[Federal Register Volume 63, Number 235 (Tuesday, December 8, 1998)]
[Notices]
[Pages 67722-67723]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 98-32515]
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DEPARTMENT OF THE TREASURY
Customs Service
Implementation of the Automated Drawback Selectivity Program
AGENCY: U.S. Customs Service, Department of the Treasury.
ACTION: General notice.
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SUMMARY: This document sets forth for the information of the general
public the text of a document that was previously published in the
Customs Bulletin on November 25, 1998, pursuant to section 622 of the
Customs Modernization provisions of the North American Free Trade
Agreement Implementation Act, to provide notice of the nationwide
operational implementation of an automated drawback selectivity
program. Publication of that notice in the Customs Bulletin was a
prerequisite to application of the section 622 provisions that provide
for the imposition of monetary penalties for filing false drawback
claims and that provide for the establishment of a drawback compliance
program.
FOR FURTHER INFORMATION CONTACT: Al Morawski, Office of Field
Operations (202-927-1082).
SUPPLEMENTARY INFORMATION:
Background
On December 8, 1993, the President signed the North American Free
Trade Agreement Implementation Act (the Act, Pub. L. 103-182, 107 Stat.
2057). Title VI of the Act set forth Customs Modernization provisions
that included, in section 622, provisions regarding penalties for false
drawback claims. Paragraph (a) of section 622 amended the Tariff Act of
1930 by adding section 593A (codified at 19 U.S.C. 1593a) which
prescribes the actions that Customs may take (including the assessment
of monetary penalties) for the filing of false drawback claims,
requires Customs to establish a voluntary drawback compliance program,
and requires the Secretary of the Treasury to promulgate regulations
and guidelines to implement the section 593A provisions. Under
paragraph (b) of section 622, the section 593A provisions apply to
drawback claims filed on and after the nationwide operational
implementation of an automated drawback selectivity program by Customs,
and Customs was required to publish in the Customs Bulletin the
effective date of that selectivity program. The notice mandated by
paragraph (b) of section 622 was published in the Customs Bulletin on
November 25, 1998, and is republished here for the information of the
general public.
Dated: December 2, 1998.
Stuart P. Seidel,
Assistant Commissioner, Office of Regulations and Rulings.
Accordingly, the document that provided notice of the nationwide
operational implementation of the automated drawback selectivity
program, as discussed above, is reproduced below:
Department of the Treasury
United States Customs Service
[T.D. 98-88]
Implementation of the Automated Drawback Selectivity Program
AGENCY: U.S. Customs Service, Department of the Treasury.
ACTION: General notice.
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SUMMARY: Pursuant to section 622 of the Customs Modernization
provisions of the North American Free Trade Agreement Implementation
Act, this document provides notice of the nationwide operational
implementation of an automated drawback selectivity program.
Publication of this notice is a prerequisite to application of the
section 622 provisions that provide for the imposition of monetary
penalties for filing false drawback claims and that provide for the
establishment of a drawback compliance program.
DATES: The automated drawback selectivity program was implemented on
August 29, 1998. The liability for monetary penalties for the filing
of false drawback claims applies to drawback claims filed on and
after November 25, 1998.
FOR FURTHER INFORMATION CONTACT: Al Morawski, Office of Field
Operations (202-927-1082).
SUPPLEMENTARY INFORMATION:
Background
The Customs Modernization provisions contained in Title VI of
the North American Free Trade Agreement Implementation Act (the Act,
Pub. L. 103-182, 107 Stat. 2057) included, in section 622,
provisions regarding penalties for false drawback claims.
Paragraph (a) of section 622 amended the Tariff Act of 1930 by
adding section 593A (codified at 19 U.S.C. 1593a) which (1)
prescribes the actions that Customs may take, including the
assessment of monetary penalties, for the filing of a false
(fraudulent or negligent) drawback claim, (2) requires Customs to
establish a voluntary drawback compliance program under which
participants in certain circumstances may be afforded an alternative
to the monetary penalty that would normally apply for filing a false
drawback claim, and (3) requires the Secretary of the Treasury to
promulgate regulations and guidelines to implement the section 593A
provisions.
Under paragraph (b) of section 622, which concerns the effective
date of the amendment made by paragraph (a), the section 593A
provisions can apply only to drawback claims filed on and after the
nationwide operational implementation of an automated drawback
selectivity program by Customs. Customs is required under paragraph
(b) of section 622 to publish in the Customs Bulletin the effective
date of the selectivity program.
Drawback Compliance Program
On March 5, 1998, Customs published in the Federal Register (63
FR 10970) as T.D. 98-16 a final rule document which revised the
provisions within the Customs Regulations that pertain to drawback.
The bulk of those drawback regulatory changes involved a revision of
Part 191 of the Customs Regulations (19 CFR Part 191) in order to,
among other things, reflect extensive changes to the drawback law
made by section 632 of the Act. The Part 191 texts as so revised
also include a Subpart S, Secs. 191.191 through 191.195, which
pertains to the drawback compliance program mandated by section 593A
of the Tariff Act of 1930 as added by section 622 of the Act. Those
Subpart S provisions are directed to procedural aspects of the
drawback compliance program (such as program participation
requirements, including application submission and approval
standards) and therefore do not incorporate specific standards for
the assessment or mitigation of penalties against program
participants for filing false drawback claims. In view of the
effective date limitation in paragraph (b) of section 622 of the
Act, Customs has to date not accepted applications from prospective
program participants or in any other way put those Subpart S
provisions into operation.
Penalties and Mitigation Guidelines for False Drawback Claims
On September 29, 1998, Customs published in the Federal Register
(63 FR 51868) a notice of proposed rulemaking which set forth
proposed amendments to the Customs Regulations to set forth the
procedures to be followed when false drawback claims are filed and
penalties are thereby incurred. The proposed regulatory changes
implement all penalty aspects of section 622 of the Act and thus
include proposed mitigation guidelines that Customs would follow in
arriving at a just and reasonable assessment and disposition of
liabilities when false drawback claims are filed and penalties are
incurred by drawback compliance program participants or by persons
who are not participants in that program. The document also proposed
an amendment to the regulatory texts adopted by T.D. 98-16 to
provide more specificity regarding the grounds and procedures for
removal of a participant from the drawback
[[Page 67723]]
compliance program. The Background portion of the document also
referred to paragraph (b) of section 622 of the Act, noting in this
regard that the proposed regulatory amendments set forth in the
document, if adopted as a final rule, will not be effective until
Customs implements an automated drawback selectivity program.
Implementation of the Selectivity Program
Customs hereby gives notice that on August 29, 1998, Customs
implemented, on a nationwide operational basis, an automated
drawback selectivity program. This criteria-based selectivity
program automates the previously manual, labor-intensive processing
of drawback claims. This automation will result in more efficient
processing of drawback data and will move Customs one step closer to
paperless processing of drawback claims.
As a consequence of implementation of the drawback selectivity
program, any person who files a false drawback claim on and after
November 25, 1998, will become potentially liable for a monetary
penalty under 19 U.S.C. 1593a. However, Customs does not intend to
issue a penalty notice or take any other action authorized by 19
U.S.C. 1593a in respect of any such violation until such time as
final regulations implementing the provisions of 19 U.S.C. 1593a are
in effect.
Dated: November 4, 1998.
Robert S. Trotter,
Assistant Commissioner, Office of Field Operations.
[FR Doc. 98-32515 Filed 12-7-98; 8:45 am]
BILLING CODE 4820-02-P