[Federal Register Volume 64, Number 151 (Friday, August 6, 1999)]
[Proposed Rules]
[Pages 42872-42873]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 99-20248]


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DEPARTMENT OF THE TREASURY

Customs Service

19 CFR Part 113

RIN 1515-AC44


Importation and Entry Bond Conditions Regarding Other Agency 
Documentation Requirements

AGENCY: U.S. Customs Service, Department of the Treasury.

ACTION: Notice of proposed rulemaking.

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SUMMARY: This document proposes to amend the Customs Regulations with 
regard to the basic importation and entry bond condition under which, 
if merchandise is conditionally released to the principal named in the 
bond, the principal agrees to furnish Customs with any document or 
evidence as required by law or regulation. The proposed amendment would 
extend this requirement, and consequently the potential liability for 
payment of liquidated damages for a breach of the bond condition, to 
documents and evidence submitted to other Government agencies under 
laws and regulations of those other agencies.

DATES: Comments must be received on or before October 5, 1999.

ADDRESSES: Written comments (preferably in triplicate) may be addressed 
to the Regulations Branch, Office of Regulations and Rulings, U.S. 
Customs Service, 1300 Pennsylvania Avenue, NW., Washington, DC 20229. 
Comments submitted may be inspected at the Regulations Branch, Office 
of Regulations and Rulings, U.S. Customs Service, 1300 Pennsylvania 
Avenue, NW., 3rd Floor, Washington, DC.

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

SUPPLEMENTARY INFORMATION:

Background

    Section 113.62 of the Customs Regulations (19 CFR 113.62) sets 
forth the conditions that are incorporated by reference in a basic 
importation and entry bond (on Customs Form 301) that must be on file 
with Customs when merchandise is imported and entered in the United 
States. Those conditions involve the agreements on the part of the 
obligors under the bond (that is, the principal and/or the surety) to 
take specific actions required by statute or regulation in connection 
with the importation/entry process and to pay liquidated damages as a 
consequence of a default on any agreement in a bond condition.
    Paragraph (c) of Sec. 113.62 concerns the agreement to produce 
documents and evidence. This regulatory text provides that ``[i]f 
merchandise is released conditionally to the principal before all 
required documents or other evidence is produced, the principal agrees 
to furnish Customs with any document or evidence as required by law or 
regulation, and within the time specified by law or regulations'' 
(emphasis added). Since this bond condition refers only to documents or 
other evidence required to be furnished to Customs, it would not apply 
to documents and other evidence that are required by law or regulation 
to be submitted to another Government agency. Under paragraph (l)(1) of 
Sec. 113.62, if the principal defaults on the paragraph (c) agreement, 
the obligors (that is, the principal and surety, jointly and severally) 
agree to pay liquidated damages in an amount generally equal to the 
value of the merchandise involved in the default or another amount that 
may vary depending on the nature of the merchandise or the terms of the 
specific substantive law or regulation at issue.

Basis for the Proposed Regulatory Change

    On January 13, 1999, the Farm Service Agency (FSA) of the 
Department of Agriculture published in the Federal Register (64 FR 
2152) a proposed rule to amend Part 782 of the FSA Regulations (7 CFR 
part 782), which pertains to the end-use certificate program. The end-
use certificate program was established pursuant to section 321(f) of 
the North American Free Trade Agreement Implementation Act (Public Law 
103-182, 107 Stat. 2057), which is codified at 19 U.S.C. 3391(f). The 
program applies to wheat or barley imported into the United States from 
any foreign country or instrumentality thereof that, as of April 8, 
1994, required end-use certificates for imports of U.S.-produced wheat 
or barley. The purpose of the program is to ensure that foreign 
agricultural commodities do not benefit from U.S. export programs (see 
H. Rep. 103-361, 103d Cong., 1st Sess., at 68). The regulations under 
the program, which were promulgated by the FSA in consultation with 
Customs as required by the statute, currently affect only wheat 
originating in Canada (see 7 CFR 782.10(b)).
    The amendments proposed by the FSA in the January 13, 1999 notice 
would affect Secs. 782.2 and 782.12 (7 CFR 782.2 and 782.12), which set 
forth, respectively, the definitions that apply for purposes of Part 
782 and the requirements for completing and filing the end-use 
certificate for imports of wheat originating in Canada. Specifically, 
the proposed regulatory changes would: (1) Amend the definition of 
``importer'' to refer to the party qualifying as importer of record 
under 19 U.S.C. 1484(a); (2) reduce the time period for submission of 
the end-use certificate (form FSA-750) to the FSA from ``within 15 
workdays following the date of entry'' to ``within 10 workdays 
following the date of entry or release'; and (3) add several data 
elements to be set forth on the form FSA-750.
    In addition to a discussion of the proposed regulatory amendments, 
the background portion of the January 13, 1999, FSA notice contains the 
following statement: ``The U.S. Customs Service has informed the 
Department of Agriculture officials that it will be amending the 
provisions of their basic import bond to allow for the assessment of 
damages if there is a failure to provide the End-Use Certificate in the 
time period provided by FSA.'' This statement resulted from discussions 
that Customs personnel had with FSA personnel regarding ways to improve 
the administration and enforcement of the end-use certificate program, 
consistent with the statutory consultative mandate set forth in the 
statute and reflected in the FSA regulations (see 7 CFR 782.3), and 
reflected the fact that the text of present paragraph (c) of 
Sec. 113.62 technically does not apply to the end-use certificate 
because it is not furnished to Customs but rather is submitted to the 
FSA.

[[Page 42873]]

Nature and Scope of the Proposed Regulatory Change

    Based on the above, Customs is proposing in this document to revise 
paragraph (c) of Sec. 113.62 to ensure that it will cover documents and 
other evidence required in connection with the importation/entry 
process that are prescribed by, and submitted to, Government agencies 
other than Customs. Although the need for this proposal arose in the 
specific context of the FSA end-use certificate program, Customs has 
drafted the proposed new regulatory language in broad terms because 
Customs believes that the basic principle at issue should be applicable 
to importation/entry-related requirements of all Government agencies.

Comments

    Before adopting this proposed regulation as a final rule, 
consideration will be given to any written comments timely submitted to 
Customs, including comments on the clarity of this proposed rule and 
how it may be made easier to understand. Comments submitted will be 
available for public inspection in accordance with the Freedom of 
Information Act (5 U.S.C. 552), Sec. 1.4, Treasury Department 
Regulations (31 CFR 1.4), and Sec. 103.11(b), Customs Regulations (19 
CFR 103.11(b)), on normal business days between the hours of 9 a.m. and 
4:30 p.m. at the Regulations Branch, Office of Regulations and Rulings, 
U.S. Customs Service, 1300 Pennsylvania Avenue, NW., 3rd Floor, 
Washington, DC.

Regulatory Flexibility Act and Executive Order 12866

    Pursuant to the provisions of the Regulatory Flexibility Act (5 
U.S.C. 601 et seq.), it is certified that the proposed amendment, if 
adopted, will not have a significant economic impact on a substantial 
number of small entities. The proposed regulatory amendment will not 
require any additional action on the part of the public but rather is 
intended to facilitate Customs enforcement efforts involving existing 
import requirements under other Government agency laws and regulations. 
Accordingly, the proposed amendment is not subject to the regulatory 
analysis or other requirements of 5 U.S.C. 603 and 604. Furthermore, 
this document does not meet the criteria for a ``significant regulatory 
action'' as specified in E.O. 12866.

Drafting Information

    The principal author of this document was Francis W. Foote, Office 
of Regulations and Rulings, U.S. Customs Service. However, personnel 
from other offices participated in its development.

List of Subjects in 19 CFR Part 113

    Bonds, Customs duties and inspection, Imports, Reporting and 
recordkeeping requirements, Surety bonds.

Proposed Amendments to the Regulations

    For the reasons stated above, it is proposed to amend Part 113 of 
the Customs Regulations (19 CFR part 113) as set forth below.

PART 113--CUSTOMS BONDS

    1. The authority citation for Part 113 continues to read in part as 
follows:

    Authority: 19 U.S.C. 66, 1623, 1624.
* * * * *
    2. Section 113.62(c) is revised to read as follows:


Sec. 113.62  Basic importation and entry bond conditions.

* * * * *
    (c) Agreement to produce documents and evidence. If merchandise is 
released conditionally to the principal before production of all 
documents or other evidence required by a law or regulation 
administered by Customs or another government agency, the principal 
agrees to furnish Customs or the other government agency with any such 
document or other evidence as required by, and within the time 
specified in, such law or regulation.
* * * * *
Raymond W. Kelly,
Commissioner of Customs.

    Approved: June 17, 1999.
John P. Simpson,
Deputy Assistant Secretary of the Treasury.
[FR Doc. 99-20248 Filed 8-5-99; 8:45 am]
BILLING CODE 4820-02-P