Petitions for Relief; Seizures, Penalties, and Liquidated Damages

DEPARTMENT OF THE TREASURY

Customs Service

19 CFR Parts 10, 12, 18, 24, 111, 113, 114, 125, 134, 145, 162,

171, and 172

RIN 1515-AC01

Petitions for Relief; Seizures, Penalties, and Liquidated Damages

AGENCY: Customs Service, Treasury.

ACTION: Notice of proposed rulemaking.

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SUMMARY: This document proposes significant amendments to parts 171 and

172 of the Customs Regulations relating to the filing of petitions in

penalty, liquidated damages, and seizure cases. The proposed

regulations are briefer and are designed to allow more flexibility and

useful contact with Government officials in an effort to administer

cases in the most efficient way possible. These proposed regulations

promote a more customer-friendly atmosphere and eliminate needless or

redundant provisions. The affected parts are recrafted to include

petition processing in seizure and unsecured penalty cases under part

171 and liquidated damages and secured penalty petition processing

under part 172.

DATES: Comments must be received on or before April 3, 1998.

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

Office of Regulations and Rulings, Regulations Branch, Ronald Reagan

Building, 1300 Pennsylvania Avenue, NW., Washington, D.C. 20229, and

inspected at the Regulations Branch, Ronald Reagan Building, Suite

3000, 1300 Pennsylvania Avenue, NW., Washington, D.C.

FOR FURTHER INFORMATION CONTACT: Jeremy Baskin, Penalties Branch,

Office of Regulations and Rulings, 202-927-2344.

SUPPLEMENTARY INFORMATION:

Background

ons and Rulings, Regulations Branch, Ronald Reagan

Building, 1300 Pennsylvania Avenue, NW., Washington, D.C. 20229, and

inspected at the Regulations Branch, Ronald Reagan Building, Suite

3000, 1300 Pennsylvania Avenue, NW., Washington, D.C.

FOR FURTHER INFORMATION CONTACT: Jeremy Baskin, Penalties Branch,

Office of Regulations and Rulings, 202-927-2344.

SUPPLEMENTARY INFORMATION:

Background

Under the provisions of sections 618 and 623 of the Tariff Act of

1930, as amended (19 U.S.C. 1618 and 1623), and sections 320 of title

46, United States Code App. (46 U.S.C.App. 320), and section 5321 of

title 31, United States Code (31 U.S.C. 5321), the Secretary of the

Treasury is empowered to remit forfeitures, mitigate penalties, or

cancel claims arising from violation of Customs bonds upon terms and

conditions that he deems appropriate. Under general rulemaking

authority as provided by sections 66 and 624 of the Tariff Act of 1930,

as amended (19 U.S.C. 66 and 1624), the Secretary is authorized to make

such regulations necessary to carry out the provisions of the Tariff

Act. Consistent with that authority, Parts 171 (relating to seizures

and penalties) and 172 (relating to liquidated damages) of the Customs

Regulations (19 CFR parts 171 and 172) were promulgated to provide for

the petitioning process in order to allow for the orderly remission of

forfeitures, mitigation of penalties, and cancellation of claims for

liquidated damages.

Customs is proposing significant amendments to Parts 171 and 172 of

the Customs Regulations relating to the filing of petitions in penalty,

liquidated damages, and seizure cases. The new regulations will be

briefer and will allow more flexibility and useful contact with

Government officials in an effort to administer cases in the most

efficient way possible. These regulations will promote a more customer-

friendly atmosphere and will eliminate needless or redundant

provisions.

The scope of Parts 171 and 172 has been changed

lty,

liquidated damages, and seizure cases. The new regulations will be

briefer and will allow more flexibility and useful contact with

Government officials in an effort to administer cases in the most

efficient way possible. These regulations will promote a more customer-

friendly atmosphere and will eliminate needless or redundant

provisions.

The scope of Parts 171 and 172 has been changed. Inasmuch as

certain penalties are guaranteed by the conditions of the International

Carrier Bond, and, therefore involve surety participation, the

provisions of Part 172 will relate to all claims for liquidated damages

and penalties secured by a bond. This will mean that all claims against

surety will be handled in a consistent manner. Part 171 will relate to

unsecured fines and penalties and all seizure and forfeiture cases.

The proposed regulations anticipate that electronic filing of

petitions is an inevitability even though Customs does not currently

have, on a nationwide basis, the capabilities to accept petitions

electronically. Accordingly, the regulations reflect the acceptance of

electronic signatures and eliminate the requirement of duplicate copies

if an electronic petition is filed.

The proposed regulations require that petitions for relief must be

signed by the petitioner, his attorney-at-law or a Customs broker, but

will allow others, in certain non-commercial violations (such as

passenger/baggage violations), to file petitions on behalf of non-

English speaking claimants to property or other petitioners who have

some disability that may impede the ability to file a petition.

Instances have occurred where these petitions have been rejected

because they did not meet the signature requirements of the old

regulations. A strict reading of the current regulations would bar

Customs from considering those petitions. This position causes needless

delay in administrative processing of cases

titioners who have

some disability that may impede the ability to file a petition.

Instances have occurred where these petitions have been rejected

because they did not meet the signature requirements of the old

regulations. A strict reading of the current regulations would bar

Customs from considering those petitions. This position causes needless

delay in administrative processing of cases. The new proposed provision

will open the process in these situations and promote efficiency by

allowing, in non-commercial violations, a non-English speaking

petitioner or petitioner who has a disability which may impede his

ability to file a petition to enlist a family member or other

representative to file a petition on his behalf.

Under current regulation, Customs may limit the petitioning period

to 7 days in cases involving violations of 19 U.S.C. 1592 when the

running of the statute of limitations is imminent. Customs finds no

reason to limit the 7-day petitioning period option to just 1592 cases.

The proposed regulations extend the 7-day rule to all cases and clarify

that it is 7 working days, rather than calendar days.

The current regulatory section entitled ``Additional evidence

required with certain petitions'' is proposed to be eliminated as

unnecessary. The provisions of proposed new Sec. 171.2 indicate that

the claimant or petitioner must establish a petitionable interest in

seized property. How that proof is presented is not a subject that need

be controlled by regulation.

Oral presentations will continue to be afforded as a matter of

right in 1592 cases and only as a matter of discretion in other cases.

The proposed regulations simply remove the reference to cases commenced

subsequent to December 31, 1978. This provision has become obsolete

with the passage of time.

Title VI of the North American Free Trade Agreement Implementation

Act (known commonly as the Customs Modernization Act) (Pub.L. 103-182,

107 Stat. 2057) amended the provisions of 19 U.S.C

a matter of discretion in other cases.

The proposed regulations simply remove the reference to cases commenced

subsequent to December 31, 1978. This provision has become obsolete

with the passage of time.

Title VI of the North American Free Trade Agreement Implementation

Act (known commonly as the Customs Modernization Act) (Pub.L. 103-182,

107 Stat. 2057) amended the provisions of 19 U.S.C. 1595a(c) to provide

for the seizure and forfeiture of stolen property. Implementing

regulations for this amendment were promulgated by Treasury Decision

96-2 (T.D. 96-2). This amendment has rendered Sec. 171.22(c) obsolete,

as those provisions of the new statute are applicable to any stolen

property, not only that stolen in Canada and brought into the United

States. Accordingly, it is proposed to no longer include that provision

in the regulations.

Mitigation guidelines for monetary penalties assessed pursuant to

19 U.S.C. 1592 are currently published as Appendix B to Part 171 of the

Regulations. Accordingly, the provisions of Sec. 171.23 of the current

regulations, making these guidelines available upon request, are

obsolete and it is proposed that this section be eliminated.

The offices of Regional Commissioner and District Director were

eliminated under Customs reorganization; therefore, all references to

those offices and delegations of authority to those individuals to

decide petitions and supplemental petitions for relief are obsolete.

Through Treasury Decision 95-78 (T.D. 95-78), Customs published an

Interim Rule which amended the regulations and authorized Fines,

Penalties, and Forfeitures Officers to decide petitions for relief and

certain designated Headquarters officials assigned to field locations

to decide supplemental and second supplemental petitions for relief in

certain cases (although this document proposes to eliminate second

supplemental petitions, as discussed later herein). Those changes are

reflected in this document

authorized Fines,

Penalties, and Forfeitures Officers to decide petitions for relief and

certain designated Headquarters officials assigned to field locations

to decide supplemental and second supplemental petitions for relief in

certain cases (although this document proposes to eliminate second

supplemental petitions, as discussed later herein). Those changes are

reflected in this document.

Consistent with the reorganization and Customs policy of empowering

employees, the proposed regulations remove specific delegations of

mitigation authority from the body of regulatory text with the

intention of affording the Secretary of the Treasury and the

Commissioner of Customs the opportunity to delegate authority to decide

petitions and supplemental petitions to the field through delegation

orders, without the necessity of amending the regulations. A separate

document will be published in the Federal Register detailing the new

delegations.

The document proposes that the provisions of Part 111 be amended to

eliminate the requirement of Headquarters approval of broker penalty

cases assessed in excess of $10,000.

Novel or complex issues often arise concerning Customs policy with

regard to Customs actions or potential actions relating to seizures and

forfeitures, penalties (including penalty-based demands for duty),

liquidated damages or case assessment or mitigation in cases that are

otherwise within field jurisdiction because of the value of the

property or the amount of the penalty or claim for liquidated damages.

In those instances, Headquarters advice may need to be sought.

Accordingly, the

potential actions relating to seizures and

forfeitures, penalties (including penalty-based demands for duty),

liquidated damages or case assessment or mitigation in cases that are

otherwise within field jurisdiction because of the value of the

property or the amount of the penalty or claim for liquidated damages.

In those instances, Headquarters advice may need to be sought.

Accordingly, the

proposed regulations include a section in both Parts 171 and 172 to

allow any Customs officer or an alleged violator to initiate a request

for advice to be submitted to the Fines, Penalties, and Forfeitures

Officer for forwarding to the Chief, Penalties Branch, Office of

Regulations and Rulings. The Fines, Penalties, and Forfeitures Officer

will retain the authority to refuse to forward any request that fails

to raise a qualifying issue.

Under current policy, Customs officers are empowered to accept

petitions filed untimely in response to claims for liquidated damages.

Those petitions can be accepted at any time prior to determination that

a claim is eligible to be placed on a surety sanction list. The

proposed regulations will permit Customs to accept late petitions in

penalty cases as well, but, as articulated in guidelines published for

cancellation of bond charges (see T.D. 94-38), lateness in filing a

petition may be considered when considering remission or mitigation of

a claim and less generous relief, if otherwise merited, may be afforded

to the petitioner who files in an untimely manner.

The courts have consistently held that a claim for liquidated

damages is not a ``charge or exaction'' which is properly the subject

of a protest filed pursuant to the authority of 19 U.S.C. 1514. See

United States v. Toshoku America, Inc., 879 F.2d 815 (Fed.Cir. 1989);

Halperin Shipping Co., Inc. v. United States, 14 CIT 438, 742 F.Supp.

1163 (1990)

etitioner who files in an untimely manner.

The courts have consistently held that a claim for liquidated

damages is not a ``charge or exaction'' which is properly the subject

of a protest filed pursuant to the authority of 19 U.S.C. 1514. See

United States v. Toshoku America, Inc., 879 F.2d 815 (Fed.Cir. 1989);

Halperin Shipping Co., Inc. v. United States, 14 CIT 438, 742 F.Supp.

1163 (1990). In light of these decisions, the proposed regulations

indicate that claims for liquidated damages and decisions on petitions

are not properly the subject of a protest filed pursuant to 19 U.S.C.

1514.

In Trayco, Inc. v. United States, ---- Fed.Cir.(T) ------, 994 F.2d

832 (1993), the Court permitted a company that had petitioned for

relief, received a decision on the petition and, although unhappy with

the mitigation offered, paid that mitigated amount ``under protest'',

to file suit to recover the amount paid. The Court noted that as ``* *

* nothing in the statute or regulations gives notice that a party may

relinquish its rights to judicial review by paying a mitigated penalty

and filing a second supplemental petition, we decline to hold that

Trayco is estopped where it accompanied its payment with a statement

expressly reserving its rights to judicial review.'' See Id. at 839.

Customs proposes to amend the regulations to provide that any payment

made in compliance with a mitigation decision will act as an accord and

satisfaction whereby the paying party has elected to resolve the case

through the administrative process and has waived the right to sue for

a refund. This express statement will also be included in all

mitigation decisions offered to petitioners in order to provide full

disclosure as to their administrative or judicial rights. Customs will

not accept payments ``under protest.''

Additionally, in the proposed regulations, second supplemental

petitions are eliminated

gh the administrative process and has waived the right to sue for

a refund. This express statement will also be included in all

mitigation decisions offered to petitioners in order to provide full

disclosure as to their administrative or judicial rights. Customs will

not accept payments ``under protest.''

Additionally, in the proposed regulations, second supplemental

petitions are eliminated. Therefore, payment of a mitigated amount will

never be necessary to receive original or appellate administrative

review and a petitioner will not be required to later sue for a refund

of monies paid if he believes the underlying penalty was incorrectly

assessed or the claim improperly mitigated.

The proposed regulations include a provision whereby the deciding

Customs official reserves the right to require a waiver of the statute

of limitations executed by the claimants to the property or charged

party or parties as a condition precedent before accepting a

supplemental petition in any case where the statute will be available

as a defense to all or part of that case within one year from the date

of decision on the original petition for relief. Upon receipt of such a

waiver, any reduced time period for acceptance of a petition would not

be necessary. The proposed regulations remove a restriction on the

filing of supplemental petitions in broker penalty cases. Under current

Sec. 111.95, Customs Regulations, a final determination of $1,000 or

less in response to a petition for relief in a case involving

assessment of a penalty for violation of the provisions of 19 U.S.C.

1641 may not be the subject of a supplemental petition. There is no

basis to single out this particular violation as not being worthy of a

supplemental petition for relief. All parties should have the same

administrative rights

a final determination of $1,000 or

less in response to a petition for relief in a case involving

assessment of a penalty for violation of the provisions of 19 U.S.C.

1641 may not be the subject of a supplemental petition. There is no

basis to single out this particular violation as not being worthy of a

supplemental petition for relief. All parties should have the same

administrative rights.

It is noted that no changes are proposed to Subpart F, Part 171, of

the current regulations relating to expedited procedures promulgated as

a result of passage of the Anti-Drug Abuse Act of 1988 and applicable

to certain administrative forfeiture proceedings.

Sections 10.39(e) and (f) of the current regulations, relating to

the filing of petitions in cases involving breaches of the terms and

conditions of temporary importation bonds (TIBs), provide for different

standards of review if there has been a default with respect to all of

the articles entered under bond or if there has been a default with

respect to part, but not all, of the articles entered under bond. This

bifurcation is unnecessary. The proposed regulations combine the

provisions of Secs. 10.39(e) and (f) to provide a single standard for

review of TIB petitions without regard to whether all or part of the

merchandise entered under the TIB are in breach.

Current Sec. 162.48, Customs Regulations, relating to the

disposition of perishable and low-value property, permits Customs, by

the authority granted in section 612 of the Tariff Act of 1930, as

amended (19 U.S.C. 1612), to destroy summarily low-value seized

property (less than $1,000) when the costs of storing and maintaining

such property are disproportionate to its value. Customs would then

reimburse any successful petitioning claimant from the Forfeiture Fund

perishable and low-value property, permits Customs, by

the authority granted in section 612 of the Tariff Act of 1930, as

amended (19 U.S.C. 1612), to destroy summarily low-value seized

property (less than $1,000) when the costs of storing and maintaining

such property are disproportionate to its value. Customs would then

reimburse any successful petitioning claimant from the Forfeiture Fund.

The provisions of section 667 of the Customs Modernization Act remove

this $1,000 cap and permit the summary destruction of any seized

property, without regard to value, if the costs of maintaining such

property are disproportionate to its value. The proposed amendment is

consistent with this legislative change.

Finally, the provisions of Part 162 are proposed to be amended to

specifically empower Fines, Penalties, and Forfeitures Officers to

accept waivers of the statute of limitations with regard to actual or

potential violations arising in ports over which they have

jurisdiction. The Office of Regulations and Rulings would retain

authority to accept waivers in established actual cases over which it

has monetary jurisdiction and a petition for relief has been filed.

Proposed conforming amendments to Parts 10, 12, 18, 24, 111, 113,

114, 125, 134, 145, and 162 are also set forth in this document.

Comments

Before making a determination in this matter, Customs will consider

any written comments timely submitted. Comments 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)), during

regular business hours of 9:00 a.m. to 4:30 p.m. at the Regulations

Branch, Office of Regulations and Rulings, Ronald Reagan Building, 1300

Pennsylvania Avenue, NW., Washington, D.C.

Regulatory Flexibility and Executive Order 12866

edom 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)), during

regular business hours of 9:00 a.m. to 4:30 p.m. at the Regulations

Branch, Office of Regulations and Rulings, Ronald Reagan Building, 1300

Pennsylvania Avenue, NW., Washington, D.C.

Regulatory Flexibility and Executive Order 12866

Inasmuch as small business entities are rarely repeat violators of

Customs laws, and, therefore, will seldom need to avail themselves of

these regulatory provisions and file petitions for relief on a regular

basis, it is certified, pursuant to the provisions of the Regulatory

Flexibility Act (5 U.S.C. 601 et seq.), that the proposed amendments,

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

substantial number of small entities. Accordingly, the amendments are

not subject to the regulatory analysis requirements of 5 U.S.C. 603 and

604. The document does not meet the criteria for a ``significant

regulatory action'' under E.O. 12866.

List of Subjects

19 CFR Part 10

Alterations, Bonds, Customs duties and inspection, Exports,

Imports, Preference programs, Repairs, Reporting and recordkeeping

requirements, Trade agreements.

19 CFR Part 12

Bonds, Customs duties and inspection, Labeling, Marking, Prohibited

merchandise, Reporting and recordkeeping requirements, Restricted

merchandise, Seizure and forfeiture, Trade agreements.

19 CFR Part 18

Bonds, Customs duties and inspection, Penalties, Prohibited

merchandise, Reporting and recordkeeping requirements.

19 CFR Part 24

Accounting, Claims, Customs duties and inspection, Financial and

accounting procedures, Harbors, Reporting and recordkeeping

requirements, Trade agreements.

19 CFR Part 111

Administrative practice and procedure, Bonds, Brokers, Customs

duties and inspection, Imports, Licensing, Penalties, Reporting and

recordkeeping requirements.

19 CFR Part 113

ecordkeeping requirements.

19 CFR Part 24

Accounting, Claims, Customs duties and inspection, Financial and

accounting procedures, Harbors, Reporting and recordkeeping

requirements, Trade agreements.

19 CFR Part 111

Administrative practice and procedure, Bonds, Brokers, Customs

duties and inspection, Imports, Licensing, Penalties, Reporting and

recordkeeping requirements.

19 CFR Part 113

Bonds, Customs duties and inspection, Exports, Foreign commerce and

trade statistics, Freight, Imports, Reporting and recordkeeping

requirements.

19 CFR Part 114

Carnets, Customs duties and inspection.

19 CFR Part 125

Bonds, Customs duties and inspection, Freight, Reporting and

recordkeeping requirements.

19 CFR Part 134

Country of origin, Customs duties and inspection, Imports,

Labeling, Marking, Packaging and containers, Reporting and

recordkeeping requirements.

19 CFR Part 145

Customs duties and inspection, Imports, Mail, Postal service,

Reporting and recordkeeping requirements.

19 CFR Part 162

Administrative practice and procedure, Customs duties and

inspection, Law enforcement, Penalties, Prohibited merchandise,

Reporting and recordkeeping requirements, Seizures and forfeitures.

19 CFR Part 171

Administrative practice and procedure, Customs duties and

inspection, Law enforcement, Penalties, seizures, and forfeitures.

19 CFR Part 172

Administrative practice and procedure, Customs duties and

inspection, Penalties.

Proposed Amendments to the Regulations

For the reasons stated above, it is proposed to amend parts 10, 12,

18, 24, 111, 113, 114, 125, 134, 145, 162, 171, and 172, Customs

Regulations (19 CFR parts 10, 12, 18, 24, 111, 113, 114, 125, 134, 145,

162, 171, and 172), as set forth below.

PART 10--ARTICLES CONDITIONALLY FREE, SUBJECT TO A REDUCED RATE,

ETC.

1. The general authority citation for part 10 continues to read as

follows:

For the reasons stated above, it is proposed to amend parts 10, 12,

18, 24, 111, 113, 114, 125, 134, 145, 162, 171, and 172, Customs

Regulations (19 CFR parts 10, 12, 18, 24, 111, 113, 114, 125, 134, 145,

162, 171, and 172), as set forth below.

PART 10--ARTICLES CONDITIONALLY FREE, SUBJECT TO A REDUCED RATE,

ETC.

1. The general authority citation for part 10 continues to read as

follows:

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

Tariff Schedule of the United States), 1321, 1481, 1484, 1498, 1508,

1623, 1624, 3314.

2. It is proposed to revise the introductory paragraph of

Sec. 10.39(e) to read as follows:

Sec. 10.39 Cancellation of bond charges.

* * * * *

(e) If there has been a default with respect to any or all of the

articles covered by the bond and a written petition for relief is filed

as provided in part 172 of this chapter, it shall be reviewed by the

Fines, Penalties, and Forfeitures Officer having jurisdiction in the

port where the entry was filed. If the Fines, Penalties, and

Forfeitures Officer is satisfied that the importation was properly

entered under Chapter 98, subchapter XIII, and that there was no intent

to defraud the revenue or delay the payment of duty, the Fines,

Penalties, and Forfeitures Officer may cancel the liability for the

payment of liquidated damages as follows:

* * * * *

3. It is proposed to amend Sec. 10.39 by removing paragraph (f) and

redesignating current paragraphs (g) and (h) respectively as paragraphs

ntered under Chapter 98, subchapter XIII, and that there was no intent

to defraud the revenue or delay the payment of duty, the Fines,

Penalties, and Forfeitures Officer may cancel the liability for the

payment of liquidated damages as follows:

* * * * *

3. It is proposed to amend Sec. 10.39 by removing paragraph (f) and

redesignating current paragraphs (g) and (h) respectively as paragraphs

(f) and (g).

PART 12--SPECIAL CLASSES OF MERCHANDISE

1. The general authority citation and relevant specific authority

citations for part 12 continue 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 (HTSUS)), 1624.

* * * * *

Sections 12.95 through 12.103 also issued under 15 U.S.C. 1241-

1245;

* * * * *

2. It is proposed to amend Sec. 12.102 by removing the number

``6O'' and adding in its place the number ``3O'.

PART 18--TRANSPORTATION IN BOND AND MERCHANDISE IN TRANSIT

1. The general authority citation and relevant specific authority

citations for part 18 continue 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,

1624.

* * * * *

Section 18.8 also issued under 19 U.S.C. 1623;

* * * * *

2. It is proposed to revise Sec. 18.8(d) to read as follows:

Sec. 18.8 Liability for shortage, irregular delivery, or nondelivery;

penalties.

* * * * *

part 18 continue 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,

1624.

* * * * *

Section 18.8 also issued under 19 U.S.C. 1623;

* * * * *

2. It is proposed to revise Sec. 18.8(d) to read as follows:

Sec. 18.8 Liability for shortage, irregular delivery, or nondelivery;

penalties.

* * * * *

(d) In any case in which liquidated damages are imposed in

accordance with this section and the Fines, Penalties, and Forfeitures

Officer is satisfied by evidence submitted to him with a petition for

relief filed in accordance with the provisions of part 172 of this

chapter that any violation of the terms and conditions of the bond

occurred without any intent to evade any law or regulation, the Fines,

Penalties, and Forfeitures Officer, in accordance with delegated

authority, may cancel such claim upon the payment of any lesser amount

or without the payment of any amount as may be deemed appropriate under

the law and in view of the circumstances.

* * * * *

PART 24--CUSTOMS FINANCIAL AND ACCOUNTING PROCEDURE

1. The general authority citation and relevant specific authority

citations for part 24 continue to read as follows:

Authority: 5 U.S.C. 301; 19 U.S.C. 58a-58c, 66, 1202 (General

Note 20, Harmonized Tariff Schedule of the United States), 1624; 31

U.S.C. 9701;

* * * * *

Section 24.24 also issued under 26 U.S.C. 4461, 4462;

* * * * *

2. It is proposed to amend the first sentence of Sec. 24.24(h)(3)

by removing the phrase ``published pursuant to the provisions of

Sec. 172.22(d)(1) of this chapter''.

PART 111--CUSTOMS BROKERS

1. The general authority citation for part 111 continues to read as

follows:

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

Tariff Schedule of the United States), 1624, 1641.

2. It is proposed to amend Sec. 111.92 by removing the last

sentence.

3. It is proposed to revise Sec. 111.95 to read as follows:

Sec. 111.95 Supplemental petition for relief.

PART 111--CUSTOMS BROKERS

1. The general authority citation for part 111 continues to read as

follows:

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

Tariff Schedule of the United States), 1624, 1641.

2. It is proposed to amend Sec. 111.92 by removing the last

sentence.

3. It is proposed to revise Sec. 111.95 to read as follows:

Sec. 111.95 Supplemental petition for relief.

A decision of the Fines, Penalties, and Forfeitures Officer with

regard to any petition filed in accordance with part 171 of this

chapter may be the subject of a supplemental petition for relief. Any

supplemental petition also must be filed in accordance with the

provisions of part 171 of this chapter.

PART 113--CUSTOMS BONDS

1. The general authority citation and relevant specific authority

citation for part 113 continue to read as follows:

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

Subpart E also issued under 19 U.S.C. 1484, 1551, 1565.

2. It is proposed to revise Sec. 113.46 to read as follows:

Sec. 113.46 Cancellation of bond charges resulting from failure to

produce documents.

Guidelines published by the Commissioner of Customs set forth

provisions relating to cancellation of bond charges resulting from

failure to produce documents.

3. It is proposed to amend Sec. 113.52 by removing the words ``and

172.22(c)'' from the parenthetical phrase contained therein.

4. It is proposed to amend Sec. 113.54(a) by removing ``172.31''

and adding in its place ``172.11(b)''.

PART 114--CARNETS

1. The general authority citation for part 114 continues to read as

follows:

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

Tariff Schedule of the United States), 1623, 1624.

2. It is proposed to amend Sec. 114.34(c) by removing the final

non-parenthetical sentence and the final parenthetical sentence.

PART 125--CARTAGE AND LIGHTERAGE OF MERCHANDISE

1. The general authority citation and relevant specific authority

citation for part 125 continue to read as follows:

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

Tariff Schedule of the United States), 1623, 1624.

2. It is proposed to amend Sec. 114.34(c) by removing the final

non-parenthetical sentence and the final parenthetical sentence.

PART 125--CARTAGE AND LIGHTERAGE OF MERCHANDISE

1. The general authority citation and relevant specific authority

citation for part 125 continue to read as follows:

Authority: 19 U.S.C. 66, 1565, 1624.

* * * * *

Sections 125.41 and 125.42 also issued under 19 U.S.C. 1623.

2. It is proposed to revise Sec. 125.42 to read as follows:

Sec. 125.42 Cancellation of liability.

The Fines, Penalties, and Forfeitures Officer, in accordance with

delegated authority, may cancel liquidated damages incurred under the

bond of the foreign trade zone operator, containing the bond conditions

set forth in Sec. 113.73 of this chapter, or under the bond of the

cartman, lighterman, bonded carrier, bonded warehouse operator,

container station operator or centralized examination station operator

on Customs Form 301, containing the bond conditions set forth in

Sec. 113.63 of this chapter, upon the payment of such lesser amount, or

without the payment of any amount, as the Fines, Penalties, and

Forfeitures Officer may deem appropriate under the circumstances.

Application for cancellation of liquidated damages incurred shall be

made in accordance with the provisions of part 172 of this chapter.

PART 134--COUNTRY OF ORIGIN MARKING

1. The general authority citation for part 134 continues 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), 1304, 1624.

2. It is proposed to amend Sec. 134.54(a) by removing the phrase

``plus any estimated duty thereon as determined at the time of entry.''

3. It is proposed to amend Sec. 134.54(b) by removing the second

sentence.

PART 145--MAIL IMPORTATIONS

tinues 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), 1304, 1624.

2. It is proposed to amend Sec. 134.54(a) by removing the phrase

``plus any estimated duty thereon as determined at the time of entry.''

3. It is proposed to amend Sec. 134.54(b) by removing the second

sentence.

PART 145--MAIL IMPORTATIONS

1. The general authority citation and relevant specific authority

citation for part 145 continue to read as follows:

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

Tariff Schedule of the United States), 1624.

Section 145.4 also issued under 18 U.S.C. 545, 19 U.S.C. 1618.

* * * * *

2. It is proposed to revise Sec. 145.4(b) to read as follows:

Sec. 145.4 Dutiable merchandise without declaration or invoice,

prohibited merchandise, and merchandise imported contrary to law.

* * * * *

(b) Mitigation of forfeiture. Any claimant incurring a forfeiture

of merchandise for violation of this section may file a petition for

relief pursuant to part 171 of this chapter. Mitigation of that

forfeiture may occur consistent with mitigation guidelines.

* * * * *

PART 162--RECORDKEEPING, INSPECTION, SEARCH AND SEIZURE

1. The general authority citation and relevant specific authority

citation for part 162 continue to read as follows:

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

* * * * *

Section 162.48 also issued under 19 U.S.C. 1606, 1607, 1608,

1612, 1613b, 1618;

* * * * *

2. It is proposed to amend Sec. 162.48 by revising the heading to

read as follows:

Sec. 162.48 Disposition of perishable and other seized property.

3. It is proposed to amend paragraph (b) of Sec. 162.48 by removing

from the first sentence the phrase ``and such value is less than

$1,000,''.

4. It is proposed to amend Sec. 162.79b by removing the last

sentence.

5. It is proposed to amend subpart G, part 162 by adding a new

Sec. 162.81 to read as follows:

Sec. 162.81 Statute of limitation waivers.

perishable and other seized property.

3. It is proposed to amend paragraph (b) of Sec. 162.48 by removing

from the first sentence the phrase ``and such value is less than

$1,000,''.

4. It is proposed to amend Sec. 162.79b by removing the last

sentence.

5. It is proposed to amend subpart G, part 162 by adding a new

Sec. 162.81 to read as follows:

Sec. 162.81 Statute of limitation waivers.

Waivers of the statute of limitations in any matter relating to any

actual or potential penalty, seizure or claim for liquidated damages

may be accepted by any Fines, Penalties, and Forfeitures Officer except

that waivers of the statute of limitations submitted with regard to any

penalty, seizure or liquidated damages case in which a petition has

been filed and is under review by the Chief, Penalties Branch, Office

of Regulations and Rulings, or the Secretary of the Treasury or his

designee, shall be accepted by the Chief, Penalties Branch, Office of

Regulations and Rulings.

PART 171--FINES, PENALTIES, AND FORFEITURES

1. The authority citation for part 171 continues to read as

follows:

Authority: 19 U.S.C. 66, 1592, 1618, 1624. The provisions of

subpart C also issued under 22 U.S.C. 401; 46 U.S.C. App. 320 unless

otherwise noted.

Subpart F also issued under 19 U.S.C. 1595a, 1605, 1624; 21

U.S.C. 881 note.

2. It is proposed to revise Sec. 171.0 to read as follows:

Sec. 171.0 Scope.

This part contains provisions relating to petitions for relief from

fines, forfeitures, and certain penalties incurred, and petitions for

the restoration of proceeds from sale of seized and forfeited property.

This part does not relate to petitions on claims for liquidated damages

or penalties which are guaranteed by the conditions of the

International Carrier Bond (see Sec. 113.64 of this chapter).

3. It is proposed to revise subparts A through E of part 171 to

read as follows:

Subpart A--Application for Relief

Sec. 171.1 Petition for relief.

e violation or seizure;

(3) The facts and circumstances relied upon by the petitioner to

justify remission or mitigation; and

(4) If a seizure case, proof of a petitionable interest in the

seized property.

(d) False statement in petition. A false statement contained in a

petition may subject the petitioner to prosecution under the provisions

of 18 U.S.C. 1001.

Sec. 171.2 Filing a petition.

(a) Where filed. A petition for relief shall be filed with the

Fines, Penalties, and Forfeitures office whose address is given in the

notice.

(b) When filed. (1) Seizures. Petitions for relief from seizures

shall be filed within 30 days from the date of mailing of the notice of

seizure.

(2) Penalties. Petitions for relief from penalties shall be filed

within 60 days of the mailing of the notice of penalty incurred.

(c) Extensions. The Fines, Penalties, and Forfeitures Officer is

empowered to grant extensions of time to file petitions when the

circumstances so warrant.

(d) Number of copies. The petition shall be filed in duplicate

unless filed electronically.

(e) Exception for certain cases. If a penalty is assessed or a

seizure is made and fewer than 180 days remain from the date of penalty

notice or seizure before the statute of limitations may be asserted as

a defense, the Fines, Penalties, and Forfeitures Officer may specify in

the notice a reasonable period of time, but not less than 7 working

days, for the filing of a petition for relief. If a petition is not

filed within the time specified, the matter shall be transmitted

promptly to the appropriate Office of the Chief Counsel for referral to

the Department of Justice.

Sec. 171.3 Oral presentations seeking relief.

enalties, and Forfeitures Officer may specify in

the notice a reasonable period of time, but not less than 7 working

days, for the filing of a petition for relief. If a petition is not

filed within the time specified, the matter shall be transmitted

promptly to the appropriate Office of the Chief Counsel for referral to

the Department of Justice.

Sec. 171.3 Oral presentations seeking relief.

(a) For violation of section 592. If the penalty incurred is for a

violation of section 592, Tariff Act of 1930, as amended (19 U.S.C.

1592), the person named in the notice, in addition to filing a

petition, may make an oral presentation seeking relief in accordance

with this paragraph. For purposes of this paragraph, a proceeding

commences with the issuance of a prepenalty notice or, if no prepenalty

notice is issued, with the issuance of a notice of claim or a monetary

penalty.

(b) Other oral presentations. Oral presentations other than those

provided in paragraph (a) of this section may be allowed in the

discretion of any official of the Customs Service or Department of the

Treasury authorized to act on a petition or supplemental petition.

Subpart B--Actions on Petitions

Sec. 171.11 Petitions acted on by Fines, Penalties, and Forfeitures

Officer.

(a) Remission or mitigation authority. Upon receipt of a petition

for relief submitted pursuant to the provisions of section 618 of the

Tariff Act of 1930, as amended (19 U.S.C. 1618), or section 5321(c) of

title 31, United States Code (31 U.S.C. 5321(c)), or section 320 of

title 46, United States Code App. (46 U.S.C. App. 320), the Fines,

Penalties, and Forfeitures Officer is empowered to remit or mitigate on

such terms and conditions as, under law and in view of the

circumstances, he or she shall deem appropriate in accordance with

appropriate delegations of authority.

, or section 5321(c) of

title 31, United States Code (31 U.S.C. 5321(c)), or section 320 of

title 46, United States Code App. (46 U.S.C. App. 320), the Fines,

Penalties, and Forfeitures Officer is empowered to remit or mitigate on

such terms and conditions as, under law and in view of the

circumstances, he or she shall deem appropriate in accordance with

appropriate delegations of authority.

(b) When violation did not occur. Notwithstanding any other

delegation of authority, the Fines, Penalties, and Forfeitures Officer

is always empowered to cancel any claim when he or she definitely

determines that the act or omission forming the basis of any claim of

penalty or forfeiture did not occur.

(c) When violation is result of vessel in distress. The Fines,

Penalties, and Forfeitures Officer may remit without payment any

penalty which arises for violation of the coastwise laws if he or she

is satisfied that the violation occurred as a direct result of an

arrival of the transporting vessel in distress.

Sec. 171.12 Petitions referred to Customs Headquarters.

Upon receipt of a petition for relief filed pursuant to the

provisions of section 618 of the Tariff Act of 1930, as amended (19

U.S.C. 1618), section 5321(c) of title 31, United States Code (31

U.S.C. 5321(c)), or section 320 of title 46, United States Code App.

(46 U.S.C. App. 320), involving fines, penalties, and forfeitures which

are outside of his or her delegated authority, the Fines, Penalties,

and Forfeitures Officer shall refer that petition to the Chief,

Penalties Branch, Office of Regulations and Rulings, Customs

Headquarters, who is empowered to remit or mitigate on such terms and

conditions as, under law and in view of the circumstances, he or she

shall deem appropriate, unless there has been no delegation of

authority to act by the Secretary of the Treasury or his designee

,

and Forfeitures Officer shall refer that petition to the Chief,

Penalties Branch, Office of Regulations and Rulings, Customs

Headquarters, who is empowered to remit or mitigate on such terms and

conditions as, under law and in view of the circumstances, he or she

shall deem appropriate, unless there has been no delegation of

authority to act by the Secretary of the Treasury or his designee. In

those cases where there has been no delegation to act by the Secretary

or his designee, the Chief, Penalties Branch, shall forward the matter

to the Department with a recommendation.

Sec. 171.13 Limitations on consideration of petitions.

(a) Late petitions. Petitions filed after the expiration of the 30-

or 60-day petitioning period may be considered by the deciding official

if, in his or her discretion, the efficient administration of justice

would be met.

(b) Cases referred for institution of legal proceedings. No action

shall be taken on any petition after the case has been referred to the

Department of Justice for institution of legal proceedings. The

petition shall be forwarded to the Department of Justice.

(c) Conveyance awarded for official use. No petition for remission

of forfeiture of a seized conveyance which has been forfeited and

retained for

official use shall be considered unless it is filed before final

disposition of the property is made. This does not affect petitions for

restoration of proceeds of sale filed pursuant to the provisions of

section 613 of the Tariff Act of 1930, as amended (19 U.S.C. 1613).

Sec. 171.14 Headquarters advice.

emission

of forfeiture of a seized conveyance which has been forfeited and

retained for

official use shall be considered unless it is filed before final

disposition of the property is made. This does not affect petitions for

restoration of proceeds of sale filed pursuant to the provisions of

section 613 of the Tariff Act of 1930, as amended (19 U.S.C. 1613).

Sec. 171.14 Headquarters advice.

The advice of the Director, International Trade Compliance

Division, Office of Regulations and Rulings, Customs Headquarters, may

be sought in any case, without regard to delegated authority to act on

a petition or offer, when a novel or complex issue concerning a ruling,

policy, or procedure is presented concerning a Customs action(s) or

potential Customs action(s) relating to seizures and forfeitures,

penalties (including penalty-based demands for duty), or mitigating or

remitting any claim. The request for advice may be initiated by the

alleged violator or any Customs officer, but must be submitted to the

Fines, Penalties, and Forfeitures Officer. The Fines, Penalties, and

Forfeitures Officer retains the authority to refuse to forward any

request that fails to raise a qualifying issue and to seek legal advice

from the appropriate Associate or Assistant Chief Counsel in such

cases.

Subpart C--Disposition of Petitions

Sec. 171.21 Written decisions.

If a petition for relief relates to a violation of sections 592 or

641, Tariff Act of 1930, as amended (19 U.S.C. 1592 or 19 U.S.C. 1641),

the petitioner shall be provided with a written statement setting forth

the decision on the matter and the findings of fact and conclusions of

law upon which the decision is based.

Sec. 171.22 Limitation on time decision effective.

.21 Written decisions.

If a petition for relief relates to a violation of sections 592 or

641, Tariff Act of 1930, as amended (19 U.S.C. 1592 or 19 U.S.C. 1641),

the petitioner shall be provided with a written statement setting forth

the decision on the matter and the findings of fact and conclusions of

law upon which the decision is based.

Sec. 171.22 Limitation on time decision effective.

A decision to mitigate a penalty or to remit a forfeiture upon

condition that a stated amount is paid shall be effective for not more

than 60 days from the date of notice to the petitioner of such decision

unless the decision itself prescribes a different effective period. If

payment of the stated amount or arrangements for such payment are not

made, or a supplemental petition is not filed in accordance with

regulation, the full penalty or claim for forfeiture shall be deemed

applicable and shall be enforced by promptly referring the matter,

after required collection action, if appropriate, to the appropriate

Office of the Chief Counsel for preparation for referral to the

Department of Justice unless other action has been directed by the

Commissioner of Customs.

Sec. 171.23 Decisions not protestable.

(a) Mitigation decision not subject to protest. Any decision to

remit a forfeiture or mitigate a penalty is not a protestable decision

as defined under the provisions of 19 U.S.C. 1514. Any payment made in

compliance with any decision to remit a forfeiture or mitigate a

penalty is not a charge or exaction and therefore is not a protestable

action as defined under the provisions of 19 U.S.C. 1514.

Mitigation decision not subject to protest. Any decision to

remit a forfeiture or mitigate a penalty is not a protestable decision

as defined under the provisions of 19 U.S.C. 1514. Any payment made in

compliance with any decision to remit a forfeiture or mitigate a

penalty is not a charge or exaction and therefore is not a protestable

action as defined under the provisions of 19 U.S.C. 1514.

(b) Payment of mitigated amount as accord and satisfaction. Payment

of a mitigated amount in compliance with an administrative decision on

a petition or supplemental petition for relief shall be considered an

election of administrative proceedings and full disposition of the

case. Payment of a mitigated amount will act as an accord and

satisfaction of the Government claim. Payment of a mitigated amount

will never serve as a bar to filing a supplemental petition for relief.

Subpart D--Offers in Compromise

Sec. 171.31 Form of offers.

Offers in compromise submitted pursuant to the provisions of

section 617 of the Tariff Act of 1930, as amended (19 U.S.C. 1617),

must expressly state that they are being submitted in accordance with

the provisions of that section. The amount of the offer must be

deposited with Customs in accordance with the provisions of Sec. 161.5

of this chapter.

Sec. 171.32 Authority to accept offers.

The authority to accept offers in compromise, when recommended by

the General Counsel of the Treasury or his designee, resides with the

official having authority to decide a petition for relief.

Sec. 171.33 Acceptance of offers in compromise.

An offer in compromise shall be considered accepted only when the

offeror is so notified in writing. As a condition to accepting an offer

in compromise, the offeror may be required to enter into any collateral

agreement or to post any security which is deemed necessary for the

protection of the interest of the United States.

Subpart E--Restoration of Proceeds of Sale

Sec. 171.41 Application of provisions for petitions for relief.

red accepted only when the

offeror is so notified in writing. As a condition to accepting an offer

in compromise, the offeror may be required to enter into any collateral

agreement or to post any security which is deemed necessary for the

protection of the interest of the United States.

Subpart E--Restoration of Proceeds of Sale

Sec. 171.41 Application of provisions for petitions for relief.

The general provisions of subpart B of this part on filing and

content of petitions for relief apply to petitions for restoration of

proceeds of sale except insofar as modified by this subpart.

Sec. 171.42 Time limit for filing petition for restoration.

A petition for the restoration of proceeds of sale under section

613, Tariff Act of 1930, as amended (19 U.S.C. 1613) shall be filed

within 3 months after the date of the sale.

Sec. 171.43 Evidence required.

In addition to such other evidence as may be required under the

provisions of subpart B of this part, the petition for restoration of

proceeds of sale under section 613, Tariff Act of 1930, as amended (19

U.S.C. 1613), shall show the interest of the petitioner in the

property. The petition shall be supported by satisfactory proof that

the petitioner did not know of the seizure prior to the declaration or

decree of forfeiture and was in such circumstances as prevented him

from knowing of it.

Sec. 171.44 Forfeited property authorized for official use.

ion 613, Tariff Act of 1930, as amended (19

U.S.C. 1613), shall show the interest of the petitioner in the

property. The petition shall be supported by satisfactory proof that

the petitioner did not know of the seizure prior to the declaration or

decree of forfeiture and was in such circumstances as prevented him

from knowing of it.

Sec. 171.44 Forfeited property authorized for official use.

If forfeited property which is the subject of a claim under section

613, Tariff Act of 1930, as amended (19 U.S.C. 1613) has been

authorized for official use, retention or delivery shall be regarded as

the sale thereof for the purposes of section 613. The appropriation

available to the receiving agency for the purchase, hire, operation,

maintenance and repair of property of the kind so received is available

for the granting of relief to the claimant and for the satisfaction of

liens for freight, charges and contributions in general average that

may have been filed.

4. It is proposed to amend part 171 by adding a new subpart G to

read as follows:

Subpart G--Supplemental Petitions for Relief

Sec. 171.61 Time and place of filing.

If the petitioner is not satisfied with a decision of the deciding

official on an original petition for relief, a supplemental petition

may be filed with the Fines, Penalties, and Forfeitures Officer having

jurisdiction in the port where the violation occurred. Such

supplemental petition shall be filed within 60 days from the date of

notice to the petitioner of the decision from which further relief is

requested unless another time to file such a supplemental petition is

prescribed in the decision. A supplemental petition may be filed

whether or not the mitigated penalty or forfeiture remission amount

designated in the decision on the original petition is paid.

Sec. 171.62 Supplemental petition decision authority.

ate of

notice to the petitioner of the decision from which further relief is

requested unless another time to file such a supplemental petition is

prescribed in the decision. A supplemental petition may be filed

whether or not the mitigated penalty or forfeiture remission amount

designated in the decision on the original petition is paid.

Sec. 171.62 Supplemental petition decision authority.

(a) Decisions of Fines, Penalties, and Forfeitures Officer.

Supplemental petitions filed on cases where the original decision was

made by the Fines, Penalties, and Forfeitures Officer shall be

initially reviewed by that official. The Fines, Penalties, and

Forfeitures Officer may choose to grant more relief and issue a

decision indicating same to the petitioner. If the petitioner is

dissatisfied with the further relief granted or if the Fines,

Penalties, and Forfeitures Officer decides to grant no further relief,

the supplemental petition shall be forwarded to a designated

Headquarters official assigned to a field location for review and

decision, except that supplemental petitions filed in cases involving

violations of 19 U.S.C. 1641 where the amount of the penalty assessed

exceeds $10,000 shall be forwarded to the Chief, Penalties Branch,

Office of Regulations and Rulings.

(b) Decisions of Customs Headquarters. Supplemental petitions filed

on cases where the original decision was made by the Chief, Penalties

Branch, Office of Regulations and Rulings, Customs Headquarters, shall

be forwarded to the Director, International Trade Compliance Division,

Customs Headquarters, for review and decision.

(c) Decisions of Treasury Department. Supplemental petitions filed

on cases where the original decision was made in the Treasury

Department, shall be referred to the Chief, Penalties Branch, Office of

Regulations and Rulings, Customs Headquarters, who shall forward the

supplemental petitions to the Department with a recommendation.

nce Division,

Customs Headquarters, for review and decision.

(c) Decisions of Treasury Department. Supplemental petitions filed

on cases where the original decision was made in the Treasury

Department, shall be referred to the Chief, Penalties Branch, Office of

Regulations and Rulings, Customs Headquarters, who shall forward the

supplemental petitions to the Department with a recommendation.

(d) Authority of Assistant Commissioner. Any authority given to any

Headquarters official by this part may also be exercised by the

Assistant Commissioner, Office of Regulations and Rulings, or his

designee.

Sec. 171.63 Appeals to the Secretary of the Treasury in certain 1592

cases.

A petitioner filing a supplemental petition pursuant to this

subpart from a decision of the Chief, Penalties Branch, Office of

Regulations and Rulings, with respect to any liability assessed under

19 U.S.C. 1592 may request that the petition be accepted as an appeal

to the Secretary of the Treasury. The Secretary or his designee will

accept for decision any such supplemental petition when in his

discretion he determines that such petition raises a question of fact,

law or policy of such importance as to require a decision by the

Secretary. If the Secretary or his designee declines to accept an

appeal for decision, the petitioner will be so informed. In such a

case, a decision will be issued thereon by the Director, International

Trade Compliance Division.

Sec. 171.64 Waiver of statute of limitations.

The deciding official always reserves the right to require a waiver

of the statute of limitations executed by the claimants to the property

or charged party or parties as a condition precedent before accepting a

petition for relief or a supplemental petition in any case where the

statute will be available as a defense to all or part of that case

within one year from the date of decision on the original petition for

relief.

PART 172--CLAIMS FOR LIQUIDATED DAMAGES; PENALTIES SECURED BY BONDS

ecuted by the claimants to the property

or charged party or parties as a condition precedent before accepting a

petition for relief or a supplemental petition in any case where the

statute will be available as a defense to all or part of that case

within one year from the date of decision on the original petition for

relief.

PART 172--CLAIMS FOR LIQUIDATED DAMAGES; PENALTIES SECURED BY BONDS

1. The authority citation for Part 172 is revised to read as

follows:

Authority: 19 U.S.C. 66, 1618, 1623, 1624.

PART 172--[REVISED]

2. It is proposed to revise part 172 to read as follows:

PART 172--CLAIMS FOR LIQUIDATED DAMAGES; PENALTIES SECURED BY BONDS

Sec. 172.0 Scope.

This part contains provisions relating to petitions for relief from

claims for liquidated damages arising under any Customs bond and

penalties incurred which are secured by the conditions of the

International Carrier Bond (See Sec. 113.64 of this chapter). This part

does not relate to petitions on unsecured fines or penalties or

seizures and forfeitures, nor does it relate to petitions for the

restoration of proceeds of sale pursuant to 19 U.S.C. 1613.

Subpart A--Notice of Claim and Application for Relief

Sec. 172.1 Notice of liquidated damages or penalty incurred and right

to petition for relief.

(a) Notice of liquidated damages or penalty incurred. When there is

a failure to meet the conditions of any bond posted with Customs or

when a violation occurs which results in assessment of a penalty which

is secured by a Customs bond, the principal shall be notified in

writing of any liability for liquidated damages or penalty incurred and

a demand shall be made for payment. The sureties on such bond shall

also be notified in writing of any such liability at the same time.

(b) Notice of right to petition for relief. The notice shall inform

the principal that application may be made for relief from payment of

liquidated damages or penalty.

Sec. 172.2 Petition for relief.

liability for liquidated damages or penalty incurred and

a demand shall be made for payment. The sureties on such bond shall

also be notified in writing of any such liability at the same time.

(b) Notice of right to petition for relief. The notice shall inform

the principal that application may be made for relief from payment of

liquidated damages or penalty.

Sec. 172.2 Petition for relief.

(a) To whom addressed. Petitions for the cancellation of any claim

for liquidated damages or remission or mitigation of a fine or penalty

secured by a Customs bond incurred under any law or regulation

administered by Customs shall be addressed to the Fines, Penalties, and

Forfeitures Officer designated in the notice of claim.

(b) Signature. The petition for remission or mitigation shall be

signed by the petitioner, his attorney-at-law or a Customs broker. If

the petitioner is a corporation, the petition may be signed by an

officer or responsible supervisory official of the corporation, or a

representative of the corporation. Electronic signatures are

acceptable. The deciding officer may, in his or her discretion, require

proof of representation before consideration of any petition.

(c) Form. The petition for cancellation, remission or mitigation

need not be in any particular form. It shall set forth the following:

(1) The date and place of the violation; and

(2) The facts and circumstances relied upon by the petitioner to

justify cancellation, remission or mitigation.

(d) False statement in petition. A false statement contained in a

petition may subject the petitioner to prosecution under the provisions

of 18 U.S.C. 1001.

Sec. 172.3 Filing a petition.

(a) Where filed. A petition for relief shall be filed by the bond

principal with the Fines, Penalties, and Forfeitures office whose

address is given in the notice.

fy cancellation, remission or mitigation.

(d) False statement in petition. A false statement contained in a

petition may subject the petitioner to prosecution under the provisions

of 18 U.S.C. 1001.

Sec. 172.3 Filing a petition.

(a) Where filed. A petition for relief shall be filed by the bond

principal with the Fines, Penalties, and Forfeitures office whose

address is given in the notice.

(b) When filed. Petitions for relief shall be filed within 60 days

from the date of mailing to the bond principal the notice of claim for

liquidated damages or penalty secured by a bond.

(c) Extensions. The Fines, Penalties, and Forfeitures Officer is

empowered to grant extensions of time to file petitions when the

circumstances so warrant.

(d) Number of copies. The petition shall be filed in duplicate

unless filed electronically.

(e) Exception for certain cases. If a penalty or claim for

liquidated damages is assessed and fewer than 180 days remain from the

date of penalty or liquidated damages notice before the statute of

limitations may be asserted as a defense, the Fines, Penalties, and

Forfeitures Officer may specify in the notice a reasonable period of

time, but not less than 7 working days, for the

filing of a petition for relief. If a petition is not filed within the

time specified, the matter shall be transmitted promptly to the

appropriate Office of the Chief Counsel for referral to the Department

of Justice.

172.4 Demand on surety.

If the principal fails to file a petition for relief or fails to

comply in the prescribed time with a decision to mitigate a penalty or

cancel a claim for liquidated damages issued with regard to a petition

for relief, Customs shall make a demand for payment on surety. Surety

will then have 60 days from the date of the demand to file a petition

for relief.

Subpart B--Actions on Petitions

Sec. 172.11 Petitions acted on by Fines, Penalties, and Forfeitures

Officer.

the prescribed time with a decision to mitigate a penalty or

cancel a claim for liquidated damages issued with regard to a petition

for relief, Customs shall make a demand for payment on surety. Surety

will then have 60 days from the date of the demand to file a petition

for relief.

Subpart B--Actions on Petitions

Sec. 172.11 Petitions acted on by Fines, Penalties, and Forfeitures

Officer.

(a) Mitigation or cancellation authority. Upon receipt of a

petition for relief submitted pursuant to the provisions of section 618

or 623 of the Tariff Act of 1930, as amended (19 U.S.C. 1618 or 19

U.S.C. 1623), or section 320 of title 46, United States Code App. (46

U.S.C. App. 320), the Fines, Penalties, and Forfeitures Officer,

notwithstanding any other regulation, is empowered to mitigate any

penalty or cancel any claim for liquidated damages on such terms and

conditions as, under law and in view of the circumstances, he or she

shall deem appropriate in accordance with appropriate delegations of

authority.

(b) When violation did not occur. Notwithstanding any other

delegation of authority, the Fines, Penalties, and Forfeitures Officer

is always empowered to cancel any case without payment of a mitigated

or cancellation amount when he or she definitely determines that the

act or omission forming the basis of any claim of penalty or claim for

liquidated damages did not occur.

Sec. 172.12 Petitions acted on at Customs Headquarters.

twithstanding any other

delegation of authority, the Fines, Penalties, and Forfeitures Officer

is always empowered to cancel any case without payment of a mitigated

or cancellation amount when he or she definitely determines that the

act or omission forming the basis of any claim of penalty or claim for

liquidated damages did not occur.

Sec. 172.12 Petitions acted on at Customs Headquarters.

Upon receipt of a petition for relief filed pursuant to the

provisions of section 618 or 623 of the Tariff Act of 1930, as amended

(19 U.S.C. 1618 or 19 U.S.C. 1623), or section 320 of title 46, United

States Code App. (46 U.S.C. App. 320), involving fines, penalties, and

claims for liquidated damages which are outside of his or her

jurisdiction, the Fines, Penalties, and Forfeitures Officer shall refer

that petition to the Chief, Penalties Branch, Office of Regulations and

Rulings, Customs Headquarters, who is empowered, notwithstanding any

other regulation, to mitigate penalties or cancel bond claims on such

terms and conditions as, under law and in view of the circumstances, he

or she shall deem appropriate.

Sec. 172.13 Limitations on consideration of petitions.

(a) Late petitions. Petitions filed after the expiration of the 60-

day petitioning period may be considered by the deciding official if,

in his or her discretion, the efficient administration of justice would

be met.

(b) Cases referred for institution of legal proceedings. No action

shall be taken on any petition if the civil liability has been referred

to the Department of Justice for institution of legal proceedings. The

petition shall be forwarded to the Department of Justice.

may be considered by the deciding official if,

in his or her discretion, the efficient administration of justice would

be met.

(b) Cases referred for institution of legal proceedings. No action

shall be taken on any petition if the civil liability has been referred

to the Department of Justice for institution of legal proceedings. The

petition shall be forwarded to the Department of Justice.

(c) Delinquent sureties. No action shall be taken on any petition

from a principal or surety if received after the issuance to surety of

a notice to show cause pursuant to the provisions of Sec. 113.38(c)(3)

of this chapter.

Sec. 172.14 Headquarters advice.

The advice of the Director, International Trade Compliance

Division, Office of Regulations and Rulings, Customs Headquarters, may

be sought in any case, without regard to jurisdictional amount, when a

novel or complex issue concerning a ruling, policy, or procedure is

presented concerning a Customs action(s) or potential Customs action(s)

relating to penalties secured by bonds (including penalty-based demands

for duty), claims for liquidated damages or mitigating any claim. The

request for advice may be initiated by the bond principal, surety or

any Customs officer, but must be submitted to the Fines, Penalties, and

Forfeitures Officer. The Fines, Penalties, and Forfeitures Officer

retains the authority to refuse to forward any request that fails to

raise a qualifying issue and to seek legal advice from the appropriate

Associate or Assistant Chief Counsel in such cases.

Subpart C--Disposition of Petitions

Sec. 172.21 Limitation on time decision effective.

t must be submitted to the Fines, Penalties, and

Forfeitures Officer. The Fines, Penalties, and Forfeitures Officer

retains the authority to refuse to forward any request that fails to

raise a qualifying issue and to seek legal advice from the appropriate

Associate or Assistant Chief Counsel in such cases.

Subpart C--Disposition of Petitions

Sec. 172.21 Limitation on time decision effective.

A decision to mitigate a penalty or to cancel a claim for

liquidated damages upon condition that a stated amount is paid shall be

effective for not more than 60 days from the date of notice to the

petitioner of such decision unless the decision itself prescribes a

different effective period. If payment of the stated amount is not made

or a petition or a supplemental petition is not filed in accordance

with regulation, the full penalty or claim for liquidated damages shall

be deemed applicable and shall be enforced by promptly transmitting the

matter, after required collection action, if appropriate, to the

appropriate office of the Chief Counsel for preparation for referral to

the Department of Justice unless other action has been directed by the

Commissioner of Customs. Any such case may also be the basis for a

sanction action commenced in accordance with regulations in this

Chapter.

Sec. 172.22 Decisions not protestable.

(a) Mitigation decision not subject to protest. Any decision to

remit or mitigate a penalty or cancel a claim for liquidated damages

upon payment of a lesser amount is not a protestable decision as

defined under the provisions of 19 U.S.C. 1514. Any payment made in

compliance with any decision to remit or mitigate a penalty or cancel a

claim for liquidated damages upon payment of a lesser amount is not a

charge or exaction and therefore is not a protestable action as defined

under the provisions of 19 U.S.C. 1514.

damages

upon payment of a lesser amount is not a protestable decision as

defined under the provisions of 19 U.S.C. 1514. Any payment made in

compliance with any decision to remit or mitigate a penalty or cancel a

claim for liquidated damages upon payment of a lesser amount is not a

charge or exaction and therefore is not a protestable action as defined

under the provisions of 19 U.S.C. 1514.

(b) Payment of mitigated or cancellation amount as accord and

satisfaction. Payment of a mitigated or cancellation amount in

compliance with an administrative decision on a petition or

supplemental petition for relief shall be considered an election of

administrative proceedings and full disposition of the case. Payment of

a mitigated or cancellation amount will act as an accord and

satisfaction of the Government claim. Payment of a mitigated or

cancellation amount will never serve as a bar to filing a supplemental

petition for relief.

Subpart D--Offers in Compromise

Sec. 172.31 Form of offers.

Offers in compromise submitted pursuant to the provisions of

section 617 of the Tariff Act of 1930, as amended (19 U.S.C. 1617),

must expressly state that they are being submitted in accordance with

the provisions of that section. The amount of the offer must be

deposited with Customs in accordance with the provisions of Sec. 161.5

of this chapter.

Sec. 172.32 Authority to accept offers.

The authority to accept offers in compromise, when recommended by

the General Counsel of the Treasury or his designee, resides with the

official having authority to decide a petition for relief, except that

offers in compromise submitted with regard to penalties secured by a

bond or claims for liquidated damages which are the subject of a letter

to show cause issued to a surety in anticipation of possible sanction

action authorized under the provisions of part 113 of this chapter

shall be accepted by the designated Headquarters official who issued

the show cause letter.

for relief, except that

offers in compromise submitted with regard to penalties secured by a

bond or claims for liquidated damages which are the subject of a letter

to show cause issued to a surety in anticipation of possible sanction

action authorized under the provisions of part 113 of this chapter

shall be accepted by the designated Headquarters official who issued

the show cause letter.

Sec. 172.33 Acceptance of offers in compromise.

An offer in compromise shall be considered accepted only when the

offeror is so notified in writing. As a condition to accepting an offer

in compromise, the offeror may be required to enter into any collateral

agreement or to post any security which is deemed necessary for the

protection of the interest of the United States.

Subpart E--Supplemental Petitions for Relief

Sec. 172.41 Time and place of filing.

If the petitioner is not satisfied with a decision of the deciding

official on an original petition for relief, a supplemental petition

may be filed with the Fines, Penalties, and Forfeitures Officer having

jurisdiction in the port where the violation occurred. Such

supplemental petition shall be filed within 60 days from the date of

notice to the petitioner of the decision from which further relief is

requested unless another time to file such a supplemental petition is

prescribed in the decision. A supplemental petition may be filed

whether or not the mitigated amount designated in the decision on the

original petition is paid.

Sec. 172.42 Supplemental petition decision authority.

filed within 60 days from the date of

notice to the petitioner of the decision from which further relief is

requested unless another time to file such a supplemental petition is

prescribed in the decision. A supplemental petition may be filed

whether or not the mitigated amount designated in the decision on the

original petition is paid.

Sec. 172.42 Supplemental petition decision authority.

(a) Decisions of Fines, Penalties, and Forfeitures Officer.

Supplemental petitions filed on cases where the original decision was

made by the Fines, Penalties, and Forfeitures Officer, shall be

initially reviewed by that official. The Fines, Penalties, and

Forfeitures Officer may choose to grant more relief and issue a

decision indicating same to the petitioner. If the petitioner is

dissatisfied with the further relief granted or if the Fines,

Penalties, and Forfeitures Officers decides to grant no further relief,

the supplemental petition shall be forwarded to a designated

Headquarters official assigned to a field location for review and

decision.

(b) Decisions of Customs Headquarters. Supplemental petitions filed

on cases where the original decision was made by the Chief, Penalties

Branch, Office of Regulations and Rulings, Customs Headquarters, shall

be forwarded to the Director, International Trade Compliance Division,

for review and decision.

(c) Authority of Assistant Commissioner. Any authority given to any

Headquarters official by this part may also be exercised by the

Assistant Commissioner, Office of Regulations and Rulings, or his

designee.

Sec. 172.43 Waiver of statute of limitations.

ns and Rulings, Customs Headquarters, shall

be forwarded to the Director, International Trade Compliance Division,

for review and decision.

(c) Authority of Assistant Commissioner. Any authority given to any

Headquarters official by this part may also be exercised by the

Assistant Commissioner, Office of Regulations and Rulings, or his

designee.

Sec. 172.43 Waiver of statute of limitations.

The deciding official always reserves the right to require a waiver

of the statute of limitations executed by the charged party or parties

as a condition precedent before accepting a supplemental petition in

any case where the statute will be available as a defense to all or

part of that case within one year from the date of decision on the

original petition for relief.

Samuel H. Banks,

Acting Commissioner of Customs.

Approved: January 13, 1998.

John P. Simpson,

Deputy Assistant Secretary of the Treasury.

[FR Doc. 98-2250 Filed 1-30-98; 8:45 am]

BILLING CODE 4820-02-P