Seizure of Merchandise

DEPARTMENT OF THE TREASURY

19 CFR Part 162

[T.D. 96-2]

RIN 1515-AB62

Seizure of Merchandise

AGENCY: Customs Service, Treasury.

ACTION: Final rule.

-----------------------------------------------------------------------

SUMMARY: In this document, Customs is amending 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

amendment follows the legislation and specifies the circumstances under

which the mandatory and permissive seizures may take place. The

amendment also contains provisions for the detention of merchandise and

the remission of articles subject to seizure and forfeiture.

EFFECTIVE DATE: January 29, 1996.

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.

On May 3, 1995, Customs published a Notice of Proposed Rulemaking

in the Federal Register (60 FR 21788), which proposed amending the

Customs Regulations to reflect these statutory

[[Page 67058]]

changes. Because no comments were received in response to the Notice of

Proposed Rulemaking, Customs is now amending its regulations as

proposed.

The Mod Act amendments to Sec. 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 amendment addresses conditions where seizure

is mandatory.

Paragraph (b) of the 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 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 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 amendment.

Regulatory Flexibility Act

Insofar as the regulations closely follow legislative direction,

pursuant to the provisions of the Regulatory Flexibility Act (5 U.S.C.

601, et seq.), it is certified that the amendment 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.

Amendment

Section 162, Customs Regulations (19 CFR Part 162) is amended as

set forth below:

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

1. The general authority citation for Part 162 is revised and a new

specific cite for Sec. 162.23 is added 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 section 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. 80302).

(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 Sec. 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.

[[Page 67059]]

(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 of this chapter).

(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).

George J. Weise,

Commissioner of Customs.

Approved: November 29, 1995.

Dennis M. O'Connell,

Acting Deputy Assistant Secretary of the Treasury.

[FR Doc. 95-31325 Filed 12-27-95; 8:45 am]

BILLING CODE 4820-02-P