[Federal Register Volume 64, Number 1 (Monday, January 4, 1999)]
[Rules and Regulations]
[Pages 27-34]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 98-34675]


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DEPARTMENT OF THE TREASURY

Customs Service

19 CFR Parts 123, 142, and 178

[T.D. 99-2]
RIN 1515-AC16


Land Border Carrier Initiative Program

AGENCY: Customs Service, Treasury.

ACTION: Final rule.

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SUMMARY: This document amends the Customs Regulations to provide for 
the Land Border Carrier Initiative Program (LBCIP), a program designed 
to prevent smugglers of illicit drugs from utilizing commercial land 
conveyances for their contraband. The program provides for agreements 
between carriers and Customs in which the carrier agrees to increase 
its security measures and cooperate more closely with Customs, and 
Customs agrees to apply, commensurate with the degree of carrier 
compliance with the terms of the agreement, special administrative 
provisions pertaining to penalty amounts and expedited processing of 
penalty actions if illegal drugs are found on a conveyance belonging to 
the participating carrier. Further, at certain, high-risk locations 
along the land border, an importer's continued use of the Line Release 
method of processing entries of merchandise is conditioned on the use 
of carriers that participate in the LBCIP. These regulatory changes are 
designed to improve Customs enforcement of Federal drug laws along the 
land border by enhancing its ability to interdict illicit drug 
shipments through additional trade movement information provided by 
common carriers that voluntarily choose to participate in the LBCIP.

EFFECTIVE DATE: February 3, 1999.

FOR FURTHER INFORMATION CONTACT: Jim Kelly, Office of Field Operations, 
Anti-Smuggling Division, (202) 927-0458.

SUPPLEMENTARY INFORMATION:

Background

    In 1984 Customs began an air and sea Carrier Initiative Program 
(CIP), in part because of Customs growing awareness of an increase in 
the smuggling of marijuana and cocaine in the South Florida area. 
Developed under Customs remission and mitigation of penalties authority 
pursuant to section 618 of the Tariff Act of 1930 (19 U.S.C. 1618), the 
CIP was grounded in the execution of written Carrier Initiative 
Agreements between Customs and the common carrier, whereby the carrier 
agrees to improve cargo and conveyance security, and Customs provides 
security and drug awareness training.
    In 1986, Congress enacted the Anti-Drug Abuse Act of 1986 (Pub. L. 
99-570, 100 Stat. 3207; 21 U.S.C. 801 note) (the 1986 Act) to, among 
other things, strengthen Federal efforts to improve the enforcement of 
Federal drug laws and enhance the interdiction of illicit drug 
shipments. Pursuant to the drug interdiction mandates contained in the 
1986 Act, in 1995 Customs decided to expand the CIP to land border 
carriers to address the increasing drug smuggling threat along the 
southwest border.
    This new Land Border Carrier Initiative Program (LBCIP) is designed 
to prevent smugglers of illicit drugs from utilizing commercial land 
conveyances for their contraband. The program solicits land and rail 
carriers to voluntarily enter into agreements with Customs in which the 
carrier agrees to increase its security measures and cooperate more 
closely with Customs in identifying and reporting suspected smuggling 
conduct in exchange for

[[Page 28]]

which Customs agrees to provide training to carrier employees and 
drivers in the areas of cargo and personnel security, document review 
techniques, drug awareness, and conveyance search. Further, should 
illegal drugs be found aboard a conveyance belonging to a participating 
carrier, Customs agrees to apply, commensurate with the degree of 
carrier compliance with the terms of the agreement, special 
administrative provisions pertaining to penalty amounts and expedited 
processing of penalty actions.
    In conjunction with implementing the LBCIP, Customs decided to tie 
the mutual benefits of Line Release processing to the security offered 
by the LBCIP at certain, high-risk locations along the southwest 
border. Thus, Customs planned to require at these designated locations 
that an importer's continued use of the Line Release method of 
processing entries of merchandise is conditioned on the use of carriers 
that participate in the LBCIP. Customs planned to publish a list of 
these high-risk locations along the southwest border in the Federal 
Register.
    On December 30, 1997, Customs published a Notice of Proposed 
Rulemaking (NPRM) in the Federal Register (62 FR 67765) that proposed 
to amend the Customs Regulations to provide for the LBCIP and to 
require that merchandise be transported by a LBCIP participant for 
merchandise to be processed through use of Line Release at certain 
high-risk locations. Customs stated in the BACKGROUND portion of the 
document its intention that the LBCIP would be implemented at the 
southwest border. Comments were solicited on the proposal. The comment 
period closed March 2, 1998; four comments were received. The comments 
and Customs responses are set forth below.

Analysis of Comments

Concerns With the LBCIP, in General

    Comment: All of the commenters inquired if the LBCIP would be 
limited to the southwest border. Acknowledging that Customs stated its 
intention to limit the LBCIP to the Mexican border in the BACKGROUND 
portion of the NPRM, these commenters pointed out that the proposed 
regulations did not contain such a limitation and that Customs should 
clearly indicate in the regulatory text portion of the Final Rule 
document that the LBCIP will apply only to the Mexican border.
    Customs Response: The whole reason for expanding the Carrier 
Initiative Program (CIP) to include land border carriers is to address 
the increased drug-smuggling threat to the United States. While that 
threat presently comes primarily from the southwest border, should that 
threat find other avenues for entering the U.S., i.e., along the 
northern border, and if the regulations expressly restrict the LBCIP's 
application to the southern border, then Customs would not be able to 
employ the LBCIP as a law enforcement tool to counter the threat from 
the different direction. On reconsideration of the scope and benefits 
of the program, it makes more sense to make the program available to 
all interested carriers than to restrict the program's availability to 
one border area.
    Accordingly, although it was Customs intention at the time it 
published the NPRM to implement the LBCIP only along the southwest 
border--where the drug threat to the United States is greatest--because 
of the interest raised in the comments concerning the application of 
special administrative provisions (see below), Customs will now make 
the program available to interested carriers at any Customs land border 
crossing point. Thus, no change will be made to Sec. 123.71, which 
describes the LBCIP in general terms, to expressly limit the 
application of the LBCIP to the southwest border.
    Comment: Two commenters inquired that if the LBCIP Agreements are 
only entered into with carriers on the southwest border, will the 
accompanying special administrative provisions pertaining to the 
assessment and mitigation of penalties for carriage of controlled 
substances apply only at the Mexican border, and not the Canadian 
border?
    Customs Response: As mentioned above, because of comments concerned 
about the application of special administrative provisions, Customs has 
decided to expand the availability of the LBCIP to interested carriers 
at any land border crossing location. Accordingly, the issues of 
limited LBCIP participation and application of special administrative 
provisions are rendered moot.
    Comment: One commenter wanted Customs to define a ``high-risk'' 
area in the regulations, stating that carriers need to know whether 
they are operating in such areas, which can effect carrier safety and 
security and impact operational efficiency. This commenter also 
inquired that should Canadian land border ports ever be designated as 
``high risk'', will Customs afford Canadian carriers fair and 
appropriate notice so that they can meet the requirements of the LBCIP.
    Along this line of inquiry, another commenter stated that 
compliance with the LBCIP is only a requirement for carriers 
participating in Line Release and that the LBCIP should remain a 
voluntary program for carriers not participating in Line Release.
    Customs Response: These comments reveal a certain confusion 
concerning how the LBCIP is designed to operate as a voluntary, stand-
alone program and how it interrelates with the Line Release-method of 
processing certain merchandise. As provided in proposed Sec. 123.71, 
the LBCIP is a voluntary program--for carriers--designed to assist 
Customs in preventing the smuggling of controlled substances into the 
United States. The LBCIP is independent of Line Release processing, 
which is an automated method to expedite the release of certain 
shipments--for importers. However, at certain land border crossing 
locations, designated ``high risk'' by Customs, an importer's continued 
use of Line Release processing will be contingent on the importer's use 
of carriers that participate in the LBCIP. Accordingly, if there are no 
carriers at a designated high-risk area that participate in the LBCIP, 
then the importer cannot use the Line Release program.
    ``High-risk'' locations--where continued use of Line Release will 
be conditioned on the importer's use of carriers that participate in 
the LBCIP-- currently designated by Customs are:

1. Calexico, CA;
2. Otay Mesa, CA;
3. Tecate, CA;
4. Douglas, AZ;
5. Nogales, AZ;
6. Brownsville, TX;
7. Del Rio, TX
8. Eagle Pass, TX;
9. El Paso, TX;
10. Hidalgo, TX, the cargo-processing center at Pharr;
11. Laredo, TX; and
12. Progreso, TX.

These ports of entry are designated as ``high risk'' based on seizure 
statistics. Additional areas designated by Customs as high risk will be 
identified in General Notices that will be published in the Federal 
Register. These notices will normally be published with a 30-day 
delayed effective date to give affected importers time to restructure 
their business interests.

Concerns With the Written Agreement; Sec. 123.72

    Comment: One commenter stated that a standard agreement should be 
used throughout the entire southwest border, and another commenter 
stated that port

[[Page 29]]

directors should not have the ability to change the language in an 
agreement.
    Customs Response: Since the drug threat is the focus of the program 
and not regional/local conditions, one standard agreement will be used 
in the LBCIP, and port directors will not have the ability to modify 
the language employed in agreements.
    Comment: One commenter stated that Customs should clarify whether 
they want carriers or individual train crews, to enter into agreements 
with Customs. This commenter suggested that Customs should revise 
Sec. 123.71 to make this clear.
    Customs Response: As provided at proposed Sec. 123.72, which 
pertains to the written agreement requirement, it is the commercial 
carriers (not the drivers of the conveyance) that are to enter into the 
written agreement with Customs. The statement in proposed Sec. 123.71 
that the LBCIP is a program designed to enlist the voluntary 
cooperation of the designated drivers of commercial entities as well as 
the commercial entities was merely to reflect that a participating 
carrier's commitment to the LBCIP includes the carrier being 
responsible, after designating drivers (or crews) for program 
participation, for adequately training the drivers (or crews) on how to 
identify and report suspected smuggling attempts. Accordingly, the 
carriers are, in effect, responsible for enlisting the cooperation of 
the drivers (or crews) they designate to be in the program. However, 
because language regarding drivers in Secs. 123.71, 123.72, and 123.74 
confused readers concerning whether Customs intends to enter into 
individual agreements with the drivers (or crew), these provisions will 
be revised to remove references to designated drivers.
    However, because the cooperation of drivers is such an integral 
part of the program and with the revisions discussed above to 
Secs. 123.71, 123.72, and 123.74, a new Sec. 123.76 will be added that 
more fully explains how drivers fit into the program.
    Comment: One commenter wants Customs to modify the written 
agreement provision (Sec. 123.72) to acknowledge that the training of 
railroad crews might impact existing labor agreements.
    Customs Response: Since the LBCIP is a voluntary program, Customs 
finds the issue of labor agreements between carriers and its employees 
outside the scope of these regulations. Accordingly, no change will be 
made to Sec. 123.72.
    Comment: Concerned with the written agreement provision that 
requires carrier-participants to establish security procedures aimed at 
restricting access to transporting conveyances and preventing the 
unauthorized lading of illegal drugs while the conveyance is en route 
to the U.S., one commenter suggested that Sec. 123.72(b) be revised to 
acknowledge the national limits incumbent on establishing such security 
measures.
    Customs Response: Customs is well aware of the national limits/
physical restraints faced by carrier-applicants in establishing the 
security measures provided for at Sec. 123.72(b) and does not expect 
the carriers to do what is beyond their control. With the LBCIP being a 
cooperative venture between participant-carriers and Customs, Customs 
will of course work with particular carriers to establish those 
security procedures that are necessary and within the ability of the 
LBCIP participant to implement. Since the scope of the security burden 
on the carrier-participant is substantially less than that envisioned 
by the commenter, Customs sees no reason to revise the security 
requirements of Sec. 123.72(b).
    Comment: Two commenters wanted Customs to clarify what background 
checks need to be performed and on which employees. These commenters 
questioned which criminal records have to be checked--presumably this 
relates to records maintained by the resident country of the 
participant-carrier--and whether the ``all personnel designated to 
participate in the LBCIP'' language encompasses all employees who will 
handle a shipment from the time it crosses one border, traverses the 
U.S., and arrives at another border, and all employees in between. 
These commenters argued that the scope of such a provision would affect 
thousands, if not tens of thousands, of employees, and that the 
provision should be limited to new hires. Based on the magnitude of 
these concerns, two commenters stated that Customs paperwork 
assessment/recordkeeping burden is understated.
    Customs Response: Section 123.72(c) provides, in part, that, to the 
extent permitted by law, participant-carriers are to conduct employment 
and criminal history record checks on all (not just newly hired) 
employees who will be designated to participate in the LBCIP. Customs 
contemplates within this context that a carrier-employer need not check 
the criminal histories of all employees as all employees will not be 
designated to be involved with the LBCIP. Involvement with the LBCIP 
would mean involvement with physically processing/transporting the 
merchandise that is to be exported to the United States. Further, 
Customs contemplates that the criminal records of all potential 
employees who may be involved with physically processing/ transporting 
merchandise for export to the United States may not be accessible to 
the carrier-exporter despite the carrier-employer's best efforts. Thus, 
concerning the question of which criminal records have to be checked, a 
carrier-employer would be required to report to Customs any criminal 
activity concerning employees that are directly involved with the 
physical processing/transporting of merchandise exported to the United 
States, which the employer learns either through a search of accessible 
criminal records maintained by the country in which the employee is 
hired or through communication by the employee to the employer. Given 
the above, no change to Sec. 123.72(c) will be made.
    Regarding Customs assessment of the paperwork burden in applying 
for the LBCIP, since the scope of the background checks is more limited 
and reasonable than understood by the commenters, Customs does not 
believe that the time an average carrier will spend completing the 
application for LBCIP participation, providing background information 
on drivers designated for inclusion in the program, completing an 
affidavit of business character, and listing the conveyances that will 
be used will exceed one hour. However, because some carrier-applicants 
will experience a significant turnover in drivers, conveyances, and 
ownership, those applicants may have a greater paperwork burden--as 
much as 2 hours a week--in complying with the continuing reporting 
obligations of the program. Other carrier-applicants are so large and 
have so many drivers, they may fall outside the average. Accordingly, 
Customs will revise its paperwork estimates to fully account for this 
secondary reporting burden. The collection of information data 
previously submitted to the Office of Management and Budget has been 
revised to reflect an increase of 3 more hours per respondent. This 
increase is based on increased applicants and business turnover 
estimates, which impact both the initial paperwork requirement and the 
secondary reporting obligation.
    Comment: One commenter wanted Customs to clarify the terms 
``properly registered conveyances,'' i.e., does it pertain to railcars 
or locomotives, and two commenters suggested that locomotive engineers 
be separately enumerated, rather than be collectively included with 
drivers.
    Customs Response: For purposes of the written agreement, the term 
``conveyance'' would include

[[Page 30]]

locomotives--being the powered unit--rather than the railcars, which 
are non-powered, and the term ``drivers'' would include locomotive 
engineers--being the drivers of the powered conveyance. Concerning the 
``proper registration'' of such conveyances, what is envisioned here is 
that the conveyance is registered with the appropriate government 
agency responsible for registering such conveyances in the country 
where the conveyance operates.
    Customs believes that no change to Sec. 123.72(d) is necessary.
    Comment: One commenter wanted Customs to define the term 
``dishonest conduct'' in the regulations.
    Customs Response: Although not a term of art, the term ``dishonest 
conduct'' has been defined as an absence of integrity; a disposition to 
betray, cheat, deceive, lie, or defraud; and being untrustworthy. The 
meaning of the term extends beyond acts which would be criminal, and is 
not restricted to such conduct as would be criminal. However, the term 
does not necessarily include ``wrongful acts''. For example, a speeding 
violation in an automobile would be a wrongful act in law, but it does 
not constitute ``dishonest conduct''. The term ``dishonest conduct'' is 
designed, but not limited, to include any conduct or activity that 
bears on an individual's veracity, such as allegations/complaints of 
lying, misleading, or perjury. Examples of such conduct would include 
writing bad checks, misrepresenting employment history, and deceiving 
government agencies as to the nature of information. Customs does not 
believe that it is appropriate to define the term in the regulations.
    Comment: Three commenters requested that Sec. 123.72 be revised to 
delete references to principals, drivers, and conveyances, because such 
information is irrelevant. Further, these commenters stated that the 
five-day notification period for advising Customs concerning material 
changes in business organization, drivers, or conveyances serves no 
useful purpose and that this time-frame is too short anyway.
    Customs Response: Customs believes that by receiving the names of 
the drivers and principal officers of the companies who apply to join 
the LBCIP, Customs is better able to make a determination about the 
threat posed by the drivers and companies and to make an informed 
decision about the suitability of the carriers and specific drivers for 
the program. Customs also believes that the five-day notification 
period is sufficient time for a carrier to advise Customs in writing by 
mail of material changes affecting a carrier's business organization, 
designated drivers or registered conveyances. Accordingly, no change to 
Sec. 123.72 will be made.
    Comment: One commenter wanted to delete language regarding the 
requirement to provide information about past business relations, and 
the necessity of providing information about ``dishonest conduct''. 
Another commenter wanted clearer language regarding the ``affidavit of 
business character'' requirement.
    Customs Response: Because of the high-risk environment in which 
transportation companies sometime operate, Customs believes that it is 
imperative that principals of participating carriers submit an 
``affidavit of business character'' and that information concerning 
``dishonest conduct'' on the part of all designated participants be 
provided to Customs. This information will assist Customs in making 
informed decisions about a carrier's suitability for the program.

Concerns With the Revocation Procedure; Sec. 123.75

    Comment: One commenter argued that carriers should be provided with 
advance notice of revocation and given the opportunity to cure defaults 
prior to revocations. This commenter also questioned the scope of 
revocations, wanting to know if all Customs land border ports will be 
notified in the case of a revocation.
    Customs Response: Because the LBCIP is a cooperative venture 
between Customs and participant-carriers, the on-going dialogue between 
Customs and the carrier will enable a carrier to be aware of Customs 
concerns regarding the carrier's operations and allow a carrier to 
explain or take remedial action to resolve a deficiency in the 
carrier's operations. However, in cases where immediate revocation is 
necessary, proposed Sec. 123.75(c) details the appeal process to be 
followed by the subject carrier once a decision to immediately revoke 
the carrier's participation in the LBCIP has been made by a port 
director. Under this process, the subject participant-carrier may file 
a written appeal directly with the Assistant Commissioner of Field 
Operations within 10 days and receive a determination within 30 days of 
the appeal's receipt by the Assistant Commissioner. Customs believes 
that these time frames provide carriers with ample time to cure 
operational defects noted by Customs, and that the process will ensure 
uniformity regarding revocations.
    Concerning the scope of revocations, decisions to immediately 
revoke a carrier-participant or individual driver would be effective at 
the national level; all land border ports would be notified.
    Comment: One commenter felt that some misdemeanors, such as drunk 
driving, should not result in revocation.
    Customs Response: Offenses such as drunk driving will not 
automatically result in revocation. The circumstances of such conduct, 
i.e., did it occur as an incident to employment, will be fully 
considered by Customs before any action to institute revocation 
procedures is initiated.
    Comment: One commenter wanted Customs to define ``misuse'' 
regarding authorized conveyances.
    Customs Response: The term ``misuse'' of authorized conveyances 
means the unauthorized use of a carrier's conveyance by a designated 
driver, e.g., making unscheduled stops/trips, and such other use as 
goes beyond the scope of the agreement entered into between the carrier 
and Customs.

Concerns Over Tying Line Release to LBCIP; Secs. 123.71, 142.41, and 
142.41

    Comment: Two commenters did not see the value of linking the LBCIP 
to Line Release at ``high-risk'' areas.
    Customs Response: Linking the LBCIP with Line Release at designated 
``high-risk'' areas will aid Customs invaluably in its endeavor to 
thwart the smuggling of illicit drugs into the United States. The LBCIP 
is based on a mutual exchange of business information between a 
participant carrier and Customs: Customs receives participant-specific 
information regarding the participant's facilities, conveyances, 
drivers, and business structure; the carrier receives special training 
in the areas of cargo and personnel security standards, document 
review, drug awareness, and container/conveyance searches. Line 
Release, on the other hand, requires an importer to provide Customs 
with information regarding the merchandise being imported, the 
importer, and the shipper or manufacturer. Linking the LBCIP with Line 
Release merges the merchandise, importer, carrier, driver, and 
conveyance data together, thereby enhancing Customs ability to assess 
the threat of each Line Release-type commercial shipment more 
effectively. Accordingly, since Customs scrutiny of Line Release 
transactions would be enhanced if it possesses the information that 
LBCIP participants provide, it makes perfect sense at those LBCIP 
locations designated as ``high risk'' to condition an importer's 
continued use of Line Release on the use of carriers/drivers that 
participate in the LBCIP.

[[Page 31]]

Conclusion

    After careful consideration of all the comments received and 
further review of the matter, Customs has decided to adopt as a final 
rule with the modifications and changes discussed above and set forth 
below, the amendments to implement the LBCIP and tying Line Release 
privileges to LBCIP carriers/drivers at certain, high-risk locations. 
The document also identifies the high-risk locations where merchandise 
must be transported by carriers who are participants in the LBCIP in 
order for the merchandise to be processed through Line Release.
    To reflect the paperwork requirements contained at Sec. 123.73, 
part 178 of the Customs Regulations is also amended.

Regulatory Flexibility Act and Executive Order 12866

    Pursuant to provisions of the Regulatory Flexibility Act (5 U.S.C. 
601 et seq.), it is certified that the amendments will not have a 
significant economic impact on a substantial number of small entities, 
because the amendments concern a voluntary program that will confer a 
benefit on the trade community. Accordingly, the amendments are not 
subject to the regulatory analysis or other requirements of 5 U.S.C. 
603 and 604. This amendment does not meet the criteria for a 
``significant regulatory action'' as specified in Executive Order 
12866.

Paperwork Reduction Act

    The collection of information contained in these final regulations 
has been revised, reviewed, and approved by the Office of Management 
and Budget (OMB) in accordance with the requirements of the Paperwork 
Reduction Act of 1995 (44 U.S.C. 3507) under control number 1515-0217. 
An agency may not conduct or sponsor, and a person is not required to 
respond to, a collection of information unless the collection of 
information displays a valid control number assigned by OMB.
    The collection of information in this final rule is at Sec. 123.73. 
This information is required to improve Customs ability to interdict 
illicit drug shipments along the land border in cooperation with common 
carriers and their designated drivers who voluntarily participate in 
the LBCIP. This information will be used to process applications for 
voluntary participation in the Land Border Carrier Initiative Program. 
The likely respondents are commercial carrier organizations that engage 
in foreign commerce and trade along the land border of the United 
States.
    The estimated average burden associated with the collection of 
information in this final rule is four hours per respondent or 
recordkeeper. Comments concerning the accuracy of this burden estimate 
and suggestions for reducing this burden should be directed to the U.S. 
Customs Service, Information Services Group, Office of Finance, 1300 
Pennsylvania Ave., N.W., Washington, D.C. 20229; and to OMB, Attention: 
Desk Officer for the Department of the Treasury, Office of Information 
and Regulatory Affairs, Washington, D.C. 20503.

Drafting Information

    The principal author of this document was Gregory R. Vilders, 
Attorney, Regulations Branch. However, personnel from other offices 
participated in its development.

List of Subjects

19 CFR Part 123

    Administrative practice and procedure, Aliens, Canada, Common 
carriers, Customs duties and inspection, Forms, Imports, International 
boundaries, Mexico, Motor carriers, Railroads, Reporting and 
recordkeeping requirements, Vehicles.

19 CFR Part 142

    Bonds, Common carriers, Customs duties and inspection, Entry of 
merchandise, Forms, Reporting and recordkeeping requirements.

19 CFR Part 178

    Administrative practice and procedure, Collections of information, 
Exports, Imports, Paperwork requirements, Reporting and recordkeeping 
requirements.

Amendments To the Regulations

    For the reasons stated above, parts 123, 142, and 178 of the 
Customs Regulations (19 CFR parts 123, 142, and 178) are amended as set 
forth below:

PART 123--CUSTOMS RELATIONS WITH CANADA AND MEXICO

    1. The general authority citation for part 123 continues to read as 
follows, the specific authority citation for Sec. 123.71 is removed, 
and specific authority citations for Secs. 123.71 through 123.76 and 
for Sec. 123.81 are added, to read as follows:

    Authority: 19 U.S.C. 66, 1202 (General Note 20, Harmonized 
Tariff Schedule of the United States (HTSUS)), 1431, 1433, 1624.
* * * * *
    Sections 123.71-123.76 also issued under 19 U.S.C. 1618; Section 
123.81 also issued under 19 U.S.C. 1595.

    2. Subpart H is redesignated as subpart I and Secs. 123.71 and 
123.72 are redesignated as Secs. 123.81 and 123.82 therein, 
respectively, and a new subpart H, consisting of Secs. 123.71 through 
123.76, is added to read as follows:

Subpart H--Land Border Carrier Initiative Program

Sec.
123.71  Description of program.
123.72  Written agreement requirement.
123.73  Application to participate.
123.74  Notice of selection; appeal of determination.
123.75  Notice of revocation; appeal of decision.
123.76  Authorization by Customs for participants to use certain 
drivers.

Subpart H--Land Border Carrier Initiative Program


Sec. 123.71  Description of program.

    The Land Border Carrier Initiative Program (LBCIP) is a program 
designed to enlist the voluntary cooperation of commercial conveyance 
entities in Customs effort to prevent the smuggling of controlled 
substances into the United States. Participation in the LBCIP requires 
the land or rail commercial carrier to enter into a written agreement 
with Customs that describes the responsibilities of participants in the 
LBCIP. The agreement generally provides that the carrier agrees to 
enhance the security of its facilities and the conveyances employed to 
transport merchandise. The carrier also agrees to cooperate closely 
with Customs in identifying and reporting suspected smuggling attempts. 
In exchange for this cooperation, Customs agrees to provide training to 
carrier personnel in the areas of cargo and personnel security, 
document review techniques, drug awareness, and conveyance searches. 
Customs also agrees that should a controlled substance be found aboard 
a conveyance owned or operated by a participating carrier, special 
administrative procedures relating to the assessment and mitigation of 
drug-related penalties will be followed; the degree of compliance with 
the terms of the agreement will be considered as an additional positive 
mitigating factor in any seizure or penalties decision or 
recommendation. Lastly, at certain high-risk locations, for the use of 
Line Release, imported merchandise, which otherwise qualifies for Line 
Release entry (see, subpart D of part 142 of this chapter), must be 
transported over the border by carriers that participate in the LBCIP. 
The locations where the use of Line Release will be conditioned on 
participation in the LBCIP will be published in the Federal Register.

[[Page 32]]

Sec. 123.72  Written agreement requirement.

    Commercial carriers desiring to participate in the LBCIP shall 
enter into a written agreement with Customs regarding the mutual 
obligations of the carrier-participant and Customs. The terms and 
conditions in the written agreement shall generally provide that the 
carrier-applicant agrees:
    (a) To participate in Customs training regarding cargo and 
personnel security, document review techniques, drug awareness, and 
conveyance searches;
    (b) To establish security systems at the place of business for the 
safe storage and handling of cargo intended to be imported into the 
United States; and security procedures aimed at restricting access to 
transporting conveyances and preventing the unauthorized lading of 
illegal drugs while the conveyance is en route to the United States;
    (c) To conduct, to the extent allowed by law, employment and 
criminal history record checks on all personnel designated to 
participate in the LBCIP and to exercise responsible supervision and 
control over those personnel;
    (d) To ensure that only authorized drivers and properly registered 
conveyances are utilized in the transportation of merchandise into the 
United States, and to maintain current lists of such drivers and 
conveyances for Customs inspection upon request;
    (e) To immediately report to the appropriate port director any 
criminal or dishonest conduct on the part of drivers designated to 
participate in the LBCIP, or attempts by others to impede, influence, 
or coerce the carrier or drivers into violating any United States law, 
including Customs regulations, especially those concerned with 
trafficking in illegal drugs; and
    (f) To notify the appropriate port director in writing by mail 
within 5 days of any change in legal name, business address, business 
principals, ownership, drivers, or conveyances that affects the basis 
for continued participation in the LBCIP.


Sec. 123.73  Application to participate.

    To request participation in the LBCIP, the carrier-applicant must 
submit an application containing the information requested in this 
section. The application must be accompanied by two copies of a LBCIP 
written agreement (see Sec. 123.72 of this part; upon request, the 
local port director will provide copies of an unsigned written 
agreement) containing original signatures of corporate officers or 
owners of the common carrier. The application shall be prepared by the 
common carrier, be signed by corporate officers or owners, and 
submitted to the port director. If a submitted application does not 
provide all of the information specified in this section, the 
processing of the application will either be delayed or the application 
will be rejected. The application shall include the following 
information:
    (a) General business identification and site condition information. 
The name and address of the commercial conveyance entity, the names of 
all principals or corporate officers, the name and telephone number of 
an individual to be contacted for further information, and a complete 
and detailed description of the premises where business operations are 
conducted, to include all working/storage areas and security features 
employed;
    (b) Designated driver information. A listing of the drivers 
designated by the carrier who will be transporting merchandise into the 
U.S. The listing shall set forth the name(s), address(es), date of 
birth, nationality, driver's license number, and any other personal 
identifying information regarding the drivers listed, e.g., social 
security number (if available), to enable Customs to conduct background 
checks and to aid Customs officers at the border crossing point in 
identifying individual LBCIP-authorized drivers;
    (c) Conveyance identification information. A listing of the 
conveyances, e.g., trucks and locomotives, that the carrier will 
utilize to transport merchandise into the U.S. The listing shall set 
forth the type and make of conveyances, country of registration and 
license number(s), conveyance-specific identifying markings, e.g., 
vehicle identification numbers (VINs), and any other general conveyance 
identifying information, e.g., weight, color, recognizable 
modifications, etc., to aid Customs officers at the border crossing 
point in identifying particular LBCIP-registered conveyances; and
    (d) Affidavit of business character. A statement signed by the 
carrier-applicant which attests to each principal's or corporate 
officer's past and present business relations, e.g., a list of past 
companies worked for and positions held, which fully explains the 
presence of any past or present crime involving theft or smuggling or 
investigations into such crimes, or other dishonest conduct on the part 
of a principal.


Sec. 123.74  Notice of selection; appeal of determination.

    The information provided pursuant to paragraphs (b) through (d) of 
Sec. 123.73 shall constitute the criteria used to evaluate the 
competency of the carrier-applicant to participate in the LBCIP. 
Following Customs evaluation of the information provided, Customs shall 
notify the carrier-applicant in writing of Customs determination as to 
whether the carrier-applicant is qualified to participate in the LBCIP. 
In cases of selection, Customs will sign and return one of the copies 
of the written agreement. In cases of nonselection, the written notice 
shall clearly state the reason(s) for denial and recite the applicant's 
appeal rights under paragraph (b) of this section.
    (a) Grounds for nonselection. The port director may deny a 
carrier's application to participate in the LBCIP for any of the 
following reasons:
    (1) Evidence of any criminal or dishonest conduct involving the 
carrier, a corporate officer, designated drivers, or other person the 
port director determines is exercising substantial ownership or control 
over the carrier operation or corporate officer;
    (2) Evidence of improper use of designated conveyances;
    (3) Evidence that the written agreement was entered into by fraud 
or misstatement of a material fact; or
    (4) A determination is made that the grant of LBCIP privileges 
would endanger the revenue or security of the Customs area.
    (b) Appeal of determination. Carrier-applicants not selected to 
participate in the LBCIP and who wish to appeal the decision shall 
either:
    (1) Appeal the adverse determination in accordance with the appeal 
procedure set forth in Sec. 123.75(c) of this part; or
    (2) Cure any deficiency in the first application by submitting a 
new application to the port director who denied the previous 
application after waiting 60 days from the date of issuance of the 
first determination.


Sec. 123.75  Notice of revocation; appeal of decision.

    (a) Revocation. The port director may immediately revoke a 
carrier's participation in the LBCIP and cancel the written agreement 
for any of the following applicable reasons:
    (1) The selection and written agreement were obtained through fraud 
or the misstatement of a material fact by the carrier;
    (2) The carrier, a corporate officer, or other person the port 
director determines is exercising substantial ownership or control over 
the carrier operation or corporate officer, is indicted for, convicted 
of, or has committed acts which would constitute any felony or 
misdemeanor under

[[Page 33]]

United States Federal or State law. In the absence of an indictment, 
conviction, or other legal process, the port director must have 
probable cause to believe the proscribed acts occurred;
    (3) The carrier-participant allows an unauthorized person or entity 
to use its LBCIP certificate or other approved form of identification;
    (4) The carrier-participant misuses authorized conveyances;
    (5) The carrier-participant refuses or otherwise fails to follow 
any proper order of a Customs officer or any Customs order, rule, or 
regulation;
    (6) The carrier-participant fails to operate in accordance with the 
terms of the written agreement; or
    (7) Continuation of LBCIP privileges would endanger the revenue or 
security of the Customs area in the judgment of the port director.
    (b) Notice. When a decision revoking participation has been made, 
the port director shall notify the carrier-participant of the decision 
in writing. The notice of revocation shall clearly state the reason(s) 
for revocation and recite the applicant's appeal rights under paragraph 
(c) of this section.
    (c) Appeal of decision. Carrier-participants that receive a notice 
of revocation and who wish to appeal the decision shall file a written 
appeal with the Assistant Commissioner, Office of Field Operations, 
U.S. Customs Service, Washington, D.C. 20229, within 10 calendar days 
of receipt of the notice. The appeal shall be filed in duplicate and 
shall set forth the carrier's responses to the grounds specified by the 
port director in the notice. Within 30 working days of receipt of the 
appeal, the Assistant Commissioner, or his designee, shall make a 
determination regarding the appeal and notify the applicant in writing.


Sec. 123.76  Authorization by Customs for participants to use certain 
drivers.

    (a) Responsibilities of LBCIP participants. An LBCIP participant is 
required, pursuant to Sec. 123.73 of this part, to list the drivers 
designated to transport merchandise into the United States for the 
carrier to enable Customs to conduct background checks. An LBCIP 
participant is also required, pursuant to Sec. 123.72 of this part, to 
conduct, to the extent allowed by law, employment and criminal history 
checks on all personnel designated to participate in the LBCIP; these 
personnel include drivers.
    (b) Authorization of drivers by Customs. Customs may not approve a 
carrier for participation in the LBCIP if it determines that there is 
evidence that a driver designated by a carrier has been involved in 
criminal or dishonest conduct or it may request that the carrier not 
use that driver before approving the carrier for participation. Once a 
carrier has been accepted in the LBCIP, Customs may determine to cancel 
a particular driver's authorization to transport merchandise for a 
LBCIP carrier for the reasons set forth in paragraph (c) of this 
section.
    (c) Reasons for cancellation of driver's authorization. Customs may 
cancel a driver's authorization to transport merchandise for an LBCIP 
participant for any of the following reasons:
    (1) The designated driver is indicted for, convicted of, or has 
committed acts which would constitute any felony or misdemeanor under 
United States Federal or State law. In the absence of an indictment, 
conviction, or other legal process, the port director must have 
probable cause to believe the proscribed acts occurred;
    (2) The designated driver allows an unauthorized person or entity 
to use his LBCIP certificate or other approved form of identification;
    (3) The designated driver misuses authorized conveyances;
    (4) The designated driver refuses or otherwise fails to follow any 
proper order of a Customs officer or any Customs order, rule, or 
regulation; or
    (5) The designated driver fails to operate in accordance with the 
terms of the written agreement.
    (d) Notice; rights of driver. (1) If driver not acceptable to 
Customs at time of review of carrier's application. When Customs 
notifies a carrier-applicant, pursuant to Sec. 123.74 of this part, of 
its nonselection into the LBCIP because of conduct committed by a 
driver designated by the carrier or when Customs conditionally approves 
a carrier-applicant's participation in the LBCIP, but does not approve 
a driver designated on the application to be authorized to transport 
merchandise under the LBCIP, Customs will also notify the driver of the 
decision in writing and recite the driver's appeal rights under 
paragraph (e) of this section.
    (2) If driver's authorization cancelled. When Customs makes a 
determination to cancel the authorization of a particular designated 
driver, pursuant to Sec. 123.76(b) of this section, Customs will notify 
both the carrier-participant and the driver of the decision in writing; 
the notice to the driver will recite the driver's appeal rights under 
paragraph (e) of this section.
    (e) Appeal rights of drivers. Drivers who receive a notice of 
nonselection or cancellation and who wish to appeal the decision shall 
file a written appeal with the Assistant Commissioner, Office of Field 
Operations, U.S. Customs Service, Washington, D.C. 20229, within 10 
calendar days of receipt of the notice. The appeal shall be filed in 
duplicate and shall set forth the driver's responses to the grounds 
specified by the port director in the notice. Within 30 working days of 
receipt of the appeal, the Assistant Commissioner, or his designee, 
shall make a determination regarding the appeal and notify the 
applicant in writing.

PART 142--ENTRY PROCESS

    1. The authority citation for part 142 continues to read as 
follows:

    Authority: 19 U.S.C. 66, 1448, 1484, 1624.

    2. Section 142.41 is amended by adding a sentence at the end to 
read as follows:


Sec. 142.41  Line Release.

    * * * At certain high-risk locations along the land borders of the 
United States (the locations to be published in the Federal Register), 
which are approved by Customs for handling Line Release, the use of 
Line Release for particular shipments may be denied by Customs unless 
the imported merchandise is transported by carriers that participate in 
the Land Border Carrier Initiative Program (see, subpart H of part 123 
of this chapter).


Sec. 142.47  [Amended]

    3. In Sec. 142.47, the first sentence of paragraph (b) is amended 
by removing the words ``because of an examination'' and adding, in 
their place, the words ``for the following reasons: because of an 
examination, because a carrier transporting the Line Release 
merchandise is not a participant in the Land Border Carrier Initiative 
Program (LBCIP), or because a driver or conveyance is not authorized in 
accordance with the LBCIP''.

PART 178--APPROVAL OF INFORMATION COLLECTION REQUIREMENTS

    1. The authority citation for part 178 continues to read as 
follows:

    Authority: 5 U.S.C. 301; 19 U.S.C. 1624; 44 U.S.C. 3501 et seq.

    2. Section 178.2 is amended by adding, in appropriate numerical 
order, a listing for Sec. 123.73 to read as follows:


Sec. 178.2  Listing of OMB control numbers.

------------------------------------------------------------------------
                                                             OMB control
       19 CFR Section                  Description               No.
------------------------------------------------------------------------
 

[[Page 34]]

 
                  *        *        *        *        *
Sec.  123.73................  Application to participate in    1515-0217
                               the Land Border Carrier
                               Initiative Program.
 
                  *        *        *        *        *
------------------------------------------------------------------------

Raymond W. Kelly,
Commissioner of Customs.

    Approved: November 4, 1998.
Dennis M. O'Connell,
Acting Deputy Assistant Secretary of the Treasury.
[FR Doc. 98-34675 Filed 12-31-98; 8:45 am]
BILLING CODE 4820-02-P