Importation and Entry Bond Conditions Regarding Other Agency Documentation Requirements

DEPARTMENT OF THE TREASURY

Customs Service

19 CFR Part 113

RIN 1515-AC44

Importation and Entry Bond Conditions Regarding Other Agency

Documentation Requirements

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

ACTION: Notice of proposed rulemaking.

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SUMMARY: This document proposes to amend the Customs Regulations with

regard to the basic importation and entry bond condition under which,

if merchandise is conditionally released to the principal named in the

bond, the principal agrees to furnish Customs with any document or

evidence as required by law or regulation. The proposed amendment would

extend this requirement, and consequently the potential liability for

payment of liquidated damages for a breach of the bond condition, to

documents and evidence submitted to other Government agencies under

laws and regulations of those other agencies.

DATES: Comments must be received on or before October 5, 1999.

ADDRESSES: Written comments (preferably in triplicate) may be addressed

to the Regulations Branch, Office of Regulations and Rulings, U.S.

Customs Service, 1300 Pennsylvania Avenue, NW., Washington, DC 20229.

Comments submitted may be inspected at the Regulations Branch, Office

of Regulations and Rulings, U.S. Customs Service, 1300 Pennsylvania

Avenue, NW., 3rd Floor, Washington, DC.

FOR FURTHER INFORMATION CONTACT: Jeremy Baskin, Penalties Branch,

Office of Regulations and Rulings (202-927-2344).

SUPPLEMENTARY INFORMATION:

Background

Section 113.62 of the Customs Regulations (19 CFR 113.62) sets

forth the conditions that are incorporated by reference in a basic

importation and entry bond (on Customs Form 301) that must be on file

with Customs when merchandise is imported and entered in the United

States. Those conditions involve the agreements on the part of the

obligors under the bond (that is, the principal and/or the surety) to

take specific actions required by statute or regulation in connection

with the importation/entry process and to pay liquidated damages as a

consequence of a default on any agreement in a bond condition.

Paragraph (c) of Sec. 113.62 concerns the agreement to produce

documents and evidence. This regulatory text provides that ``[i]f

merchandise is released conditionally to the principal before all

required documents or other evidence is produced, the principal agrees

to furnish Customs with any document or evidence as required by law or

regulation, and within the time specified by law or regulations''

(emphasis added). Since this bond condition refers only to documents or

other evidence required to be furnished to Customs, it would not apply

to documents and other evidence that are required by law or regulation

to be submitted to another Government agency. Under paragraph (l)(1) of

Sec. 113.62, if the principal defaults on the paragraph (c) agreement,

the obligors (that is, the principal and surety, jointly and severally)

agree to pay liquidated damages in an amount generally equal to the

value of the merchandise involved in the default or another amount that

may vary depending on the nature of the merchandise or the terms of the

specific substantive law or regulation at issue.

Basis for the Proposed Regulatory Change

On January 13, 1999, the Farm Service Agency (FSA) of the

Department of Agriculture published in the Federal Register (64 FR

2152) a proposed rule to amend Part 782 of the FSA Regulations (7 CFR

part 782), which pertains to the end-use certificate program. The end-

use certificate program was established pursuant to section 321(f) of

the North American Free Trade Agreement Implementation Act (Public Law

103-182, 107 Stat. 2057), which is codified at 19 U.S.C. 3391(f). The

program applies to wheat or barley imported into the United States from

any foreign country or instrumentality thereof that, as of April 8,

1994, required end-use certificates for imports of U.S.-produced wheat

or barley. The purpose of the program is to ensure that foreign

agricultural commodities do not benefit from U.S. export programs (see

H. Rep. 103-361, 103d Cong., 1st Sess., at 68). The regulations under

the program, which were promulgated by the FSA in consultation with

Customs as required by the statute, currently affect only wheat

originating in Canada (see 7 CFR 782.10(b)).

The amendments proposed by the FSA in the January 13, 1999 notice

would affect Secs. 782.2 and 782.12 (7 CFR 782.2 and 782.12), which set

forth, respectively, the definitions that apply for purposes of Part

782 and the requirements for completing and filing the end-use

certificate for imports of wheat originating in Canada. Specifically,

the proposed regulatory changes would: (1) Amend the definition of

``importer'' to refer to the party qualifying as importer of record

under 19 U.S.C. 1484(a); (2) reduce the time period for submission of

the end-use certificate (form FSA-750) to the FSA from ``within 15

workdays following the date of entry'' to ``within 10 workdays

following the date of entry or release'; and (3) add several data

elements to be set forth on the form FSA-750.

In addition to a discussion of the proposed regulatory amendments,

the background portion of the January 13, 1999, FSA notice contains the

following statement: ``The U.S. Customs Service has informed the

Department of Agriculture officials that it will be amending the

provisions of their basic import bond to allow for the assessment of

damages if there is a failure to provide the End-Use Certificate in the

time period provided by FSA.'' This statement resulted from discussions

that Customs personnel had with FSA personnel regarding ways to improve

the administration and enforcement of the end-use certificate program,

consistent with the statutory consultative mandate set forth in the

statute and reflected in the FSA regulations (see 7 CFR 782.3), and

reflected the fact that the text of present paragraph (c) of

Sec. 113.62 technically does not apply to the end-use certificate

because it is not furnished to Customs but rather is submitted to the

FSA.

[[Page 42873]]

Nature and Scope of the Proposed Regulatory Change

Based on the above, Customs is proposing in this document to revise

paragraph (c) of Sec. 113.62 to ensure that it will cover documents and

other evidence required in connection with the importation/entry

process that are prescribed by, and submitted to, Government agencies

other than Customs. Although the need for this proposal arose in the

specific context of the FSA end-use certificate program, Customs has

drafted the proposed new regulatory language in broad terms because

Customs believes that the basic principle at issue should be applicable

to importation/entry-related requirements of all Government agencies.

Comments

Before adopting this proposed regulation as a final rule,

consideration will be given to any written comments timely submitted to

Customs, including comments on the clarity of this proposed rule and

how it may be made easier to understand. Comments submitted will be

available for public inspection in accordance with the Freedom of

Information Act (5 U.S.C. 552), Sec. 1.4, Treasury Department

Regulations (31 CFR 1.4), and Sec. 103.11(b), Customs Regulations (19

CFR 103.11(b)), on normal business days between the hours of 9 a.m. and

4:30 p.m. at the Regulations Branch, Office of Regulations and Rulings,

U.S. Customs Service, 1300 Pennsylvania Avenue, NW., 3rd Floor,

Washington, DC.

Regulatory Flexibility Act and Executive Order 12866

Pursuant to the provisions of the Regulatory Flexibility Act (5

U.S.C. 601 et seq.), it is certified that the proposed amendment, if

adopted, will not have a significant economic impact on a substantial

number of small entities. The proposed regulatory amendment will not

require any additional action on the part of the public but rather is

intended to facilitate Customs enforcement efforts involving existing

import requirements under other Government agency laws and regulations.

Accordingly, the proposed amendment is not subject to the regulatory

analysis or other requirements of 5 U.S.C. 603 and 604. Furthermore,

this document 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 Francis W. Foote, 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 113

Bonds, Customs duties and inspection, Imports, Reporting and

recordkeeping requirements, Surety bonds.

Proposed Amendments to the Regulations

For the reasons stated above, it is proposed to amend Part 113 of

the Customs Regulations (19 CFR part 113) as set forth below.

PART 113--CUSTOMS BONDS

1. The authority citation for Part 113 continues to read in part as

follows:

Authority: 19 U.S.C. 66, 1623, 1624.

* * * * *

2. Section 113.62(c) is revised to read as follows:

Sec. 113.62 Basic importation and entry bond conditions.

* * * * *

(c) Agreement to produce documents and evidence. If merchandise is

released conditionally to the principal before production of all

documents or other evidence required by a law or regulation

administered by Customs or another government agency, the principal

agrees to furnish Customs or the other government agency with any such

document or other evidence as required by, and within the time

specified in, such law or regulation.

* * * * *

Raymond W. Kelly,

Commissioner of Customs.

Approved: June 17, 1999.

John P. Simpson,

Deputy Assistant Secretary of the Treasury.

[FR Doc. 99-20248 Filed 8-5-99; 8:45 am]

BILLING CODE 4820-02-P