Any decision to 
remit or mitigate a penalty or cancel a claim for liquidated damages 
upon payment of a lesser amount is not a protestable decision as 
defined under the provisions of 19 U.S.C. 1514. Any payment made in 
compliance with any decision to remit or mitigate a penalty or cancel a 
claim for liquidated damages upon payment of a lesser amount is not a 
charge or exaction and therefore is not a protestable action as defined 
under the provisions of 19 U.S.C. 1514.
    (b) Payment of mitigated or cancellation amount as accord and 
satisfaction. Payment of a mitigated or cancellation amount in 
compliance with an administrative decision on a petition or 
supplemental petition for relief shall be considered an election of 
administrative proceedings and full disposition of the case. Payment of 
a mitigated or cancellation amount will act as an accord and 
satisfaction of the Government claim. Payment of a mitigated or 
cancellation amount will never serve as a bar to filing a supplemental 
petition for relief.

Subpart D--Offers in Compromise


Sec. 172.31  Form of offers.

    Offers in compromise submitted pursuant to the provisions of 
section 617 of the Tariff Act of 1930, as amended (19 U.S.C. 1617), 
must expressly state that they are being submitted in accordance with 
the provisions of that section. The amount of the offer must be 
deposited with Customs in accordance with the provisions of Sec. 161.5 
of this chapter.


Sec. 172.32  Authority to accept offers.

    The authority to accept offers in compromise, when recommended by 
the General Counsel of the Treasury or his designee, resides with the 
official having authority to decide a petition for relief, except that 
offers in compromise submitted with regard to penalties secured by a 
bond or claims for liquidated damages which are the subject of a letter 
to show cause issued to a surety in anticipation of possible sanction 
action authorized under the provisions of part 113 of this chapter

[[Page 5338]]

shall be accepted by the designated Headquarters official who issued 
the show cause letter.


Sec. 172.33  Acceptance of offers in compromise.

    An offer in compromise shall be considered accepted only when the 
offeror is so notified in writing. As a condition to accepting an offer 
in compromise, the offeror may be required to enter into any collateral 
agreement or to post any security which is deemed necessary for the 
protection of the interest of the United States.

Subpart E--Supplemental Petitions for Relief


Sec. 172.41  Time and place of filing.

    If the petitioner is not satisfied with a decision of the deciding 
official on an original petition for relief, a supplemental petition 
may be filed with the Fines, Penalties, and Forfeitures Officer having 
jurisdiction in the port where the violation occurred. Such 
supplemental petition shall be filed within 60 days from the date of 
notice to the petitioner of the decision from which further relief is 
requested unless another time to file such a supplemental petition is 
prescribed in the decision. A supplemental petition may be filed 
whether or not the mitigated amount designated in the decision on the 
original petition is paid.


Sec. 172.42  Supplemental petition decision authority.

    (a) Decisions of Fines, Penalties, and Forfeitures Officer. 
Supplemental petitions filed on cases where the original decision was 
made by the Fines, Penalties, and Forfeitures Officer, shall be 
initially reviewed by that official. The Fines, Penalties, and 
Forfeitures Officer may choose to grant more relief and issue a 
decision indicating same to the petitioner. If the petitioner is 
dissatisfied with the further relief granted or if the Fines, 
Penalties, and Forfeitures Officers decides to grant no further relief, 
the supplemental petition shall be forwarded to a designated 
Headquarters official assigned to a field location for review and 
decision.
    (b) Decisions of Customs Headquarters. Supplemental petitions filed 
on cases where the original decision was made by the Chief, Penalties 
Branch, Office of Regulations and Rulings, Customs Headquarters, shall 
be forwarded to the Director, International Trade Compliance Division, 
for review and decision.
    (c) Authority of Assistant Commissioner. Any authority given to any 
Headquarters official by this part may also be exercised by the 
Assistant Commissioner, Office of Regulations and Rulings, or his 
designee.


Sec. 172.43  Waiver of statute of limitations.

    The deciding official always reserves the right to require a waiver 
of the statute of limitations executed by the charged party or parties 
as a condition precedent before accepting a supplemental petition in 
any case where the statute will be available as a defense to all or 
part of that case within one year from the date of decision on the 
original petition for relief.
Samuel H. Banks,
Acting Commissioner of Customs.

    Approved: January 13, 1998.
John P. Simpson,
Deputy Assistant Secretary of the Treasury.
[FR Doc. 98-2250 Filed 1-30-98; 8:45 am]
BILLING CODE 4820-02-P