[Federal Register Volume 65, Number 144 (Wednesday, July 26, 2000)]
[Rules and Regulations]
[Pages 45873-45875]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 00-18819]


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DEPARTMENT OF THE TREASURY

Customs Service

19 CFR Part 12

[T.D. 00-52]
RIN 1515-AC36


Forced or Indentured Child Labor

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

ACTION: Final rule.

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SUMMARY: This document amends the Customs Regulations with the 
particular intent to stop illegal shipments of products of forced or 
indentured child labor and to punish violators. The document amends the 
Customs Regulations to provide for the seizure and forfeiture of 
merchandise that is found to be a prohibited importation under 19 
U.S.C. 1307, concerning products of convict labor, forced labor, or 
indentured labor under penal sanctions, including forced or indentured 
child labor under penal sanctions. The amendment makes clear that 
nothing in the Customs Regulations precludes Customs from seizing for 
forfeiture merchandise imported in violation of applicable Federal 
criminal law dealing with prison-labor goods. The amendments form part 
of a vigorous law enforcement initiative undertaken by Customs to 
prohibit the importation of merchandise produced by forced or 
indentured child labor.

EFFECTIVE DATE: August 25, 2000.

FOR FURTHER INFORMATION CONTACT: Glen E. Vereb, Office of Regulations 
and Rulings, 202-927-2320.

SUPPLEMENTARY INFORMATION:

Background

    Section 307 of the Tariff Act of 1930 (19 U.S.C. 1307) generally 
prohibits the importation of goods, wares, articles, and merchandise 
mined, produced, or manufactured wholly or in part in any foreign 
country by convict labor or/and forced labor or/and indentured labor 
under penal sanctions. Such prohibitions are enforced by Customs under 
Secs. 12.42-12.44 of the Customs Regulations (19 CFR 12.42-12.44).
    If Customs finds, on the basis of information presented and 
investigated under the procedures described in Sec. 12.42(a)-(e), that 
a class of merchandise is subject to the prohibition under section 307, 
the Commissioner of Customs, with the approval of the Secretary of the 
Treasury, will publish a finding to this effect in the weekly issue of 
the Customs Bulletin and in the Federal Register, as prescribed in 
Sec. 12.42(f).
    Under Sec. 12.43, an importer is afforded the opportunity to 
furnish proof within 3 months after importation in order to establish 
the admissibility of particular imported merchandise detained by 
Customs under Sec. 12.42(e) or covered by a finding under 
Sec. 12.42(f), that the particular merchandise being imported is not 
itself produced with the use of a type of labor specified in section 
307.
    Section 12.44 deals with the disposition of merchandise determined 
to be inadmissible under section 307. Currently, Sec. 12.44 provides in 
pertinent part that such merchandise may be exported at any time within 
the 3-month period after importation. If not so exported and if no 
proof of admissibility has been provided, the importer is advised in 
writing that the merchandise is excluded from entry and, 60 days 
thereafter, the merchandise is deemed abandoned and will be destroyed 
unless it has been exported or a protest has been filed under 19 U.S.C. 
1514.

Forced or Indentured Child Labor

    A general provision in the Fiscal Year (FY) 1998 Treasury 
Appropriations Act

[[Page 45874]]

made clear what is implicit in the law: that merchandise manufactured 
with the use of forced or indentured child labor under penal sanctions 
falls within the prohibition of section 1307. This Act prohibits 
Customs from using any of the appropriation to permit the importation 
into the United States of such merchandise. In addition, in the last 
three State of the Union addresses, President Clinton has pledged to 
fight abusive child labor.
    Following the enactment of the FY 1998 appropriations amendment 
regarding forced or indentured child labor under penal sanctions, both 
the Treasury Department and the National Economic Council chaired in-
depth interagency discussions aimed at strengthening the capability of 
the Executive Branch to enforce the prohibition on imports that were 
produced by forced or indentured child labor under penal sanctions.
    To this end, the Treasury Department, by a document published in 
the Federal Register (63 FR 30813) on June 5, 1998, established a 
Treasury Advisory Committee on International Child Labor Enforcement, 
whose ultimate purpose was to support a vigorous law enforcement 
initiative to stop illegal shipments of products of forced or 
indentured child labor under penal sanctions and to punish violators. 
By a document published in the Federal Register (65 FR 11831) on March 
6, 2000, the Treasury Department determined that it was in the public 
interest to renew this Advisory Committee for an additional two-year 
term beyond its original expiration date (June 22, 2000).

Proposed Amendment

    As part of the foregoing initiative, by a document published in the 
Federal Register (64 FR 62618) on November 17, 1999, Customs proposed 
to amend Sec. 12.42(a) to make expressly clear that merchandise 
manufactured with the use of forced or indentured child labor under 
penal sanctions falls within the prohibition of 19 U.S.C. 1307.
    Also, Customs proposed to amend Sec. 12.44 regarding the 
disposition to be accorded merchandise that is a prohibited importation 
under section 307. Under this proposed amendment, in the case of 
merchandise covered by a finding under Sec. 12.42(f), if the 
Commissioner of Customs advised the port director that the proof 
furnished under Sec. 12.43 did not establish the admissibility of a 
particular importation of such merchandise, or if no proof was timely 
furnished in this regard, the merchandise would then be seized and be 
subject to the commencement of forfeiture proceedings under subpart E 
of part 162 of the Customs Regulations (19 CFR part 162, subpart E). 
Currently, such merchandise is permitted to be exported at any time 
before it is deemed to have been abandoned.
    In addition, Customs proposed to amend Sec. 12.44 to state 
explicitly that nothing in the Customs Regulations (19 CFR Chapter I) 
precluded Customs from seizing for forfeiture merchandise imported in 
violation of applicable Federal criminal law (18 U.S.C. 1761-1762) 
dealing with prison-labor goods.

Discussion of Comment

    Counsel on behalf of a domestic trade association submitted the 
only comment in response to the notice of proposed rulemaking. The 
trade association supported the proposed amendments. However, the 
association asked that Sec. 12.42 also be amended to impose a one-year 
time limit within which Customs would need to complete, and take 
appropriate action in connection with, an investigation undertaken 
pursuant to 19 U.S.C. 1307. In this regard, the association wanted 
Sec. 12.42 further revised to require that persons presenting 
information of an alleged violation of section 1307 be kept informed, 
along with any interested domestic producers, and any other interested 
parties, regarding the continuing progress of an investigation. 
Finally, the association requested that Sec. 12.42(e) be amended to 
require that the Commissioner withhold release of any merchandise 
undergoing investigation for a possible violation of 19 U.S.C. 1307 if 
there were reasonable grounds to believe that the merchandise was 
indeed a prohibited importation under section 1307.

Customs Response

    Customs believes that it would be inappropriate and 
counterproductive to impose an inflexible time limit in Sec. 12.42 for 
any investigation initiated under 19 U.S.C. 1307. The quality of the 
information received regarding suspected violations of section 1307 
varies substantially in each case. Extensive and lengthy investigation 
is required in some cases, and significant barriers (e.g., cultural, 
political, geographic) must be overcome, in order to obtain the 
evidence needed to support lawful Customs action under the statute. 
Also, the disclosure of information regarding ongoing Customs 
investigations is generally contrary to agency policy.
    Lastly, Sec. 12.42(e) already provides that if the Commissioner of 
Customs finds at any time that information available reasonably but not 
conclusively indicates that merchandise within the purview of section 
1307 is being, or is likely to be, imported, the Commissioner will 
notify all port directors accordingly. The port directors are then to 
withhold the release of any such merchandise pending instructions from 
the Commissioner as to whether the merchandise may be released 
otherwise than for exportation. Customs believes that this is 
sufficient and that no amendment of Sec. 12.42(e) is needed under the 
circumstances.

Conclusion

    In view of the foregoing, and following careful consideration of 
the issues raised by the commenter and further review of the matter, 
Customs has concluded that the proposed amendments should be adopted.

Additional Changes

    In addition, Customs has determined that the phrase, ``including 
forced or indentured child labor'', appearing in proposed 
Sec. 12.42(a), should be revised to read, ``including forced or 
indentured child labor under penal sanctions'', in order to conform 
precisely with the plain language and requirements of 19 U.S.C. 1307. 
Also, proposed Sec. 12.44 is revised essentially to retain the 
provision contained in the current regulation (19 CFR 12.44 (1999)) 
regarding the disposition to be accorded merchandise that has been 
detained under Sec. 12.42(e) but that is not subject to a finding under 
Sec. 12.42(f).

Regulatory Flexibility Act and Executive Order 12866

    Because the importation of goods, wares, articles, and merchandise 
mined, produced or manufactured wholly or in part in any foreign 
country by forced labor is prohibited, Customs anticipates that there 
will not be a substantial number of small entities that would become 
involved in a prohibited importation. The rule applies to products 
subject to a ``finding'' that the class of merchandise was produced 
with forced or indentured child labor under penal sanctions, a more 
formal Customs action with a higher burden of proof than simple Customs 
detention of merchandise based on reasonable suspicion. Also the range 
of countries and products which are likely to be implicated in findings 
of forced or indentured child labor under penal sanctions is likely to 
be fairly narrow. Accordingly, it is certified, in accordance with the 
Regulatory Flexibility Act (5 U.S.C. 601 et seq.) that this final rule 
will not have a significant economic impact on a substantial number of 
small entities. Nor does the

[[Page 45875]]

document meet the criteria for a ``significant regulatory action'' as 
specified in E.O. 12866.

List of Subjects in 19 CFR Part 12

    Customs duties and inspection, Entry of merchandise, Imports, 
Prohibited merchandise, Restricted merchandise, Seizure and forfeiture.

Amendments to the Regulations

    Part 12, Customs Regulations (19 CFR part 12), is amended as set 
forth below.

PART 12--SPECIAL CLASSES OF MERCHANDISE

    1. The general authority citation for part 12 continues to read as 
follows, and the relevant specific sectional authority is revised to 
read as follows:

    Authority: 5 U.S.C. 301; 19 U.S.C. 66, 1202 (General Note 20, 
Harmonized Tariff Schedule of the United States (HTSUS)), 1624;
* * * * *
    Sections 12.42 through 12.44 also issued under 19 U.S.C. 1307 and 
Pub. L. 105-61 (111 Stat. 1272);
* * * * *

    2. Section 12.42 is amended by revising the first sentence of 
paragraph (a) to read as follows:


Sec. 12.42  Findings of Commissioner of Customs.

    (a) If any port director or other principal Customs officer has 
reason to believe that any class of merchandise that is being, or is 
likely to be, imported into the United States is being produced, 
whether by mining, manufacture, or other means, in any foreign locality 
with the use of convict labor, forced labor, or indentured labor under 
penal sanctions, including forced child labor or indentured child labor 
under penal sanctions, so as to come within the purview of section 307, 
Tariff Act of 1930, he shall communicate his belief to the Commissioner 
of Customs. * * *
* * * * *
    3. Section 12.44 is revised to read as follows:


Sec. 12.44  Disposition.

    (a) Export and abandonment. Merchandise detained pursuant to 
Sec. 12.42(e) may be exported at any time prior to seizure pursuant to 
paragraph (b) of this section, or before it is deemed to have been 
abandoned as provided in this section, whichever occurs first. Provided 
no finding has been issued by the Commissioner of Customs under 
Sec. 12.42(f) and the merchandise has not been exported within 3 months 
after the date of importation, the port director will ascertain whether 
the proof specified in Sec. 12.43 has been submitted within the time 
prescribed in that section. If the proof has not been timely submitted, 
or if the Commissioner of Customs advises the port director that the 
proof furnished does not establish the admissibility of the 
merchandise, the port director will promptly advise the importer in 
writing that the merchandise is excluded from entry. Upon the 
expiration of 60 days after the delivery or mailing of such advice by 
the port director, the merchandise will be deemed to have been 
abandoned and will be destroyed, unless it has been exported or a 
protest has been filed as provided for in section 514, Tariff Act of 
1930.
    (b) Seizure and summary forfeiture. In the case of merchandise 
covered by a finding under Sec. 12.42(f), if the Commissioner of 
Customs advises the port director that the proof furnished under 
Sec. 12.43 does not establish the admissibility of the merchandise, or 
if no proof has been timely furnished, the port director shall seize 
the merchandise for violation of 19 U.S.C. 1307 and commence forfeiture 
proceedings pursuant to part 162, subpart E, of this chapter.
    (c) Prison-labor goods. Nothing in this chapter precludes Customs 
from seizing for forfeiture merchandise imported in violation of 18 
U.S.C. 1761 and 1762 concerning prison-labor goods.

Raymond W. Kelly,
Commissioner of Customs.
    Approved: June 19, 2000.
John P. Simpson,
Deputy Assistant Secretary of the Treasury.
[FR Doc. 00-18819 Filed 7-25-00; 8:45 am]
BILLING CODE 4820-02-P