Land Border Carrier Initiative Program

DEPARTMENT OF THE TREASURY

Customs Service

19 CFR Parts 123, 142, and 178

[T.D. 99-2]

RIN 1515-AC16

Land Border Carrier Initiative Program

AGENCY: Customs Service, Treasury.

ACTION: Final rule.

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SUMMARY: This document amends the Customs Regulations to provide for

the Land Border Carrier Initiative Program (LBCIP), a program designed

to prevent smugglers of illicit drugs from utilizing commercial land

conveyances for their contraband. The program provides for agreements

between carriers and Customs in which the carrier agrees to increase

its security measures and cooperate more closely with Customs, and

Customs agrees to apply, commensurate with the degree of carrier

compliance with the terms of the agreement, special administrative

provisions pertaining to penalty amounts and expedited processing of

penalty actions if illegal drugs are found on a conveyance belonging to

the participating carrier. Further, at certain, high-risk locations

along the land border, an importer's continued use of the Line Release

method of processing entries of merchandise is conditioned on the use

of carriers that participate in the LBCIP. These regulatory changes are

designed to improve Customs enforcement of Federal drug laws along the

land border by enhancing its ability to interdict illicit drug

shipments through additional trade movement information provided by

common carriers that voluntarily choose to participate in the LBCIP.

EFFECTIVE DATE: February 3, 1999.

FOR FURTHER INFORMATION CONTACT: Jim Kelly, Office of Field Operations,

Anti-Smuggling Division, (202) 927-0458.

SUPPLEMENTARY INFORMATION:

Background

In 1984 Customs began an air and sea Carrier Initiative Program

(CIP), in part because of Customs growing awareness of an increase in

the smuggling of marijuana and cocaine in the South Florida area.

Developed under Customs remission and mitigation of penalties authority

pursuant to section 618 of the Tariff Act of 1930 (19 U.S.C. 1618), the

CIP was grounded in the execution of written Carrier Initiative

Agreements between Customs and the common carrier, whereby the carrier

agrees to improve cargo and conveyance security, and Customs provides

security and drug awareness training.

In 1986, Congress enacted the Anti-Drug Abuse Act of 1986 (Pub. L.

99-570, 100 Stat. 3207; 21 U.S.C. 801 note) (the 1986 Act) to, among

other things, strengthen Federal efforts to improve the enforcement of

Federal drug laws and enhance the interdiction of illicit drug

shipments. Pursuant to the drug interdiction mandates contained in the

1986 Act, in 1995 Customs decided to expand the CIP to land border

carriers to address the increasing drug smuggling threat along the

southwest border.

This new Land Border Carrier Initiative Program (LBCIP) is designed

to prevent smugglers of illicit drugs from utilizing commercial land

conveyances for their contraband. The program solicits land and rail

carriers to voluntarily enter into agreements with Customs in which the

carrier agrees to increase its security measures and cooperate more

closely with Customs in identifying and reporting suspected smuggling

conduct in exchange for

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which Customs agrees to provide training to carrier employees and

drivers in the areas of cargo and personnel security, document review

techniques, drug awareness, and conveyance search. Further, should

illegal drugs be found aboard a conveyance belonging to a participating

carrier, Customs agrees to apply, commensurate with the degree of

carrier compliance with the terms of the agreement, special

administrative provisions pertaining to penalty amounts and expedited

processing of penalty actions.

In conjunction with implementing the LBCIP, Customs decided to tie

the mutual benefits of Line Release processing to the security offered

by the LBCIP at certain, high-risk locations along the southwest

border. Thus, Customs planned to require at these designated locations

that an importer's continued use of the Line Release method of

processing entries of merchandise is conditioned on the use of carriers

that participate in the LBCIP. Customs planned to publish a list of

these high-risk locations along the southwest border in the Federal

Register.

On December 30, 1997, Customs published a Notice of Proposed

Rulemaking (NPRM) in the Federal Register (62 FR 67765) that proposed

to amend the Customs Regulations to provide for the LBCIP and to

require that merchandise be transported by a LBCIP participant for

merchandise to be processed through use of Line Release at certain

high-risk locations. Customs stated in the BACKGROUND portion of the

document its intention that the LBCIP would be implemented at the

southwest border. Comments were solicited on the proposal. The comment

period closed March 2, 1998; four comments were received. The comments

and Customs responses are set forth below.

Analysis of Comments

Concerns With the LBCIP, in General

Comment: All of the commenters inquired if the LBCIP would be

limited to the southwest border. Acknowledging that Customs stated its

intention to limit the LBCIP to the Mexican border in the BACKGROUND

portion of the NPRM, these commenters pointed out that the proposed

regulations did not contain such a limitation and that Customs should

clearly indicate in the regulatory text portion of the Final Rule

document that the LBCIP will apply only to the Mexican border.

Customs Response: The whole reason for expanding the Carrier

Initiative Program (CIP) to include land border carriers is to address

the increased drug-smuggling threat to the United States. While that

threat presently comes primarily from the southwest border, should that

threat find other avenues for entering the U.S., i.e., along the

northern border, and if the regulations expressly restrict the LBCIP's

application to the southern border, then Customs would not be able to

employ the LBCIP as a law enforcement tool to counter the threat from

the different direction. On reconsideration of the scope and benefits

of the program, it makes more sense to make the program available to

all interested carriers than to restrict the program's availability to

one border area.

Accordingly, although it was Customs intention at the time it

published the NPRM to implement the LBCIP only along the southwest

border--where the drug threat to the United States is greatest--because

of the interest raised in the comments concerning the application of

special administrative provisions (see below), Customs will now make

the program available to interested carriers at any Customs land border

crossing point. Thus, no change will be made to Sec. 123.71, which

describes the LBCIP in general terms, to expressly limit the

application of the LBCIP to the southwest border.

Comment: Two commenters inquired that if the LBCIP Agreements are

only entered into with carriers on the southwest border, will the

accompanying special administrative provisions pertaining to the

assessment and mitigation of penalties for carriage of controlled

substances apply only at the Mexican border, and not the Canadian

border?

Customs Response: As mentioned above, because of comments concerned

about the application of special administrative provisions, Customs has

decided to expand the availability of the LBCIP to interested carriers

at any land border crossing location. Accordingly, the issues of

limited LBCIP participation and application of special administrative

provisions are rendered moot.

Comment: One commenter wanted Customs to define a ``high-risk''

area in the regulations, stating that carriers need to know whether

they are operating in such areas, which can effect carrier safety and

security and impact operational efficiency. This commenter also

inquired that should Canadian land border ports ever be designated as

``high risk'', will Customs afford Canadian carriers fair and

appropriate notice so that they can meet the requirements of the LBCIP.

Along this line of inquiry, another commenter stated that

compliance with the LBCIP is only a requirement for carriers

participating in Line Release and that the LBCIP should remain a

voluntary program for carriers not participating in Line Release.

Customs Response: These comments reveal a certain confusion

concerning how the LBCIP is designed to operate as a voluntary, stand-

alone program and how it interrelates with the Line Release-method of

processing certain merchandise. As provided in proposed Sec. 123.71,

the LBCIP is a voluntary program--for carriers--designed to assist

Customs in preventing the smuggling of controlled substances into the

United States. The LBCIP is independent of Line Release processing,

which is an automated method to expedite the release of certain

shipments--for importers. However, at certain land border crossing

locations, designated ``high risk'' by Customs, an importer's continued

use of Line Release processing will be contingent on the importer's use

of carriers that participate in the LBCIP. Accordingly, if there are no

carriers at a designated high-risk area that participate in the LBCIP,

then the importer cannot use the Line Release program.

``High-risk'' locations--where continued use of Line Release will

be conditioned on the importer's use of carriers that participate in

the LBCIP-- currently designated by Customs are:

1. Calexico, CA;

2. Otay Mesa, CA;

3. Tecate, CA;

4. Douglas, AZ;

5. Nogales, AZ;

6. Brownsville, TX;

7. Del Rio, TX

8. Eagle Pass, TX;

9. El Paso, TX;

10. Hidalgo, TX, the cargo-processing center at Pharr;

11. Laredo, TX; and

12. Progreso, TX.

These ports of entry are designated as ``high risk'' based on seizure

statistics. Additional areas designated by Customs as high risk will be

identified in General Notices that will be published in the Federal

Register. These notices will normally be published with a 30-day

delayed effective date to give affected importers time to restructure

their business interests.

Concerns With the Written Agreement; Sec. 123.72

Comment: One commenter stated that a standard agreement should be

used throughout the entire southwest border, and another commenter

stated that port

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directors should not have the ability to change the language in an

agreement.

Customs Response: Since the drug threat is the focus of the program

and not regional/local conditions, one standard agreement will be used

in the LBCIP, and port directors will not have the ability to modify

the language employed in agreements.

Comment: One commenter stated that Customs should clarify whether

they want carriers or individual train crews, to enter into agreements

with Customs. This commenter suggested that Customs should revise

Sec. 123.71 to make this clear.

Customs Response: As provided at proposed Sec. 123.72, which

pertains to the written agreement requirement, it is the commercial

carriers (not the drivers of the conveyance) that are to enter into the

written agreement with Customs. The statement in proposed Sec. 123.71

that the LBCIP is a program designed to enlist the voluntary

cooperation of the designated drivers of commercial entities as well as

the commercial entities was merely to reflect that a participating

carrier's commitment to the LBCIP includes the carrier being

responsible, after designating drivers (or crews) for program

participation, for adequately training the drivers (or crews) on how to

identify and report suspected smuggling attempts. Accordingly, the

carriers are, in effect, responsible for enlisting the cooperation of

the drivers (or crews) they designate to be in the program. However,

because language regarding drivers in Secs. 123.71, 123.72, and 123.74

confused readers concerning whether Customs intends to enter into

individual agreements with the drivers (or crew), these provisions will

be revised to remove references to designated drivers.

However, because the cooperation of drivers is such an integral

part of the program and with the revisions discussed above to

Secs. 123.71, 123.72, and 123.74, a new Sec. 123.76 will be added that

more fully explains how drivers fit into the program.

Comment: One commenter wants Customs to modify the written

agreement provision (Sec. 123.72) to acknowledge that the training of

railroad crews might impact existing labor agreements.

Customs Response: Since the LBCIP is a voluntary program, Customs

finds the issue of labor agreements between carriers and its employees

outside the scope of these regulations. Accordingly, no change will be

made to Sec. 123.72.

Comment: Concerned with the written agreement provision that

requires carrier-participants to establish security procedures aimed at

restricting access to transporting conveyances and preventing the

unauthorized lading of illegal drugs while the conveyance is en route

to the U.S., one commenter suggested that Sec. 123.72(b) be revised to

acknowledge the national limits incumbent on establishing such security

measures.

Customs Response: Customs is well aware of the national limits/

physical restraints faced by carrier-applicants in establishing the

security measures provided for at Sec. 123.72(b) and does not expect

the carriers to do what is beyond their control. With the LBCIP being a

cooperative venture between participant-carriers and Customs, Customs

will of course work with particular carriers to establish those

security procedures that are necessary and within the ability of the

LBCIP participant to implement. Since the scope of the security burden

on the carrier-participant is substantially less than that envisioned

by the commenter, Customs sees no reason to revise the security

requirements of Sec. 123.72(b).

Comment: Two commenters wanted Customs to clarify what background

checks need to be performed and on which employees. These commenters

questioned which criminal records have to be checked--presumably this

relates to records maintained by the resident country of the

participant-carrier--and whether the ``all personnel designated to

participate in the LBCIP'' language encompasses all employees who will

handle a shipment from the time it crosses one border, traverses the

U.S., and arrives at another border, and all employees in between.

These commenters argued that the scope of such a provision would affect

thousands, if not tens of thousands, of employees, and that the

provision should be limited to new hires. Based on the magnitude of

these concerns, two commenters stated that Customs paperwork

assessment/recordkeeping burden is understated.

Customs Response: Section 123.72(c) provides, in part, that, to the

extent permitted by law, participant-carriers are to conduct employment

and criminal history record checks on all (not just newly hired)

employees who will be designated to participate in the LBCIP. Customs

contemplates within this context that a carrier-employer need not check

the criminal histories of all employees as all employees will not be

designated to be involved with the LBCIP. Involvement with the LBCIP

would mean involvement with physically processing/transporting the

merchandise that is to be exported to the United States. Further,

Customs contemplates that the criminal records of all potential

employees who may be involved with physically processing/ transporting

merchandise for export to the United States may not be accessible to

the carrier-exporter despite the carrier-employer's best efforts. Thus,

concerning the question of which criminal records have to be checked, a

carrier-employer would be required to report to Customs any criminal

activity concerning employees that are directly involved with the

physical processing/transporting of merchandise exported to the United

States, which the employer learns either through a search of accessible

criminal records maintained by the country in which the employee is

hired or through communication by the employee to the employer. Given

the above, no change to Sec. 123.72(c) will be made.

Regarding Customs assessment of the paperwork burden in applying

for the LBCIP, since the scope of the background checks is more limited

and reasonable than understood by the commenters, Customs does not

believe that the time an average carrier will spend completing the

application for LBCIP participation, providing background information

on drivers designated for inclusion in the program, completing an

affidavit of business character, and listing the conveyances that will

be used will exceed one hour. However, because some carrier-applicants

will experience a significant turnover in drivers, conveyances, and

ownership, those applicants may have a greater paperwork burden--as

much as 2 hours a week--in complying with the continuing reporting

obligations of the program. Other carrier-applicants are so large and

have so many drivers, they may fall outside the average. Accordingly,

Customs will revise its paperwork estimates to fully account for this

secondary reporting burden. The collection of information data

previously submitted to the Office of Management and Budget has been

revised to reflect an increase of 3 more hours per respondent. This

increase is based on increased applicants and business turnover

estimates, which impact both the initial paperwork requirement and the

secondary reporting obligation.

Comment: One commenter wanted Customs to clarify the terms

``properly registered conveyances,'' i.e., does it pertain to railcars

or locomotives, and two commenters suggested that locomotive engineers

be separately enumerated, rather than be collectively included with

drivers.

Customs Response: For purposes of the written agreement, the term

``conveyance'' would include

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locomotives--being the powered unit--rather than the railcars, which

are non-powered, and the term ``drivers'' would include locomotive

engineers--being the drivers of the powered conveyance. Concerning the

``proper registration'' of such conveyances, what is envisioned here is

that the conveyance is registered with the appropriate government

agency responsible for registering such conveyances in the country

where the conveyance operates.

Customs believes that no change to Sec. 123.72(d) is necessary.

Comment: One commenter wanted Customs to define the term

``dishonest conduct'' in the regulations.

Customs Response: Although not a term of art, the term ``dishonest

conduct'' has been defined as an absence of integrity; a disposition to

betray, cheat, deceive, lie, or defraud; and being untrustworthy. The

meaning of the term extends beyond acts which would be criminal, and is

not restricted to such conduct as would be criminal. However, the term

does not necessarily include ``wrongful acts''. For example, a speeding

violation in an automobile would be a wrongful act in law, but it does

not constitute ``dishonest conduct''. The term ``dishonest conduct'' is

designed, but not limited, to include any conduct or activity that

bears on an individual's veracity, such as allegations/complaints of

lying, misleading, or perjury. Examples of such conduct would include

writing bad checks, misrepresenting employment history, and deceiving

government agencies as to the nature of information. Customs does not

believe that it is appropriate to define the term in the regulations.

Comment: Three commenters requested that Sec. 123.72 be revised to

delete references to principals, drivers, and conveyances, because such

information is irrelevant. Further, these commenters stated that the

five-day notification period for advising Customs concerning material

changes in business organization, drivers, or conveyances serves no

useful purpose and that this time-frame is too short anyway.

Customs Response: Customs believes that by receiving the names of

the drivers and principal officers of the companies who apply to join

the LBCIP, Customs is better able to make a determination about the

threat posed by the drivers and companies and to make an informed

decision about the suitability of the carriers and specific drivers for

the program. Customs also believes that the five-day notification

period is sufficient time for a carrier to advise Customs in writing by

mail of material changes affecting a carrier's business organization,

designated drivers or registered conveyances. Accordingly, no change to

Sec. 123.72 will be made.

Comment: One commenter wanted to delete language regarding the

requirement to provide information about past business relations, and

the necessity of providing information about ``dishonest conduct''.

Another commenter wanted clearer language regarding the ``affidavit of

business character'' requirement.

Customs Response: Because of the high-risk environment in which

transportation companies sometime operate, Customs believes that it is

imperative that principals of participating carriers submit an

``affidavit of business character'' and that information concerning

``dishonest conduct'' on the part of all designated participants be

provided to Customs. This information will assist Customs in making

informed decisions about a carrier's suitability for the program.

Concerns With the Revocation Procedure; Sec. 123.75

Comment: One commenter argued that carriers should be provided with

advance notice of revocation and given the opportunity to cure defaults

prior to revocations. This commenter also questioned the scope of

revocations, wanting to know if all Customs land border ports will be

notified in the case of a revocation.

Customs Response: Because the LBCIP is a cooperative venture

between Customs and participant-carriers, the on-going dialogue between

Customs and the carrier will enable a carrier to be aware of Customs

concerns regarding the carrier's operations and allow a carrier to

explain or take remedial action to resolve a deficiency in the

carrier's operations. However, in cases where immediate revocation is

necessary, proposed Sec. 123.75(c) details the appeal process to be

followed by the subject carrier once a decision to immediately revoke

the carrier's participation in the LBCIP has been made by a port

director. Under this process, the subject participant-carrier may file

a written appeal directly with the Assistant Commissioner of Field

Operations within 10 days and receive a determination within 30 days of

the appeal's receipt by the Assistant Commissioner. Customs believes

that these time frames provide carriers with ample time to cure

operational defects noted by Customs, and that the process will ensure

uniformity regarding revocations.

Concerning the scope of revocations, decisions to immediately

revoke a carrier-participant or individual driver would be effective at

the national level; all land border ports would be notified.

Comment: One commenter felt that some misdemeanors, such as drunk

driving, should not result in revocation.

Customs Response: Offenses such as drunk driving will not

automatically result in revocation. The circumstances of such conduct,

i.e., did it occur as an incident to employment, will be fully

considered by Customs before any action to institute revocation

procedures is initiated.

Comment: One commenter wanted Customs to define ``misuse''

regarding authorized conveyances.

Customs Response: The term ``misuse'' of authorized conveyances

means the unauthorized use of a carrier's conveyance by a designated

driver, e.g., making unscheduled stops/trips, and such other use as

goes beyond the scope of the agreement entered into between the carrier

and Customs.

Concerns Over Tying Line Release to LBCIP; Secs. 123.71, 142.41, and

142.41

Comment: Two commenters did not see the value of linking the LBCIP

to Line Release at ``high-risk'' areas.

Customs Response: Linking the LBCIP with Line Release at designated

``high-risk'' areas will aid Customs invaluably in its endeavor to

thwart the smuggling of illicit drugs into the United States. The LBCIP

is based on a mutual exchange of business information between a

participant carrier and Customs: Customs receives participant-specific

information regarding the participant's facilities, conveyances,

drivers, and business structure; the carrier receives special training

in the areas of cargo and personnel security standards, document

review, drug awareness, and container/conveyance searches. Line

Release, on the other hand, requires an importer to provide Customs

with information regarding the merchandise being imported, the

importer, and the shipper or manufacturer. Linking the LBCIP with Line

Release merges the merchandise, importer, carrier, driver, and

conveyance data together, thereby enhancing Customs ability to assess

the threat of each Line Release-type commercial shipment more

effectively. Accordingly, since Customs scrutiny of Line Release

transactions would be enhanced if it possesses the information that

LBCIP participants provide, it makes perfect sense at those LBCIP

locations designated as ``high risk'' to condition an importer's

continued use of Line Release on the use of carriers/drivers that

participate in the LBCIP.

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Conclusion

After careful consideration of all the comments received and

further review of the matter, Customs has decided to adopt as a final

rule with the modifications and changes discussed above and set forth

below, the amendments to implement the LBCIP and tying Line Release

privileges to LBCIP carriers/drivers at certain, high-risk locations.

The document also identifies the high-risk locations where merchandise

must be transported by carriers who are participants in the LBCIP in

order for the merchandise to be processed through Line Release.

To reflect the paperwork requirements contained at Sec. 123.73,

part 178 of the Customs Regulations is also amended.

Regulatory Flexibility Act and Executive Order 12866

Pursuant to 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,

because the amendments concern a voluntary program that will confer a

benefit on the trade community. Accordingly, the amendments are not

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

603 and 604. This amendment does not meet the criteria for a

``significant regulatory action'' as specified in Executive Order

12866.

Paperwork Reduction Act

The collection of information contained in these final regulations

has been revised, reviewed, and approved by the Office of Management

and Budget (OMB) in accordance with the requirements of the Paperwork

Reduction Act of 1995 (44 U.S.C. 3507) under control number 1515-0217.

An agency may not conduct or sponsor, 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.

The collection of information in this final rule is at Sec. 123.73.

This information is required to improve Customs ability to interdict

illicit drug shipments along the land border in cooperation with common

carriers and their designated drivers who voluntarily participate in

the LBCIP. This information will be used to process applications for

voluntary participation in the Land Border Carrier Initiative Program.

The likely respondents are commercial carrier organizations that engage

in foreign commerce and trade along the land border of the United

States.

The estimated average burden associated with the collection of

information in this final rule is four hours per respondent or

recordkeeper. Comments concerning the accuracy of this burden estimate

and suggestions for reducing this burden should be directed to the U.S.

Customs Service, Information Services Group, Office of Finance, 1300

Pennsylvania Ave., N.W., Washington, D.C. 20229; and to OMB, Attention:

Desk Officer for the Department of the Treasury, Office of Information

and Regulatory Affairs, Washington, D.C. 20503.

Drafting Information

The principal author of this document was Gregory R. Vilders,

Attorney, Regulations Branch. However, personnel from other offices

participated in its development.

List of Subjects

19 CFR Part 123

Administrative practice and procedure, Aliens, Canada, Common

carriers, Customs duties and inspection, Forms, Imports, International

boundaries, Mexico, Motor carriers, Railroads, Reporting and

recordkeeping requirements, Vehicles.

19 CFR Part 142

Bonds, Common carriers, Customs duties and inspection, Entry of

merchandise, Forms, Reporting and recordkeeping requirements.

19 CFR Part 178

Administrative practice and procedure, Collections of information,

Exports, Imports, Paperwork requirements, Reporting and recordkeeping

requirements.

Amendments To the Regulations

For the reasons stated above, parts 123, 142, and 178 of the

Customs Regulations (19 CFR parts 123, 142, and 178) are amended as set

forth below:

PART 123--CUSTOMS RELATIONS WITH CANADA AND MEXICO

1. The general authority citation for part 123 continues to read as

follows, the specific authority citation for Sec. 123.71 is removed,

and specific authority citations for Secs. 123.71 through 123.76 and

for Sec. 123.81 are added, to read as follows:

Authority: 19 U.S.C. 66, 1202 (General Note 20, Harmonized

Tariff Schedule of the United States (HTSUS)), 1431, 1433, 1624.

* * * * *

Sections 123.71-123.76 also issued under 19 U.S.C. 1618; Section

123.81 also issued under 19 U.S.C. 1595.

2. Subpart H is redesignated as subpart I and Secs. 123.71 and

123.72 are redesignated as Secs. 123.81 and 123.82 therein,

respectively, and a new subpart H, consisting of Secs. 123.71 through

123.76, is added to read as follows:

Subpart H--Land Border Carrier Initiative Program

Sec.

123.71 Description of program.

123.72 Written agreement requirement.

123.73 Application to participate.

123.74 Notice of selection; appeal of determination.

123.75 Notice of revocation; appeal of decision.

123.76 Authorization by Customs for participants to use certain

drivers.

Subpart H--Land Border Carrier Initiative Program

Sec. 123.71 Description of program.

The Land Border Carrier Initiative Program (LBCIP) is a program

designed to enlist the voluntary cooperation of commercial conveyance

entities in Customs effort to prevent the smuggling of controlled

substances into the United States. Participation in the LBCIP requires

the land or rail commercial carrier to enter into a written agreement

with Customs that describes the responsibilities of participants in the

LBCIP. The agreement generally provides that the carrier agrees to

enhance the security of its facilities and the conveyances employed to

transport merchandise. The carrier also agrees to cooperate closely

with Customs in identifying and reporting suspected smuggling attempts.

In exchange for this cooperation, Customs agrees to provide training to

carrier personnel in the areas of cargo and personnel security,

document review techniques, drug awareness, and conveyance searches.

Customs also agrees that should a controlled substance be found aboard

a conveyance owned or operated by a participating carrier, special

administrative procedures relating to the assessment and mitigation of

drug-related penalties will be followed; the degree of compliance with

the terms of the agreement will be considered as an additional positive

mitigating factor in any seizure or penalties decision or

recommendation. Lastly, at certain high-risk locations, for the use of

Line Release, imported merchandise, which otherwise qualifies for Line

Release entry (see, subpart D of part 142 of this chapter), must be

transported over the border by carriers that participate in the LBCIP.

The locations where the use of Line Release will be conditioned on

participation in the LBCIP will be published in the Federal Register.

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Sec. 123.72 Written agreement requirement.

Commercial carriers desiring to participate in the LBCIP shall

enter into a written agreement with Customs regarding the mutual

obligations of the carrier-participant and Customs. The terms and

conditions in the written agreement shall generally provide that the

carrier-applicant agrees:

(a) To participate in Customs training regarding cargo and

personnel security, document review techniques, drug awareness, and

conveyance searches;

(b) To establish security systems at the place of business for the

safe storage and handling of cargo intended to be imported into the

United States; and security procedures aimed at restricting access to

transporting conveyances and preventing the unauthorized lading of

illegal drugs while the conveyance is en route to the United States;

(c) To conduct, to the extent allowed by law, employment and

criminal history record checks on all personnel designated to

participate in the LBCIP and to exercise responsible supervision and

control over those personnel;

(d) To ensure that only authorized drivers and properly registered

conveyances are utilized in the transportation of merchandise into the

United States, and to maintain current lists of such drivers and

conveyances for Customs inspection upon request;

(e) To immediately report to the appropriate port director any

criminal or dishonest conduct on the part of drivers designated to

participate in the LBCIP, or attempts by others to impede, influence,

or coerce the carrier or drivers into violating any United States law,

including Customs regulations, especially those concerned with

trafficking in illegal drugs; and

(f) To notify the appropriate port director in writing by mail

within 5 days of any change in legal name, business address, business

principals, ownership, drivers, or conveyances that affects the basis

for continued participation in the LBCIP.

Sec. 123.73 Application to participate.

To request participation in the LBCIP, the carrier-applicant must

submit an application containing the information requested in this

section. The application must be accompanied by two copies of a LBCIP

written agreement (see Sec. 123.72 of this part; upon request, the

local port director will provide copies of an unsigned written

agreement) containing original signatures of corporate officers or

owners of the common carrier. The application shall be prepared by the

common carrier, be signed by corporate officers or owners, and

submitted to the port director. If a submitted application does not

provide all of the information specified in this section, the

processing of the application will either be delayed or the application

will be rejected. The application shall include the following

information:

(a) General business identification and site condition information.

The name and address of the commercial conveyance entity, the names of

all principals or corporate officers, the name and telephone number of

an individual to be contacted for further information, and a complete

and detailed description of the premises where business operations are

conducted, to include all working/storage areas and security features

employed;

(b) Designated driver information. A listing of the drivers

designated by the carrier who will be transporting merchandise into the

U.S. The listing shall set forth the name(s), address(es), date of

birth, nationality, driver's license number, and any other personal

identifying information regarding the drivers listed, e.g., social

security number (if available), to enable Customs to conduct background

checks and to aid Customs officers at the border crossing point in

identifying individual LBCIP-authorized drivers;

(c) Conveyance identification information. A listing of the

conveyances, e.g., trucks and locomotives, that the carrier will

utilize to transport merchandise into the U.S. The listing shall set

forth the type and make of conveyances, country of registration and

license number(s), conveyance-specific identifying markings, e.g.,

vehicle identification numbers (VINs), and any other general conveyance

identifying information, e.g., weight, color, recognizable

modifications, etc., to aid Customs officers at the border crossing

point in identifying particular LBCIP-registered conveyances; and

(d) Affidavit of business character. A statement signed by the

carrier-applicant which attests to each principal's or corporate

officer's past and present business relations, e.g., a list of past

companies worked for and positions held, which fully explains the

presence of any past or present crime involving theft or smuggling or

investigations into such crimes, or other dishonest conduct on the part

of a principal.

Sec. 123.74 Notice of selection; appeal of determination.

The information provided pursuant to paragraphs (b) through (d) of

Sec. 123.73 shall constitute the criteria used to evaluate the

competency of the carrier-applicant to participate in the LBCIP.

Following Customs evaluation of the information provided, Customs shall

notify the carrier-applicant in writing of Customs determination as to

whether the carrier-applicant is qualified to participate in the LBCIP.

In cases of selection, Customs will sign and return one of the copies

of the written agreement. In cases of nonselection, the written notice

shall clearly state the reason(s) for denial and recite the applicant's

appeal rights under paragraph (b) of this section.

(a) Grounds for nonselection. The port director may deny a

carrier's application to participate in the LBCIP for any of the

following reasons:

(1) Evidence of any criminal or dishonest conduct involving the

carrier, a corporate officer, designated drivers, or other person the

port director determines is exercising substantial ownership or control

over the carrier operation or corporate officer;

(2) Evidence of improper use of designated conveyances;

(3) Evidence that the written agreement was entered into by fraud

or misstatement of a material fact; or

(4) A determination is made that the grant of LBCIP privileges

would endanger the revenue or security of the Customs area.

(b) Appeal of determination. Carrier-applicants not selected to

participate in the LBCIP and who wish to appeal the decision shall

either:

(1) Appeal the adverse determination in accordance with the appeal

procedure set forth in Sec. 123.75(c) of this part; or

(2) Cure any deficiency in the first application by submitting a

new application to the port director who denied the previous

application after waiting 60 days from the date of issuance of the

first determination.

Sec. 123.75 Notice of revocation; appeal of decision.

(a) Revocation. The port director may immediately revoke a

carrier's participation in the LBCIP and cancel the written agreement

for any of the following applicable reasons:

(1) The selection and written agreement were obtained through fraud

or the misstatement of a material fact by the carrier;

(2) The carrier, a corporate officer, or other person the port

director determines is exercising substantial ownership or control over

the carrier operation or corporate officer, is indicted for, convicted

of, or has committed acts which would constitute any felony or

misdemeanor under

[[Page 33]]

United States Federal or State law. In the absence of an indictment,

conviction, or other legal process, the port director must have

probable cause to believe the proscribed acts occurred;

(3) The carrier-participant allows an unauthorized person or entity

to use its LBCIP certificate or other approved form of identification;

(4) The carrier-participant misuses authorized conveyances;

(5) The carrier-participant refuses or otherwise fails to follow

any proper order of a Customs officer or any Customs order, rule, or

regulation;

(6) The carrier-participant fails to operate in accordance with the

terms of the written agreement; or

(7) Continuation of LBCIP privileges would endanger the revenue or

security of the Customs area in the judgment of the port director.

(b) Notice. When a decision revoking participation has been made,

the port director shall notify the carrier-participant of the decision

in writing. The notice of revocation shall clearly state the reason(s)

for revocation and recite the applicant's appeal rights under paragraph

(c) of this section.

(c) Appeal of decision. Carrier-participants that receive a notice

of revocation and who wish to appeal the decision shall file a written

appeal with the Assistant Commissioner, Office of Field Operations,

U.S. Customs Service, Washington, D.C. 20229, within 10 calendar days

of receipt of the notice. The appeal shall be filed in duplicate and

shall set forth the carrier's responses to the grounds specified by the

port director in the notice. Within 30 working days of receipt of the

appeal, the Assistant Commissioner, or his designee, shall make a

determination regarding the appeal and notify the applicant in writing.

Sec. 123.76 Authorization by Customs for participants to use certain

drivers.

(a) Responsibilities of LBCIP participants. An LBCIP participant is

required, pursuant to Sec. 123.73 of this part, to list the drivers

designated to transport merchandise into the United States for the

carrier to enable Customs to conduct background checks. An LBCIP

participant is also required, pursuant to Sec. 123.72 of this part, to

conduct, to the extent allowed by law, employment and criminal history

checks on all personnel designated to participate in the LBCIP; these

personnel include drivers.

(b) Authorization of drivers by Customs. Customs may not approve a

carrier for participation in the LBCIP if it determines that there is

evidence that a driver designated by a carrier has been involved in

criminal or dishonest conduct or it may request that the carrier not

use that driver before approving the carrier for participation. Once a

carrier has been accepted in the LBCIP, Customs may determine to cancel

a particular driver's authorization to transport merchandise for a

LBCIP carrier for the reasons set forth in paragraph (c) of this

section.

(c) Reasons for cancellation of driver's authorization. Customs may

cancel a driver's authorization to transport merchandise for an LBCIP

participant for any of the following reasons:

(1) The designated driver is indicted for, convicted of, or has

committed acts which would constitute any felony or misdemeanor under

United States Federal or State law. In the absence of an indictment,

conviction, or other legal process, the port director must have

probable cause to believe the proscribed acts occurred;

(2) The designated driver allows an unauthorized person or entity

to use his LBCIP certificate or other approved form of identification;

(3) The designated driver misuses authorized conveyances;

(4) The designated driver refuses or otherwise fails to follow any

proper order of a Customs officer or any Customs order, rule, or

regulation; or

(5) The designated driver fails to operate in accordance with the

terms of the written agreement.

(d) Notice; rights of driver. (1) If driver not acceptable to

Customs at time of review of carrier's application. When Customs

notifies a carrier-applicant, pursuant to Sec. 123.74 of this part, of

its nonselection into the LBCIP because of conduct committed by a

driver designated by the carrier or when Customs conditionally approves

a carrier-applicant's participation in the LBCIP, but does not approve

a driver designated on the application to be authorized to transport

merchandise under the LBCIP, Customs will also notify the driver of the

decision in writing and recite the driver's appeal rights under

paragraph (e) of this section.

(2) If driver's authorization cancelled. When Customs makes a

determination to cancel the authorization of a particular designated

driver, pursuant to Sec. 123.76(b) of this section, Customs will notify

both the carrier-participant and the driver of the decision in writing;

the notice to the driver will recite the driver's appeal rights under

paragraph (e) of this section.

(e) Appeal rights of drivers. Drivers who receive a notice of

nonselection or cancellation and who wish to appeal the decision shall

file a written appeal with the Assistant Commissioner, Office of Field

Operations, U.S. Customs Service, Washington, D.C. 20229, within 10

calendar days of receipt of the notice. The appeal shall be filed in

duplicate and shall set forth the driver's responses to the grounds

specified by the port director in the notice. Within 30 working days of

receipt of the appeal, the Assistant Commissioner, or his designee,

shall make a determination regarding the appeal and notify the

applicant in writing.

PART 142--ENTRY PROCESS

1. The authority citation for part 142 continues to read as

follows:

Authority: 19 U.S.C. 66, 1448, 1484, 1624.

2. Section 142.41 is amended by adding a sentence at the end to

read as follows:

Sec. 142.41 Line Release.

* * * At certain high-risk locations along the land borders of the

United States (the locations to be published in the Federal Register),

which are approved by Customs for handling Line Release, the use of

Line Release for particular shipments may be denied by Customs unless

the imported merchandise is transported by carriers that participate in

the Land Border Carrier Initiative Program (see, subpart H of part 123

of this chapter).

Sec. 142.47 [Amended]

3. In Sec. 142.47, the first sentence of paragraph (b) is amended

by removing the words ``because of an examination'' and adding, in

their place, the words ``for the following reasons: because of an

examination, because a carrier transporting the Line Release

merchandise is not a participant in the Land Border Carrier Initiative

Program (LBCIP), or because a driver or conveyance is not authorized in

accordance with the LBCIP''.

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, in appropriate numerical

order, a listing for Sec. 123.73 to read as follows:

Sec. 178.2 Listing of OMB control numbers.

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

OMB control

19 CFR Section Description No.

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

[[Page 34]]

* * * * *

Sec. 123.73................ Application to participate in 1515-0217

the Land Border Carrier

Initiative Program.

* * * * *

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

Raymond W. Kelly,

Commissioner of Customs.

Approved: November 4, 1998.

Dennis M. O'Connell,

Acting Deputy Assistant Secretary of the Treasury.

[FR Doc. 98-34675 Filed 12-31-98; 8:45 am]

BILLING CODE 4820-02-P