[Federal Register Volume 65, Number 241 (Thursday, December 14, 2000)]
[Rules and Regulations]
[Pages 78090-78093]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 00-31882]


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DEPARTMENT OF THE TREASURY

Customs Service

19 CFR Parts 162, 171 AND 178

[T.D. 00-88)
RIN 1515-AC69


Civil Asset Forfeiture

AGENCY: Customs Service, Department of the Treasury.

ACTION: Interim rule; solicitation of comments.

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SUMMARY: This document amends the Customs Regulations, on an interim 
basis, in order to implement the provisions of the Civil Asset 
Forfeiture Reform Act of 2000 (CAFRA), insofar as these provisions are 
applicable to laws enforced by Customs. The CAFRA creates general rules 
governing civil forfeiture proceedings. However, CAFRA specifically 
exempts from certain of its requirements forfeitures that are made 
under a number of statutes, among these being: The Tariff Act of 1930 
or any other provision of law codified in title 19, United States Code; 
the Internal Revenue Code of 1986; the Federal Food, Drug, and Cosmetic 
Act; and the Trading with the Enemy Act. In addition, the interim rule 
makes minor conforming changes to the Customs Regulations in order to 
reflect a recodification of existing statutory law.

DATES: Interim rule is effective August 23, 2000, and applies to any 
forfeiture proceeding commenced on or after August 23, 2000. Comments 
must be received on or before February 12, 2001.

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

FOR FURTHER INFORMATION CONTACT: Jeremy Baskin, Penalties Branch (202-
927-2344).

SUPPLEMENTARY INFORMATION:

Background

    Section 2 of the Civil Asset Forfeiture Reform Act of 2000 
(``CAFRA''), Pub. L. 106-185, 114 Stat. 202, enacted on April 25, 2000, 
and codified at title 18, United States Code, section 983 (18 U.S.C. 
983), creates general rules for civil forfeiture proceedings. This 
section of the CAFRA, however, specifically exempts from certain of its 
requirements forfeitures undertaken pursuant to the following statutes: 
The Tariff Act of 1930 or any other provision of law codified in title

[[Page 78091]]

19, United States Code; the Internal Revenue Code of 1986; the Federal 
Food, Drug, and Cosmetic Act (21 U.S.C. 301 et seq.); the Trading with 
the Enemy Act (50 U.S.C. App. 1 et seq.); and section 1 of title VI of 
the Act of June 15, 1917 (40 Stat. 233; 22 U.S.C. 401).
    Under section 2 of the CAFRA, specified duties and obligations are 
placed upon Government officials to be designated by seizing agencies. 
To clarify and implement the law in this regard, the interim rule 
identifies the particular Customs official who will grant extensions of 
time for sending notices of seizure, as authorized by 18 U.S.C. 
983(a)(1)(B), and it identifies those Customs officials who will rule 
on requests for immediate release of seized property, as authorized by 
18 U.S.C. 983(f)(2). The interim regulations also provide clear 
guidance to Customs officials in the processing of property seized for 
forfeiture under the CAFRA.
    To address these matters, the interim rule adds a new subpart H to 
part 162 of the Customs Regulations (19 CFR part 162, subpart H).
    Furthermore, the interim regulations make clear that acceptance of 
an administrative forfeiture remission does not make the government 
liable for fees, costs or interest pursuant to 28 U.S.C. 2465. In this 
respect, a new Sec. 171.24 is added to the Customs Regulations (19 CFR 
171.24) to provide that, in the case of any seizure for forfeiture that 
is remitted or mitigated under 19 U.S.C. 1618 or 31 U.S.C. 5321, the 
person who accepts such a remission or mitigation decision will not be 
considered to have substantially prevailed in a civil forfeiture 
proceeding for purposes of being able to collect any fees, costs or 
interest from the Government.
    With the exception of the amendment providing for a new 
Sec. 171.24, seizures exempt from the requirements of section 2 of the 
CAFRA will be processed in accordance with existing regulations.
    Lastly, Pub. L. 103-272, 108 Stat. 745, dated July 5, 1994, 
reenacted and recodified the provisions of title 49, United States 
Code. To this end, the interim rule removes the reference to ``49 
U.S.C. App.'' appearing in part 171, subpart F, of the Customs 
Regulations (19 CFR part 171, subpart F), and adds in its place a 
reference to ``49 U.S.C. 80303'', in accordance with the recodification 
of the statutory provision specifically made by section 1(e) of Public 
Law 103-272.

Comments

    Before adopting these interim regulations as a final rule, 
consideration will be given to any written comments that are timely 
submitted to Customs. Customs specifically requests comments on the 
clarity of this interim rule and how it may be made easier to 
understand. Comments submitted will be available for 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 regular 
business days between the hours of 9:00 a.m. and 4:30 p.m. at the 
Regulations Branch, U.S. Customs Service, 1300 Pennsylvania Avenue, 
NW., 3rd Floor, Washington, D.C.

Inapplicability of Notice and Delayed Effective Date Requirements, 
the Regulatory Flexibility Act and Executive Order 12866

    The interim regulations do not impose any additional requirements 
upon the public. Rather, these regulations are intended both to confer 
certain additional rights on property owners or interested parties, and 
to provide clear guidance to Customs officials in the processing of 
property seized for forfeiture under the CAFRA. Accordingly, it has 
been determined that notice and public comment procedures are 
inapplicable and unnecessary in this case pursuant to 5 U.S.C. 
553(b)(B), and pursuant to 5 U.S.C. 553(d)(1) and (d)(3), a delayed 
effective date is not required. Because this document is not subject to 
the requirements of 5 U.S.C. 553, as noted, it is not subject to the 
provisions of the Regulatory Flexibility Act (5 U.S.C. 601 et seq.). 
Nor do the interim amendments result in a ``significant regulatory 
action'' as specified in E.O. 12866.

Paperwork Reduction Act

    The collection of information contained in this interim rule has 
already been approved by the Office of Management and Budget (OMB) in 
accordance with the Paperwork Reduction Act of 1995 (44 U.S.C. 3507) 
and assigned OMB Control Number 1515-0052 (Petition for remission or 
mitigation of forfeitures and penalties incurred). This collection 
encompasses a claim for seized property in a non-judicial civil 
forfeiture proceeding. This rule does not present any material change 
to the existing approved information collection. An agency may not 
conduct, 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.
    Part 178, Customs Regulations (19 CFR part 178), containing the 
list of approved information collections, is appropriately revised to 
make reference to OMB Control Number 1515-0052.

List of Subjects

19 CFR Part 162

    Administrative practice and procedure, Customs duties and 
inspection, Drug traffic control, Imports, Inspection, Law enforcement, 
Penalties, Prohibited merchandise, Reporting and recordkeeping 
requirements, Seizures and forfeitures.

19 CFR Part 171

    Administrative practice and procedure, Customs duties and 
inspection, Law enforcement, Penalties, Seizures and forfeitures.

19 CFR Part 178

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

Amendments to the Regulations

    Parts 162, 171 and 178, Customs Regulations (19 CFR parts 162, 171 
and 178), are amended as set forth below.

PART 162--INSPECTION, SEARCH, AND SEIZURE

    1. The general authority citation for part 162 continues to read as 
follows, and a specific authority citation for Secs. 162.91-162.96 is 
added to read as follows:

    Authority: 5 U.S.C. 301; 19 U.S.C. 66, 1592, 1593a, 1624.
* * * * *
    Sections 162.91 through 162.96 also issued under 18 U.S.C. 983.

    2. Part 162 is amended by adding a new subpart H to read as 
follows:

Subpart H--Civil Asset Forfeiture Reform Act

Sec.
162.91  Exemptions.
162.92   Notice of seizure.
162.93   Failure to issue notice of seizure.
162.94   Filing of a claim for seized property.
162.95   Release of seized property.
162.96   Remission of forfeitures and payment of fees, costs or 
interest.

Subpart H--Civil Asset Forfeiture Reform Act


Sec. 162.91   Exemptions.

    The provisions of this subpart will apply to all seizures of 
property for civil forfeiture made by Customs officers except for those 
seizures of property to be forfeited under the following statutes: The 
Tariff Act of 1930 or any other provision of law codified in title19,

[[Page 78092]]

United States Code; the Internal Revenue Code of 1986; the Federal 
Food, Drug, and Cosmetic Act (21 U.S.C. 301 et seq.); the Trading with 
the Enemy Act (50 U.S.C. App. 1 et seq.); and section 1 of title VI of 
the Act of June 15, 1917 (40 Stat. 233; 22 U.S.C. 401).


Sec. 162.92  Notice of seizure.

    (a) Generally. Customs will send written notice of seizure as 
provided in this section to all known interested parties as soon as 
practicable. Except as provided in paragraphs (b), (c) and (d) of this 
section, in no case may notice be sent more than 60 calendar days after 
the date of seizure. Any notice issued under this section will include 
all information that is required by Sec. 162.31(a) and (b) of this 
part.
    (b) Seizure by state or local authorities. In a case in which 
property is seized by a state or local law enforcement agency and 
turned over to Customs for the purpose of forfeiture under Federal law, 
notice will be sent not more than 90 calendar days after the date of 
seizure by the State or local law enforcement agency.
    (c) Identity or interest of party not determined. If the identity 
or interest of a party is not determined until after the seizure or 
turnover, but it is determined before a declaration of forfeiture, 
notice will be sent to such interested party not later than 60 calendar 
days after the determination by Customs of the identity of the party or 
the party's interest.
    (d) Extensions by Customs. (1) The Assistant Commissioner, 
Investigations, or his designee, may extend the period for sending 
notice under this section for a period not to exceed 30 calendar days, 
if it is determined that issuance of the notice within 60 calendar days 
of seizure may have an adverse result, including:
    (i) Endangering the life or physical safety of an individual;
    (ii) Flight from prosecution;
    (iii) Destruction of or tampering with evidence;
    (iv) Intimidation of potential witnesses; or
    (v) Otherwise seriously jeopardizing an investigation or unduly 
delaying a trial.
    (2) The period for sending notice of seizure as provided in 
paragraph (d)(1) of this section may not be further extended except by 
order of a court of competent jurisdiction as prescribed in paragraph 
(e) of this section.
    (e) Extensions by a court. Upon motion by the Government, a court 
of competent jurisdiction may extend the period for sending notice for 
a period not to exceed 60 calendar days. This period may be further 
extended by the court for additional 60 calendar-day periods, as 
necessary, if the court determines, based on a written certification of 
the Assistant Commissioner, Investigations, or designee, that the 
conditions set forth in paragraph (d) of this section are present.


Sec. 162.93  Failure to issue notice of seizure.

    If Customs does not send notice of a seizure of property in 
accordance with Sec. 162.92 to the person from whom the property was 
seized, and no extension of time is granted, Customs will return the 
property to that person without prejudice to the right of the 
Government to commence a forfeiture proceeding at a later time. Customs 
is not, however, required to return contraband or other property that 
the person may not legally possess.


Sec. 162.94  Filing of a claim for seized property.

    (a) Generally. In lieu of filing a petition for relief in 
accordance with part 171 of this chapter, any person claiming property 
seized by Customs in a non-judicial civil forfeiture proceeding may 
file a claim with the appropriate Fines, Penalties, and Forfeitures 
Officer.
    (b) When filed. Unless the Fines, Penalties, and Forfeitures 
Officer provides additional time to the person filing a claim for 
seized property pursuant to paragraph (a) of this section, the claim 
must be filed within 35 calendar days after the date the notice of 
seizure is mailed. If the notice of seizure is not received, a claim 
may be filed not later than 30 calendar days after the date of final 
publication of notice of seizure and intent to forfeit the property.
    (c) Form of claim. The claim must be in writing but need not be 
made in any particular form.
    (d) Content of claim. The claim must:
    (1) Identify the specific property being claimed;
    (2) State the claimant's interest in the property (and provide 
customary documentary evidence of such interest, if available) and 
state that the claim is not frivolous; and
    (3) Be made under oath, subject to penalty of perjury.
    (e) Effect of claim. Not later than 90 calendar days after a claim 
has been filed, the Government will file an appropriate complaint for 
forfeiture, except that a court in the district in which the complaint 
will be filed may extend the period for filing a complaint for good 
cause shown or upon agreement of the parties.


Sec. 162.95  Release of seized property.

    (a) Generally. Except as provided in paragraph (b) of this section, 
a claimant to seized property under 18 U.S.C. 983(a) is entitled to 
immediate release of the property if:
    (1) The claimant has a possessory interest in the property;
    (2) The claimant has sufficient ties to the community to provide 
assurance that the property will be available at the time of trial;
    (3) The continued possession of the property by Customs pending the 
final disposition of forfeiture proceedings will cause substantial 
hardship to the claimant, such as preventing an individual from 
working, or leaving an individual homeless; and
    (4) The claimant's likely hardship from the continued possession by 
Customs of the seized property outweighs the risk that the property 
will be destroyed, damaged, lost, concealed, or transferred if it is 
returned to the claimant during the pendency of the proceedings.
    (b) Exceptions. Immediate release of seized property under 
paragraph (a) of this section will not apply if the seized property:
    (1) Is contraband, currency or other monetary instrument, or 
electronic funds, unless, in the case of currency, other monetary 
instrument or electronic funds, such property comprises the assets of a 
legitimate business;
    (2) Is to be used as evidence of a violation of the law;
    (3) By reason of design or other characteristic, is particularly 
suited for use in illegal activities; or
    (4) Is likely to be used to commit additional criminal acts if 
returned to the claimant.
    (c) Request for release. A claimant seeking release of property 
under this section must request possession of the property from the 
Fines, Penalties, and Forfeitures Officer who issued the notice of 
seizure. The request need not be made in any particular form, but must 
be in writing and set forth the basis on which the requirements of 
paragraph (a) of this section have been met. The request may be filed 
at any time during which the property remains under seizure.
    (d) Granting request for release. The Fines, Penalties, and 
Forfeitures Officer may release the property if it is determined to be 
appropriate under paragraphs (a) through (c) of this section.
    (e) Denial of or failure to act on request for release. If the 
Fines, Penalties, and Forfeitures Officer denies the request for 
release or fails to make a decision on the request by the 15th

[[Page 78093]]

calendar day after the date the request is received by Customs, the 
claimant may file a petition in the district court in which the 
complaint has been filed, or, if no complaint has been filed, in the 
U.S. district court in which the seizure warrant was issued or in the 
U.S. district court for the district in which the property was seized.


Sec. 162.96  Remission of forfeitures and payment of fees, costs or 
interest.

    When a person elects to petition for relief before, or in lieu of, 
filing a claim under Sec. 162.94, any seizure subject to forfeiture 
under this subpart may be remitted or mitigated pursuant to the 
provisions of 19 U.S.C. 1618 or 31 U.S.C. 5321(c), as applicable. Any 
person who accepts a remission or mitigation decision will not be 
considered to have substantially prevailed in a civil forfeiture 
proceeding for purposes of collection of any fees, costs or interest 
from the Government.

PART 171--FINES, PENALTIES AND FORFEITURES

    1. The authority citation for part 171 is revised to read as 
follows:

    Authority: 18 U.S.C. 983; 19 U.S.C. 66, 1592, 1593a, 1618, 1624; 
22 U.S.C. 401; 31 U.S.C. 5321; 46 U.S.C. App. 320.

    Subpart F also issued under 19 U.S.C. 1595a, 1605, 1614; 21 U.S.C. 
881 note.

    2. Part 171 is amended by adding a new Sec. 171.24 to read as 
follows:


Sec. 171.24  Remission of forfeitures and payment of fees, costs or 
interest.

    Any seizure subject to forfeiture may be remitted or mitigated 
pursuant to the provisions of 19 U.S.C. 1618 or 31 U.S.C. 5321, as 
applicable. Any person who accepts a remission or mitigation decision 
will not be considered to have substantially prevailed in a civil 
forfeiture proceeding for purposes of collection of any fees, costs or 
interest from the Government.


Sec. 171.52  [Amended]

    3. In Sec. 171.51(b)(7) and 171.52(a), the reference to ``49 U.S.C. 
App. 782'' is removed and, in its place, a reference to ``49 U.S.C. 
80303'' is added.

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 the following in appropriate 
numerical sequence according to the section number under the columns 
indicated:


Sec. 178.2  Listing of OMB control numbers.

------------------------------------------------------------------------
                                                             OMB Control
          19 CFR Section                  Description            No.
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*                  *                  *                  *
                  *                  *                  *
Secs.  162.94, 162.95(c).........  Petition for remission      1515-0052
                                    or mitigation of
                                    forefeitures and
                                    penalties incurred.
 
*                  *                  *                  *
                  *                  *                  *
Sec.  171.11.....................  Petition for remission      1515-0052
                                    or mitigation of
                                    forfeitures and
                                    penalties incurred.
 
*                  *                  *                  *
                  *                  *                  *
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    Approved: August 24, 2000.
Raymond W. Kelly,
Commissioner of Customs.
John P. Simpson,
Deputy Assistant Secretary of the Treasury.
[FR Doc. 00-31882 Filed 12-13-00; 8:45 am]
BILLING CODE 4820-02-P