[Federal Register Volume 63, Number 83 (Thursday, April 30, 1998)]
[Rules and Regulations]
[Pages 23643-23657]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 98-11481]



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  Federal Register / Vol. 63, No. 83 / Thursday, April 30, 1998 / Rules 
and Regulations  

[[Page 23643]]


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DEPARTMENT OF JUSTICE

Immigration and Naturalization Service

8 CFR Part 273

[INS No. 1697-95]
RIN 1115-AD97


Screening Requirements of Carriers

AGENCY: Immigration and Naturalization Service, Justice.

ACTION: Final rule.

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SUMMARY: This rule amends the Immigration and Naturalization Service 
(the Service) regulations by establishing procedures carriers must 
undertake for the proper screening of passengers at the ports of 
embarkation to become eligible for a reduction, refund, or waiver of a 
fine imposed under section 273 of the Immigration and Nationality Act 
(the Act). This rule is necessary to enable the Service to reduce, 
refund, or waive fines for carriers that have taken appropriate 
measures to properly screen passengers being transported to the United 
States, while continuing to impose financial penalties against those 
carriers that fail to properly screen passengers.

DATES: This rule is effective June 1, 1998. The supplementary 
information portion of this final rule requires carriers whose 
Performance Level (PL) is not at or better than the Acceptable 
Performance Level (APL), to submit evidence to the Service so that they 
may receive an automatic fine reduction of 25 percent, if certain 
conditions are met. Since this evidence is considered an information 
collection which is subject to review by the Office of Management and 
Budget (OMB) under the Paperwork Reductions Act (PRA), the evidence 
cannot be submitted until OMB approves the information collection 
requirements. The Service will publish a notice in the Federal Register 
once OMB approval of the information collection is obtained.

FOR FURTHER INFORMATION CONTACT:
Robert F. Hutnick, Assistant Chief Inspector, Immigration and 
Naturalization Service, 425 I Street, NW., Room 4064, Washington, DC 
20536, telephone number (202) 616-7499.

SUPPLEMENTARY INFORMATION: The imposition of administrative fines has 
long been an important tool in enforcing the United States immigration 
laws and safeguarding its borders. Both section 273 of the Act and 
prior law reflect a similar Congressional purpose to compel carriers, 
under pain of penalties, to ensure enforcement of, and compliance with, 
certain provisions of the immigration laws. In enacting both section 
273 of the Act of 1952 and section 16 of the Immigration Act of 1924 
(the precursor to section 273(a) of the Act of 1952), Congress intended 
to make the carrier ensure compliance with the requirements of the law. 
The carriers have long sought relief from fines by having the Service 
consider extenuating circumstances related to the imposition of fines.
    Prior to the enactment of section 209(a)(6) of the Immigration and 
Nationality Technical Corrections Act of 1994, Pub. L. 103-416, dated 
October 25, 1994, it was the Service's policy not to reduce, refund, or 
waive fines imposed under section 273 of the Act except pursuant to 
section 273(c) of the Act where the carrier could, to the satisfaction 
of the Attorney General, demonstrate that it did not know, and could 
not have ascertained by the exercise of reasonable diligence, that the 
individual transported was an alien and that a valid passport or visa 
was required.
    This final rule provides procedures carriers must undertake for the 
proper screening of aliens at the port of embarkation to become 
eligible for reduction, refund, or waiver of a fine imposed under 
section 273 of the Act. Nevertheless, it is important to note that 
these are voluntary procedures for carriers. This final rule further 
prescribes conditions the Service will consider before reducing, 
refunding, or waiving a fine. Of primary importance will be the 
carrier's performance in screening passengers. The Service will 
determine a carrier's performance record by analyzing statistics on the 
number of improperly documented nonimmigrant passengers transported to 
the United States by each carrier compared to the total number of 
documented nonimmigrant passengers transported.
    This final rule will enable the Service to reduce, refund, or waive 
a fine imposed under section 273 of the Act for a carrier that 
demonstrates successful screening procedures by achieving satisfactory 
performance in the transportation of properly documented nonimmigrants 
to the United States. This will enable the Service to reduce, refund, 
or waive fines for carriers that have taken appropriate measures to 
properly screen passengers while continuing to impose financial 
penalties on carriers that fail to properly screen passengers. It is 
important to note that the final rule does not impose any additional 
requirements on the carriers, and that carriers are free to observe 
current procedures both in respect to screening their passengers and 
filing their defenses.
    The Service wishes to maintain flexibility in assessing the success 
of a carrier's screening procedures. The Service has devised an initial 
means of measurement, as set forth in the following paragraphs, but 
will re-examine this strategy if such re-examination is appropriate. 
The Service is committed to working with the carriers and will consult 
with them on any contemplated changes in the method of assessment.
    Under the methodology, a carrier's performance level (PL) will be 
determined by taking the number of each carrier's nonimmigrant 
violations of section 273 of the Act for a fiscal year and dividing 
this by the number of documented nonimmigrants transported by the 
carrier for the same fiscal year and multiplying the result by 1,000. A 
carrier's PL will be calculated annually.
    The Service shall establish an Acceptable Performance Level (APL), 
based on statistical analysis of the performance of all carriers, as a 
means of evaluating whether the carrier has successfully screened all 
of its passengers in accordance with 8 CFR 273.3. The APL shall be 
determined by taking the total number of all carrier nonimmigrant 
violations of section 273 of the Act for a fiscal year and dividing 
this by the total number of documented nonimmigrants transported by all

[[Page 23644]]

carriers for the same fiscal year and multiplying the result by 1,000.
    The Service shall establish a Second Acceptable Performance Level 
(APL2), based on statistical analysis of the performance of all 
carriers at or better than the APL, as a means of further evaluating 
carrier success in screening its passengers in accordance with 8 CFR 
273.3. Using carrier statistics for only those carriers which are at or 
better than the APL, the APL2 shall be determined by taking the total 
number of these carriers' nonimmigrant violations of section 273 of the 
Act for a fiscal year and dividing by the total number of documented 
nonimmigrants transported by these carriers for the same fiscal year 
and multiplying the result by 1,000.
    Carriers which have achieved a PL at or better than the APL, as 
determined by the Service, will be eligible for a 25 percent fine 
reduction in the amount of any fine covered by this provision if the 
carrier applies for a reduction, refund, or waiver of fines according 
to the procedures listed in 8 CFR 280.12 and 8 CFR 280.51. Carriers 
which have achieved a PL at or better than the APL2, as determined by 
the Service, will be eligible for a 50 percent fine reduction in the 
amount of any fine covered by this provision if the carrier applies for 
a reduction, refund, or waiver of fines according to the procedures 
listed in 8 CFR 280.12 and 8 CFR 280.51. Additional factors the Service 
will consider in determining whether the Service will reduce, refund, 
or waive a fine under section 273 of the Act and the amount of such 
reduction, refund, or waiver are: (1) The carrier's history of fines 
violations, (2) the carriers payment record for fines, liquidated 
damages, and user fees, and (3) the existence of any extenuating 
circumstances. In the future, the Service may consider other factors in 
evaluating carrier performance including participation in data sharing 
initiatives or evaluation of a carrier's performance by particular 
port(s) of embarkation and/or route(s) to determine carrier fines 
mitigation levels.
    To maintain flexibility in determining the success of a carrier's 
screening procedures, the Service will not include in the regulation 
the methodology it will use in determining a carrier's PL, the APL, or 
the APL2 or the fines reduction percentage levels. Both the methodology 
used to determine the success of a carrier's screening procedures and 
the fines reduction percentage will be periodically revisited by the 
Service to maximize carrier cooperation and vigilance in their 
screening procedures. The Service shall compute all carrier PLs, the 
APL, and the APL2 periodically but may elect to use the APL or APL2 
from a previous period when determining carrier fines reduction, 
refunds, or waivers for a specific period(s). While the individual 
carrier's PL will be computed at least annually, the benchmark APL and 
APL2 may apply to a longer period. Initially the Service may set the 
benchmark criteria for 3 years. If this is done, it will be done across 
the board for all carriers. The Service will publish any significant 
adverse changes regarding fines reduction in the Federal Register in 
accordance with the Administrative Procedure Act (APA) prior to 
implementation. Maintaining a flexible approach allows the Service to 
work in partnership with the carriers toward the mutual goal of 
decreasing the number of improperly documented nonimmigrants 
transported to the United States.
    Carriers may elect to sign a Memorandum of Understanding (MOU) with 
the Service for the broader application of the reduction, refund, or 
waiver of fines imposed under section 273 of the Act by agreeing to 
perform additional measures to intercept improperly documented aliens 
at ports of embarkation to the United States. The MOU is attached as an 
appendix to this final rule. Carriers performing these additional 
measures to the satisfaction of the Commissioner would be eligible for 
automatic fine reductions, refunds, or waivers as prescribed in the 
MOU. Carriers signatory to the MOU with the Service would be eligible 
for an automatic fine reduction of 25 or 50 percent depending on 
whether a carrier's PL is at or better than the APL or APL2 
respectively, as determined by the Service. Carriers not signatory to 
an MOU would not be eligible for automatic fine reductions, refunds, or 
waivers. Nevertheless, this rule does not preclude any carrier, whether 
or not signatory to the MOU, from requesting fines reduction, refund, 
or waiver according to the procedures listed in 8 CFR 280.12 and 8 CFR 
280.51. Even if the carrier's PL is not at or better than the APL, the 
carrier may receive an automatic fine reduction of 25 percent, if it 
meets certain conditions, including: (1) It is signatory to the MOU, 
which is predicated on the carrier submitting evidence that it has 
taken extensive measures to prevent the transport of improperly 
documented passengers to the United States, and; (2) it is in 
compliance with the MOU. This evidence shall be submitted to the 
Assistant Commissioner for Inspections for consideration. Evidence may 
include, but is not limited to, the following: (a) Information 
regarding the carrier's document screening training program, including 
attendance of the carrier's personnel in any Service, Department of 
State, or other training programs, the number of employees trained, and 
a description of the training program; (b) information regarding the 
date and number of improperly documented aliens intercepted by the 
carrier at the port(s) of embarkation, including, but not limited to, 
the alien's name, date of birth, passport nationality, passport number, 
other travel document information, reason boarding was refused, and 
port of embarkation, unless not permitted by local law or local 
competent authority. In such instances, the carrier shall notify the 
Service of this prohibition and shall propose alternative means for 
meeting this objective; and, (c) any other evidence to demonstrate the 
carrier's efforts to properly screen passengers destined for the United 
States; and, (3) it appears to the satisfaction of the Assistant 
Commissioner for Inspections that other Service data and information, 
including a carrier's PL, indicate the carrier has demonstrated 
improvement in the screening of its passengers. The evidence that must 
be submitted to the Service by a carrier whose PL is not at or better 
than the APL, is considered an information collection which is covered 
under the Paperwork Reduction Act (PRA). Accordingly, those carriers 
whose PL is below the APL cannot submit evidence to the Service until 
the information collection is approved by the Office of Management and 
Budget (OMB) in accordance with the PRA. Once the Service receives 
approval from OMB on the information collection, it will notify the 
public by PRA notice in the Federal Register that the information 
collection is approved.
    The levels for fines mitigation are loosely based on the Canadian 
fines mitigation system. Based on performance levels of the carriers, 
the Canadian system provides for an automatic fines reduction of 25 
percent upon the carrier signing an MOU with the Canadian Government. 
Through attaining performance standards established in the Canadian 
MOU, carriers can earn further reductions of 50, 75, or 100 percent of 
their fines.
    This rule further clarifies fines imposed under section 273(d) of 
the Act by stating that provisions of section 273(e) of the Act do not 
apply to any fine imposed under section 243(c)(1)(B) of the Act, prior 
section 273(d) of the Act in effect until April 1, 1997, nor under any 
provisions other than sections 273(a)(1) and 273(b) of the Act.
    On June 10, 1996, at 61 FR 29323-29327, the Service published a 
proposed

[[Page 23645]]

rule with requests for comments in the Federal Register, in order to 
comply with section 209(a)(6) of the Immigration and Nationality 
Technical Corrections Act of 1994, which permitted the Service to 
mitigate fines in certain cases where the carrier demonstrates that it 
had screened all passengers in accordance with regulations prescribed 
by the Attorney General or if circumstances exist that the Attorney 
General determines would justify such mitigation. Interested persons 
were invited to submit written comments on or before August 9, 1996. 
The following is a discussion of those comments received by the Service 
and the Service's response.

Discussion of Comments on the Proposed Rule

    The Service received a total of 15 written responses containing 
comments on the proposed rule. The respondents were classified as 
follows:
    Fourteen respondents commented that the proposed methodology by 
which the Service will calculate the carrier's individual performance 
level (PL) and the acceptable performance levels (APL and APL2) are not 
accurate measures of a carrier performance. Many reasons were cited as 
follows:
    One objection to the methodology was that the carriers were seen as 
being ``pitted'' against one another instead of being rated on 
individual merit. The Service does not intend for carriers to compete 
against each other. The Service does intend to use the APL as a 
measurement of individual carrier performance. To respond to several 
commenters on the recalculation of the PL, APL, and APL2 figures, the 
PL will be calculated annually for individual carriers. The 1994 APL 
and APL2 will be used as the standard for the past fines being held in 
abeyance and for the fiscal years 1995-1997 and possibly longer, based 
on Service discretion. Individual carrier performance is compared 
against this overall average performance level of all carriers (APL and 
APL2). Carriers will be rewarded by the mitigation of carrier fines of 
25 or 50 percent, depending on a carrier's PL as compared to this 
overall average. Individual statistical performance needs a baseline to 
measure performance. Therefore, the Service has used the overall 
average of all carriers to create the necessary baseline.
    Some commenters objected to FY 94 being used as the baseline. The 
Service chose FY 94 since it was the first year in which the Service 
was able to obtain the total number of documented nonimmigrant 
passengers per carrier from the Form I-92, Aircraft/Vessel Report. 
Prior to FY 94, this data was discarded.
    Several commenters claimed that requiring carriers to meet or 
exceed an ``arbitrary'' APL is inconsistent with the intent of Congress 
and is unrelated to the basic concept of mitigation. Commenters argued 
that Congress ``intended'' that section 273(e) would result in complete 
relief from the fine procedures, so that if a carrier satisfies the 
screening requirements, the Service would be required to reduce the 
fine to zero. These commenters believe that the proposed rule is 
contrary to this ``intent'' because the proposed rule permits the 
Service to reduce the fine by a specified amount that is less than 100 
percent. The Service disagrees with the commenters' claims about 
Congressional ``intent.'' The intent of any statute is to be found in 
the text of the statute itself. See Mallard v. U.S. Dist. Ct. for the 
S. Dist. of Iowa, 490 U.S. 296, 300 [1989]; INS v. Phinpathya, 464 U.S. 
183, 189 [1984]. Section 273(e) of the Act provides that the Attorney 
General ``may * * * reduce[], refund[], or waive[]'' a fine under 
section 273(a) and (b), ``under such regulations as the Attorney 
General shall prescribe'' [emphasis added]. Thus, the statute entrusts 
to the Attorney General's discretion the authority to determine under 
what circumstances the Service should reduce, refund, or mitigate a 
fine under section 273(a) and (b). Nothing in section 273(e) of the Act 
requires the Service, in the exercise of the Attorney General's 
discretion, either to reduce the fine to zero in every case or to leave 
the fine at the full statutory amount. Nor does the existing 
legislative history support the commenters' claims about the ``intent'' 
of section 273(e) of the Act. See 140 Cong. Rec. S14400-S14405 [daily 
ed. October 6, 1994]; id., H9272-H9281 [daily ed. September 20, 1994]. 
The Service contends that section 273, read as a whole, provides both a 
``positive'' and a ``negative'' incentive for a carrier to ensure that 
it permits only aliens with proper documents to board airplanes and 
other vessels bound for the United States. The ``negative'' incentive 
is the risk of incurring the statutory fine. The ``positive'' incentive 
is that the amount of the fine may be reduced, if the carrier has acted 
reasonably in its efforts to screen passengers. The carrier 
demonstrates that it has properly screened its passengers by having a 
PL at or better than the APL as determined by the Service. Measuring 
the performance of carriers is basic to the concept of mitigation. The 
policy of imposing a monetary penalty, but mitigating the amount of the 
penalty if a carrier has taken appropriate steps to screen passengers 
is a reasonable way to implement section 273 as a whole. This policy is 
well within the authority of the Attorney General to promulgate 
regulations for the administration of the immigration laws.
    It must be emphasized that the Service policy of strictly enforcing 
the fine provisions of section 273 of the Act in appropriate cases is a 
continuation of a more than 70-year-old policy of carrying out 
Congress' intent to hold carriers responsible for passengers they have 
transported to the United States. The Board of Immigration Appeals (the 
Board) and the courts have consistently held that carriers must 
exercise reasonable diligence in boarding their passengers for 
transport to the United States and are subject to administrative fines 
for failure to do so, e.g., Matter of Eastern Airlines, Inc., Flight 
#798, 20 I&N Dec. 57 (BIA 1989); Matter of M/V Guadalupe, 13 I&N Dec. 
67 (BIA 1968); New York & Porto Rico S.S. Co. v. United States, 66 F.2d 
523, 525 (2d Cir. 1933).
    The imposition of administrative fines in appropriate cases has 
long been an important tool in enforcing our immigration laws and 
safeguarding our borders. In enacting both section 273 of the Act of 
1952 as well as section 16 of the Immigration Act of 1924, the 
precursor of section 273, Congress intended to make the carrier ensure 
compliance with the requirements of the respective statutory 
provisions. See Joint Hearings on the Revision of Immigration, 
Naturalization, and Nationality Laws, Senate and House Subcommittees on 
the Judiciary, Testimony of Stuart G. Tipton, General Counsel, Air 
Transport Association of America at p. 294 (March 14, 1951); Matter of 
M/V ``Runaway'', 18 I&N Dec. at 128 (citing section 273 cases). Indeed, 
in enacting section 273 of the Act, Congress strengthened the previous 
penalty provisions, which only applied to carriers unlawfully 
transporting immigrants to this country, to include the unlawful 
transport of nonimmigrants as well. See Matter of S.S. Greystroke 
Castle and M/V Western Queen, 6 I&N Dec. 112, 114-15 (BIA, AG 1954); 
Legal Opinion of the INS General Counsel, 56336/273a at 6 (Sept. 3, 
1953). The intent of Congress embodied in sections 273(e) is to reward 
carriers which properly screen their passengers prior to coming to the 
United States. By determining a carrier's PL and rewarding carriers 
with a satisfactory PL through fines mitigation, the Service fulfills 
the intent of Congress.

[[Page 23646]]

    One commenter requested that ``[t]he Service should expressly agree 
that it will not initiate legislation to increase the amount of the 
penalty for violation of [section 273 of the Act] for at least five 
years.'' As stated previously, the Service views the fines program as 
an important tool in enforcing our immigration laws by imposing 
financial penalties on those carriers which fail to properly screen 
passengers. The Executive Branch has a constitutional duty to recommend 
legislation that the Executive Branch considers necessary or 
appropriate. Therefore, the Service does not agree with the commenter's 
request. The Service does note, however, that the Service is required 
by statute to adjust civil administrative fines by regulation to 
account for the effect of inflation. Federal Civil Penalty Inflation 
Adjustment Act of 1990, Sec. 4, as amended by Debt Collection 
Improvement Act of 1996, Pub. L. No. 104-134, ch. 10, 
Sec. 31001(s)(1)(A), 110 Stat. 1321, ______ (1996).
    Some commenters claimed that the APL structure encourages the 
continuance of the ``adversarial relationship'' between the carriers 
and the Service. On the contrary, carrier organizations and the Service 
have conducted extensive dialogue on the formulation of this rule. The 
past collaboration between the carrier organizations and the Service 
led to the near-completion of the Carrier Cooperative Agreement. The 
Agreement was the precursor to the present fine mitigation regulation 
language and corresponding MOU. The Agreement had the endorsement of 
the major carrier organizations. The Service also actively enlisted 
carrier participation in the writing of the fines mitigation proposed 
rule. Meetings were held with the carrier organizations on several 
occasions to discuss the fines mitigation legislation and the mutual 
concerns of the Service and the carriers. The Service maintains a 
strong customer orientation within the boundaries of its mission as 
evidenced by the National Performance Review (NPR) initiatives at the 
major Ports-of-Entry. The Service has actively involved the carriers, 
as major stakeholders, the re-engineering of the inspection process. 
The Service values its cooperative relationship with the carriers and 
their parent organizations. The Service believes the cooperative nature 
of the MOU to be signed with the carriers will lead to an even closer, 
mutually beneficial relationship. The ultimate customers, the American 
people and bona fide passengers, are better served by the carriers and 
the Service by preventing the transportation of improperly documented 
aliens to the United States. While none of these considerations 
eliminates the tension inherent in the relationship between a 
regulatory agency and the entities subject to regulation, they do 
bespeak as cooperative a relationship as possible.
    Some commenters claimed that the variables used in calculating the 
PL, APL, and APL2 are not clearly defined while other variables, such 
as carrier size, market characteristics, risk factors at ports of 
embarkation, passenger nationalities, local government laws, etc., are 
not factored in the calculations. The Service contents the factors are 
clearly defined. The Service will calculate a carrier's PL by dividing 
the number of each carrier's violations of section 273 of the Act for a 
fiscal year by the number of documented nonimmigrants transported by 
the carrier and multiplying the result by 1,000. This calculation will 
include only those aliens who are documented by the completion of an I-
94 and statistically recorded on Form I-92. This calculation does not 
include violations for improperly documented first-time immigrants or 
lawful permanent residents, Canadian citizens, lawful residents of 
Canada, and any other class of nonimmigrant aliens not required to 
complete the Form I-94 as enumerated in 8 CFR 231.1. In determining the 
number of passengers transported to the United States by each carrier, 
the passengers brought from contiguous territory have been omitted from 
the total number of passengers transported as requested by several 
commenters to the rule. They correctly pointed out that to include 
these numbers when section 273 of the Act specifically excludes fines 
levied for transporting improperly documented passengers from 
contiguous territory would unfairly alter the PL, APL, and APL2 
calculations. The APL will be calculated by taking the total number of 
all carrier violations of section 273 of the Act for a fiscal year and 
dividing this by the total number of documented nonimmigrants 
transported by all carriers for the same fiscal year and multiplying 
the result by 1,000. The same groups of aliens which have been omitted 
from the calculation of a carrier's PL have also been omitted for the 
calculation of the APL. The second Acceptable Performance Level (APL2) 
will be based on statistical analysis of the performance of all 
carriers at or better than the APL. Using carrier statistics only for 
those carriers which are at or better than the APL, the APL2 shall be 
determined by taking the total number of these carrier violations of 
section 273 of the Act for a fiscal year and dividing by the total 
number of documented nonimmigrants transported by these carriers for 
the same fiscal year and multiplying the result by 1,000. Likewise, the 
same groups of aliens which have been omitted from the calculation of a 
carrier's PL and APL have also been omitted for the calculation of the 
APL2. Carrier size is therefore inconsequential to the determination of 
a carrier's PL. The three measurements show the number of violations 
under section 273 of the Act per 1,000 passengers transported. This 
enables the Service to even the playing field and determine the carrier 
performance of small and large carriers per 1,000 passengers. Other 
variables, including market characteristics, risk factors at ports of 
embarkation, passenger nationalities, and local government laws, have 
not been factored into these numbers. Nevertheless, even if a carrier's 
PL is not at or better than the APL, due to these variables, the 
carrier may receive an automatic 25 percent reduction in fines, if it 
meets certain conditions, including being signatory to the MOU 
predicated on the submission of evidence demonstrating that the carrier 
has taken extensive measures to prevent the transport of improperly 
documented passengers to the United States and remaining in compliance 
with the MOU. This evidence must be submitted to the Assistant 
Commissioner for Inspections for consideration. Evidence may include, 
but is not limited to, the following: (1) Information regarding the 
carrier's document screening training program, including attendance of 
the carrier's personnel in any Service, Department of State, or other 
training programs, the number of employees trained, and a description 
of the training program; (2) information regarding the date and number 
of improperly documented aliens intercepted by the carrier at the 
port(s) of embarkation including, but not limited to, the alien's name, 
date of birth, passport nationality, passport number, other travel 
document information, reason boarding was refused, and port of 
embarkation; and, (3) any other evidence to demonstrate the carrier's 
efforts to properly screen passengers destined to the United States. 
The Service will consider these variables and Service data in 
determining fines mitigation for carriers failing to meet the APL 
level. The Service has previously stated in the proposed rule summary 
that it may consider other factors in evaluating carrier performance, 
including participation in data sharing initiatives or evaluation of a 
carrier's performance

[[Page 23647]]

by particular port(s) of embarkation and/or route(s) to determine 
carrier fines mitigation levels at a later date as technology improves 
and more information is available.
    Commenters calculated that only 20 percent of the carriers would be 
entitled to any fines mitigation under the Service's methodology. Some 
respondents further stated that the rule was deliberately designed to 
defeat Congress' intent by making a substantial degree of mitigation 
too difficult for a carrier to achieve.
    To the contrary, the Service's calculations, upon which the PL, 
APL, and APL2 will be determined, show that 41 percent of the carriers 
(45 out of 109) will qualify for fines mitigation for fiscal year 1995 
based on FY 94 violations. Nineteen (19) percent of the carriers (21 
out of 109) achieved a PL at or better than the APL2 and are eligible 
for 50 percent fines mitigation and 24 carriers achieved a PL at or 
better than the APL and are eligible for 25 percent fines mitigation. 
This does not include those carriers which apply for fines mitigation 
based on the submission of evidence as described in section 4.13 of the 
MOU (See attanchment). For violations in FY 96, the Service plans to 
retain the APL2 and APL yardsticks from FY 94 to determine fines 
mitigation. Further, 53 percent of the carriers (55 our of 104) are 
eligible for fines mitigation in FY 96 based on violations which 
occurred in FY 95 using the FY 94 APL yardstick. Thirty-two percent of 
the carriers (33 out of 104) are eligible for 50 percent fines 
mitigation in FY 96 for having a PL at or better than the FY 94 APL2 
yardstick. The Service envisions that cooperation in the sharing of 
information regarding fraudulent documents, the training of carrier 
agents by the Service's Ports-of Entry officers, carrier consultants, 
and overseas officers, and carrier dissemination of this information to 
their agents at the ports of embarkation, will continue to lower the 
number of improperly documented aliens arriving at United States Ports-
of-Entry. The Service expects that the number of carriers eligible for 
fines mitigation to increase for FY 97 and beyond. Carrier interest in 
the training of its agents in the immigration laws and regulations of 
the United States together with invaluable Service document training 
has made the carrier-Service partnership a success.
    Several commenters suggested that the Service should increase the 
levels of fines mitigation for those carriers who meet the APL and 
APL2, including up to 100 percent fines mitigation. Some respondents 
suggested having higher levels (for example, APL3 or APL4 levels). The 
amount of the fines mitigation, including possible increases to a 
higher percentage for violations of section 273 of the Act for carriers 
with an exceptional PL, and higher levels of fines mitigation shall be 
re-examined by the Service at a later date. The Service is not adverse 
to increasing the amount of fines mitigation or having higher levels 
providing it is in the interest of the American people to do so.
    Several commenters suggested that the Service's methodology in 
determining performance levels should be entirely abandoned. They 
stated that, if the Service must employ such a method, the calculation 
should be made using the carriers' PL median ratio as the APL and 
giving fines mitigation to all those carriers whose PL is at or better 
than this average. These respondents contend that such a calculation 
would be a fairer representation of carrier performance and enable a 
significantly higher percentage of carriers to qualify for fines 
mitigation. This calculation simply rewards the top 50 percent of the 
carriers regardless of the actual performance of the carrier. The 
Service's methodology of using the overall PL ratio measures a 
carrier's performance against the average performance of all carriers 
in FY 94. As stated previously, the Service calculates that 41 percent 
of the carriers will be eligible for fines mitigation for FY 95 
violations of section 273 of the Act. Fifty-three percent of the 
carriers are eligible for fines mitigation in FY 96 based on violation 
which occurred in FY 95 using the FY 94 APL. This favorably compares to 
the respondents suggestion that 50 percent of the carriers should be 
eligible for fines mitigation. The Service believes its methodology is 
sound but will re-examine it periodically to ensure that it sets both 
an appropriate benchmark by which to measure carrier performance and 
provides an appropriate level of relief for those carriers whose 
performance exceeds the norm.
    Some respondents argue that the results of the calculations would 
be dramatically different if all passengers were considered in the 
methodology. Section 273 of the Act clearly specifies that the carrier 
can only be fined for the transportation of ``* * * (other than from 
foreign contiguous territory) any alien [emphasis added] who does not 
have a valid passport and an unexpired visa, if a visa is required 
under this Act or regulations issued thereunder.'' Therefore the 
Service cannot fine carriers for the transportation of United States 
(U.S.) citizens or for improperly documented passengers arriving from 
contiguous territory and maintains no records on improperly documented 
U.S. citizens or improperly documented passengers arriving from 
contiguous territory. Since these passengers cannot be fined under 
section 273 of the Act, they are omitted from the carrier's passenger 
calculations. The reason that some other groups of aliens are not 
counted in the passenger number statistics is due to the fact that the 
Service cannot collect this information because they are exempt from 
presentation of the Form I-94, Arrival/Departure Record. Intending and 
returning immigrants and nonimmigrants are not required to complete 
Form I-94 and are counted together with U.S. citizens of Form I-92, 
Aircraft/Vessel Report. Only the number of documented nonimmigrants 
applying for admission to the United States with a Form I-94 is 
recorded on Form I-92 by the Service. This information on Form I-92 is 
used by the Service to determine the PL, APL, and APL2.
    One respondent argued that if the Service will not consider 
immigrants in its methodology, then any violations involving those 
persons who destroy their documents prior to arriving in the United 
States, also known as document-destroyers, should be removed from the 
calculations since such aliens are actually intending immigrants. As 
previously stated, section 273 of the Act requires valid documentation 
for aliens. A document-destroyer is an alien. Therefore, he or she 
requires valid documentation. Failure to have valid documentation 
requires the Service to impose a fine of $3,000 on the carrier for the 
violation. Every improperly documented alien may be an intending 
immigrant. The fact remains that the document-destroyers do not possess 
the necessary documentation required of immigrants or non-immigrants. 
Therefore, the carrier is liable for fines under section 273 of the Act 
for bringing an improperly documented alien to the United States. Other 
commenters simply requested the Service not to count carrier violations 
involving those aliens who destroy their documents on the aircraft. The 
Service cannot ignore the fact that the carrier transported a passenger 
to the United States without proper documents. Carriers are responsible 
for bringing to the United States aliens with proper documentation. It 
is unreasonable for the carriers to expect the Service to fail to 
impose fines on carriers where no documents are presented or any 
evidence that an apparent valid travel document had existed. Thus, the 
carrier is responsible for the presentation to the alien to the Service 
with proper

[[Page 23648]]

documentation. Nevertheless, the Service has, under the umbrella of 
prosecutorial discretion, consistently relieved the carriers of fines 
for document-destroyers and aliens possessing fraudulent documentation. 
The former group requires the carrier to present evidence that the 
alien had documentation whose validity was reasonably apparent at the 
time of boarding. The Service allows the carrier to present photocopies 
of the documents presented by aliens who have destroyed their 
documents. Fines for both groups of improperly documented aliens are 
only imposed when those documents are ``blatantly fraudulent.'' Through 
the various carrier-Service training programs, the number of document-
destroyers has been significantly reduced during the last 4 years. This 
is evidenced by the dramatic decrease in document-destroyers at John F. 
Kennedy International Airport from 3,193 document-destroyers in FY 93 
to only 582 document-destroyers in FY 96. According to the National 
Fines Office (NFO) statistics, the percentage of document-destroyer 
violations as compared to the total number of violations under section 
273(a) of the Act dropped from 37.4 percent in FY 93 to 26.9 percent in 
FY 94, the last year fine statistics were available due to the pending 
publication of this final rule.
    Some commenters requested that the Service postpone the final rule 
because of cases on appeal to the Board on the strict liability of 
section 273 of the Act. The commenters pointed out that the Service has 
acknowledged in a wire to field offices that the ``* * * carrier[s] 
cannot be held liable for the level of forensic or law enforcement 
expertise which is the proper province of an official immigration 
agency'' (See Service Wire # 1501217/01CE/1213.000 dated December, 
1989, entitled ``Stowaways on Commercial Airline Flights''). 
Nevertheless, the wire also states that in instances ``[w]here a 
document is obviously altered, counterfeit, or expired, or where a 
passenger is an obvious impostor, to the extent that any reasonable 
person should be able to identify the deficiency, a carrier is required 
to refuse boarding as a matter of reasonable diligence. The 
photocopying of such a document does not provide protection from 
liability to fine.'' In cases involving fraud, the Service has not held 
the carrier liable for fines under section 273 of the Act unless the 
fraud is sufficiently obvious that a reasonable person exercising 
reasonable diligence could have detected the fraud. In FY 94 only six 
fraudulent document cases qualified for fines using this standard. The 
Service does not consider it proper to await the Board's decision in 
any particular case that might now be pending before promulgating this 
final rule. The Service must decide a fine case according to the law as 
it exists at the time of decision. To the extent that future precedent 
decisions of the Board or of the Federal courts continue to refine the 
jurisprudence of fine cases, the Service will apply these future 
precedents into its own decision-making.
    One respondent argues that the calculations should not include 
violations where a nonimmigrant was admitted to the United States under 
a waiver in accordance with 8 CFR 212.1(g), since the granting of such 
a waiver negates the concept of a violation. Waiving an applicant's 
documentary requirements subsequent to an arrival is no defense to 
liability of the carrier under section 273(a) for bringing to the 
United States an alien without a visa, if a visa is required by law or 
regulation. See The Peninsular & Occidental Steamship Company v. The 
United States, 242 F. 2d 639 (5 Cir. 1957); Matter of SS Florida, 5 I&N 
Dec. 85 (BIA 1954); Matter of Plane ``F-BHSQ'', 9 I&N Dec. 595 (BIA 
1962). The regulation, 8 CFR 212.1(g) also parallels the granting of a 
visa waiver to a lawful permanent resident found in 8 CFR 211.1(b)(3).
    The regulation at 8 CFR 212.1(g) was recently amended (See 61 FR 
11717, dated March 22, 1996) to read, in part:
    Upon a nonimmigrant's application on Form I-193, a district 
director at a port of entry may, in an exercise of his or her 
discretion, on a case-by-case basis, waive the documentary 
requirements, if satisfied that the nonimmigrant cannot present the 
required documents because of an unforeseen emergency.
    The clarification at 8 CFR 212.1(g) gave the Service the ability to 
exercise discretion to admit improperly documented nonimmigrants while 
penalizing carriers by the imposition of fines for the bringing of 
these aliens to the United States in violation of section 273 of the 
Act. Amending the regulation clarified any ambiguity regarding 
carriers' liability to ensure the transportation of properly documented 
aliens to the United States and to impose penalties for failure to do 
so, whether or not a waiver of documents in granted. This is similar to 
the granting of individual waivers to lawful permanent residents under 
8 CFR 211.1(b)(3), which also does not relieve the carrier of fine 
liability under section 273 of the Act. The authority to fine carriers, 
even when a waiver of documents is granted, has been the intent of 
Congress since the enactment of the Immigration Act of 1924 which 
established section 16, the precursor to section 273 of the Immigration 
Act of 1952.
    Thirteen respondents commented that, although section 273(e) of the 
Act states that fines may be ``reduced, refunded or waived,'' the 
proposed rule addresses only the reduction of these fines and fails to 
address the manner by which fines may be refunded or waived. 
Respondents argue that the proposed rule offers no guarantee of an 
avenue of full relief form fine liability. Nine respondents commented 
that the proposed rule refers to mitigating circumstances and 
extenuating circumstances which would warrant mitigation of fines but 
that these circumstances are not defined. The respondents state that 
the National Fines Office (NFO) should specify the circumstances by 
which it will mitigate fines and define the degree of mitigation 
applicable to each circumstance.
    The term refund as defined by Black's Law Dictatory means ``[t]o 
repay or restore; to return money in restitution or repayment.'' For 
the purposes of fines, this suggests that a fine has been paid by the 
carrier and money is refunded (repaid, restored, or returned) to the 
carrier. Under present fines procedures enumerated in 8 CFR 280.12 and 
8 CFR 280.51 the Service is required to issue a Form I-79, Notice of 
Intent to Fine, and to allow the carrier to present evidence in defense 
of the fine and/or seek mitigation or remittance of the fine. In 
contested section 273 violations, no refund of money is due because the 
Service does not require the payment of a violation prior to the case's 
final disposition. If the carrier is signatory to the Service's 
proposed fines mitigation Memorandum of Understanding (MOU), the 
carrier will receive an automatic reduction of its fine prior to the 
Form I-79 being sent to the carrier. Signatory carriers to the MOU may, 
in addition, defend the fine in accordance with the procedures outlined 
in 8 CFR 280.12 and 8 CFR 280.51 to receive fines mitigation or 
remission.
    The term waived is defined by Black's to mean ``[t]o abandon, throw 
away, renounce, repudiate, or surrender a claim, a privilege, a right, 
or the opportunity to take advantage of some defect, irregularity, or 
wrong. To give up right or claim voluntarily.'' The respondents fail to 
consider the entire section of 273(e) added by Congress. Section 273(e) 
of the Act reads, in its entirety:

[[Page 23649]]

    (e) A fine under this section may be reduced, refunded, or waived 
under such regulations as the Attorney General shall prescribe in cases 
in which--
    (1) the carrier demonstrates that it had screened all passengers on 
the vessel or aircraft in accordance with procedures prescribed by the 
Attorney General, or
    (2) circumstances exist that the Attorney General determines would 
justify such reduction, refund, or waiver.
The respondents omitted the line ``* * * under such regulations as the 
Attorney General shall prescribe * * *.''
    In addition to the fines mitigation available to carriers under the 
Service's policy of performance levels, some mitigating circumstances 
will warrant a further reduction of 25 percent. Some extenuating 
circumstances will result in a 100 percent waiver of the fine. These 
circumstances will not be part of the regulation; however, some of the 
mitigating and extenuating circumstances under which the Service will 
either mitigate or waive these penalties are listed in the following 
paragraphs. It is recommended that carriers defend fines cases in which 
the carrier believes circumstances exist that would warrant further 
mitigation or waiver of the fine. These cases will be handled on a 
case-by-case basis. Due to changes in technology and unforeseen 
circumstances, this list is not a complete one and additions or 
deletions to it may become necessary. Though the Service contends that 
section 273(e) of the Act does not require the Service to provide full 
relief from fines, the Service has on occasion exercised its 
prosecutorial discretion to de facto ``waive'' a fine. The Service now 
has the statutory authority to waive fines if extenuating circumstances 
exist and will consider these circumstances on a case-by-case basis. 
Such circumstances may include, but are not limited to, the following 
situations:
    (a) Canadian national (no visa required) not in possession of their 
Alien Registration Receipt Card (ARC), Form I-551;
    (b) Alien who has been rescued at sea;
    (c) Documented evidence of a United States Consulate or Service 
officer providing incorrect information to the carrier resulting in the 
transportation of an improperly documented alien;
    (d) Lawful permanent resident (LPR) who presents self to the 
carrier as a Visa Waiver Pilot Program (VWPP) applicant and who is in 
possession of a return ticket indicating a stay of less than 90 days in 
the United States;
    (e) Lawful permanent resident whose Alien Documentation, 
Identification, and Telecommunication (ADIT) stamp has no expiration 
date or the expiration date is placed underneath the ADIT stamp;
    (f) Nonimmigrant in possession of a one-or-two entry nonimmigrant 
visa where the previous Service admission stamp is not on the visa or 
facing passport page;
    (g) Alien arriving on a vessel or aircraft landing for emergent 
reasons and requiring an unscheduled landing in the United States;
    (h) Alien arriving on a United States Government chartered aircraft 
or vessel;
    (i) Nonimmigrant in possession of a machine-readable Canadian 
Border Crossing Card (BCC) without notation indicating it is valid for 
crossing the United States-Canadian border;
    (j) Lawful permanent resident without Form I-551 and who is only in 
transit through the United States; and,
    (k) Alien not in possession of proper documentation but where the 
carrier presents photocopies of reasonably apparent valid documents 
seen at boarding and which were subsequently destroyed or discarded en 
route to the United States. Waiver of the fine would not occur in this 
instance if the documents were blatantly fraudulent or if the carrier 
makes a statement to the Service that they suspected the documents to 
be fraudulent.
    Examples of circumstances that would warrant mitigation by 25 
percent may include, but are not limited to the following situations:
    (a) Nonimmigrant child who is added to a passport subsequent to the 
issuance of the nonimmigrant visa where the ``s'' in the word 
``BEARER(S)'' is crossed out;
    (b) Lawful permanent resident who is not in possession of Form I-
551, but possesses a Form I-797, Notice of Action, removing conditional 
status and indicating it is valid for travel and employment;
    (c) British subject, including British overseas citizen, British 
dependent territories citizen, or citizen of a British commonwealth 
country, seeking entry under WVPP but not eligible for the WVPP because 
they were not a British citizen with unrestricted right of permanent 
abode in the United Kingdom; and
    (d) A nonimmigrant who would otherwise qualify for admission under 
the Transit without Visa (TWOV) Program except that he or she is 
arriving at a non-designated TWOV Port-of-Entry.
    Eleven respondents cite Sec. 273.4(b) of the proposed regulation as 
an area of concern. It states: The Service may, at any time, conduct an 
inspection of a carrier's document screening procedures at ports of 
embarkation to determine compliance with the procedures listed in 
Sec. 273.3. If the carrier's port of embarkation operation is found not 
to be in compliance, the carrier will be notified by the Service that 
its fines will not be eligible for refund, reduction, or waiver of 
fines under section 273(e) of the Act unless the carrier can establish 
that lack of compliance was beyond the carrier's control.
    The respondents express no objection to the Service's intention to 
conduct an inspection of a carrier's screening procedures at a port of 
embarkation but question whether the Service has the authority to 
conduct inspections in sovereign countries. The respondents express 
concern that the Service might consider the carrier to be non-compliant 
with the screening requirements if the carrier is otherwise compliant 
but local authorities prevent the Service from performing an 
inspection. The Service does concur with the comments regarding 
Sec. 273.4(b). No Service inspection of a carrier's boarding procedure 
shall take place if not permitted by the local competent authority. The 
Service never contemplated penalizing a carrier for non-compliance of 
its screening procedure due to the inability of the Service to inspect 
its operation at a port of embarkation due to the refusal of a 
competent authority to grant the Service inspection privileges. 
However, the Service does expect the carrier to use its good offices 
with the local competent authority to secure access for a Service 
inspection. This section of the regulation shall be amended to read as 
follows:
    The Service may, at any time, conduct an inspection of a carrier's 
document screening procedures at ports of embarkation to determine 
compliance with the procedures listed in Sec. 273.3, to the extent 
permitted by the local competent authority responsible for port access 
or security. If necessary, the carrier shall use its good offices to 
obtain this permission from the local authority [emphasis added]. If 
the carrier's port of embarkation * * *.
    Similarly, three sections of the MOU, 1.3, 3.4, and 3.7, will also 
be amended with the same language. Nevertheless, if a carrier cannot 
comply with a section of the MOU because of local law, the carrier must 
notify the Assistant Commissioner of Inspections, in writing, listing 
the specific section of the MOU with which it is unable to be in 
compliance because of said local law or local competent authority. The 
carrier must notify the Service within ten (10) days after becoming 
aware of this

[[Page 23650]]

inability to comply in order to be deemed in compliance with the MOU. 
Section 3.14 has been added to the MOU. It reads as follows:
    The Carrier agrees to notify the Assistant Commissioner of 
Inspections, in writing, if it is unable to comply with any section of 
the MOU because of local law or local competent authority. The Carrier 
shall list the specific section of the MOU with which it is unable to 
comply and, to be in compliance with the MOU, shall notify the Service 
within ten (10) days after becoming cognizant of this prohibition. 
Further, in such instances the Carrier shall propose alternative means 
for meeting the objective sought by the paragraph in question. For 
instance, where review of foreign boarding procedures cannot be 
performed by INS personnel, the Carrier could provide that an audit of 
their operation be performed by local authorities or by private 
auditors.
    Additionally, if a carrier's port of embarkation operation was 
found not to be in compliance, the carrier's eligibility for refund, 
reduction, or waiver of fines would be jeopardized only for those 
violations from that port of embarkation. Fines originating from that 
specific port of embarkation would not be subject to fines mitigation 
unless the carrier could establish that lack of compliance was beyond 
the carrier's control. The carrier's entire fines mitigation could be 
placed in jeopardy the following year if their PL were adversely 
affected causing the carrier to have an PL worse than the APL or APL2 
itself. The Service would be reluctant to allow a carrier with a 
declining PL that was lower than the APL to receive fines mitigation 
unless evidence was presented to suggest that the carrier planned to 
increase or had increased screening and vigilance procedures or that 
there were extenuating circumstances beyond the control of the carrier.
    Six respondents state that the proposed rule, though supposedly 
based on the Canadian system of fines mitigation, bears little 
resemblance to the actual Canadian method, which allows for up-front 
reductions of 100 percent for eligible carriers. The proposed Service 
fines mitigation policy, though similar to the Canadian fines 
mitigation system, is significantly different because of the following: 
(1) Vast differences in traffic volume in the United States as compared 
with Canada; (2) the large number of ports of embarkation to the United 
States; (3) the large number of United States Ports-of-Entry; and, (4) 
the different statutes themselves. The United States Ports-of-Entry 
handle almost ten times the volume of traffic transported to Canada. 
The relative small scale of the air traffic to Canada enables the 
Canadians to screen each air route to Canada so that a standard is 
created for carrier screening performance from each port of 
embarkation. By contrast, the huge number of routes to the United 
States prevents the Service from performing a similar exercise. The 
Canadian fines system also allows for carrier fines in the 
transportation of aliens who destroy or discard their documents prior 
to arrival in Canada. On the other hand, the United States may accept 
carrier photocopies of these document-destroyers' apparently valid 
documents and may terminate the fines case upon their submission 
whereas the Canadians do not accept photocopies.
    The respondents further claim that the Service's proposed rule 
offers a maximum of 50 percent up-front reduction thereby ``forcing 
carriers to defend themselves in every instance.'' The Service 
disagrees that the carriers will be forced to defend themselves in 
every instance if signatory to the MOU. During 8 years of fines 
interaction with the Service's NFO, the carriers have obtained a 
thorough knowledge of the fines process and what fines will be 
terminated by the Service and what fines will not. The examples of 
mitigating and extenuating circumstances listed above where the Service 
will waive or mitigate a fine will provide the carriers with further 
information to determine whether to defend or seek reduction or waiver 
of a fine.
    Some respondents claim the Canadian method resulted in a 50 percent 
decrease in improperly documented arrivals in the first year of 
implementation and that the program resulted in enhanced cooperation 
between the carriers and the Canadian Government. The respondents state 
that, because the proposed rule does not provide incentives comparable 
to the Canadian method, relations between the carriers and the Service 
will not improve and the number of violations of section 273 of the Act 
will not necessarily decrease.
    The Service has seen a downward trend in the transportation of 
improperly documented aliens nationwide since 1992. The number of 
violations of section 273 of the Act reached its high point in FY 91 
(7,052 violations) and FY 92 (7,072). For FY 94, the last year in which 
statistics are available due to this final rule, there were only 4,512 
violations of section 273 of the Act, a 36 percent decrease. The 
Service has also noticed the number of document-destroyers at John F. 
Kennedy International Airport (JFKIA) has decreased from 3,153 in FY 93 
to only 582 in FY 96; an 80 percent decrease. The number of asylum 
claims in JFKIA, which include the document-destroyers and aliens 
arriving with fraudulent documents, decreased from 9,180 in FY 92 to 
only 1,213 in FY 96; an 86 percent decrease. The Service views the 
fines increase to the present sum of $3,000 as the catalyst which made 
it cost-effective for carriers to seek Service training for its agents 
stationed at the overseas ports of embarkation. This cooperation 
between the carriers and the Service has brought both closer to 
reaching the mutually beneficial goal of reducing the number of 
improperly documented aliens arriving in the United States. The fines 
mitigation regulation and corresponding MOU represent an extension of 
this partnership, where the carrier is financially rewarded for 
properly screening its passengers prior to embarkation to the United 
States.
    The Service concedes that if this plan is implemented there is no 
guarantee that the number of violations will decrease. The Service is 
unsure whether, by decreasing the amount of fines imposed on carriers 
through this final rule, the carriers will continue to invest the time 
and monetary resources on the training programs now in place. With 
carrier turnover of overseas agents at 25 percent per year, the 
carriers must continue to invest in their training programs on the 
interception of fraudulent documents and on documentary requirements of 
the United States so that the number of violations does not increase. 
Until the effects of fines mitigation on the increase or decrease of 
violations is known, fines mitigation percentages are to be initiated 
at only 25 and 50 percent. The Service will retain the flexibility to 
increase, decrease, or maintain the mitigation reductions and/or the 
APL and APL2 yardsticks so that any overall decrease in carrier 
screening can be rectified through appropriate Service action.
    Several respondents charged that the Service's proposed rule was 
deliberately designed to defeat Congressional intent by determining 
reductions based on payment history. Delinquent carrier fines, 
liquidated damages, and user fee payments have made this a necessity. 
Service records reflect that over $5 million of carrier fines, 
liquidated damages, and user fees are outstanding for more than 30 
days. Existing administrative means to enforce collection of these 
monies are insufficient and have led to litigation. This provision in 
the final rule will enable the Service to collect the

[[Page 23651]]

outstanding obligations of commercial transportation lines in a more 
timely and cost-effective manner. This policy was first published in 
the Federal Register as a notice of policy regarding contracts between 
the Service and the carriers (See 61 FR 5410, February 12, 1996). In 
the notice, the Service informed the public of its intention to deny 
transportation line requests for the following contracts, if the line 
had an unacceptable fines, liquidated damages, or user fee payment 
record: (1) Form I-420, Agreement (Land Borders) Between Transportation 
Line and the United States; (2) Form I-425, Agreement (Preinspection) 
Between Transportation Line and the United States (At Places Outside of 
the United States); (3) progressive clearance agreement requests; (4) 
Form I-426, Immediate and Continuous Transit Agreement, also known as 
Transit Without Visa (TWOV) agreement; (5) International-to-
International (ITI) agreements, also known as In-Transit Lounge (ITL) 
agreements; and, (6) Form I-775, Visa Waiver Pilot Program (VWPP) 
Carrier Agreement. An unacceptable fines payment record is one that 
includes fines or liquidated damages that are delinquent 30 days and 
have been affirmed by either a final decision or formal order. An 
unacceptable user fee payment record is one that includes user fees 
that are delinquent 30 days.
    The Service also notified the public of its intention to evaluate 
existing carrier agreements for possible cancellation on account of a 
carrier's unacceptable payment record. The Service stated it will 
notify the affected carrier in writing of the proposed Service decision 
and will allow the carrier 30 days to make full payment of the debt or 
to show cause why the debt is not valid. The Service will issue a final 
determination after the close of the 30-day period. Promptness and good 
faith in the payment of fines are critically relevant factors in 
carrier performance which motivates mitigation of fines. It is clearly 
logical to link the mitigation of fines to the prompt and faithful 
payment of fines and this reasoning has been upheld in the courts (See 
Amwest Surety Insurance Company v. Reno, CA No. 93-56625, DC No. CV-93-
03256-JSL[S]). There is no legislative history to support the 
respondents' claims regarding Congressional intent of section 273(e) of 
the Act (See 140 Cong. Rec. S14400-S14405 [daily ed. October 6, 1994]; 
id., H9272-H9281 [daily ed. September 20, 1994]).
    The Service agrees with the commenter regarding prior notification 
to the carrier of an unsatisfactory fines, liquidated damages, or user 
fee payment record before termination of its fines mitigation levels 
(whether 25 or 50 percent). Therefore, the Service will notify the 
affected carrier in writing of the proposed Service decision to 
terminate a carrier's fines mitigation privilege. The Service will 
allow the carrier 30 days to make full payment of the debt or to show 
cause why the debt is not valid. Fines incurred during the 30-day 
period will be mitigated in accordance with the carrier's fines 
mitigation PL. The Service will issue a final determination after the 
close of the 30-day period. Carrier fines violations incurred from the 
date of an adverse determination by the Service to terminate a 
carrier's fines mitigation privilege will not be subject to automatic 
fines mitigation based on screening procedures; however, individual 
requests for reduction, refund, or waiver citing mitigating or 
extenuating circumstances will be considered.
    One respondent requested that the proposed rule include a specific 
waiver for sanctions against a carrier for the transportation of an 
alien who is granted asylum or permitted to stay in the United States 
on humanitarian grounds. The respondent argues that sanctions against 
the carrier are unfounded as long as the United States has an asylum 
program and that inhibiting the carrier from transporting refugees to 
the United States would constitute a human rights violation on the part 
of the Service. The Service has in place procedures (See 8 CFR 280.12 
and 280.51) whereby carriers may request mitigation or termination of a 
fine for extenuating circumstances.
    Aliens who desire to request asylum in the United States should 
follow the normal overseas refugee processing procedures. The Service 
requires refugees to follow these procedures to obtain the proper 
documentation to enter the United States. To allow carriers the 
authority to determine admissibility of aliens not in possession of 
proper documentation at the port of embarkation, because they indicate 
a desire to apply for asylum in the United States, would seriously 
undermine the enforcement of the Act and the security of the United 
States, and would circumvent existing immigration laws and regulations.
    Several commenters have noted that Sec. 273.4(a) requires the 
carrier to ``provide evidence that it screened all passengers on the 
conveyance for the instant flight or voyage in accordance with the 
procedures listed in Sec. 263.3'' [emphasis added]. The commenters 
requested that the term ``evidence'' be explained as to the Service 
requirement. To fulfill this requirement the carrier must certify, on 
carrier or its agent's letterhead, that in the particular voyage where 
an improperly documented alien was transported, the carrier screened 
all passengers on the conveyance in accordance with the procedures 
listed in 8 CFR 273.3. Carriers who are not signatory to the MOU who 
request fines mitigation based on screening procedures must include 
this certification along with its application for reduction, refund, or 
waiver of fines in accordance with the procedures outlined in 8 CFR 
280.12 and 8 CFR 280.51. Several commenters pointed out the 
typographical error in Sec. 273.6(b) whereby the word ``not'' was 
mistakenly omitted form the proposed rule. The sentence is corrected to 
read as follows:
    (b) Carriers signatory to an MOU will not [emphasis added] be 
required to apply for reduction, refund, or waiver of fines in 
accordance with the procedures outlined in 8 CFR 280.12 and 8 CFR 
280.51, but will follow procedures as set forth in the MOU.
    Many commenters stated that the regulation and the corresponding 
MOU have terms which are vague and ambiguous. The Service, during the 
writing of the Carrier Cooperative Agreement (CCA), the precursor to 
the present regulation and MOU, was requested to use general language 
so that the carrier, not the Service, would determine the screening 
procedures to utilize at the ports of embarkation, since the carrier is 
in the best position to decide on the amount of screening necessary at 
particular ports of embarkation. Some ports of embarkation require 
minimal amount of screening due to the low-risk nature of the 
passengers while at high-risk ports of embarkation a greater amount is 
appropriate. The carrier organizations requested that the carriers 
themselves determine the level of document screening necessary rather 
than have the Service mandate a level of screening that may not be 
cost-effective for the carrier.
    Several commenters requested the Service to provide fines 
mitigation based on ``carrier compliance with INS-prescribed screening 
procedures.'' While the Service has set out the screening requirements 
carriers must undertake at the ports of embarkation in order to be 
eligible for fines mitigation, the Service cannot physically verify a 
carrier's actual screening procedures at every port of embarkation due 
to the limited Service personnel and the large number of carriers and 
ports of embarkation. As stated previously, in comparing the Canadian 
and United States systems for fines mitigation, the

[[Page 23652]]

size of the passenger transportation industry in the United States 
makes the individual verification of a carrier's overseas screening 
procedures not feasible. The Service contemplates the inspection of 
only a sampling of carrier screening procedures at foreign ports of 
embarkation each year. Therefore, the Service is forced to determine 
carrier screening performance based on the proposed methodology 
explained previously.
    Several respondents claimed that the proposed rule does not 
``provide carriers with sufficient certainty that fines will be reduced 
if specified criteria are met.'' The Service has made it emphatically 
clear that fines will be reduced if the carrier has effective screening 
procedures. Effective screening is determined by the carrier's PL and 
if that PL is at or better than the APL. If the carrier's PL does not 
meet or exceed the APL, the carrier may still submit evidence in 
accordance with section 4.13 of the MOU, maintain a satisfactory fines, 
liquidated damages, and user fee payment record to be eligible for 
fines mitigation. If there are additional ``extenuating 
circumstances,'' the carrier may be eligible for additional fines 
mitigation above and beyond the up-front reductions established by the 
PL of the carrier. Thus, carriers meeting the first two requirements 
enumerated in Sec. 273.5(c) of the regulation (i.e. effective screening 
procedures and satisfactory fines and user fee payment record) can be 
certain that their fines will be reduced according to the carrier's PL. 
In addition, carriers not signatory to the MOU may seek mitigation or 
remission of fines in accordance with the procedures outlined in 8 CFR 
280.12 and 8 CFR 280.51.
    One respondent incorrectly cites the case of Linea Area Nacional de 
Chile S.A. v. Sale to support his argument that it is unfair ``to fine 
a carrier where it has properly screened the passengers for the 
[Transit Without Visa] TWOV requirements.'' This case involved a 
dispute between the carriers and the Service regarding responsibility 
for the detention of TWOV aliens, and has nothing to do with the 
boarding of improperly documented TWOV or nonimmigrant aliens.
    One commenter queried the significance of the MOU to a carrier 
whose PL did not meet or exceed the APL and if that carrier would 
qualify for the 25 percent automatic fines mitigation. If the carrier 
is signatory to the MOU and is eligible for automatic fines mitigation, 
the Service will not require the submission of evidence demonstrating 
the extent to which a carrier prevents the transport of improperly 
documented passengers for each case. Being signatory to the MOU will 
satisfy the requirement that the carrier has screened all passengers on 
the vessel or aircraft in accordance with procedures prescribed by the 
Attorney General as section 273(e)(1) of the Act requires. Of course, 
if the carrier can provide evidence that mitigating or extenuating 
factors should be considered as well, filing a defense for additional 
fines mitigation would be recommended.
    If a carrier is not signatory to the MOU, regardless of their PL, 
the Service will require certification that the carrier properly 
screened its passengers if the carrier is applying for fines mitigation 
based on screening requirements. The Service intends to consider the 
evidence presented by a non-signatory carrier, including the carrier's 
current and past PLs, as well as other Service data and information, 
prior to the granting of the fines mitigation for screening procedures. 
In addition, the Service will consider any additional evidence that 
would demonstrate any mitigating or extenuating factors relevant to 
additional fines mitigation.
    Several commenters wanted the Service to give extra ``benefit'' to 
carriers employing professional security agencies. While the Service 
commends such actions, it would be inappropriate to further reward a 
carrier for the use of a professional security agency merely because it 
was deemed ``professional.'' The carrier's reward for the employment of 
such an agency is the reduction of the number of improperly documented 
aliens transported to the United States. The fewer number of fines 
violations a carrier incurs, the lower the carrier's PL. The lower the 
carrier's PL, the greater the amount of fines reduction. This will 
result in the reduction in the amount and number of fines imposed on 
the carriers.
    Several commenters requested the source of the figures used in 
determining a carrier's PL, the APL, and APL2. The number of each 
carrier's violations is taken from the number of fines violations 
recorded by the National Fines Office (NFO) for each carrier for each 
fiscal year. This number omits all fines for lawful permanent residents 
and fines cases recommended from the Ports-of-Entry which are rejected 
by the NFO. This number does not omit those fines which are appealed to 
the Board of Immigration Appeals (BIA) by the carrier. To delete the 
fines appealed by the carrier from this number would decrease a 
carrier's PL even though the Service contends a fines violation did 
occur. A carrier which appealed all its fines, no matter how frivolous 
the appeals, would then have a PL of zero. This result would create a 
perverse incentive to appeal all cases, regardless of the merits of a 
particular case. The more prudent course, which the Service will 
follow, is to consider in the calculation of the PL all fines imposed, 
including those on appeal, but then to recalculate a carrier's PL, as 
necessary, to reflect those cases in which the carrier prevails on 
appeal to the BIA or in the courts.
    The source of the number of documented nonimmigrant arrivals per 
carrier per fiscal year is obtained from the Forms I-92, Aircraft/
Vessel reports completed at the individual Ports-of-Entry. Based on the 
suggestion of some commenters, the Service intends to use the same 
yardstick (APL and APL2) computed by using data from fiscal year 1994 
(FY) for the mitigation of fines for FY 95, FY 96, and for FY 97. The 
Service may exercise its discretion to use the APL and APL2 FY 94 
yardstick for fines mitigation for FY 98 and FY 99. The Service concurs 
with several commenters' observation that by re-computing the APL and 
APL2 annually, the Service would continually raise the fines mitigation 
standard, preventing carriers from ever qualifying for fines mitigation 
by having a ``moving bell curve.''
    Some commenters have stated that carriers are eligible for fines 
mitigation under section 273(c) of the Act. The Service does not 
concur. Section 273(c) of the Act provides for fines remission or 
refund but not for fines mitigation. The Service has remitted or 
refunded fines when a carrier demonstrates that it has exercised 
reasonable diligence. Section 273(c), however, does not provide for 
fines reduction or mitigation.
    Some commenters wanted the Service to ``make clear that training is 
not tied to attendance of such [Carrier] personnel at INS training 
sessions.'' The Service has no intention of dictating to the carrier 
the type of training it should provide its employees. However, the 
Service does require the carrier to have trained employees at the ports 
of embarkation to examine all travel documents. Further, carriers 
signatory to the MOU agree to participate in Service training programs 
and use Service Information Guides (See section 3.9 of the MOU).
    Some respondents have stated that, due to time constraints and 
carrier facilitation needs, the carrier is unable to perform a thorough 
examination of a passenger's travel documents. In addition, several 
commenters claim they fear legal action if they refuse to board a 
passenger. Nevertheless, Congress

[[Page 23653]]

requires the carrier to make certain its passengers are properly 
documented and gives the Service the authority to impose financial 
penalties on carriers which bring improperly documented aliens to the 
United States. See Matter of Swiss Air ``Flight 164'' 15 I&N Dec 111 
(BIA 1974).
    One commenter requested that the Service determine the PL, APL, and 
APL2 quarterly. At the present time the Service projects a minimum 3-
month lag time in the computation of a carrier's PL each fiscal year. 
If technological advances permit the rapid collection of this 
information, the Service will consider the commenter's suggestion for 
quarterly or semi-annual computation of a carrier's PL and/or the APL/
APL2. Additionally, the Service is not opposed to future consideration 
of the proposal made by the commenter requesting that the Service 
determine carrier PLs, APLs, and APL2s for individual ports of 
embarkation (i.e., individual routes). As technology improves, the 
Service will examine the feasibility of making these calculations and 
presenting this approach to the carriers. Consultations with the 
carriers on these and other modifications, including risk assessments, 
route variations, past and present carrier performance history, and a 
general commitment to the process of proper screening of passengers, 
should be ongoing so that needed regulatory changes, if any, or changes 
to the MOU, can be incorporated in the next revision of the fines 
mitigation program.
    The Service concurs with several commenters who suggested that the 
MOUs should all expire on a certain day rather than 2 years from the 
date of each carrier's approval by the Service. Accordingly, the MOU 
will expire on September 30, 2000, for all carriers.
    The Service concurs with one commenter's suggestion that the 
Service should immediately share information with the carrier at the 
Port-of-Entry where the fines violation occurs and is recommended to 
the Service. The Service currently provides the carrier with a copy of 
the Form I-849, Report to National Fines Office [NFO] of Possible 
Violation of the INA, which gives the carrier the Service's reason(s) 
for recommendation of the fine to the NFO for issuance of the Form I-
79, Notice of Intent to Fine. It is the issuance of Form I-79 that is 
the official Service notification to a carrier that a violation has 
occurred for which a fine may be assessed. The Form I-79 is issued by 
the NFO after review of the evidence submitted. If the carrier would 
like additional information, the NFO can answer most inquires. If 
carriers want a revision of the Form I-849, the Office of Inspections 
should be requested to consider such suggestions when the Service next 
modifies the Form I-849.
    The Service concurs with a commenter that the Service should 
designate a coordinator to be the contact point for all issues arising 
from implementation of the MOU. Therefore, section 4.1 has been added 
to the MOU and subsequent sections re-numbered. Section 4.1 reads as 
follows:
    The Director of the National Fines Office will serve as a 
coordinator for all issues arising from the implementation of this MOU. 
The INS shall provide the carrier with the coordinator's name, address, 
telephone, and facsimile number.
    The Service has also taken into consideration suggested changes to 
several sections of the MOU and concurs on the following amendments to 
the MOU:
    In section 3.2 the word ``verify'' is replaced by the phrase 
``confirm, to the best of their ability'' and the word ``apparent'' is 
added to the last sentence. Section 3.2 is amended to read as follows:
    The Carrier agrees to verify that trained personnel examine and 
screen passengers' travel documents to confirm, to the best of their 
ability, that the passport, visa (if one of required), or other travel 
documents presented are valid and unexpired, and that the passenger, 
and any accompanying passenger named in the passport, is the apparent 
rightful holder of the document.
    In section 3.6 one commenter requested the addition of the sentence 
``[f[ollowing notification by the INS, or its representative, the'' to 
precede the present section 3.6. The Service concurs with this 
suggestion. Section 3.6 is amended to read as follows:
    Following notification by the INS, or its representative, the 
Carrier shall refuse to knowingly transport any individual who has been 
determined by an INS official not to be in possession of proper 
documentation to enter or pass through the United States. Transporting 
any improperly documented passenger so identified may result in a civil 
penalty. At locations where there is no INS presence, carriers may 
request State Department Consular officials to examine and advise on 
authenticity of passenger documentation. State Department Consular 
officials will act in an advisory capacity only.
    The Service also concurs with the commenter regarding section 3.8 
dealing with carrier security at the port of embarkation. The word 
``adequate'' shall be replaced by the word ``reasonable.'' Section 3.8 
is amended to read as follows:
    The Carrier shall maintain a reasonable level of security designed 
to prevent passengers from circumventing any Carrier document checks. 
The Carrier shall also maintain a reasonable level of security designed 
to prevent stowaways from boarding the Carrier's aircraft or vessel.
    The Service is committed to continuing consultations with the 
carrier organizations in the area of fines mitigation. The Service 
views the fines mitigation regulation and the corresponding carrier-
Service MOU as prime examples of carrier-Service cooperation in 
facilitating travel for the general public and protecting the American 
people through the enforcement of the immigration laws and regulations. 
The Service views the fines mitigation final rule as a continuance of 
this carrier-Service interaction and welcomes all future carrier 
questions and issues to improve passenger facilitation and enforcement 
of the Act and its regulations.

Regulatory Flexibility Act

    The Commissioner of the Immigration and Naturalization Service, in 
accordance with the Regulatory Flexibility Act (5 U.S.C. 605(b)), has 
reviewed this regulation and, by approving it, certifies that the rule 
will not have significant economic impact on a substantial number of 
small entities. This rule will not adversely affect carrier 
expenditures but will lessen carrier expenditures for certain carriers, 
including carriers that may qualify as ``small entities,'' which 
properly screen passengers being transported to the United States. The 
imposition of fines is a requirement of law and a valuable tool in 
preventing the landing of undocumented or insufficiently documented 
aliens in the United States. Fines for transporting improperly 
documented passengers are imposed by many countries, including Canada, 
Germany, and the United Kingdom. Currently, if carriers want to lessen 
the monies paid to the Service for fines violations under section 273 
of the Act, the carrier trains its employees in documentary 
requirements for entering the United States. This training is necessary 
regardless of fines mitigation provisions. Any additional training 
required by the MOU can be provided by the Service's Carrier Consultant 
Program (CCP) upon carrier request. Carrier agent training is generally 
one to two days and can be conducted at the port of embarkation. 
Training materials are provided by the Service. The only

[[Page 23654]]

cost to the carrier will be the lost productivity of the carrier agent 
to attend the training sessions. However, that cost exists now so the 
Service anticipates little or no increase in costs to any participating 
carrier. The Service has also developed an Information Guide to be 
distributed to the carriers for use at the foreign ports of 
embarkation. It will function as a resource to assist carrier personnel 
in determining proper documentary requirements and detecting fraud. 
Most carriers probably do a cost-benefit analysis to determine the 
amount of carrier training versus fines violation costs. Likewise, each 
carrier will probably conduct a cost-benefit analysis prior to signing 
the MOU. Carriers signatory to the MOU will have automatic fines 
reduction and will save the cost of filing appeals for every case, 
unless further reduction or termination of the fine is sought. Smaller 
carriers that have high violation rates or cannot dedicate resources to 
training its agents are invited to contact the Service on the best way 
to address these problems. There is no indication that smaller carriers 
are fined more or less than larger carriers. Carrier size is not a 
factor in the determination of a carrier's performance level. With 
section 286 of the Act being amended by section 124 of the Illegal 
Immigration Reform And Immigrant Responsibility Act of 1996 (Pub. L. 
104-208, Dated September 30, 1996, known as IIRIRA), the Service is 
mandated to provide training and technical assistance to commercial 
airline personnel regarding the detection of fraudulent documents at an 
amount not less than five percent of the Service's user fee revenue. 
Smaller carriers can therefore rely on the Service to fulfill many of 
their training requirements. However, ultimately it is up to the 
carrier to consider the costs and benefits of participating in the 
program.

Unfunded Mandates Reform Act of 1995

    This rule will not result in the expenditure by State, local and 
tribal governments, in the aggregate, or by the private sector, of $100 
million or more in any 1 year, and it will not significantly or 
uniquely affect small governments. Therefore, no actions were deemed 
necessary under the provisions of the Unfunded Mandates Reform Act of 
1995.

Small Business Regulatory Enforcement Fairness Act of 1996

    This rule is not a major rule as defined by section 804 of the 
Small Business Regulatory Enforcement Act of 1996. This rule will not 
result in an annual effect on the economy of $100 million or more; a 
major increase in cost or prices; or significant adverse effects on 
competition, employment, investment, productivity, innovation, or on 
the ability of the United States-based companies to compete with 
foreign-based companies in domestic and export markets.

Executive Order 12866

    This rule is considered by the Department of Justice, Immigration 
and Naturalization Service, to be a ``significant regulatory action'' 
under Executive Order 12866, section 3(f), Regulatory Planning and 
Review. Accordingly this regulation has been submitted to the Office of 
Management and Budget for review.
    The Service has estimated the reduction in collections due to the 
implementation of this regulation as follows:

FY95 Backlogged Cases: 2033

    Up to 19% of the carriers may receive 50% reduction (based on 
APL2); up to 22% of the carriers may receive 25% reduction (based on 
APL); up to 29% of the carriers may receive 25% reduction (based on 
MOU); and, up to 30% of the carriers may receive no reduction.
    Estimated collections due from FY95 cases: $4.7 million.
    Estimated collections without mitigation: $6.1 million.
    Difference in collections: $1.4 million or 23% reduction.

FY96 Backlogged Cases: 3086

    Up to 32% of the carriers may receive 50% reduction (based on 
APL2); up to 21% of the carriers may receive 25% reduction (based on 
APL); up to 24% of the carriers may receive 25% reduction (based on 
MOU); and, up to 23% of the carriers may receive no reduction.
    Estimated collections due from FY96 cases: $6.8 million.
    Estimated collections without mitigation: $9.3 million.
    Difference in collections: $2.5 million or 27% reduction.

FY97 Backlogged Cases: 2097

    Up to 37% of the carriers may receive 50% reduction (based on 
APL2); up to 18% of the carriers may receive 25% reduction (based on 
APL); up to 23% of the carriers may receive 25% reduction (based on 
MOU); and, up to 22% of the carriers may receive no reduction.
    Estimated collections due from FY97 cases: $4.6 million.
    Estimated collections without mitigation: $6.3 million.
    Difference in collections: $1.7 million or 27% reduction.

Executive Order 12612

    The regulation adopted herein will not have substantial direct 
effects on the States, on the relationship between the National 
Government and the States, or on the distribution of power and 
responsibilities among the various levels of government. Therefore, in 
accordance with Executive Order 12612, it is determined that this rule 
does not have sufficient federalism implications to warrant the 
preparation of a Federalism Assessment.

Executive Order 12988 Civil Justice Reform

    This final rule meets the applicable standards set forth in 
sections 3(a) and 3(b)(2) of E.O. 12988.

Paperwork Reduction Act of 1995.

    The supplementary information portion of this final rule requires 
carriers whose PL is not at or better than the APL, to submit evidence 
to the Service so that they may receive an automatic fine reduction of 
25 percent, if certain conditions are met. The evidence is considered 
an information collection which is subject to review by OMB under the 
Paperwork Reductions Act of 1995. Therefore, the agency solicits public 
comments on the information collection requirements for 60 days in 
order to:
    (1) Evaluate whether the proposed collection of information is 
necessary for the proper performance of the functions of the agency, 
including whether the information will have practical utility;
    (2) Evaluate the accuracy of the agency's estimate of the burden of 
the proposed collection of information, including the validity of the 
methodology and assumptions used;
    (3) Enhance the quality, utility, and clarity of the information to 
be collected; and
    (4) Minimize the burden of the collection of information on those 
who are to respond, including through the use of appropriate automated, 
electronic, mechanical, or other technological collection techniques or 
other forms of information technology, e.g., permitting electronic 
submission of responses.
    The Service, in calculating the overall burden this requirement 
will place upon the public, estimates that approximately 65 carriers 
whose PL is not at or better than the APL, will submit evidence to take 
advantage of the 25 percent fines reduction. The Service also estimates 
that it will take each carrier approximately 100 hours to comply with 
the evidence requirements. This amounts to 6500 total burden hours.

[[Page 23655]]

    As required by section 3507(d) of the Paperwork Reduction Act of 
1995, the Service has submitted a copy of this final rule to OMB for 
its review of the information collection requirements. Other 
organizations and individuals interested in submitting comments 
regarding this burden estimate or any aspect of these information 
collection requirements, including suggestions for reducing the burden, 
should direct them to: Immigration and Naturalization Service, 
Director, Policy Directives and Instructions Branch, Room 5307, 425 I 
Street NW., Washington, DC 20536. The comments or suggestions should be 
submitted within 60 days of publication of this rulemaking.

List of Subjects in 8 CFR Part 273

    Administrative practice and procedure, Aliens, Carriers, Penalties.

    Accordingly, chapter I of title 8 of the Code of Federal 
Regulations is amended by adding a new part 273 as follows:

PART 273--CARRIER RESPONSIBILITIES AT FOREIGN PORTS OF EMBARKATION; 
REDUCING, REFUNDING, OR WAIVING FINES UNDER SECTION 273 OF THE ACT

Sec.
273.1 General.
273.2 Definition.
273.3 Screening procedures.
273.4 Demonstration by carrier that screening requirements were met.
273.5 General criteria used for reduction, refund, or waiver of 
fines.
273.6 Memorandum of Understanding.

    Authority: 8 U.S.C. 1103, 1323; 8 CFR part 2.


Sec. 273.1  General.

    In any fines case in which a fine is imposed under section 273 of 
the Act involving an alien brought to the United States after December 
24, 1994, the carrier may seek a reduction, refund, or waiver of fine, 
as provided for by section 273(e) of the Act, in accordance with this 
part. The provisions of section 273(e) of the Act and of this part do 
not apply to any fine imposed under any provision other than section 
273 (a)(1) and (b) of the Act.


Sec. 273.2  Definition.

    As used in this part, the term Carrier means an individual or 
organization engaged in transporting passengers or goods for hire to 
the United States.


Sec. 273.3  Screening procedures.

    (a) Applicability. The terms and conditions contained in paragraph 
(b) of this section apply to those owners, operators, or agents of 
carriers which transport passengers to the United States.
    (b) Procedures at ports of embarkation. At each port of embarkation 
carriers shall take reasonable steps to prevent the boarding of 
improperly documented aliens destined to the United States by taking 
the following steps:
    (1) Screening of passengers by carrier personnel prior to boarding 
and examination of their travel documents to ensure that:
    (i) The passport or travel document presented is not expired and is 
valid for entry into the United States;
    (ii) The passenger is the rightful holder; and
    (iii) If the passenger requires a visa, the visa is valid for the 
holder and any other accompanying passengers named in the passport.
    (2) Refusing to board any passenger determined to be improperly 
documented. Failure to refuse boarding when advised to do so by a 
Service or Consular Officer may be considered by the Service as a 
factor in its evaluation of applications under Sec. 273.5.
    (3) Implementing additional safeguards such as, but not necessarily 
limited to, the following:
    (i) For instances in which the carrier suspects fraud, assessing 
the adequacy of the documents presented by asking additional, pertinent 
questions or by taking other appropriate steps to corroborate the 
identity of passengers, such as requesting secondary information.
    (ii) Conducting a second check of passenger documents, when 
necessary at high-risk ports of embarkation, at the time of boarding to 
verify that all passengers are properly documented consistent with 
paragraph (b)(1) of this section. This includes a recheck of documents 
at the final foreign port of embarkation for all passengers, including 
those originally boarded at a prior stop or who are being transported 
to the United States under the Transit Without Visa (TWOV) or 
International-to-International (ITI) Programs.
    (iii) Providing a reasonable level of security during the boarding 
process so that passengers are unable to circumvent any carrier 
document checks.


Sec. 273.4  Demonstration by carrier that screening requirements were 
met.

    (a) To be eligible to apply for reduction, refund, or waiver of a 
fine, the carrier shall provide evidence that it screened all 
passengers on the conveyance for the instant flight or voyage in 
accordance with the procedures listed in Sec. 273.3.
    (b) The Service may, at any time, conduct an inspection of a 
carrier's document screening procedures at ports of embarkation to 
determine compliance with the procedures listed in Sec. 273.3, to the 
extent permitted by the local competent authority responsible for port 
access or security. If necessary, the carrier shall use its good 
offices to obtain this permission from the local authority. If the 
carrier's port of embarkation operation is found not to be in 
compliance, the carrier will be notified by the Service that it will 
not be eligible for refund, reduction, or waiver of fines under section 
273(e) of the Act unless the carrier can establish that lack of 
compliance was beyond the carrier's control.


Sec. 273.5  General criteria used for reduction, refund, or waiver of 
fines.

    (a) Upon application by the carrier, the Service shall determine 
whether circumstances exist which would justify a reduction, refund, or 
waiver of fines pursuant to section 273(e) of the Act.
    (b) Applications for reduction, refund, or waiver of fine under 
section 273(e) of the Act shall be made in accordance with the 
procedures outlined in 8 CFR 280.12 and 8 CFR 280.51.
    (c) In determining the amount of the fine reduction, refund, or 
waiver, the Service shall consider:
    (1) The effectiveness of the carrier's screening procedures;
    (2) The carrier's history of fines violations, including fines, 
liquidated damages, and user fee payment records; and,
    (3) The existence of any extenuating circumstances.


Sec. 273.6  Memorandum of Understanding.

    (a) Carriers may apply to enter into a Memorandum of Understanding 
(MOU) with the Service for an automatic reduction, refund, or waiver of 
fines imposed under section 273 of the Act.
    (b) Carriers signatory to an MOU will not be required to apply for 
reduction, refund, or waiver of fines in accordance with the procedures 
outlined in 8 CFR 280.12 and 8 CFR 280.51, but will follow procedures 
as set forth in the MOU.
    (c) Carriers signatory to an MOU will have fines reduced, refunded, 
or waived according to performance standards enumerated in the MOU or 
as determined by the Service.
    (d) Carriers signatory to an MOU are not precluded from seeking 
additional reduction, refund, or waiver of fines in accordance with the 
procedures outlined in 8 CFR 280.12 and 8 CFR 280.51.


[[Page 23656]]


    Dated: April 24, 1998.
Doris Meissner,
Commissioner, Immigration and Naturalization Service.

    Note: Appendix A, Memorandum of Understanding, will not appear 
in the Code of Federal Regulations.

Appendix A--United States Immigration and Naturalization Service 
Section 273(E) Memorandum of Understanding

    This voluntary Memorandum of Understanding (MOU) is made between 
____________________ (hereafter referred to as the ``Carrier'') and 
the United States Immigration and Naturalization Service (hereafter 
referred to as the ``INS'').
    The purpose of this MOU is to identify the responsibilities of 
each party to improve the performance of the Carrier with respect to 
its duty under section 273 of the Immigration and Nationality Act 
(the Act) to prevent the transport of improperly documented aliens 
to the United States. Based on the Carrier's Performance Level (PL) 
in comparison to the Acceptable Performance Level (APL) or Second 
APL (APL2) set by the INS, and based upon compliance with the other 
stipulations outlined in the MOU, the INS may refund, reduce, or 
waive a part of the Carrier's section 273 of the Act administrative 
penalties. The MOU cannot, by law, exempt the Carrier from liability 
for civil penalties. Although taking the steps set forth below will 
not relieve the Carrier of liability from penalties, the extent to 
which the Carrier has complied with this MOU will be considered as a 
factor in cases where the INS may reduce, refund, or waive a fine.
    It is understood and agreed by the parties that this MOU is not 
intended to be legally enforceable by either party. No claims, 
liabilities, or rights shall arise from or with respect to this MOU 
except as provided for in the Act or the Code of Federal 
Regulations. Nothing in this MOU relieves the Carrier of any 
responsibilities with respect to United States laws, the Act, or the 
Code of Federal Regulations.
    This document, once jointly endorsed, will serve as a working 
agreement to be utilized for all fines cases relating to section 273 
of the Act, and reflects the mutual understanding of the Carrier and 
the INS. This MOU shall take effect immediately upon its approval by 
the Assistant Commissioner for Inspections and shall be a valid 
working document and shall expire on September 30, 2000.
    The Carrier's compliance with the MOU shall be evaluated 
periodically. The Carrier shall be notified in writing of its PL and 
the overall APL for each rating period. Accordingly, the Carrier 
agrees to begin prompt and complete implementation of all of the 
terms listed in this MOU. With 30 days written notice, either party 
may terminate this MOU, for any reason, to include the INS' 
termination of this MOU for the Carrier's failure to abide by its 
terms. Any subsequent fines will be imposed for the full penalty 
amount.

Memorandum of Understanding

1. Introduction

    1.1  The Assistant Commissioner for Inspections shall exercise 
oversight regarding the Carrier's compliance with this MOU.
    1.2  The Carrier agrees to begin implementation of the 
provisions set forth below immediately upon signing and receipt of 
the MOU signed by the Assistant Commissioner for Inspections.
    1.3  The Carrier agrees to permit the INS to monitor its 
compliance with the terms of this MOU. The Carrier shall permit the 
INS to conduct an inspection of the Carrier's document screening 
procedures at ports of embarkation before arrival in the United 
States, to determine compliance with the procedures listed in this 
MOU, to the extent permitted by competent local authorities 
responsible for port access and security. If necessary, the carrier 
agrees to use its good offices to obtain this permission.
    1.4  The Carrier agrees to designate a coordinator to be the 
contact point for all issues arising from the implementation of this 
MOU. The Carrier shall provide the INS with the coordinator's name, 
title, address, telephone number, and facsimile number.
    1.5  The Carrier shall require that all of its employees, 
including its representatives, follow the provisions of this MOU, 
and comply with all requirements of the Act. The Carrier further 
agrees to cooperate with the INS in an open two-way exchange of 
pertinent information.

2. Prompt Payment

    2.1  The INS agrees to authorize a reduction in fine penalties 
based on compliance with this MOU only if the Carrier has paid all 
administrative fines, liquidated damages, and user fees. This 
includes interest and penalties that have been imposed by either a 
formal order or final decision, except cases on appeal.
    2.2  The Carrier agrees to promptly pay all administrative 
fines, liquidated damages, and user fees. This includes interest and 
penalties that are imposed by a formal order or a final decision 
during the time this MOU is in effect, except cases on appeal. 
Prompt payment for the purposes of this MOU means payments made 
within 30 days from the date of billing.
    2.3  The INS shall periodically review the Carrier's record of 
prompt payment for administrative fines, liquidated damages, and 
user fees including interest and penalties. Failure to make prompt 
payment will result in the loss of benefits of the MOU.
    2.4  The Carrier agrees to select a person from its organization 
as a contact point in the INS Office of Finance for the resolution 
of payment issues. The Carrier shall provide the INS with the 
contact person's name, title, address, telephone number, and 
facsimile number.

3. Carrier Agreement

    3.1  The Carrier shall refuse to knowingly carry any improperly 
documented passenger.
    3.2  The Carrier agrees to verify that trained personnel examine 
and screen passengers' travel documents to confirm, to the best of 
their ability, that the passport, visa (if one is required), or 
other travel documents presented are valid and unexpired, and that 
the passenger, and any accompanying passenger named in the passport, 
is the apparent rightful holder of the document.
    3.3  The Carrier agrees to conduct additional document checks 
when deemed appropriate, to verify that all passengers, including 
transit passengers, are in possession of their own, and proper, 
travel documents as they board the aircraft, and to identify any 
fraudulent documents.
    3.4  The Carrier agrees to permit INS and State Department 
Consular officials to screen passengers' travel documents before or 
after the Carrier has screened those passengers for boarding, to the 
extent permitted by the competent local authorities responsible for 
port access and security. If necessary, the carrier agrees to use 
its good offices to obtain this permission.
    3.5  In cases involving suspected fraud, the Carrier shall 
assess the adequacy of the documents presented by questioning 
individuals or by taking other appropriate steps to corroborate the 
identity of the passengers, such as requesting secondary 
identification.
    3.6  Following notification by the INS, or its representative, 
about a particular passenger or passengers, the carrier shall refuse 
to knowingly transport any such individual determined by an INS 
official not to be in possession of proper documentation to enter or 
pass through the United States. Transporting any improperly 
documented passenger so identified may result in a civil penalty. At 
locations where there is no INS presence, carriers may request State 
Department Consular officials to examine and advise on authenticity 
of passenger documentation. State Department Consular officials will 
act in an advisory capacity only.
    3.7  Where the Carrier has refused to board a passenger based on 
a suspicion of fraud or other lack of proper documentation, the 
Carrier agrees to make every effort to notify other carriers at that 
port of embarkation about that passenger, to the extent permitted by 
competent local authorities responsible for port access and 
security. If necessary, the carrier agrees to use its good offices 
to obtain this permission.
    3.8  The Carrier shall maintain a reasonable level of security 
designed to prevent passengers from circumventing any Carrier 
document checks. The Carrier shall also maintain an adequate level 
of security designed to prevent stowaways from boarding the 
Carrier's aircraft or vessel.
    3.9  The Carrier agrees to participate in INS training programs 
and utilize INS Information Guides and other information provided by 
the INS to assist the Carrier in determining documentary 
requirements and detecting fraud.
    3.10  The Carrier agrees to make the INS Information Guides and 
other information provided by the INS readily available for use by 
Carrier personnel, at every port of embarkation.
    3.11  The Carrier agrees to make appropriate use of 
technological aids in screening documents including ultra violet 
lights, magnification devices, or other equipment identified by the 
INS to screen documents.

[[Page 23657]]

    3.12  The Carrier agrees to expeditiously respond to written 
requests from the appropriate INS official(s) for information 
pertaining to the identity, itinerary, and seating arrangements of 
individual passengers. The Carrier also agrees to provide manifests 
and other information, required to identify passengers, information 
and evidence regarding the identity and method of concealment of a 
stowaway, and information regarding any organized alien smuggling 
activity.
    3.13  Upon arrival at a Port-of-Entry (POE) and prior to 
inspection, the Carrier agrees to notify INS personnel at the POE of 
any unusual circumstances, incidents, or problems at the port of 
embarkation involving the transportation of improperly documented 
aliens to the United States.
    3.14  The Carrier agrees to notify the Assistant Commissioner of 
Inspections, in writing, if it is unable to comply with any section 
of the MOU because of local law or local competent authority. The 
Carrier shall list the specific section of the MOU with which it is 
unable to comply and, to be in compliance with the MOU, shall notify 
the Service within ten (10) days after becoming cognizant of this 
prohibition to comply. Further, in such instances the Carrier shall 
propose alternative means for meeting the objective sought by the 
paragraph in question. For instance, where review of foreign 
boarding procedures cannot be performed by INS personnel, the 
Carrier could provide that an audit of its operation be performed by 
local authorities or by private auditors.

4. INS Agreement

    4.1  The Director of the National Fines Office will serve as a 
coordinator for all issues arising from the implementation of this 
MOU. The INS shall provide the carrier with the coordinator's name, 
address, telephone number, and facsimile number.
    4.2  The INS agrees to develop an Information Guide to be used 
by Carrier personnel at all ports of embarkation prior to boarding 
passengers destined to the United States. The Information Guide will 
function as a resource to assist Carrier personnel in determining 
proper documentary requirements and detecting fraud.
    4.3  The INS agrees to develop a formal, continuing training 
program to assist carriers in their screening of passengers. 
Carriers may provide input to the INS concerning specific training 
needs that they have identified. Initial and annual refresher 
training will be conducted by the INS or Carrier representatives 
trained by the INS.
    4.4  To the extent possible, INS and State Department Consular 
officials will consult, support, and assist the Carrier's efforts to 
screen passengers prior to boarding.
    4.5  The INS shall determine each Carrier's Performance Level 
(PL) based on statistical analysis of the Carrier's performance, as 
a means of evaluation whether the Carrier has successfully screened 
all of its passengers in accordance with 8 CFR 273.3 and this MOU. 
The PL is determined by taking the number of each Carrier's 
violations of section 273 of the Act for a fiscal year 1/ and 
dividing this by the number of documented nonimmigrants (i.e., those 
nonimmigrants that submit an Arrival/Departure Record, Form I-94, I-
94T, or I-94W) transported by the Carrier and multiplying the result 
by 1,000.
    4.6  The INS shall establish an Acceptable Performance Level 
(APL), based on statistical analysis of the performance of all 
carriers, as a means of evaluating whether the Carrier has 
successfully screened all of its passengers in accordance with 8 CFR 
273.3 and this MOU. The APL shall be determined by taking the total 
number of all carrier violations of section 273 of the Act for a 
fiscal year 1/ and dividing this by the total number of documented 
nonimmigrants (i.e., those nonimmigrants that submit an Arrival/
Departure Record, Form I-94, I-94T, or I-94W) transported by all 
carriers for a fiscal year and multiplying the result by 1,000.
    4.7  The INS shall establish a Second Acceptable Performance 
Level (APL2), based on statistical analysis of the performance of 
all carriers at or better than the APL, as a means of further 
evaluating carrier success in screening its passengers in accordance 
with 8 CFR 273.3 and this MOU. Using carrier statistics for only 
those carriers which are at or better than the APL, the APL2 shall 
be determined by taking the total number of these carrier violations 
of section 273 of the Act for a fiscal year \1\ and dividing by the 
total number of documented nonimmigrants (i.e., those nonimmigrants 
that submit an Arrival/Departure Record, Form I-94, I-94T, or I-94W) 
transported by these carriers and multiplying the result by 1,000.
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    \1\ The total number of carrier violations of section 273 of the 
Act for a fiscal year is determined by taking the total number of 
violations minus violations for the transportation of improperly 
documented lawful permanent residents and rejected cases. Rejected 
cases include those cases where the INS has determined that either: 
(1) no violation occurred; or, (2) sufficient evidence was not 
submitted to support the imposition of a fine.
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    4.8  The PL, APL, and APL2 may be recalculated periodically as 
deemed necessary, based on Carrier performance during the previous 
period(s).
    4.9  Carriers whose PL is at or better than the APL are eligible 
to receive an automatic 25 percent reduction, if signatory to and in 
compliance with this MOU, on fines imposed under section 273 of the 
Act for periods determined by the INS.
    4.10  Carriers whose PL is at or better than the APL2 are 
eligible to receive an automatic 50 percent reduction, if signatory 
to and in compliance with this MOU, on fines imposed under section 
273 of the Act for periods determined by the INS.
    4.11  If the Carrier's PL is not at or better than the APL, the 
Carrier may receive an automatic 25 percent reduction in fines, if 
it meets certain conditions, including being signatory to and in 
compliance with the MOU, and the carrier submits evidence that it 
has taken extensive measures to prevent the transport of improperly 
documented passengers to the United States. This evidence shall be 
submitted to the Assistant Commissioner for Inspections for 
consideration. Evidence may include, but is not limited to, the 
following: (1) Information regarding the Carrier's training program, 
including participation of the Carrier's personnel in any INS, 
Department of State (DOS), or other training programs and the number 
of employees trained: (2) information regarding the date and number 
of improperly documented aliens intercepted by the Carrier at the 
port(s) of embarkation, including, but not limited to, the aliens' 
name, date of birth, passport nationality, passport number or other 
travel document information, and reason boarding was refused, if 
otherwise permitted under local law; and, (3) other evidence, 
including screening procedure enhancements, technological or 
otherwise, to demonstrate the Carrier's good faith efforts to 
properly screen passengers destined to the United States.
    4.12  The Carrier may defend against imposition or seek further 
reduction of an administrative fine if the case is timely defended 
pursuant to 8 CFR part 280, in response to the Form I-79, Notice of 
Intent to Find, and the Carrier establishes that mitigating or 
extenuating circumstances existed at the time of the violation.
    4.13  Nothing in this MOU precludes a carrier from seeking fine 
reduction, refund, or waiver under 8 CFR 273.4.

----------------------------------------------------------------------
(Representative's Signature)

----------------------------------------------------------------------
(Title)

----------------------------------------------------------------------
(Carrier Name)

Dated:-----------------------------------------------------------------

----------------------------------------------------------------------
Assistant Commissioner, Office of Inspection, United States 
Immigration and Naturalization Service.

Dated:-----------------------------------------------------------------

[FR Doc. 98-11481 Filed 4-29-98; 8:45 am]
BILLING CODE 4410-10-M