[Federal Register Volume 68, Number 163 (Friday, August 22, 2003)]
[Proposed Rules]
[Pages 50733-50734]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 03-21574]


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DEPARTMENT OF HOMELAND SECURITY

Bureau of Customs and Border Protection

19 CFR Part 141

RIN 1515-AC15


Anticounterfeiting Consumer Protection Act: Entry Documentation

AGENCY: Customs and Border Protection, Department of Homeland Security.

ACTION: Notice of withdrawal of proposed rulemaking.

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SUMMARY: This document informs the public that the Bureau of Customs 
and Border Protection (CBP) has decided to withdraw the proposal to 
require importers to provide on the invoice a listing of all trademarks 
appearing on imported merchandise and its packaging. The proposal was 
intended to provide a means to determine whether imported merchandise 
bears an infringing trademark in violation of law. The authority for 
the proposal was section 12 of the Anticounterfeiting Consumer 
Protection Act. Based on the comments received in response to the 
proposal and further evaluation of the proposal, CBP has determined 
that the proposed rule would not be an efficient and effective way to 
combat counterfeiting and is withdrawing the proposal.

DATES: As of August 22, 2003, the proposed rule published on September 
13, 1999 (64 FR 49423) is withdrawn.

FOR FURTHER INFORMATION CONTACT: George F. McCray, Esq., Chief, 
Intellectual Property Branch, Office of Regulations and Rulings, 
Customs and Border Protection, (202) 572-8710.

SUPPLEMENTARY INFORMATION:

Background

    On September 13, 1999, Customs (then exclusively under the 
Department of the Treasury; as of March 1, 2003, the U.S. Customs 
Service was transferred to the Department of Homeland Security, and 
became redesignated as the Bureau of Customs and Border Protection 
(CBP)) published a document in the Federal Register (64 FR 49423) 
proposing to amend the Customs Regulations to require all importers to 
provide on each invoice of imported merchandise a listing of any 
trademark information appearing on the imported merchandise, including 
packaging. The proposal was intended to provide a means to determine 
whether imported merchandise bears an infringing trademark in violation 
of law. The authority for the proposal was section 12 of the 
Anticounterfeiting Consumer Protection Act of 1996 (ACPA)(19 U.S.C. 
1484(d)).
    Comments on the proposed amendment were solicited for 60 days.
    The comment period closed November 13, 1999. Fifty-seven comments 
were received. Most were against the proposal. Among the reasons cited 
were that this requirement would present an overwhelming burden to 
importers, trademark owners, manufacturers and suppliers, and establish 
unrealistic recordkeeping requirements. Further, the requirement would 
likely not be complied with by counterfeiters. Additionally, it was 
stated that the proposal would not provide Customs with any new 
enforcement tools to combat the importation of infringing goods into 
the United States.
    The following summarized comments supporting the withdrawal of the 
proposal are noted.

Costs of Compliance Would Be Enormous

    The administrative costs associated with complying with this 
requirement would be enormous. The proposed amendment would cause 
severe and unreasonable burdens to trade and provide only minimal, if 
any, benefit to CBP enforcement.
    The statement in the notice that the proposal would require 
importers to ``identify information of a sort that is already 
maintained by the importer'' is incorrect. The proposal would require 
importers to expend extraordinary efforts canvassing their suppliers--
and their suppliers' third-party suppliers--in order to develop 
required trademark lists. Additionally, even more effort would be 
required to ensure that the lists are up to date and accurately reflect 
the components contained in the merchandise covered by each specific 
invoice.
    Creating and maintaining this database would force importers to 
create new administrative procedures devoted solely to tracking 
trademarks on components contained within final products. It would also 
force importers to devote resources to policing suppliers of such 
components.

[[Page 50734]]

Unrealistic Recordkeeping Requirements

    The proposed requirement would also place difficult recordkeeping 
obligations on foreign suppliers and importers who do not have direct 
knowledge of product components or parts. It would be extremely 
difficult to effectively monitor invoicing practices of thousands of 
different foreign vendors to ensure that trademark information is 
accurately listed on invoices. Additionally, many imported products 
incorporate parts and components which are themselves trademarked 
merchandise. Obtaining information as to the trademark status of parts 
and components would require considerable effort from both vendors and 
importers, and in certain instances would be unavailable in any event.
    Most businesses (particularly those in the areas of high technology 
and communications) have very rapidly changing product specifications, 
often changing in-box components bearing trademarks during a production 
run. The logistics of managing exactly which trademarks are included in 
which box on which shipment would add enormous complexity and cost to 
the supply chain.

No New Enforcement Tools

    Furthermore, it was stated that the proposed regulation would do 
nothing to enhance Customs ability to enforce ACPA. Requiring trademark 
information to be printed on each invoice would not address the 
principal problem, which is mis-declaration by counterfeiters. Listing 
trademarks on an invoice does not help a Customs inspector determine 
whether or not the merchandise bears an infringing trademark. 
Generally, the only method of determining this is through actual 
inspection of the merchandise; in fact, without such inspections, 
substantiating the veracity of the information contained in these 
commercial invoices is extremely difficult.

Trademarked Merchandise Will Be Identified for Criminals and 
Counterfeiters Who Will Not Comply With New Requirements

    The fact that a shipment consists of branded apparel is not 
necessarily apparent from commercial and transportation documents and 
the identity of the trademarks is not always apparent from the name of 
the seller or consignee. This present circumstance makes it difficult 
for criminals to identify shipments of interest. The proposed entry 
documentation requirements would eliminate this margin of safety and 
make it easier for this class of individual to target shipments.

Increased Penalties

    The proposal creates the likelihood that importers of legitimate 
product could be penalized for inadvertent omissions of some protected 
trademarks from the invoice. The regulatory proposal would create an 
affirmative obligation on the part of exporters and importers to list 
all trademarks appearing on the merchandise to be imported into the 
United States, and the omission of information on any trademarked goods 
would impose liability, under 19 U.S.C. 1592(a) for any ``material 
omission''.

Conclusion

    CBP has determined that the proposed rulemaking should be 
withdrawn. After consideration of the comments and further review, CBP 
agrees with the majority of commenters that the proposed approach would 
not be an effective or efficient way to combat counterfeiting. Since 
section 12 of the ACPA does not mandate revision of the Customs 
Regulations, but rather provides authority for CBP to require such 
additional information as the agency determines ``may be necessary'' to 
determine whether imported merchandise bears infringing trademarks, CBP 
does not believe amendment of the Customs Regulations is required; 
Customs already has access to information from other sources which 
effectively serves to identify imported merchandise bearing violative 
trademarks. Accordingly, CBP is withdrawing the proposal published in 
the Federal Register (64 FR 49423) on September 13, 1999. If, in the 
future, a more effective and efficient method of data collection is 
developed to aid in determining whether imported merchandise bears an 
infringing trademark, CBP will consider implementation of such measures 
at that time.

Robert C. Bonner,
Commissioner, Customs and Border Protection.
    Approved: August 18, 2003.
Timothy E. Skud,
Deputy Assistant Secretary of the Treasury.
[FR Doc. 03-21574 Filed 8-21-03; 8:45 am]
BILLING CODE 4820-02-P