Seizure of Merchandise

DEPARTMENT OF THE TREASURY

Customs Service

19 CFR Part 162

RIN 1515-AB62

Seizure of Merchandise

AGENCY: Customs Service, Department of the Treasury.

ACTION: Notice of proposed rulemaking.

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SUMMARY: In this document, Customs is proposing to amend its

regulations in response to enactment of the Customs Modernization Act

(``The Mod Act''). Among its other provisions, the Mod Act amended

Section 596(c) of the Tariff Act of 1930 (19 U.S.C. 1595a(c)) to

clarify and codify Customs authority to seize and forfeit merchandise

introduced or attempted to be introduced into the United States

contrary to law. The Mod Act distinguishes between circumstances under

which seizure of such merchandise is mandatory and those in which it is

permissive. The proposed amendment follows the legislation and

specifies the circumstances under which the mandatory and permissive

seizures may take place. The proposed amendment also contains

provisions for the detention of merchandise and the remission of

articles subject to seizure and forfeiture.

DATES: Comments must be received on or before July 3, 1995.

ADDRESSES: Comments (preferably in triplicate) may be submitted to the

Regulations Branch, Office of Regulations and Rulings, U.S. Customs

Service, Franklin Court, 1301 Constitution Avenue, NW., Washington, DC

20229, and may be inspected at Franklin Court, 1099 14th Street NW.,

Washington, DC.

FOR FURTHER INFORMATION CONTACT: Todd Schneider, Penalties Branch (202)

482-6950.

SUPPLEMENTARY INFORMATION:

Background

On December 8, 1993, the President signed the North American Free

Trade Agreement Implementation Act (Pub. L. 103-182). The Customs

Modernization portion of this Act (Title VI), popularly known as the

Customs Modernization Act, or ``the Mod Act'' became effective when it

was signed. Section 624 of Title VI amended section 596(c) of the

Tariff Act of 1930 (19 U.S.C. 1595a(c)) to codify and clarify the

circumstances under which merchandise may be seized and forfeited by

Customs. Customs is now proposing to amend its regulations so that they

will conform to the amended statute.

The Mod Act amendments to section 1595a(c) provide that merchandise

which is introduced or attempted to be introduced into the United

States contrary to law shall be treated in two different manners

depending upon the circumstances of the introduction or attempted

introduction. In instances where the merchandise is stolen, smuggled,

or clandestinely imported or introduced or is a controlled substance or

contraband article, seizure is mandatory.

Paragraph (a) of the proposed amendment addresses conditions where

seizure is mandatory.

Paragraph (b) of the proposed amendment covers those situations in

which seizure is permissive. Seizure is permissive in instances where

the merchandise is subject to health, safety or conservation

restrictions which have not been complied with; when licenses, permits

or other authorizations of a U.S. Government agency are required but do

not accompany the merchandise; when copyright, trademark, or trade name

violations are involved; when trade dress merchandise involved is in

violation of a court order citing section 43 of the Act of July 5, 1946

(15 U.S.C. 1125); and when the merchandise is marked intentionally in

violation of section 304, Tariff Act of 1930 (19 U.S.C. 1304). The

legislation also provides that merchandise may be seized if it is

merchandise for which the importer has received written notices that

previous importations of identical merchandise from the same supplier

were found to have been marked in violation of section 304, Tariff Act

of 1930 (19 U.S.C. 1304).

Paragraph (c) of the proposed amendment provides instructions on

procedures which Customs will follow in resolving questions which

result from seizures which have been made under section 1595a(c).

Paragraph (d) of the proposed amendment contains language

specifying that merchandise which is misclassified or incorrectly

valued, where there is no issue of admissibility, will be subject to

seizure only under section 1592.

The Mod Act also provides that merchandise which is subject to

quantitative restrictions requiring a visa, permit, license or other

similar document from the United States Government or a foreign

government or issuing authority pursuant to a bilateral or multilateral

agreement shall be subject to detention until the appropriate visa,

license, permit or similar document or stamp is presented to Customs.

However, if the visa, license, permit, or similar document or stamp is

counterfeit as presented, the merchandise may be seized. This provision

is contained in paragraph (e) of the proposed amendment.

Comments

Before adopting the proposed amendment, consideration will be given

to any written comments timely submitted to Customs. 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 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 a.m. and 4:30 p.m. at

the [[Page 21779]] Regulations Branch, 1099 14th Street NW., Suite

4000, Washington, DC.

Regulatory Flexibility Act

Because the proposed regulations closely follow legislative

requirements, pursuant to the provisions of the Regulatory Flexibility

Act (5 U.S.C. 601, et seq.), it is certified that the proposed

regulations, if adopted, will not have a significant economic impact on

a substantial number of small entities. Accordingly, it is not subject

to the regulatory analysis or other requirements of 5 U.S.C. 603 and

604.

Executive Order 12866

This amendment 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 Peter T. Lynch,

Regulations Branch, 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 162

Customs duties and inspection, Law enforcement, Seizures and

forfeitures.

Proposed Amendment

It is proposed to amend Part 162, Customs Regulations (19 CFR part

162) as set forth below:

PART 162--RECORDKEEPING, INSPECTION, SEARCH, AND SEIZURE

1. The authority citation for part 162 would be revised in part to

read as follows:

Authority: 5 U.S.C. 301; 19 U.S.C. 66, 1624.

* * * * *

Section 162.23 also issued under 19 U.S.C. 1595a(c).

* * * * *

2. In part 162, a new Sec. 162.23 is added to read as follows:

Sec. 162.23 Seizure under section 596(c), Tariff Act of 1930, as

amended (19 U.S.C. 1595a(c)).

(a) Mandatory seizures. The following, if introduced or attempted

to be introduced into the United States contrary to law, shall be

seized pursuant to section 596(c), Tariff Act of 1930, as amended (19

U.S.C. 1595a(c)):

(1) Merchandise that is stolen, smuggled, or clandestinely imported

or introduced;

(2) A controlled substance, as defined in the Controlled Substance

Act (21 U.S.C. 801 et seq.), not imported in accordance with law; or

(3) A contraband article, as defined in section 1 of the Act of

August 9, 1939 (49 U.S.C. App. 781).

(b) Permissive seizures. The following, if introduced or attempted

to be introduced into the United States contrary to law, may be seized

pursuant to section 596(c), Tariff Act of 1930, as amended (19 U.S.C.

1595a(c)):

(1) Merchandise, the importation or entry of which is subject to

any restriction or prohibition imposed by law relating to health,

safety, or conservation, and which is not in compliance with the

applicable rule, regulation or statute;

(2) Merchandise the importation or entry of which requires a

license, permit or other authorization of a United States Government

agency, and which is not accompanied by such license, permit or

authorization;

(3) Merchandise or packaging in which copyright, trademark or trade

name protection violations are involved (including, but not limited to,

a violation of sections 42, 43 or 45 of the Act of July 5, 1946 (15

U.S.C. 1124, 1125 or 1127), sections 506 or 509 of title 17, United

States Code, or sections 2318 or 2320 of title 18, United States Code);

(4) Trade dress merchandise involved in the violation of a court

order citing section 43 of the Act of July 5, 1946 (15 U.S.C. 1125);

(5) Merchandise marked intentionally in violation of 19 U.S.C.

1304;

(6) Merchandise for which the importer has received written notices

that previous importations of identical merchandise from the same

supplier were found to have been in violation of 19 U.S.C. 1304; or

(7) Merchandise subject to quantitative restrictions, found to bear

a counterfeit visa, permit, license, or similar document, or stamp from

the United States or from a foreign government or issuing authority

pursuant to a multilateral or bilateral agreement (but see paragraph

(e), of this section).

(c) Resolution of seizure under section 1595a(c). When merchandise

is either required or authorized to be seized under this section, the

forfeiture incurred may be remitted in accord with 19 U.S.C. 1618, to

include as a possible option the exportation of the merchandise under

such conditions as Customs shall impose, unless its release would

adversely affect health, safety, or conservation, or be in

contravention of a bilateral or multilateral agreement or treaty.

(d) Seizure under 19 U.S.C. 1592. If merchandise is imported,

introduced or attempted to be introduced contrary to a provision of law

governing its classification or value, and there is no issue of

admissibility, such merchandise shall not be seized pursuant to 19

U.S.C. 1595a(c). Any seizure of such merchandise shall be in accordance

with section 1592 (see Sec. 162.75).

(e) Detention only. Merchandise subject to quantitative

restrictions requiring a visa, permit, license, or other similar

document, or stamp from the United States Government or from a foreign

government or issuing authority pursuant to a bilateral or multilateral

agreement, shall be subject to detention in accordance with 19 U.S.C.

1499, unless the appropriate visa, permit, license, or similar

document, or stamp is presented to Customs (but see paragraph (b)(7) of

this section for instances when seizure may occur).

Michael H. Lane,

Acting Commissioner of Customs.

Approved: April 5, 1995.

John P. Simpson,

Deputy Assistant Secretary of the Treasury.

[FR Doc. 95-10855 Filed 5-2-95; 8:45 am]

BILLING CODE 4820-02-P