Lay Order Period; General Order; Penalties

Federal RegisterSep 25, 1998

Ask Donna

What actually matters in this document.

Text

DEPARTMENT OF THE TREASURY

Customs Service

19 CFR Parts 4, 18, 122, 123, 127, 148, 178 and 192

[T.D. 98-74]

RIN 1515-AB99

Lay Order Period; General Order; Penalties

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

ACTION: Final rule.

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

SUMMARY: This document adopts as a final rule, with some changes,

proposed amendments to the Customs Regulations regarding the obligation

of the owner, master, pilot, operator, or agent of an arriving carrier

to provide notice to Customs and to a bonded warehouse of the presence

of merchandise or baggage that has remained at the place of arrival or

unlading beyond the time period provided by regulation without entry

having been completed. The document requires one of the arriving

carrier's obligated parties, or any subsequent in-bond carrier or party

who accepts custody under a Customs-authorized permit to transfer, to

provide notice of the unentered merchandise or baggage to a bonded

warehouse. The notice to the bonded warehouse proprietor initiates his

obligation to arrange for transportation and storage of the unentered

merchandise or baggage at the risk and expense of the consignee. The

document also amends the Customs Regulations to provide for penalties

or liquidated damages against the owner or master of any conveyance, or

agent thereof, for failure to provide the required notice to Customs or

to a bonded warehouse proprietor. The document also provides for the

assessment of liquidated damages against any subsequent in-bond carrier

or other party who accepts custody of the merchandise or baggage under

a Customs-authorized permit to transfer and who fails to notify Customs

and a bonded warehouse of the presence of such unentered merchandise or

baggage and also against the warehouse operator who fails to take

required possession of the merchandise or baggage. These regulatory

changes reflect amendments to the underlying statutory authority

enacted as part of the Customs Modernization provisions of the North

American Free Trade Agreement Implementation Act. In addition, this

document makes certain conforming changes to the Customs Regulations in

order to reflect a number of other statutory amendments and repeals

enacted by the Customs Modernization provisions and in order to reflect

the recent recodification and reenactment of title 49, United States

Code.

EFFECTIVE DATE: October 26, 1998.

FOR FURTHER INFORMATION CONTACT: For legal matters: Jeremy Baskin,

Penalties Branch, Office of Regulations and Rulings (202) 927-2344. For

operational matters: Steven T. Soggin, Office of Field Operations,

(202) 927-0765.

SUPPLEMENTARY INFORMATION:

Background

On December 8, 1993, amendments to certain Customs and navigation

laws became effective as the result of enactment of the North American

Free Trade Agreement Implementation Act, Public Law 103-182, 107 Stat.

2057. Title VI of that Act sets forth Customs Modernization provisions

that are popularly referred to as the Mod Act.

Section 656 of the Mod Act amended section 448(a) of the Tariff Act

of 1930 (19 U.S.C. 1448(a)) to provide, inter alia, that: (1) the owner

or master of any vessel or vehicle, or the agent thereof, shall notify

Customs of any merchandise or baggage unladen for which entry is not

made within the time prescribed by law or regulation; (2) the Secretary

of the Treasury shall by regulation prescribe administrative penalties

not to exceed $1,000 for each bill of lading for which notice is not

given; (3) any such administrative penalty shall be subject to

mitigation and remission under section 618 of the Tariff Act of 1930,

as amended (19 U.S.C. 1618); and (4) such unentered merchandise or

baggage shall be the responsibility of the master or person in charge

of the importing vessel or vehicle, or agent thereof, until it is

removed from the carrier's control in accordance with section 490 of

the Tariff Act of 1930, as amended (19 U.S.C. 1490). On July 31, 1997,

Customs published a notice of proposed rulemaking in the Federal

of the Customs Regulations (19 CFR 4.37) and add new Sec. 122.50 and

Sec. 123.10 (19 CFR 122.50 and 19 CFR 123.10) to implement these Mod

Act statutory changes for air, land and sea carriers. Under the

proposed regulatory text, importing carriers were to be afforded a

five-working-day lay order period after the conclusion of an initial

five-working-day period after unlading or arrival of merchandise to

notify Customs, in writing or by any Customs-authorized electronic data

interchange system, of the presence of the unentered merchandise or

baggage. Penalties could be imposed if, after the five-day lay order

period, Customs had not been notified of the presence of the unentered

merchandise.

Section 658 of the Mod Act amended section 490 of the Tariff Act of

1930 (19 U.S.C. 1490) to provide that: (1) except in the case of U.S.

government importations, the carrier shall notify the bonded warehouse

of any imported merchandise for which entry is not made within the time

prescribed by law or regulation, or for which entry is incomplete

because of failure to pay estimated duties, fees or interest, or for

which entry cannot be made for want of proper documents or other cause,

or which Customs believes is not correctly and legally invoiced; and

(2) after such notification from the carrier, the bonded warehouse

shall arrange for the transportation and storage of the merchandise at

the risk and expense of the consignee. The July 31, 1997, notice of

proposed rulemaking also proposed to revise paragraph (b) of Sec. 4.37

of the Customs Regulations (19 CFR 4.37) and to include in new

Secs. 122.50 and 123.10 provisions to implement these Mod Act statutory

changes. The proposed regulatory text would have required the carrier

to provide the appropriate notification, in writing or by any Customs-

authorized electronic data interchange system, and also would have

required that the bonded warehouse operator take possession of the

merchandise within five working days after receipt of such notification

or else be liable for liquidated damages under the terms and conditions

of his custodial bond. The proposed regulatory changes also included a

cross-reference to Sec. 113.63(a)(1) of the Customs Regulations (19 CFR

113.63(a)(1)) so as to reflect the existing basis for such custodial

bond liability. In addition, the document proposed to amend paragraph

(d) of Sec. 4.37 by replacing the word ``owner'' with ``consignee'' to

align on the corresponding statutory language.

Section 611 of the Mod Act amended section 436 of the Tariff Act of

1930 (19 U.S.C. 1436), inter alia, by including

[[Page 51284]]

therein a reference to 46 U.S.C. App. 91, with the result that

penalties for violations of outbound vessel manifest filing

requirements would be incurred under the provisions of 19 U.S.C. 1436

rather than under 46 U.S.C. App. 91. The July 31, 1997, document also

proposed to amend Sec. 192.4 of the Customs Regulations (19 CFR 192.4)

to reflect this change.

Section 690 of the Mod Act provided for the repeal of a number of

statutory provisions, some of which are still referred to in Parts 4

and 122 of the Customs Regulations (19 CFR Parts 4 and 122). The July

31, 1997, document also proposed to correct those outdated references

by removing them or replacing them with references to their successor

statutory provisions.

Finally, Public Law 103-272, 108 Stat. 745, dated July 5, 1994,

reenacted and recodified the provisions of title 49, United States

Code. Section 2(b) thereof reenacted as a new section (19 U.S.C. 1644a)

certain title 49 provisions dealing with the application, to civil

aircraft, of the laws and regulations regarding the entry and clearance

of vessels. The July 31, 1997, document proposed to amend Parts 122,

123 and 148 of the Customs Regulations (19 CFR Parts 122, 123 and 148)

by updating the ``49 U.S.C. App.'' statutory references therein to

reflect the changes made by section 2(b) or other provisions of Public

Law 103-272.

The July 31, 1997, notice of proposed rulemaking made provision for

the submission of public comments on the proposed regulatory changes

for consideration before adoption of those changes as a final rule, and

the prescribed public comment period closed on September 29, 1997. A

total of 56 responses to this solicitation of comments were received by

Customs. The comments submitted are summarized and responded to below.

Discussion of Comments

Comment: Forty-one commenters suggested that the proposed five-day

period after landing of merchandise, during which the carrier was

required to notify Customs of unentered merchandise, was too short and

did not reflect current commercial reality. One of the 41 commenters

opposed to the five-day time period indicated that, under current

procedures, approximately 3 percent of arriving merchandise remains

unentered and qualifies for general order. That same commenter

indicated that, under the proposed rule, some 60 percent of cargo would

qualify for general order. If that were to be the case, general order

space would be overtaxed, unnecessary extra paperwork would ensue, and

damage to cargo moving unnecessarily to general order would occur.

One commenter suggested that while 5 working days was too short, 10

working days recognized commercial realities and would be sufficient

time to allow for unentered merchandise to remain in the custody of the

arriving carrier.

Customs response: Customs notes that many of the comments opposed

to the proposed five-day period indicated that the current regulations

provide for a 30-day lay order period, and those commenters objected

that the proposed rule involved a drastic reduction in that regulation-

mandated lay order period. However, these commenters are operating

under a misconception that the current regulations provide for a 30-day

lay order period. They do not. The current regulation addressing lay

order (19 CFR 4.37) requires that merchandise remaining on the wharf or

pier after the fifth working day after unlading shall be deposited in

the public stores or a general order warehouse, except that, at the

written request of the owner, agent, or master of the vessel, the port

director may issue a lay order allowing such merchandise or baggage to

remain on the wharf or pier properly protected for a further period

which shall be specified in the order. As a matter of practice, many

port directors allow for a lay order period of 30 days, but such

practice is discretionary with the port director and is not required by

regulation.

After review of these comments, Customs agrees that there should be

an increase in the proposed time period during which unentered

merchandise may remain at the place of unlading before notification to

Customs of the presence of such merchandise so that it can be moved

into general order. In order to establish uniformity and in

consideration of these comments, the final regulatory texts set forth

below provide for 15 calendar days, rather than the proposed five

working days, during which unentered merchandise may remain at the

place of unlading without notification to Customs. Accordingly, Customs

must be notified of the presence of merchandise that remains unentered

at the wharf, pier, or place of unlading after the fifteenth calendar

day after unlading. In addition, the headings of Sec. 4.37 and of

proposed new Secs. 122.50 and 123.10 have been changed to read

``[g]eneral order'' as there will no longer be a lay order period for

unentered merchandise beyond the original 15-calendar-day time period

after its unlading. The final regulatory texts refer to calendar days

for ease of use of current electronic systems. Additionally, port

directors will not have discretion to extend the time period during

which unentered merchandise may remain on the wharf, pier or place of

unlading.

Comment: Three commenters stated that the proposed regulatory

provision for penalties for the carrier's failure to notify Customs of

landed cargo not covered by a permit for its release is unnecessary and

should be removed.

Customs response: Customs does not agree. As previously noted,

section 656 of the Mod Act amended section 448(a) of the Tariff Act of

1930 (19 U.S.C. 1448(a)) to provide that the owner or master of any

vessel or vehicle, or the agent thereof, shall notify Customs of any

merchandise or baggage unladen for which entry is not made within the

time prescribed by law or regulation. Section 656 also provides that

the Secretary of the Treasury shall by regulation prescribe

administrative penalties not to exceed $1,000 for each bill of lading

for which notice is not given. The language of the statute is clear.

The proposed regulatory texts merely reflected that which is required

by statute.

Comment: Two commenters objected to the wording of the proposed

regulations that stated that Customs ``may'' issue penalties for

failure to notify. The commenters argued that the language of the

statute was mandatory.

Customs response: Customs disagrees. The language of the statute is

mandatory in that the Secretary ``shall'' promulgate regulations.

Assessment of the monetary penalties remains a matter of enforcement

discretion, and the proposed regulatory language therefore should not

be changed from the discretionary ``may'' to the mandatory ``shall.''

As noted above, in addition to the notification to Customs by the

master, owner, or agent thereof of the presence of unentered cargo

pursuant to 19 U.S.C. 1448(a), the carrier, pursuant to 19 U.S.C. 1490,

except in the case of U.S. government importations, is required to

notify the bonded warehouse of any imported merchandise for which entry

is not made within the time prescribed by law or regulation, or for

which entry is incomplete because of failure to pay estimated duties,

fees, or interest, or for which entry cannot be made for want of proper

documents or other cause, or which Customs believes is not correctly

and legally invoiced; and after such notification from the importing

carrier, the bonded warehouse shall arrange for the transportation and

storage of the merchandise at the risk and expense of the consignee.

Thus, the regulatory proposals in the July 31, 1997, document placed an

obligation on the

[[Page 51285]]

carrier to notify Customs of the presence of unentered merchandise

within five working days after the initial five-day period; they also

placed an additional obligation on the carrier to notify the bonded

warehouse within a third consecutive five-day period. However, the

proposed regulations were confusing as to the time periods in which the

carrier or its master or owner or agent was required to act.

Accordingly, the final regulatory texts as set forth below have been

simplified to require the owner or master of any vessel or agent

thereof, the owner or pilot of any aircraft or agent thereof, or the

owner or operator of a vehicle or agent thereof to notify Customs and a

bonded warehouse of all merchandise that remains unentered after a 15-

calendar-day period after its landing. This notification must be

provided within 20 calendar days after landing of the merchandise.

Although not specifically stated in the regulatory texts, it should be

understood that if the 20th calendar day is a Saturday, Sunday, or

holiday, the deadline for notice automatically will be extended to the

next working day after that 20th calendar day. As provided in the

statute and in the proposed regulatory texts, the final texts set forth

below state that a failure to provide timely notification to Customs

may result in the assessment of monetary penalties of up to $1,000 per

bill of lading; however, the final regulatory texts have been modified

to allow for penalties equal to the value of the merchandise on the

bill of lading when that value is less than $1,000.

Comment: One commenter raised a question as to the obligation to

notify Customs of unentered merchandise or baggage that travels under

an immediate transportation (IT) entry to a port of destination or

moves within a port under a permit to transfer to a bonded facility

such as a container station and remains unreleased or unentered after

arrival at the port of destination or bonded facility.

Customs response: Customs agrees that the proposed regulations did

not specifically reflect the obligation of a party to notify Customs

and a Customs-authorized bonded warehouse of such merchandise or

baggage when it remained unreleased and unentered, even though there

was nothing in the statute or proposed texts to distinguish the

merchandise or baggage described by the commenter from any other

merchandise or baggage that was landed from the arriving carrier and

remained unreleased and unentered. In order to clarify this point, a

new paragraph (b) text has been included in Sec. 4.37 and in new

Secs. 122.50 and 123.10 to specify the obligation to notify Customs and

a bonded warehouse of the party who initiates a bonded movement or who

receipts for merchandise or baggage under a permit to transfer when the

merchandise or baggage remains unentered and becomes eligible for

general order. If the party fails to notify Customs or a bonded

warehouse of the unentered or unreleased merchandise or baggage within

the applicable 20-day period, he may be liable for liquidated damages

under the terms and conditions of his custodial bond. See 19 CFR

113.63(c)(4). It should be noted that a claim for liquidated damages

arising from the failure to provide this notification is not considered

to constitute a claim involving merchandise and therefore the

liquidated damages must be assessed at $1,000 per violation.

Comment: Several commenters averred that while the proposed

paragraph (b) text of Sec. 4.37 and of new Secs. 122.50 and 123.10

indicated that Customs may impose a penalty against the owner, master,

or agent for the failure to notify Customs of the presence of the

unentered merchandise, no comparable penalty or liquidated damages

action are stated with regard to the failure to provide notification to

the bonded warehouse. The commenters suggested that penalties or

liquidated damages against the carrier for the failure to notify the

bonded warehouse should be stated.

Customs response: Customs agrees that the carrier should be subject

to claims for liquidated damages for failure to provide notification to

the bonded warehouse. The underlying statute (19 U.S.C. 1490) states

that a carrier ``shall notify'' the bonded warehouse of such

merchandise or baggage. Inasmuch as the carrier retains such

obligation, it is the view of Customs that claims for liquidated

damages in such circumstances are consistent with the basic intent and

requirement of the statute. In this regard, it should be noted that the

carrier remains responsible for the loss or theft of any such unentered

merchandise or baggage until it is properly transferred from the

carrier's control. Moreover, Customs notes that, as in the case of the

proposed paragraph (a) texts discussed above, the proposed paragraph

(b) texts did not address the obligation of a custodian of unentered

merchandise or baggage to provide notification when the merchandise or

baggage travels under an IT entry or moves under a permit to transfer.

Accordingly, the proposed paragraph (b) texts (redesignated below as

paragraph (c) in the texts of Secs. 4.37, 122.50 and 123.10 as a

consequence of the addition of new paragraph (b)) have been modified to

place the obligation to notify the bonded warehouse on the carrier or

any other party to whom custody of the unentered merchandise has been

transferred by a Customs authorized permit to transfer or in-bond

entry. For purposes of clarification, those texts have also been

modified to indicate that the claim for liquidated damages arising for

failure to notify the bonded warehouse shall be assessed at $1,000 per

bill of lading for which notification is not given.

Comment: Several commenters indicated that no provision exists to

allow for the warehouse proprietor to refuse cargo. One of these

commenters pointed out that there may be instances where local

ordinances would prohibit a warehouse proprietor from taking possession

of certain classes of merchandise, such as hazardous merchandise. That

same commenter indicated that there must be a provision in the

regulations to allow the proprietor to have a say over what cargo may

be accepted.

Customs response: Customs agrees that there may be situations where

the general order warehouse may be incapable of storing certain types

of merchandise that require specialized storage facilities. Customs

also acknowledges that no general order warehouse facilities exist at

certain ports. Accordingly, new paragraph (e) texts have been added to

Sec. 4.37 and have been included in new Secs. 122.50 and 123.10 as set

forth below to allow the port director, in ports where there is no

bonded warehouse to accept general order merchandise or if merchandise

requires specialized storage facilities which are unavailable in a

bonded facility, to direct the storage of merchandise by the carrier or

by any other appropriate means. However, Customs does not agree with

the suggestion that the regulations be amended to allow the bonded

warehouse operator to decline to accept merchandise he is capable of

storing. The underlying general order statute does not allow for such

discretion on the part of the general order warehouse operator.

Comment: Two commenters inquired as to whether carriers can delay

delivery of freight to bonded warehouses if freight charges have not

been satisfied.

Customs response: Customs notes that the regulations do not

authorize such delay. The current applicable regulation (19 CFR 127.31)

provides for the payment of liens for freight from the proceeds of sale

of the unentered merchandise.

[[Page 51286]]

Comment: One commenter indicated that a bonded warehouse operator

should not be subject to liquidated damages for untimely taking

possession of such merchandise unless he has given consent to handle

the merchandise.

Customs response: Customs disagrees. The underlying statutory

authority does not mention that bonded warehouse operators must consent

to the acceptance of any merchandise. Customs is unwilling to impose

such a condition by regulation.

Additional Changes to the Regulations

In addition to, or as a consequence of, the changes mentioned above

in the discussion of the public comments, the final regulatory text

amendments set forth below reflect the following changes that were not

included in the July 31, 1997, proposals.

1. Section 4.37 is set forth as an entirely revised section in

order to accommodate the changes discussed above as well as the

following further changes:

a. The texts of present paragraphs (e) and (f) have been omitted

from the revised section because they are not consistent with the

current statutory responsibilities as reflected elsewhere in the

section text;

b. The text of the last sentence of proposed paragraph (b) is set

forth separately as a new paragraph (d) in the revised section text;

c. The text of present paragraph (c) is designated as paragraph (f)

in the revised section and the text of the paragraph has been modified

to be more consistent with the language of the underlying statutory

authority (19 U.S.C. 1457); and

d. The text of present paragraph (d) is designated as paragraph (g)

in the revised section and the text of the paragraph has been modified

by removing the reference to the public stores.

2. The organizational and other changes described above in the case

of revised Sec. 4.37 are also reflected in new Secs. 122.50 and 123.10

except that the two new sections have no counterpart to paragraph (f)

of revised Sec. 4.37. Thus, paragraphs (a) through (f) of new

Secs. 122.50 and 123.10 correspond to paragraphs (a) through (e) and

(g) of revised Sec. 4.37.

3. In Part 18 of the regulations (19 CFR Part 18): the reference to

a lay order period has been removed from the first sentence of

paragraph (a)(1) of Sec. 18.2; paragraph (d) of Sec. 18.12 is revised

in order to conform to the new requirements relating to the arrival of

IT entry merchandise at the port of destination; paragraph (e) of

Sec. 18.12 is removed because it is superseded by the new general order

regulatory provisions; and, in Sec. 18.25, the cross-reference to the

regulatory provision covering the import bond is corrected to refer to

the custodial bond provision.

4. Section 659 of the Mod Act amended section 491 of the Tariff Act

of 1930 (19 U.S.C. 1491) to provide that any entered or unentered

merchandise which shall remain in a bonded warehouse pursuant to 19

U.S.C. 1490 for 6 months (rather than 1 year) from the date of

importation thereof, without all estimated duties having been paid,

shall be considered unclaimed and abandoned to the Government and shall

be appraised and sold by Customs at public auction or retained for

official use by a government agency. This document modifies the

provisions of 19 CFR 18.11(a), 18.12(a), 127.2, 127.4, 127.11 and

127.28(d) to reflect the 6-month period set forth in the statute.

5. Finally, in Secs. 122.117(b)(1) and 122.120(d)(1), the

references to lay order are replaced by references to general order in

order to reflect the change in terminology discussed above in

connection with the comments on Sec. 4.37 and new Secs. 122.50 and

123.10.

Conclusion

Accordingly, based on the comments received and the analysis of

those comments as set forth above, and after further review of this

matter, Customs believes that the proposed regulatory amendments should

be adopted as a final rule with certain changes thereto as discussed

above and as set forth below. This document also includes an

appropriate update of the list of information collection approvals

contained in Sec. 178.2 of the Customs Regulations (19 CFR 178.2).

The Regulatory Flexibility Act and Executive Order 12866

For the reasons set forth above and because the amendments conform

the Customs Regulations to statutory requirements that are already in

effect, pursuant to the provisions of the Regulatory Flexibility Act, 5

U.S.C. 601 et seq., it is certified that the amendments will not have a

significant economic impact on a substantial number of small entities.

Accordingly, the amendments are not subject to the regulatory analysis

or other requirements of 5 U.S.C. 603 and 604. Further, this document

does not meet the criteria for a ``significant regulatory action'' as

specified in E.O. 12866.

Paperwork Reduction Act

The collection of information contained in this final rule was not

proposed in the preceding notice of proposed rulemaking. The collection

of information has been reviewed and, pending receipt and evaluation of

public comments, approved by the Office of Management and Budget (OMB)

under 44 U.S.C. 3507(j) and assigned control number 1515-0220. An

agency may not conduct or sponsor, and a person is not required to

respond to, a collection of information unless it displays a valid

control number assigned by OMB.

Comments concerning the collection of information should be

directed to OMB, Attention: Desk Officer for the Department of the

Treasury, Office of Information and Regulatory Affairs, Washington,

D.C. 20503, with a copy to the U.S. Customs Service, Information

Services Group, Office of Finance, 1300 Pennsylvania Avenue, N.W.,

Washington, D.C. 20229. Any such comments should be submitted not later

than 60 days after the date of publication of this document in the

Federal Register. Comments are specifically requested concerning: (a)

whether the collection of information is necessary for the proper

performance of the functions of the U.S. Customs Service, including

whether the information will have practical utility; (b) the accuracy

of the estimated burden associated with the collection of information

(see below); (c) how to enhance the quality, utility, and clarity of

the information to be collected; (d) how to minimize the burden of

complying with the collection of information, including the application

of automated collection techniques or other forms of information

technology; and (e) estimates of capital or start-up costs and costs of

operation, maintenance, and purchase of services to provide

information.

The collection of information in this regulation is in Secs. 4.37,

122.50 and 123.10. This information is required to ensure that

merchandise and baggage imported into the United States is properly

entered or otherwise accounted for in accordance with statutory

requirements. This information will be used by Customs to determine

whether private parties have carried out their statutory

responsibilities, and to assess monetary penalties or liquidated damage

claims for failure to meet those responsibilities, and this information

also will be used by private parties in order to enable them to carry

out their statutory responsibilities and thus avoid a liability for

monetary penalties or

[[Page 51287]]

liquidated damages for failing to do so. The collection of information

is mandatory. The likely respondents and/or recordkeepers are

individuals and business organizations, including importers and

carriers.

Estimated total annual reporting and/or recordkeeping burden: 7,500

hours.

Estimated average annual burden per respondent/ recordkeeper: .25

hours.

Estimated number of respondents and/or recordkeepers: 30,000.

Estimated annual frequency of responses: 1.

List of Subjects

19 CFR Part 4

Cargo vessels, Common carriers, Customs duties and inspection,

Entry, Exports, Fishing vessels, Imports, Maritime carriers, Passenger

Vessels, Penalties, Reporting and recordkeeping requirements, Shipping,

Vessels, Yachts.

19 CFR Part 18

Bonded transportation, Bonds, Common carriers, Customs duties and

inspection, Exports, Imports, Reporting and recordkeeping requirements.

19 CFR Part 122

Air carriers, Aircraft, Airports, Air transportation, Baggage,

Bonds, Customs duties and inspection, Foreign commerce and trade

statistics, Freight, Imports, Penalties, Reporting and recordkeeping

requirements.

19 CFR Part 123

Aircraft, Canada, Customs duties and inspection, Imports,

International boundaries, International traffic, Mexico, Motor

carriers, Railroads, Reporting and recordkeeping requirements, Trade

agreements, Vehicles, Vessels.

19 CFR Part 127

Customs duties and inspection, Exports, Reporting and recordkeeping

requirements.

19 CFR Part 148

Aliens, Baggage, Crewmembers, Customs duties and inspection,

Declarations, Foreign officials, Government employees, International

organizations, Privileges and Immunities, Reporting and recordkeeping

requirements.

19 CFR Part 178

Administrative practice and procedure, Reporting and recordkeeping

requirements.

19 CFR Part 192

Aircraft, Customs duties and inspection, Export Control, Penalties,

Reporting and recordkeeping requirements, Seizures and forfeiture,

Vehicles, Vessels.

Amendments to the Regulations

Accordingly, for the reasons stated in the preamble, Parts 4, 18,

122, 123, 127, 148, 178 and 192 of the Customs Regulations (19 CFR

Parts 4, 18, 122, 123, 127, 148, 178 and 192) are amended as set forth

below:

PART 4--VESSELS IN FOREIGN AND DOMESTIC TRADES

1. The general authority citation for Part 4 and the specific

authority citations for Secs. 4.7a, 4.36 and 4.37 continue to read, and

the specific authority citations for Secs. 4.9 and 4.68 are revised to

read, as follows:

Authority: 5 U.S.C. 301; 19 U.S.C. 66, 1431, 1433, 1434, 1624;

46 U.S.C. App. 3, 91.

* * * * *

Section 4.7a also issued under 19 U.S.C. 1498, 1584;

* * * * *

Section 4.9 also issued under 42 U.S.C. 269;

* * * * *

Section 4.36 also issued under 19 U.S.C. 1431, 1457, 1458, 46

U.S.C. App. 100;

Section 4.37 also issued under 19 U.S.C. 1448, 1457, 1490;

* * * * *

Section 4.68 also issued under 46 U.S.C. App. 817d, 817e;

* * * * *

2. Part 4 is amended by removing and reserving footnotes 17, 24,

71, and 74 in Secs. 4.7a(a), 4.12(a)(3), 4.36(c) and 4.37(d).

Sec. 4.6 [Amended]

3. In Sec. 4.6, paragraph (c) is amended by removing the reference

``19 U.S.C. 1585'' and adding, in its place, the reference ``19 U.S.C.

1436''.

Sec. 4.7a [Amended]

4. In Sec. 4.7a, the first sentence of paragraph (a) is amended by

removing the words ``, required by section 432, Tariff Act of 1930, to

be separately specified''.

Sec. 4.36 [Amended]

5. In Sec. 4.36, paragraph (c) is amended by removing the words ``a

cargo within the purview of the proviso to the first subdivision of

section 431, Tariff Act of 1930'' and adding, in their place, the word

``cargo''.

6. The heading and text of Sec. 4.37 are revised to read as

follows:

Sec. 4.37 General order.

(a) Any merchandise or baggage regularly landed but not covered by

a permit for its release shall be allowed to remain at the place of

unlading until the fifteenth calendar day after landing. No later than

20 calendar days after landing, the master or owner of the vessel or

the agent thereof shall notify Customs of any such merchandise or

baggage for which entry has not been made. Such notification shall be

provided in writing or by any appropriate Customs-authorized electronic

data interchange system. Failure to provide such notification may

result in assessment of a monetary penalty of up to $1,000 per bill of

lading against the master or owner of the vessel or the agent thereof.

If the value of the merchandise on the bill is less than $1,000, the

penalty shall be equal to the value of such merchandise.

(b) Any merchandise or baggage that is taken into custody from an

arriving carrier by any party under a Customs-authorized permit to

transfer or in-bond entry may remain in the custody of that party for

15 calendar days after receipt under such permit to transfer or 15

calendar days after arrival at the port of destination. No later than

20 calendar days after receipt under the permit to transfer or 20

calendar days after arrival under bond at the port of destination, the

party shall notify Customs of any such merchandise or baggage for which

entry has not been made. Such notification shall be provided in writing

or by any appropriate Customs-authorized electronic data interchange

system. If the party fails to notify Customs of the unentered

merchandise or baggage in the allotted time, he may be liable for the

payment of liquidated damages under the terms and conditions of his

custodial bond (see Sec. 113.63(c)(4) of this chapter).

paragraphs (a) and (b) of this section, the carrier (or any other party

to whom custody of the unentered merchandise has been transferred by a

Customs authorized permit to transfer or in-bond entry) shall provide

notification of the presence of such unreleased and unentered

merchandise or baggage to a bonded warehouse certified by the port

director as qualified to receive general order merchandise. Such

notification shall be provided in writing or by any appropriate

Customs-authorized electronic data interchange system and shall be

provided within the applicable 20-day period specified in paragraph (a)

or (b) of this section. It shall then be the responsibility of the

bonded warehouse proprietor to arrange for the transportation and

storage of the merchandise or baggage at the risk and expense of the

consignee. Any unentered merchandise or baggage shall remain the

responsibility of the carrier,

[[Page 51288]]

master, or person in charge of the importing vessel or the agent

thereof or party to whom the merchandise has been transferred under a

Customs authorized permit to transfer or in-bond entry, until it is

properly transferred from his control in accordance with this

paragraph. If the party to whom custody of the unentered merchandise or

baggage has been transferred by a Customs-authorized permit to transfer

or in-bond entry fails to notify a Customs-approved bonded warehouse of

such merchandise or baggage within the applicable 20-calendar-day

period, he may be liable for the payment of liquidated damages of

$1,000 per bill of lading under the terms and conditions of his

international carrier or custodial bond (see Secs. 113.63(b), 113.63(c)

and 113.64(b) of this chapter).

(d) If the bonded warehouse operator fails to take possession of

unentered and unreleased merchandise or baggage within five calendar

days after receipt of notification of the presence of such merchandise

or baggage under this section, he may be liable for the payment of

liquidated damages under the terms and conditions of his custodial bond

(see Sec. 113.63(a)(1) of this chapter).

(e) In ports where there is no bonded warehouse authorized to

accept general order merchandise or if merchandise requires specialized

storage facilities which are unavailable in a bonded facility, the port

director, after having received notice of the presence of unentered

merchandise or baggage in accordance with the provisions of this

section, shall direct the storage of the merchandise by the carrier or

by any other appropriate means.

(f) Whenever merchandise remains on board any vessel from a foreign

port more than 25 days after the date on which report of arrival of

such vessel was made, the port director, as prescribed in section 457,

Tariff Act of 1930, as amended (19 U.S.C. 1457), may take possession of

such merchandise and cause it to be unladen at the expense and risk of

the owners of the merchandise. Any merchandise so unladen shall be sent

forthwith by the port director to a general order warehouse and stored

at the risk and expense of the owners of the merchandise.

(g) Merchandise taken into the custody of the port director

pursuant to section 490(b), Tariff Act of 1930, as amended (19 U.S.C.

1490(b)), shall be sent to a general order warehouse after 1 day after

the day the vessel was entered, to be held there at the risk and

expense of the consignee.

PART 18--TRANSPORTATION IN BOND AND MERCHANDISE IN TRANSIT

1. The general authority citation for Part 18 and the specific

authority citation for Secs. 18.11 and 18.12 are 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), 1551, 1552, 1553,

1623.

* * * * *

Section 18.11 also issued under 19 U.S.C. 1484;

Section 18.12 also issued under 19 U.S.C. 1448, 1484, 1490;

* * * * *

Sec. 18.2 [Amended]

2. In Sec. 18.2(a)(1), the first sentence is amended by removing

the words ``any lay order period and extension thereof have expired

and''.

Sec. 18.11 [Amended]

3. Section 18.11(a) is amended by removing the words ``1 year'' and

adding, in their place, the words ``6 months''.

4. In Sec. 18.12(a), the first and second sentences are amended by

removing the words ``1 year has'' and adding, in their place, the words

``6 months have''.

5. Section 18.12(d) is revised to read as follows:

Sec. 18.12 Entry at port of destination.

* * * * *

(d) All merchandise included in an immediate transportation without

appraisement entry (including carnets) not entered within 15 calendar

days after delivery at the port of destination shall be disposed of in

accordance with the applicable procedures in Sec. 4.37 or Sec. 122.50

or Sec. 123.10 of this chapter.

* * * * *

6. Section 18.12(e) is removed.

Sec. 18.25 [Amended]

7. Section 18.25(b) is amended by removing the reference

``Sec. 113.62'' and adding, in its place, the reference

``Sec. 113.63''.

PART 122--AIR COMMERCE REGULATIONS

1. The authority citation for Part 122 is revised to read as

follows:

Authority: 5 U.S.C. 301; 19 U.S.C. 58b, 66, 1433, 1436, 1448,

1459, 1590, 1594, 1623, 1624, 1644, 1644a.

Sec. 122.2 [Amended]

2. Section 122.2 is amended by removing the reference ``49 U.S.C.

App. 1509(c)'' and adding, in its place, the reference ``19 U.S.C. 1644

and 1644a''.

Sec. 122.49 [Amended]

3. Section 122.49(f) is amended by removing the words ``sections

440 (concerning post entry) and 584 (concerning manifest violations),

Tariff Act of 1930, as amended (19 U.S.C. 1440, 1584), apply'' and

adding, in their place, the words ``section 584 (concerning manifest

violations), Tariff Act of 1930, as amended (19 U.S.C. 1584),

applies''.

4. In Subpart E, Sec. 122.50 is added to read as follows:

Sec. 122.50 General order.

(a) Any merchandise or baggage regularly landed but not covered by

a permit for its release shall be allowed to remain at the place of

unlading until the fifteenth calendar day after landing. No later than

20 calendar days after landing, the pilot or owner of the aircraft or

the agent thereof shall notify Customs of any such merchandise or

baggage for which entry has not been made. Such notification shall be

provided in writing or by any appropriate Customs-authorized electronic

data interchange system. Failure to provide such notification may

result in assessment of a monetary penalty of up to $1,000 per bill of

lading against the pilot or owner of the aircraft or the agent thereof.