[Federal Register Volume 64, Number 172 (Tuesday, September 7, 1999)]
[Rules and Regulations]
[Pages 48528-48543]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 99-23033]
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DEPARTMENT OF THE TREASURY
Customs Service
19 CFR Parts 113, 151, and 178
[T.D. 99-67]
RIN 1515-AB60
Accreditation of Commercial Testing Laboratories; Approval of
Commercial Gaugers
AGENCY: Customs Service, Treasury.
ACTION: Final rule.
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SUMMARY: This document amends the Customs Regulations relating to the
commercial testing and gauging of imported merchandise, pursuant to
Customs modernization provisions of the North American Free Trade
Agreement Implementation Act. The regulations revise the general
procedures for the accreditation/reaccreditation of commercial
laboratories, the approval/reapproval of commercial gaugers, and the
suspension and revocation of such accreditations/approvals. Further,
the regulations provide that Customs will charge such laboratories/
gaugers to accredit/approve and periodically reaccredit/reapprove their
commercial services pursuant to a reimbursable fee schedule, and make
provision for the imposition of monetary penalties for failure to
adhere to any of the provisions applicable to the examination,
sampling, and testing, or gauging of imported merchandise.
EFFECTIVE DATE: October 7, 1999.
FOR FURTHER INFORMATION CONTACT: Ira Reese, Laboratories and Scientific
Services, (202) 927-1060; or Marcelino Borges, Laboratories and
Scientific Services, (202) 927-1137.
SUPPLEMENTARY INFORMATION:
Background
On December 8, 1993, the United States enacted the North American
Free Trade Agreement Implementation Act (the Act), Pub.L. 103-182, 107
Stat. 2057. Title VI of the Act contains provisions pertaining to
Customs Modernization (107 Stat. 2170); section 613 of Subtitle A to
Title VI amends section 499 of the Tariff Act of 1930 (19 U.S.C. 1499),
which provides Customs with the authority to conduct examinations and
detain imported merchandise.
The Commercial Laboratory/Gauger Testing Provisions of Section 613
The provisions of section 613, among other things, codified Customs
regulations and administrative guidelines concerning the use of
commercial laboratories and gaugers by adding a new paragraph (b) to
section 499 (19 U.S.C. 1499(b)). Regarding the accreditation/approval
aspects of commercial laboratories/gaugers, the provisions of new
paragraph (b) authorize Customs to:
(1) set procedures for the accreditation of commercial laboratories
in the United States, which may be used to perform tests relating to
the admissibility, quantity, composition, or characteristics of
imported merchandise, and the approval of commercial gaugers in the
United States, which may be used to perform tests to establish the
quantities of imported merchandise;
(2) impose reasonable charges for such accreditations/approvals and
periodic reaccreditations/reapprovals; and
(3) establish the conditions regarding the suspension and
revocation of such accreditations and approvals, which may include the
imposition of monetary
[[Page 48529]]
penalties not to exceed $100,000, in addition to penalties for any loss
of revenue, in appropriate cases.
Regarding the testing/gauging aspects of commercial laboratories/
gaugers, new paragraph (b) further provides that:
(1) in the absence of Customs testing, Customs will accept analysis
and quantity results from Customs-accredited laboratories and Customs-
approved gaugers; however, this circumstance does not limit or
otherwise preclude Customs or any other Federal agency from
independently testing, analyzing, or quantifying any sample or
merchandise;
(2) testing procedures and methodologies will be made available
upon request to any person, except when they are proprietary to the
holder of a copyright or patent or developed by Customs for enforcement
purposes; information resulting from any Customs testing will be made
available to the importer of record and any agents thereof, except when
the information meets the above specified exclusions from disclosure;
and
(3) laboratories/gaugers may seek judicial review of any final
Customs decision that adversely affects their accreditation/approval,
i.e., denial, suspension, or revocation, or that imposes a monetary
penalty, by commencing an action within 60 days of such decision in the
Court of International Trade.
New paragraph (b) (set forth as a note to 19 U.S.C. 1499) also
provides that commercial laboratories/gaugers that had already been
accredited/approved by Customs may continue the accredited/approved
activities without having to seek accreditation/approval under the new
statute but that such facilities are subject to the new statutory and
regulatory requirements for reaccreditation/reapproval.
On June 9, 1998, Customs published a Notice of Proposed Rulemaking
(NPRM) in the Federal Register (63 FR 31385) that proposed to amend the
Customs Regulations relating to the commercial testing and gauging of
imported merchandise, pursuant to Customs modernization provisions of
the North American Free Trade Agreement Implementation Act (19 U.S.C.
1499(b)), and solicited comments in these matters. The comment period
closed August 10, 1998; seven comments were received. The comments and
Customs responses are set forth below.
Analysis of Comments
Expansion of Program
Comment: Three commenters recommended against the expansion of the
current program.
Customs Response: Prior to enactment of the Act, Customs
regulations and administrative guidelines concerning the use of
commercial laboratories and gaugers only allowed for the accreditation
of commercial laboratories and the approval of commercial gaugers to
perform selected tests on certain imported merchandise. The provisions
of the Act authorizing the establishment of regulations pertaining to
testing laboratories (19 U.S.C. 1499(b)) provide that accredited
private laboratories may be used to perform tests ``that would
otherwise be performed by Customs laboratories.'' Clearly, by this
language Congress intended that the Customs laboratory accreditation
program be extended to include the testing of many more products.
Accordingly, no change to the scope of the regulatory amendments
will be made based on these comments.
Lack of Third-Party Accreditation/Approval Entities
Comment: Two commenters, both independent accreditation bodies
acknowledging Congress' intention in the Act to expand the existing
commercial laboratory accreditation program, suggested that Customs
could benefit from making use of existing accreditation programs and
urged Customs to reconsider expansion of its program to rely on such
programs. The commenters suggested that Customs shift from an
``administration'' role to an ``oversight'' role.
Customs Response: Customs is not against third-party accreditation.
However, Customs believes it is best positioned to do the accrediting
of laboratories in the expanded program. Although Customs may consider
third-party accreditation in the future, we note that our current
decision not to use a third-body accreditation organization is
predicated on several factors including the following:
A. As a public organization, Customs can keep the program costs to
a minimum while meeting all of our technical and law enforcement needs;
B. Customs has 20+ years experience in successfully running these
types of programs; and
C. Customs interests and determinations go beyond those of other
accrediting bodies, to include:
1. The financial independence of the laboratory/gauger;
2. Background investigations of the applicant;
3. Ability to do the extremely broad range of testing required by
Customs; and
4. Ability to assist gaugers and laboratories using the Informed
Compliance process.
To transfer these interests and concerns to a third body would
require time and coordination with a third body organization that could
be better used by Customs in the actual accreditation/approval process.
Accordingly, no change to the regulatory amendments will be made
based on these comments.
Methodology
Comment: One commenter expressed concern about Customs specifying
which testing methods a laboratory can use and recommends industry
input prior to the establishment of such testing requirements.
Customs Response: Although Customs has already approved certain
testing methods and designated them for use in Commodity Group
Brochures and the U.S. Customs Laboratory Methods Manual, if a
laboratory seeking accreditation/reaccreditation believes that other
testing methods are more appropriate than those testing methods
designated by Customs, then, under the provisions of Sec. 151.12(e),
the laboratory can submit to the Executive Director with its
application the testing method(s) it believes is more appropriate. Such
alternative methods will be considered and approved on a case-by-case
basis. (Note that this same latitude in designating approved
measurement procedures is afforded gaugers in Sec. 151.13(c).)
Since, as proposed, the regulations provide that commercial
laboratories may seek approval of testing methods that they believe are
appropriate, no change to the regulatory amendments will be made based
on this comment. However, because the proposed laboratory regulations
(the gauger regulations are not affected, see discussion below) did not
reference the U.S. Customs Laboratory Methods Manual as a source
containing testing methods approved by Customs, proposed Sec. 151.12(a)
is revised to include this reference as a source of appropriate testing
methods and to note its availability on the Internet at Customs' Web
Site, discussed below.
Burden of Five (5)-Day Notification in General; Notification of
Equipment, etc. Changes in Particular
Comment: One commenter felt that the five (5)-day notification
requirement
[[Page 48530]]
pertaining to changes in legal name, address, etc., was burdensome,
especially for such items as staffing, equipment, and instruments, and
suggested that Customs institute a semi-annual notification
requirement.
Customs Response: Customs agrees that there is no need to require
the reporting of ``managerial or professional or executive staff'' and
``facilities, instruments, or equipment, etc.'' and is removing that
requirement by revising the provisions of proposed Sec. 151.12(c)(6)
(and the parallel provision for gaugers at Sec. 151.13(b)(6)). However,
Customs will retain the five (5)-day notification requirement
pertaining to changes in legal name, address, etc., as these items are
substantive changes that affect the accreditation/approval of the
facility and Customs must be able to maintain accurate records.
Proficiency Training
Comment: One commenter, while supporting the need for proficiency
testing, questioned the need for Customs to develop its own program.
This commenter opined that industrial programs, such as the American
Society for Testing and Materials (ASTM) Laboratory Cross Check
Program, are already available, of proven effect and efficiency, and
should be allowed to suffice.
Customs Response: Customs agrees with this observation and has
revised the provisions of proposed Sec. 151.12(f)(3)(ii) and (iii) (and
the applicable provision for gaugers at Sec. 151.13(d)(3)(i)) to modify
the requirement that proficiency testing through check samples ``will''
be required to read ``may'' be required. This change will permit
accredited/approved laboratories/gaugers to participate in proficiency
test programs developed by recognized industrial organizations. A
facility's level of proficiency, as determined by such programs, can
then be considered by Customs when Customs evaluates the facility for
purposes of reaccreditation/reapproval. However, this change will not
preclude Customs from developing its own check program if Customs
determines that such a program is necessary.
Excessive Fee Structure; Organizations With Multiple Locations
Comment: Three commenters expressed concern about the fees
associated with the accreditation process for laboratories. Two of
these commenters stated that variable costs appeared to be high,
especially for background investigations, and one of these commenters
inquired how large commercial laboratory organizations with multiple
locations would be handled.
Customs Response: Regarding the fee structure, the provisions of
the Act were promulgated at the request of industry with the
understanding that Customs would be given the authority to recover non-
personnel costs. The costs contained in these regulations are
consistent with that authority and are Customs best estimates of
expenses. These program costs will be reevaluated periodically to see
if the assumptions upon which they are based are correct.
Customs has reviewed the fee structure of third-party accreditation
bodies, as well as those of other federal and state agencies that have
the authority to charge fees, and found that the fees proposed are
significantly lower than third-party accreditations and lower than most
public-sector run programs. Customs identified certain indeterminate
costs as variable costs in an effort to keep these costs as low as
possible to the laboratory/gauger.
Regarding organizations with multiple locations, each site within
an organization can separately apply for accreditation/approval or all
sites within an organization can be designated in a single application.
The choice will be with the applicant; however, all applicable variable
(for technical inspections) and fixed (for administration) costs
associated with processing the application submitted will be assessed
for each site designated for accreditation/approval. As stated in the
Background portion of the NPRM concerning ``variable costs,'' Customs
will endeavor to bundle these costs, which include background
investigations, so that where these costs apply to more than one site,
the costs will be fairly apportioned between applicants.
Accordingly, no change to the fee structure in the regulations will
be made based on these comments.
Fee Structure Unfair to Small Entities
Comment: Three commenters objected to the fairness of the proposed
fee structure as it will impact on very small laboratories and gaugers.
These commenters argue that such gauger/laboratory facilities currently
in the program should be exempt from any reapproval/reaccreditation
fees because they will not see any benefit from the expansion. Further,
these commenters argue that in order for an existing facility to
``expand'' its services, it will have to acquire expertise and
equipment, both of which are expensive. These commenters conclude by
stating that if Customs wants to recapture the expenses of an expanded
program it should do so by charging those facilities that will benefit,
and not those already in the program.
Customs Response: Customs is concerned about being fair to all
parties in interest. However, paragraph (b) of section 613 of the Act
mandates that while those laboratories/gaugers that were accredited/
approved prior to December 8, 1993, need not reapply for initial
accreditation/approval, such facilities will be subject to
reaccreditation/reapproval under the applicable statute and
implementing regulations. Accordingly, these grandfathered laboratory
and gauger facilities are required to pay the fees that are associated
with reaccreditation/reapproval.
Customs believes that the expansion of this program provides an
opportunity for any laboratory to participate in the laboratory program
on a level playing field. Any company will have the opportunity to look
at their position and make a decision as to the degree to which it will
participate in the laboratory program. Accordingly, Customs has
structured the cost system to be commensurate with the level of
laboratory participation in the program. The costs are being fairly
leveled against all parties and will be reviewed annually to ensure
that all costs are reasonable to the success of the program.
Accordingly, no change to the fee structure in the regulations will
be made based on these comments.
Sample Retention Policy
Comment: One commenter stated that the one year sample retention
period was too restrictive, and pointed out that special consideration
should be made where the sample is perishable or hazardous. This
commenter noted that typical storage retention periods in the
inspection industry are from 45-90 days.
Customs Response: Regarding the one-year sample-retention period
for non-perishable samples and remnants, Customs agrees that in the
main this requirement may work a hardship on laboratories. Accordingly,
Customs is lessening the retention period for non-perishable items to
four months, unless the samples are the subject of litigation.
Recently, Customs has authorized its own laboratories to shorten their
sample-retention period from one year to four months, and believes that
this same retention period could be allowed for commercial laboratories
performing Customs testing services.
Regarding the subject of perishable samples, both in the Background
[[Page 48531]]
portion and the proposed Amendments to the Regulations portion of the
NPRM (at Sec. 151.12(j)(1)) it was stated that perishable samples and
sample remnants could be disposed of more expeditiously, if done in
accordance with acceptable laboratory procedures. With regard to
hazardous materials, such samples are not considered comparable to
perishable samples, and laboratories accredited to test such materials
should know how to safely handle and store or dispose of these
materials.
Accordingly, to make more clear that there is both a perishable
goods and a non-perishable goods retention period, the provisions of
proposed Sec. 151.12(j)(1) are revised to separate the early disposal
of perishable samples provision from the non-perishable samples
provision. Further, the retention period for non-perishable goods is
lessened from one year to four months, unless the merchandise sampled
is the subject of litigation, in which case the laboratory will retain
that sample merchandise until instructed by Customs that it can dispose
of it.
Status of an Analysis Report Where Customs also Analyzes the Sample
Comment: One commenter questioned why an importer would use a
commercial laboratory if Customs could also analyze shipments and
simply ignore an accredited laboratory's report.
Customs Response: The Act provides that the establishment of a
program for the accrediting/approving of commercial facilities to
perform any of the functions currently performed by Customs facilities
does not limit in any way or preclude Customs from independently
testing or analyzing any sample or merchandise and basing
administrative action upon Customs findings. For this reason, no change
will be made to the regulations on this subject. However, Customs would
like to make all concerned aware that Customs does not simply ignore
the report of an accredited lab or an approved gauger in any situation.
Where there is a contradiction between reports, Customs will review the
situation in detail and if the report from the accredited lab or an
approved gauger is found to be more accurate or controlling in the
situation at hand, the Executive Director or his designee will
authorize the use of the accredited lab or approved gauger report in
lieu of Customs report.
Disclosure of Testing Procedures and Methods
Comment: One commenter stated that Customs should make the
following two points clear concerning the disclosure/availability of
testing procedures and methods:
(1) that the amount of laboratory analysis methods that cannot be
released because of copyright/patent or law enforcement reasons is a
very tiny fraction of Customs methods, and that all other methods,
including methods to ascertain compliance with other agency
requirements, etc., are available to the public at no charge; and
(2) that copies of U.S. Customs lab reports and worksheets are not
subject to the Freedom of Information Act (FOIA), and that such lab
reports are available free of charge and the associated worksheets are
available for a flat fee of $ 10.
Customs Response: Regarding the commenter's first contention
concerning the disclosure/availability of laboratory analysis methods,
Customs generally agrees. Customs reiterates, however, that there are
some laboratory analysis methods that are confidential because of
enforcement concerns or because the methods are patented or
copyrighted. Regarding the public availability of laboratory analysis
methods at no charge, the commenter is correct. As indicated in the
NPRM and previously in this document, a listing of the methods in the
U.S. Customs Laboratory Methods Manual is available at the Customs Web
Site on the Internet (www.customs.gov) and a description of those
methods, i.e., those prepared by public sources such as Customs
Laboratory personnel, will also be available at the Customs Web Site.
But Customs points out that other methods that have been developed by
private commercial organizations are not available from Customs. These
other methods should be obtained directly from these commercial
organizations.
Regarding the commenter's second contention concerning the free
availability of U.S. Customs lab reports without resort to FOIA and the
availability of associated worksheets for a flat fee without resort to
the FOIA, Customs does release, free of charge, to the importer of
record and their agents, including the customs broker, laboratory
reports that do not include proprietary information or are not related
to an investigation. While a FOIA request is not necessary, Customs
still requires a written request from the importer of record or agent.
When the requested Customs laboratory report is released, it does not
include the report's associated worksheets or other supporting data.
Customs laboratory worksheets, including associated spectra,
chromatograms, etc., if not containing proprietary or investigation-
related information are also released by Customs upon written request
by the importer of record and their agents, including the customs
broker. However, Customs does assess a charge for this information
based on the FOIA guidelines for the costs associated with searching
and photocopying the requested materials. This material will not be
released prior to the payment of all applicable fees.
No regulatory changes will be made based on these comments.
Subcontracting to another Customs-Accredited/Approved Site
Comment: Two commenters could not see the reason why one Customs-
approved laboratory should not be able to subcontract to another
Customs-approved laboratory. In this regard, one of these commenters
inquired as what constituted subcontracting between companies owned or
managed by the same parent organization (an issue visited briefly above
under organizations with multiple locations).
Customs Response: Reconsidering this issue and reviewing the
position contained in ASTM E548: Standard Guide for General Criteria
Used for Evaluating Laboratory Competence (and Guide 25 of the
International Organization for Standardization entitled General
Requirements for the Competence of Calibration and Test Laboratories, a
parallel publication; see discussion below), Customs agrees that
subcontracting between Customs accredited/approved facilities should be
allowed. Accordingly, the provisions of Sec. 151.12(j)(5) (and the
applicable gauger provisions at Sec. 151.13(h)(4)) are revised to allow
for subcontracting between Customs-accredited/approved facilities.
Limiting Gaugers Activities to Petroleum Products
Comment: One commenter inquired if the provisions of Sec. 151.13(a)
which state that commercial gaugers deal mainly with petroleum was
meant to limit commercial gauger activities to just petroleum products.
Customs Response: No, this is not the case. Because gauging
activities in general do include the measurement of animal and
vegetable oils, as well as petroleum and petroleum products and bulk
chemicals, proposed Sec. 151.13(a) is revised to include these
endeavors as well. Customs would like to clarify that through the
application process, a gauger can list any area of gauging where a
commercial activity may be feasible. Further, already approved gaugers
can request expanded gauging opportunities at no additional cost to
their reapproval.
[[Page 48532]]
Gauging Procedures
Comment: One commenter inquired when the Customs Commodity Group
brochure dealing with gauging and measurement procedures would be
published, so that he could review it.
Customs Response: The proposed regulatory text of Sec. 151.13(c)
providing for this was an error, as the definition of Commodity Group
Brochure (provided at Sec. 151.12(a)) clearly limits these booklets to
laboratory testing procedures; Customs does not intend to prepare such
a brochure for gauging activities. Accordingly, the regulatory text of
proposed Sec. 151.13(c) is revised to provide that approved gaugers
must comply with appropriate procedures published by such organizations
as the ASTM and the American Petroleum Institute (API), and other
procedures approved in writing by the Executive Director.
Gauger Equipment Requirements in Closed-System Measurements
Comment: One commenter expressed industry concern about the
equipment requirements contained at proposed Sec. 151.13(d)(3)(ii)(A),
which require that gaugers have all of the equipment and instruments
needed to conduct approved services, as it relates to closed system
measurement equipment. The commenter states that, unlike other aspects
of the industry, there is no standardization of this equipment, even
among different models made by the same manufacturer. The concern stems
from the fact that many closed petroleum systems have unique piping and
fittings that preclude a gauger from having all of the needed
connectors to hook up a measurement system. The commenter feels that
Customs should specify either minimum required equipment or fittings.
Customs Response: It is noted that the proposed regulations in this
area are not different from the existing regulations under which the
industry is currently operating, and no radical change is anticipated.
Enumeration of minimum required equipment or fittings is not necessary
because Customs allows this industry to establish its own requirements
(this is another reason why there is no Commodity Group Brochure for
gauging). Further, it should be noted that Customs works very
positively with this industry, on a case-by-case basis, to permit the
use of refinery or facility connectors when they are unique and
unavailable to the general gauger industry. But where the situation
becomes a routine responsibility of a gauger, Customs expects the
gauger to own and calibrate all of the connectors and equipment that
are added to a system in order to make the appropriate measurements.
Accordingly, no change to the regulations will be made based on
this comment.
Notice of Proposed Assessment of Penalties
Comment: One commenter expressed concern that there was no notice
or due process protection before the imposition of penalties, and
argued that specific guidelines should be established so that
variations in interpretation of these regulatory provisions at
different ports could be avoided.
Customs Response: Regarding the due process rights of accredited
laboratories/approved gaugers where penalties may be assessed, Customs
agrees that advance notice (30 calendar days) of impending penalties
should be clearly provided for in the regulations. Accordingly, the
provisions of proposed Secs. 151.12(k) (1) and (2) and 151.13(i) (1)
and (2) are revised to clarify when notices of proposed penalties are
issued and when final notices of penalties are issued.
Regarding the uniformity of the program, the fact that all
decisions or orders imposing monetary penalties will be made by the
Executive Director, Laboratories and Scientific Services, should ensure
that the program will be administered in a uniform manner throughout
the country. Further, Customs believes the appeal procedure provided
for in the regulations enables affected laboratories/gaugers to
challenge any decision of the Executive Director the facility believes
to be unfair. The expanded program is designed to provide optimum
uniformity with checks and balances at all decision points in order to
protect the interests of the laboratory/gauger.
Penalties, Loss of Revenue, and Liquidated Damages
Comment: One commenter argued that Customs-accredited laboratories
should not be subject to penalties, the recovery of ``lost'' revenue,
and liquidated damages under the lab's bond, as the bond is a
performance bond, not a revenue bond.
Customs Response: This comment concerns the provisions of
Sec. 151.12(k)(1)(iii), entitled ``Assessment of monetary penalties.''
Customs believes that, perhaps, it did not clearly communicate that
there is a distinction between the basis for monetary penalties and the
basis for liquidated damages. There is a statutory basis for liability
for monetary penalties and any loss of revenue in cases of intentional
falsification of data in collusion with the importer (19 U.S.C.
1499(b)(1)(B)(i)) and there is a contractual basis for liability under
the provisions of the Customs bond for liquidated damages. Customs is
revising the third sentences of proposed Sec. 151.12(k)(1)(iii) for
laboratories and Sec. 151.13(i)(1)(iii) for gaugers to distinguish
between penalties/loss of revenue and liquidated damages.
The Terms ``Current Approval'' and ``Future Regulation''
Comment: One commenter requested clarification of the difference
between ``current approval'' and ``future regulation'' regarding
reimbursable fees for accreditation/approval and periodic
reaccreditation/reapproval.
Customs Response: The thrust of this comment is not clear; however,
Customs will attempt to respond, based on the assumption that the
comment pertains to already accredited/approved laboratories/gaugers.
Both in the Background portion and the proposed Amendments to the
Regulations portion of the Notice of Proposed Rulemaking at
Sec. 151.12(j)(1) it was stated that laboratories accredited and
gaugers approved under Customs regulations prior to December 8, 1993
(the effective date of the Act) will not be required to pay applicable
reaccreditation/reapproval fees until after the third year following
the date these regulations become final. Thus, the new fees provided
for in these regulations are not applicable to grandfathered
laboratories/gaugers until their next scheduled inspection, based on
their existing triennial inspection date.
To make this point as clear as possible, the provisions of proposed
Sec. 151.12(i) (and the parallel provision for gaugers at
Sec. 151.13(g)) are revised to state that accredited/approved
facilities will have their status reevaluated on their next triennial
inspection date which is no earlier than three years after the
effective date of this regulation.
Small Business Administration
Comment: One commenter stated that there are many small businesses
that will be impacted by the regulations and inquired if the Small
Business Administration was notified of the proposed regulations.
Customs Response: Because Customs expects the number of accredited
laboratories and approved gaugers to be small, Customs has certified
that, if adopted, these regulations will not have a significant adverse
economic impact on a substantial number of small entities. A statement
to this effect was published in the NPRM. Customs has
[[Page 48533]]
not received any information during the comment period that would
indicate any significant economic impact.
Movement of Goods in International Commerce
Comment: One commenter stated that the proposal failed to address
that international business is done these days by the importers
receiving ``confirmation'' and/or ``production'' samples of products
before the shipments of the product are sent so that the importer is
assured that what is being made and shipped is what was ordered per
specifications. The apparent thrust of the comment goes to whether
Customs labs will examine these ``confirmation'' or ``production''
samples rather than samples taken from part of the merchandise actually
being imported.
Customs Response: As was stated in the Background portion of the
NPRM, importers that choose to have merchandise tested by commercial
facilities accredited/approved by Customs, must certify that the sample
tested was taken from the merchandise in the entry, i.e., from the
importer's actual importations. Customs cannot allow for the testing of
``confirmation'' or ``production'' samples that are not in fact samples
taken from part of the merchandise actually being imported. The Act
clearly provides that the tests/measurements to be allowed by
accredited/approved commercial facilities are those that will establish
the admissibility, quantity, composition, or characteristics of
imported merchandise, not merchandise that someday may be imported.
Accordingly, no change to the regulations will be made based on
this comment.
Statement of Fee Schedule and a Clarification
The fee schedule set forth in the proposal is being adopted. The
initial fixed fee schedules for accrediting/reaccrediting laboratories
and approving/ reapproving gaugers are:
For Laboratories
General Accreditation Fee: $750
Additional Commodities Fee: $200
Laboratory Reaccreditation Fee: $375
Commodity Reaccreditation Fee: $150
For Gaugers
General Approval Fee: $400
Reapproval Fee: $200
The initial variable fee schedules for accrediting/reaccrediting
laboratories and approving/reapproving gaugers are approximately $1,000
for travel per visit and $1,700 per background investigation.
Also, Customs wishes to note that laboratories/gaugers may be
accredited/approved in Puerto Rico, as the United States is defined to
include Puerto Rico, see, 19 CFR 101.1, ``Customs territory of the
United States.''
Other Changes to the Regulations
In addition to the changes to the proposed regulatory text
identified and discussed above in connection with the public comments,
Customs has made numerous editorial, nonsubstantive changes to the
proposed text (in most cases involving wording, parallel construction,
punctuation, or structure) in order to enhance the clarity,
readability, and application of the regulatory texts. An example of an
editorial change involves the grounds for nonselection/suspension,
revocation, or assessment of a monetary penalty in
Secs. 151.12(g)(2)(ii) and 151.13(e)(2)(ii), and
Secs. 151.12(k)(1)(ii)(B) and 151.13(i)(1)(ii)(B). Because of the
common elements in these four provisions, the language in all these
provisions is aligned for purposes of consistency. Several other
changes are being made as well; they are summarized below.
Section 151.12(d)
Proposed Sec. 151.12(d)(2) listed sixteen (16) commodity groups for
which accreditation could be sought without special permission from the
Executive Director. However, for ease of reference it has been decided
to merge the commodity group of Wood and Articles of Wood with the
commodity group of botanical identification. Accordingly, the final
text of this section is revised to list only fifteen (15) commodity
groups.
Section 151.12(f)
Proposed Sec. 151.12(f)(3) provided that Customs evaluation of an
applicant's professional abilities will be in accordance with the
general criteria contained in the ASTM E548: Standard Guide for General
Criteria Used for Evaluating Laboratory Competence. Because many
Laboratories follow the ISO/IEC Guide 25--General Requirements for the
Competence of Calibration and Testing Laboratories, the final text of
Sec. 151.12(f) is revised to include this publication as well.
Sections 151.12(j) and 151.13(h)
Proposed Sec. 151.12(j)(3)(F) (and the parallel provision
applicable to gaugers at proposed Sec. 151.13(h)(2)(v)(F)) provided
that reports must include the signature of the person accepting
technical responsibility for the report. Because signatures are
frequently illegible, Customs has decided to require the typed name of
the person signing the report. Accordingly, these two provisions are
revised to add the additional requirement of the typed name of the
person signing the report.
Sections 151.13(c)
The proposed heading for Sec. 151.13(c) denominated both gauging
and measurement as procedures, which might cause some applicants to
believe that there are two separate procedures. Accordingly, the
reference to gauging is removed from the heading for this section.
Conclusion
After careful consideration of all the comments received and
further review of the matter, Customs has decided to adopt the
amendments to part 151 of the Customs Regulations as a final rule with
the modifications and changes discussed above and as set forth below.
To reflect the paperwork requirements contained at Secs. 151.12(f)
and 151.13(d), part 178 of the Customs Regulations is revised to
account for the separate application data required for laboratory
accreditation and gauger approval.
The Regulatory Flexibility Act, and Executive Order 12866
Because the number of accredited laboratories and approved gaugers
is expected to be small, pursuant to the provisions of the Regulatory
Flexibility Act (5 U.S.C. 601 et seq.), it is certified that the
amendments will not have a significant adverse economic impact on a
substantial number of small entities. Accordingly, the amendments are
not subject to the regulatory analysis or other requirements of 5
U.S.C. 603 and 604. 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 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 1515-0155. 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 collections of information in this final rule are in
Secs. 151.12(e) and 151.13(c). The information is required so that
Customs can make a determination as to which applicants
[[Page 48534]]
are competent to receive or maintain accreditation/approval credentials
to test/measure imported merchandise. The information will be used to
process those applications submitted for Customs accreditation/
approval. The likely respondents are individuals and commercial
organizations who either analyze merchandise or measure, gauge, or
sample merchandise.
The estimated average burden associated with the collection of
information in this final rule is five 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, Office of Regulations and Rulings.
However, personnel from other offices participated in its development.
List of Subjects
19 CFR Part 113
Bonds, Customs duties and inspection, Exports, Freight, Imports,
Reporting and recordkeeping requirements.
19 CFR Part 151
Administrative practice and procedure, Courts, Customs duties and
inspection, Examination, Fees assessment, Gaugers, Imports,
Laboratories, Licensing, Penalties, Reporting and recordkeeping
requirements, Sampling and testing.
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 113, 151, and 178 of the
Customs Regulations (19 CFR parts 113, 151, and 178) are amended as set
forth below:
PART 113--CUSTOMS BONDS
1. The general authority citation for part 113 continues to read as
follows:
Authority: 19 U.S.C. 66, 1623, 1624.
* * * * *
Sec. 113.67 [Amended]
2. Section 113.67 is amended as follows:
a. Paragraph (a)(1)(ii) is amended by removing the words ``terms of
the Commercial Gauger Agreement [see Sec. 151.13(b)(9)] and by the'';
and by removing the citations ``Secs. 151.13 and 151.14'' and adding,
in their place, the citation ``Sec. 151.13(b)''.
b. Paragraph (b)(1)(ii) is amended by removing the words ``terms of
the Commercial Laboratory Agreement [see Sec. 151.13(b)(9)] and by
the''; and by removing the citation ``Sec. 151.13'' and adding, in its
place, the citation ``Sec. 151.12(c)''.
PART 151--EXAMINATION, SAMPLING, AND TESTING OF MERCHANDISE
1. The general authority citation for part 151 continues to read as
follows:
Authority: 19 U.S.C. 66, 1202 (General Notes 20 and 21,
Harmonized Tariff Schedule of the United States (HTSUS)), 1624.
Subpart A also issued under 19 U.S.C. 1499.
* * * * *
2. In subpart A, Sec. 151.12 is added to read as follows:
Sec. 151.12 Accreditation of commercial laboratories.
This section sets forth the requirements for commercial
laboratories to obtain accreditation by Customs for the testing of
certain commodities, and explains the operation of such accredited
laboratories. This section also provides for the imposition of
accreditation and reaccreditation fees, sets forth grounds for the
suspension and revocation of accreditation, and provides for the
imposition of a monetary penalty for an accredited commercial
laboratory that fails to adhere to the provisions of this section.
(a) Definitions. For purposes of this section, the following words
and phrases have the meanings indicated:
Analysis record. An ``analysis record'' is a compilation of all
documents which have been generated during the course of analysis of a
particular sample which, under normal circumstances, may include, both
in paper and electronic-form, such documents as work sheets, notes,
associated spectra (both spectra of the actual product and any standard
spectra used for comparison), photographs and microphotographs, and the
laboratory report.
Assistant Commissioner. In Secs. 151.12 and 151.13, references to
the ``Assistant Commissioner'' mean the Assistant Commissioner, Office
of Field Operations, located in Washington, D.C.
Check samples. ``Check samples'' are samples which have been
distributed by Customs to accredited laboratories to test their
proficiency in a certain area of accreditation.
Commodity Group Brochure. A ``Commodity Group Brochure'' is a
booklet which contains a listing of laboratory methods which commercial
laboratories are required to have the capability to perform to qualify
for Customs-accreditation in a particular commodity group. The
brochures and the U.S. Customs Laboratory Methods Manual will specify
the particular laboratory testing methods required for particular
commodity groups, unless written permission from the Executive Director
is given to use an alternate method. Procedures required by the
Executive Director may reference applicable general industry testing
standards, published by such organizations as the American Society for
Testing and Materials (ASTM) and the American Petroleum Institute
(API). Commodity Group Brochures and a listing of the methods found in
the U.S. Customs Laboratory Methods Manual are available from the U.S.
Customs Service, Attention: Executive Director, Laboratories and
Scientific Services, Washington, D.C. 20229 and can also be found on
the Customs Internet Web Site: www.customs.gov.
Executive Director. In Secs. 151.12 and 151.13, references to the
``Executive Director'' mean the Executive Director, Laboratories and
Scientific Services, located in Washington, D.C.
(b) What is a ``Customs-accredited laboratory''? ``Commercial
laboratories'' are individuals and commercial organizations that
analyze merchandise, i.e., determine its composition and/or
characteristics, through laboratory analysis. A ``Customs-accredited
laboratory'' is a commercial laboratory, within the United States, that
has demonstrated, to the satisfaction of the Executive Director,
pursuant to this section, the capability to perform analysis of certain
commodities to determine elements relating to the admissibility,
quantity, composition, or characteristics of imported merchandise.
Customs accreditation extends only to the performance of such functions
as are vested in, or delegated to, Customs.
(c) What are the obligations of a Customs-accredited laboratory? A
commercial laboratory accredited by Customs agrees to the following
conditions and requirements:
(1) To comply with the requirements of part 151, Customs
Regulations (19 CFR part 151), and to conduct professional services in
conformance
[[Page 48535]]
with approved standards and procedures, including procedures which may
be required by the Commissioner of Customs or the Executive Director;
(2) To have no interest in or other connection with any business or
other activity which might affect the unbiased performance of duties as
a Customs-accredited laboratory. It is understood that this does not
prohibit acceptance of the usual fees for professional services;
(3) To maintain the ability, i.e., the instrumentation, equipment,
qualified staff, facilities, etc., to perform the services for which
the laboratory is accredited, and allow the Executive Director to
evaluate that ability on a periodic basis by such means as on-site
inspections, demonstrations of analysis procedures, reviews of
submitted records, and proficiency testing through check samples;
(4) To retain those laboratory records beyond the five-year record-
retention period and samples (see paragraph (j)(1) of this section)
specified by Customs as necessary to address matters concerned in
pending litigation, and, if laboratory operations or accreditation
cease, to contact Customs immediately regarding the disposition of
records/samples retained;
(5) To promptly investigate any circumstance which might affect the
accuracy of work performed as an accredited laboratory, to correct the
situation immediately, and to notify both the port director and the
Executive Director of such matters, their consequences, and any
corrective action taken or that needs to be taken; and
(6) To immediately notify both the port director and the Executive
Director of any attempt to impede, influence, or coerce laboratory
personnel in the performance of their duties, or of any decision to
terminate laboratory operations or accredited status. Further, within 5
days of any changes involving legal name, address, ownership, parent-
subsidiary relationships, bond, other offices or sites, or approved
signatories to notify the Executive Director by certified mail.
(d) What are the commodity groups for which accreditation may be
sought? (1) Commercial laboratories may apply for accreditation to
perform tests for any of the commodity groups listed in paragraph
(d)(2) of this section. Applicable test procedures are listed in
Commodity Group Brochures and the U.S. Customs Laboratory Methods
Manual. Application may be made for accreditation in more than one
commodity group. At the discretion of the Executive Director
accreditation may be granted for subgroups of tests within a commodity
group or for commodity groups not specifically enumerated. Once
accredited, a Customs-accredited laboratory may apply at any time to
expand its accreditation, to add new testing sites, or increase the
number of commodity groups or subgroups accredited.
(2) The commodity groups for which accreditation may be sought
without special permission from the Executive Director are:
(i) Dairy and Chocolate Products entered under Chapters 4, 18, and
21 of the Harmonized Tariff Schedule of the United States (HTSUS);
(ii) Food and Food Products entered under Chapters 7-12, 15, 16,
and 19-21, HTSUS;
(iii) Botanical Identification--materials and products entered
under Chapters 14 and 44-46, HTSUS;
(iv) Sugar, Sugar Syrups, and Confectionery products entered under
Chapter 17, HTSUS;
(v) Spirituous Beverages entered under Chapter 22, HTSUS;
(vi) Building Stone, Ceramics, Glassware, and Other Mineral
Substances entered under Chapters 25 and 68-70, HTSUS;
(vii) Inorganic Materials, including Inorganic Compounds and Ores,
entered under Chapters 26, 28, 31, and 36-38, HTSUS;
(viii) Petroleum and Petroleum Products entered under Chapters 27
and 29, HTSUS;
(ix) Organic Materials, including Intermediates and
Pharmaceuticals, entered under Chapters 29, 30, 34, 35, and 38, HTSUS;
(x) Rubber, Plastics, Polymers, Pigments and Paints entered under
Chapters 32, 39, and 40, HTSUS;
(xi) Essential Oils and Perfumes entered under Chapter 33, HTSUS;
(xii) Leather and Articles of Leather entered under Chapters 41 and
42, HTSUS;
(xiii) Paper and Paper Products entered under Chapters 47-49,
HTSUS;
(xiv) Textiles and Related Products, including footwear and hats,
entered under Chapters 50-67, HTSUS; and,
(xv) Metals and Alloys entered under Chapters 72-83, HTSUS.
(e) What are the approved methods of analysis? Customs-accredited
laboratories must follow the general or specific testing methods set
forth in Commodity Group Brochures and the U.S. Customs Laboratory
Methods Manual in the testing of designated commodities, unless the
Executive Director gives written permission to use an alternate method.
Alternative methods will be considered and approved on a case-by-case
basis.
(f) How would a commercial laboratory become a Customs-accredited
laboratory? (1) What should an application contain? An application for
Customs accreditation must contain the following information:
(i) The applicant's legal name and the address of its principal
place of business and any other facility out of which it will work;
(ii) Detailed statements of ownership and any partnerships, parent-
subsidiary relationships, or affiliations with any other domestic or
foreign organizations, including, but not limited to, importers, other
commercial laboratories, producers, refiners, Customs brokers, or
carriers;
(iii) A statement of financial condition;
(iv) If a corporation, a copy of the articles of incorporation and
the names of all officers and directors;
(v) The names, titles, and qualifications of each person who will
be authorized to sign or approve analysis reports on behalf of the
commercial laboratory;
(vi) A complete description of the applicant's facilities,
instruments, and equipment;
(vii) An express agreement that if notified by Customs of pending
accreditation to execute a bond in accordance with part 113, Customs
Regulations (19 CFR part 113), and submit it to the Customs port
nearest to the applicant's main office. (The limits of liability on the
bond will be established by the Customs port in consultation with the
Executive Director. In order to retain Customs accreditation, the
laboratory must maintain an adequate bond, as determined by the port
director);
(viii) A listing of each commodity group for which accreditation is
being sought and, if methods are being submitted for approval which are
not specifically provided for in a Commodity Group Brochure and the
U.S. Customs Laboratory Methods Manual, a listing of such methods;
(ix) A listing by commodity group of each method according to its
Customs Laboratory Method Number for which the laboratory is seeking
accreditation;
(x) An express agreement to be bound by the obligations contained
in paragraph (c) of this section; and,
(xi) A nonrefundable pre-payment equal to 50 percent of the fixed
accreditation fee, as published in the Federal Register and Customs
Bulletin, to cover preliminary processing costs. Further, the applicant
agrees to pay Customs within 30 days of notification of preliminary
accreditation the associated charges assessed for accreditation, i.e.,
those charges for actual travel and background
[[Page 48536]]
investigation costs, and the balance of the fixed accreditation fee.
(2) Where should an application be sent? A commercial laboratory
seeking accreditation or an extension of an existing accreditation must
send a letter of application to the U.S. Customs Service, Attention:
Executive Director, Laboratories & Scientific Services, 1300
Pennsylvania Ave., NW, Washington, D.C. 20229.
(3) How will an application be reviewed?
(i) Physical plant and management system. The facility of the
applicant will be inspected to ensure that it is properly equipped to
perform the necessary tests and that staff personnel are capable of
performing required tests. Customs evaluation of an applicant's
professional abilities will be in accordance with the general criteria
contained in either the American Society for Testing and Materials
(ASTM) E548 (Standard Guide for General Criteria Used for Evaluating
Laboratory Competence) or the ISO/IEC Guide 25 (General Requirements
for the Competence of Calibration and Testing Laboratories). This
review will ascertain the laboratory's ability to manage and control
the acquisition of technical data. The review will be performed at the
time of initial application and upon reaccreditation at three-year
intervals.
(ii) Ability to perform tests on specified commodity groups. For
each commodity group applied for, the applicant will undergo a separate
review of testing capabilities. The specific accreditation will be
based on the laboratory's ability to perform the tests required for
that commodity group. This will include the qualifications of the
technical personnel in this field and the instrument availability
required by the test methods. Maintenance of accreditation will be
ongoing and may require the submission of test results on periodic
check samples. The criteria for acceptance will be based on the
laboratory's ability to produce a work product that assists in the
proper classification and entry of imported merchandise.
(iii) Determination of competence. The Executive Director will
determine the applicant's overall competence, independence, and
character by conducting on-site inspections, which may include
demonstrations by the applicant of analysis procedures and a review of
analysis records submitted, and background investigations. The
Executive Director may also conduct proficiency testing through check
samples.
(iv) Evaluation of technical and operational requirements. Customs
will determine whether the following technical and operational
requirements are met:
(A) Equipment. The laboratory must be equipped with all of the
instruments and equipment needed to conduct the tests for which it is
accredited. The laboratory must ensure that all instruments and
equipment are properly calibrated, checked, and maintained.
(B) Facilities. The laboratory must have, at a minimum, adequate
space, lighting, and environmental controls to ensure compliance with
the conditions prescribed for appropriate test procedures.
(C) Personnel. The laboratory must be staffed with persons having
the necessary education, training, knowledge, and experience for their
assigned functions (e.g., maintaining equipment, calibrating
instruments, performing laboratory analyses, evaluating analytical
results, and signing analysis reports on behalf of the laboratory). In
general, each technical staff member should hold, at a minimum, a
bachelor's degree in science or have two years related experience in an
analytical laboratory.
(g) How will an applicant be notified concerning accreditation?
(1) Notice of approval or nonselection. When Customs evaluation of
a laboratory's credentials is completed, the Executive Director will
notify the laboratory in writing of its preliminary approval or
nonselection. (Final approval determinations will not be made until the
applicant has satisfied all bond requirements and made payment on all
assessed charges and the balance of the applicable accreditation fee).
Notices of nonselection will state the specific grounds for the
determination. All final notices of accreditation, reaccreditation, or
extension of existing Customs accreditation will be published in the
Federal Register and Customs Bulletin.
(2) Grounds for nonselection. The Executive Director may deny a
laboratory's application for any of the following reasons:
(i) The application contains false or misleading information
concerning a material fact;
(ii) The laboratory, a principal of the laboratory, or a person the
Executive Director determines is exercising substantial ownership or
control over the laboratory operation is indicted for, convicted of, or
has committed acts which would:
(A) Under United States federal or state law, constitute a felony
or misdemeanor involving misstatements, fraud, or a theft-related
offense; or
(B) Reflect adversely on the business integrity of the applicant;
(iii) A determination is made that the laboratory-applicant does
not possess the technical capability, have adequate facilities, or
management to perform the approved methods of analysis for Customs
purposes;
(iv) A determination is made that the laboratory has submitted
false reports or statements concerning the sampling of merchandise, or
that the applicant was subject to sanctions by state, local, or
professional administrative bodies for such conduct;
(v) Nonpayment of assessed charges and the balance of the fixed
accreditation fee; or
(vi) Failure to execute a bond in accordance with part 113 of this
chapter.
(3) Adverse accreditation decisions; appeal procedures.
(i) Preliminary notice. A laboratory which is not selected for
accreditation will be sent a preliminary notice of action which states
the specific grounds for nonselection and advises that the laboratory
may file a response with the Executive Director within 30 calendar days
of receipt of the preliminary notice addressing the grounds for
nonselection.
(ii) Final notice. If the laboratory does not respond to the
preliminary notice, a final notice of nonselection will be issued by
the Executive Director after 30 calendar days of receipt of the
preliminary notice which states the specific grounds for the
nonselection and advises that the laboratory may administratively
appeal the final notice of nonselection to the Assistant Commissioner
within 30 calendar days of receipt of the final notice. If the
laboratory files a timely response, then the Executive Director, within
30 calendar days of receipt of the response, will issue a final
determination regarding the laboratory's accreditation. If this final
determination is adverse to the laboratory, then the final notice of
nonselection will state the specific grounds for nonselection and
advise the laboratory that it may administratively appeal the final
notice of nonselection to the Assistant Commissioner within 30 calendar
days of receipt of the final notice.
(iii) Appeal decision. The Assistant Commissioner will issue a
decision on the appeal within 30 calendar days of receipt of the
appeal. If the appeal decision is adverse to the laboratory, then the
laboratory may choose to pursue one of the following two options:
(A) Submit a new application for accreditation to the Executive
Director after waiting 90 days from the date of the Executive
Director's last decision; or
(B) File an action with the Court of International Trade, pursuant
to chapter
[[Page 48537]]
169 of title 28, United States Code, within 60 days after the issuance
of the Executive Director's final decision.
(h) What are the accreditation/reaccreditation fee requirements?
(1) In general. A fixed fee, representing Customs administrative
overhead expense, will be assessed for each application for
accreditation or reaccreditation. In addition, associated assessments,
representing the actual costs associated with travel and per diem of
Customs employees related to verification of application criteria and
background investigations will be charged. The combination of the fixed
fee and associated assessments represent reimbursement to Customs for
costs related to accreditation and reaccreditation. The fixed fee will
be published in the Customs Bulletin and the Federal Register. Based on
a review of the actual costs associated with the program, the fixed fee
may be adjusted periodically; any changes will be published in the
Customs Bulletin and the Federal Register.
(i) Accreditation fees. A nonrefundable pre-payment equal to 50
percent of the fixed accreditation fee to cover preliminary processing
costs must accompany each application for accreditation. Before a
laboratory will be accredited, it must remit to Customs, at the address
specified in the billing, within the 30 day billing period, the
associated charges assessed for the accreditation and the balance of
the fixed accreditation fee.
(ii) Reaccreditation fees. Before a laboratory will be
reaccredited, it must submit to Customs, at the billing address
specified, within the 30 day billing period the fixed reaccreditation
fee.
(2) Disputes. In the event a laboratory disputes the charges
assessed for travel and per diem costs associated with scheduled
inspection visits, it may file an appeal within 30 calendar days of the
date of the assessment with the Executive Director. The appeal letter
must specify which charges are in dispute and provide such supporting
documentation as may be available for each allegation. The Executive
Director will make findings of fact concerning the merits of an appeal
and communicate the agency decision to the laboratory in writing within
30 calendar days of the date of the appeal.
(i) Can existing Customs-accredited laboratories continue to
operate? Commercial laboratories accredited by the Executive Director
prior to December 8, 1993, will retain that accreditation under these
regulations provided they conduct their business in a manner consistent
with the administrative portions of this section. This paragraph does
not pertain to any laboratory which has had its accreditation suspended
or revoked. Laboratories which have had their accreditations continued
under this section will have their status reevaluated on their next
triennial inspection date which is no earlier than three years after
the effective date of this regulation. At the time of reaccreditation,
these laboratories must meet the requirements of this section and remit
to Customs, at the address specified in the billing, within the 30 day
billing period, the fixed reaccreditation fee. Failure to meet these
requirements will result in revocation or suspension of the
accreditation.
(j) How will Customs-accredited laboratories operate?
(1) Samples for testing. Upon request by the importer of record of
merchandise, the port director will release a representative sample of
the merchandise for testing by a Customs-accredited laboratory at the
expense of the importer. Under Customs supervision, the sample will be
split into two essentially equal parts and given to the Customs-
accredited laboratory. One portion of the sample may be used by the
Customs-accredited laboratory for its testing. The other portion must
be retained by the laboratory, under appropriate storage conditions,
for Customs use, as necessary, unless Customs requires other specific
procedures. Upon request, the sample portion reserved for Customs
purposes must be surrendered to Customs.
(i) Retention of non-perishable samples. Non-perishable samples
reserved for Customs and sample remnants from any testing must be
retained by the accredited laboratory for a period of four months from
the date of the laboratory's final analysis report, unless other
instructions are issued in writing by Customs. At the end of this
retention time period, the accredited laboratory may dispose of the
retained samples and sample remnants in a manner consistent with
federal, state, and local statutes.
(ii) Retention of perishable samples. Perishable samples reserved
for Customs and sample remnants from any testing can be disposed of
more expeditiously than provided for at paragraph (j)(1)(i) of this
section, if done in accordance with acceptable laboratory procedures,
unless other instructions are issued in writing by Customs.
(2) Reports. (i) Contents of reports. Testing data must be obtained
using methods approved by the Executive Director. The testing results
from a Customs-accredited laboratory that are submitted by an importer
of record with respect to merchandise in an entry, in the absence of
testing conducted by Customs laboratories, will be accepted by Customs,
provided that the importer of record certifies that the sample tested
was taken from the merchandise in the entry and the report establishes
elements relating to the admissibility, quantity, composition, or
characteristics of the merchandise entered, as required by law.
(ii) Status of commercial reports where Customs also tests
merchandise. Nothing in these regulations will preclude Customs from
sampling and testing merchandise from a shipment which has been sampled
and tested by a Customs-accredited laboratory at the request of an
importer. In cases where a shipment has been analyzed by both Customs
and a Customs-accredited laboratory, all Customs actions will be based
upon the analysis provided by the Customs laboratory, unless the
Executive Director advises otherwise. If Customs tests merchandise, it
will release the results of its test to the importer of record or its
agent upon request unless the testing information is proprietary to the
holder of a copyright or patent, or developed by Customs for
enforcement purposes.
(3) Recordkeeping requirements. Customs-accredited laboratories
must maintain records of the type normally kept in the ordinary course
of business in accordance with the provisions of this chapter and any
other applicable provision of law, and make them available during
normal business hours for Customs inspection. In addition, these
laboratories must maintain all records necessary to permit the
evaluation and verification of all Customs-related work, including, as
appropriate, those described below. All records must be maintained for
five years, unless the laboratory is notified in writing by Customs
that a longer retention time is necessary for particular records.
Electronic data storage and transmission may be approved by Customs.
(i) Sample records. Records for each sample tested for Customs
purposes must be readily accessible and contain the following
information:
(A) A unique identifying number;
(B) The date when the sample was received or taken;
(C) The identity of the commodity (e.g. crude oil);
(D) The name of the client;
(E) The source of the sample (e.g., name of vessel, flight number
of airline,
[[Page 48538]]
name of individual taking the sample); and
(F) If available, the Customs entry date, entry number, and port of
entry and the names of the importer, exporter, manufacturer, and
country-of-origin.
(ii) Major equipment records. Records for each major piece of
equipment or instrument (including analytical balances) used in
Customs-related work must identify the name and type of instrument, the
manufacturer's name, the instrument's model and any serial numbers, and
the occurrence of all servicing performed on the equipment or
instrument, to include recalibration and any repair work, identifying
who performed the service and when.
(iii) Records of analytical procedures. The Customs-accredited
laboratory must maintain complete and up-to-date copies of all approved
analytical procedures, calibration methods, etc., and must document the
procedures each staff member is authorized to perform. These procedures
must be readily available to appropriate staff.
(iv) Laboratory analysis records. The Customs-accredited laboratory
must identify each analysis by sample record number (see paragraph
(j)(3)(i) of this section) and must maintain all information or data
(such as sample weights, temperatures, references to filed spectra,
etc.) associated with each Customs-related laboratory analysis. Each
analysis record must be dated and initialed or signed by the staff
member(s) who did the work.
(v) Laboratory analysis reports. Each laboratory analysis report
submitted to Customs must include:
(A) The name and address of the Customs-accredited laboratory;
(B) A description and identification of the sample, including its
unique identifying number;
(C) The designations of each analysis procedure used;
(D) The analysis report itself (i.e., the pertinent characteristics
of the sample);
(E) The date of the report; and
(F) The typed name and signature of the person accepting technical
responsibility for the analysis report (i.e., an approved signatory).
(4) Representation of Customs-accredited status. Commercial
laboratories accredited by Customs must limit statements or wording
regarding their accreditation to an accurate description of the tests
for the commodity group(s) for which accreditation has been obtained.
Use of terms other than those appearing in the notice of accreditation
(see paragraph (g) of this section) is prohibited.
(5) Subcontracting prohibited. Customs-accredited laboratories must
not subcontract Customs-related analysis work to non Customs-accredited
laboratories or non Customs-approved gaugers, but may subcontract to
other facilities that are Customs-accredited/approved and in good
standing.
(k) How can a laboratory have its accreditation suspended or
revoked or be required to pay a monetary penalty?
(1) Grounds for suspension, revocation, or assessment of a monetary
penalty. (i) In general. The Executive Director may immediately suspend
or revoke a laboratory's accreditation only in cases where the
laboratory's actions are intentional violations of any Customs law or
when required by public health or safety. In other situations where the
Executive Director has cause, the Executive Director will propose the
suspension or revocation of a laboratory's accreditation or propose a
monetary penalty and provide the laboratory with the opportunity to
respond to the notice of proposed action.
(ii) Specific grounds. A laboratory's accreditation may be
suspended or revoked, or a monetary penalty may be assessed because:
(A) The selection was obtained through fraud or the misstatement of
a material fact by the laboratory;
(B) The laboratory, a principal of the laboratory, or a person the
port director determines is exercising substantial ownership or control
over the laboratory operation is indicted for, convicted of, or has
committed acts which would: under United States federal or state law,
constitute a felony or misdemeanor involving misstatements, fraud, or a
theft-related offense; or reflect adversely on the business integrity
of the applicant. In the absence of an indictment, conviction, or other
legal process, the port director must have probable cause to believe
the proscribed acts occurred;
(C) Staff laboratory personnel refuse or otherwise fail to follow
any proper order of a Customs officer or any Customs order, rule, or
regulation;
(D) The laboratory fails to operate in accordance with the
obligations of paragraph (c) of this section;
(E) A determination is made that the laboratory is no longer
technically or operationally proficient at performing the approved
methods of analysis for Customs purposes;
(F) The laboratory fails to remit to Customs, at the billing
address specified, within the 30 day billing period the associated
charges assessed for the accreditation and the balance of the fixed
accreditation fee;
(G) The laboratory fails to maintain its bond;
(H) The laboratory fails to remit to Customs, at the billing
address specified, within the 30 day billing period, the fixed
reaccreditation fee; or
(I) The laboratory fails to remit any monetary penalty assessed
under this section.
(iii) Assessment of monetary penalties. The assessment of a
monetary penalty under this section, may be in lieu of, or in addition
to, a suspension or revocation of accreditation under this section. The
monetary penalty may not exceed $100,000 per violation and will be
assessed and administered pursuant to published guidelines. Any
monetary penalty under this section can be in addition to the recovery
of:
(A) Any loss of revenue, in cases where the laboratory
intentionally falsified the analysis report in collusion with the
importer, pursuant to 19 U.S.C. 1499(b)(1)(B)(i); or
(B) Liquidated damages assessed under the laboratory's Customs
bond.
(2) Notice. When a decision to suspend or revoke accreditation,
and/or assess a monetary penalty is made, the Executive Director will
immediately notify the laboratory in writing of the decision,
indicating whether the action is effective immediately or is proposed.
(i) Immediate suspension or revocation. Where the suspension or
revocation of accreditation is immediate, the Executive Director will
issue a notice of determination which will state the specific grounds
for the immediate suspension or revocation and advise the laboratory
that, in accordance with paragraph (k)(3) of this section, it may
administratively appeal the determination to the Assistant Commissioner
within 30 calendar days of the notice of determination. The laboratory
may not perform any Customs-accredited functions during the appeal
period.
(ii) Proposed suspension, revocation, or assessment of monetary
penalty.
(A) Preliminary notice. Where the suspension or revocation of
accreditation, and/or the assessment of a monetary penalty is proposed,
the Executive Director will issue a preliminary notice of action which
will state the specific grounds for the proposed action and advise the
laboratory that it has 30 calendar days to respond. The laboratory may
respond by accepting responsibility, explaining extenuating
circumstances, and/or providing rebuttal evidence. The laboratory also
may ask for a meeting with the Executive Director or his designee to
discuss the proposed action. The laboratory may continue to perform
[[Page 48539]]
functions requiring Customs-accreditation during this 30-day period. If
the laboratory does not respond to the preliminary notice, a notice of
adverse determination, in accordance with paragraph (k)(2)(ii)(B) of
this section, will be issued by the Executive Director after 30
calendar days of receipt of the preliminary notice. If the laboratory
files a timely response, then the Executive Director, within 30
calendar days of receipt of the response, will issue a notice of
determination. If this determination is adverse to the laboratory, a
notice of adverse determination, in accordance with paragraph
(k)(2)(ii)(B) of this section, will be issued by the Executive Director
after 30 calendar days of receipt of the response.
(B) Notice of adverse determination. A notice of adverse
determination will state the action being taken, specific grounds for
the determination, and advise the laboratory that it may
administratively appeal the adverse determination to the Assistant
Commissioner, in accordance with paragraph (k)(3) of this section. The
laboratory may not continue to perform any Customs-accredited functions
upon receiving a notice of adverse determination that its accreditation
has been suspended or revoked.
(3) Appeal. A Customs-accredited laboratory receiving an adverse
determination from the Executive Director that its accreditation has
been suspended or revoked, and/or that it has been assessed a monetary
penalty may file an administrative appeal to the Assistant Commissioner
within 30 calendar days of the notice of determination. If the
laboratory does not file an administrative appeal, the determination
made by the Executive Director in paragraph (k)(2) of this section will
become a final agency decision which will be communicated to the
laboratory by a notice of final action issued 30 days after the notice
of determination. If the laboratory does file a timely appeal, then the
Assistant Commissioner, within 30 calendar days of receipt of the
appeal, will make a final agency decision regarding the laboratory's
suspension or revocation of accreditation, and/or assessment of a
monetary penalty. If the final agency decision is adverse to the
laboratory, the decision will be communicated to the laboratory by a
notice of final action. Any adverse final agency decision will be
communicated to the public by a publication in the Federal Register and
Customs Bulletin, giving the effective date, duration, and scope of the
decision. Any notice of adverse final action communicated to a
laboratory will state the action taken, the specific grounds for the
action, and advise the laboratory that it may choose to :
(i) If suspended or revoked, submit a new application to the
Executive Director after waiting 90 days from the date of the Executive
Director's notice of final action; or
(ii) File an action with the Court of International Trade, pursuant
to chapter 169 of title 28, United States Code, within 60 days after
the issuance of the Executive Director's notice of final action.
3. Section 151.13 is revised to read as follows:
Sec. 151.13 Approval of commercial gaugers.
This section sets forth the requirements for commercial gaugers to
obtain approval by Customs for the measuring of certain merchandise,
and explains the operation of such approved gaugers. This section also
provides for the imposition of approval and reapproval fees, sets forth
grounds for the suspension or revocation of approval, and provides for
the imposition of a monetary penalty for an approved commercial gauger
that fails to adhere to the provisions of this section.
(a) What is a ``Customs-approved gauger''? ``Commercial gaugers''
are individuals and commercial organizations that measure, gauge, or
sample merchandise (usually merchandise in bulk form) and who deal
mainly with animal and vegetable oils, petroleum, petroleum products,
and bulk chemicals. A ``Customs-approved gauger'' is a commercial
concern, within the United States, that has demonstrated, to the
satisfaction of the Executive Director (defined at Sec. 151.12(a)),
pursuant to this section, the capability to perform certain gauging and
measurement procedures for certain commodities. Customs approval
extends only to the performance of such functions as are vested in, or
delegated to, Customs.
(b) What are the obligations of a Customs-approved gauger? A
commercial gauger approved by Customs agrees to the following
conditions and requirements:
(1) To comply with the requirements of part 151, Customs
Regulations (19 CFR part 151), and to conduct professional services in
conformance with approved standards and procedures, including
procedures which may be required by the Commissioner of Customs or the
Executive Director;
(2) To have no interest in or other connection with any business or
other activity which might affect the unbiased performance of duties as
a Customs-approved gauger. It is understood that this does not prohibit
acceptance of the usual fees for professional services;
(3) To maintain the ability, i.e., the instrumentation, equipment,
qualified staff, facilities, etc., to perform the services for which
the gauger is approved, and allow the Executive Director to evaluate
that ability on a periodic basis by such means as on-site inspections,
demonstrations of gauging procedures, and reviews of submitted records;
(4) To retain those gauger records beyond the five-year record-
retention period specified by Customs as necessary to address matters
concerned in pending litigation, and, if gauger operations or approval
cease, to contact Customs immediately regarding the disposition of
records retained;
(5) To promptly investigate any circumstance which might affect the
accuracy of work performed as an approved gauger, to correct the
situation immediately, and to notify both the port director and the
Executive Director of such matters, their consequences, and any
corrective action taken or that needs to be taken; and
(6) To immediately notify both the port director and the Executive
Director of any attempt to impede, influence, or coerce gauger
personnel in the performance of their duties, or of any decision to
terminate gauger operations or approval status. Further, within 5 days
of any changes involving legal name, address, ownership, parent-
subsidiary relationships, bond, other offices or sites, or approved
signatories to notify the Executive Director by certified mail.
(c) What are the approved measurement procedures? Customs-approved
gaugers must comply with appropriate procedures published by such
professional organizations as the American Society for Testing and
Materials (ASTM) and the American Petroleum Institute (API), unless the
Executive Director gives written permission to use an alternate method.
Alternative methods will be considered and approved on a case-by-case
basis.
(d) How would a commercial gauger become a Customs-approved gauger?
(1) What should an application contain? An application for Customs
approval must contain the following information:
(i) The applicant's legal name and the address of its principal
place of business and any other facility out of which it will work;
(ii) Detailed statements of ownership and any partnerships, parent-
subsidiary relationships, or affiliations with any other domestic or
foreign organizations, including, but not limited to, importers,
[[Page 48540]]
producers, refiners, Customs brokers, or carriers;
(iii) A statement of financial condition;
(iv) If a corporation, a copy of the articles of incorporation and
the names of all officers and directors;
(v) The names, titles, and qualifications of each person who will
be authorized to sign or approve gauging reports on behalf of the
commercial gauger;
(vi) A complete description of the applicant's facilities,
instruments, and equipment;
(vii) An express agreement that if notified by Customs of pending
approval to execute a bond in accordance with part 113, Customs
Regulations (19 CFR part 113), and submit it to the Customs port
nearest to the applicant's main office. (The limits of liability on the
bond will be established by the Customs port in consultation with the
Executive Director. In order to retain Customs approval, the gauger
must maintain an adequate bond, as determined by the port director);
(viii) An express agreement to be bound by the obligations
contained in paragraph (b) of this section; and,
(ix) A nonrefundable pre-payment equal to 50 percent of the fixed
approval fee, as published in the Federal Register and Customs
Bulletin, to cover preliminary processing costs. Further, the applicant
agrees to pay Customs within 30 days of notification of preliminary
approval the associated charges assessed for approval, i.e., those
charges for actual travel and background investigation costs, and the
balance of the fixed approval fee.
(2) Where should an application be sent? A commercial gauger
seeking approval or an extension of an existing approval must send a
letter of application to the U.S. Customs Service, Attention: Executive
Director, Laboratories & Scientific Services, 1300 Pennsylvania Ave.,
NW, Washington, D.C. 20229.
(3) How will an application be reviewed?
(i) Determination of competence. The Executive Director will
determine the applicant's overall competence, independence, and
character by conducting on-site inspections, which may include
demonstrations by the applicant of gauging procedures and a review of
records submitted, and background investigations. The Executive
Director may also conduct proficiency testing through check samples.
(ii) Evaluation of technical and operational requirements. Customs
will determine whether the following technical and operational
requirements are met:
(A) Equipment. The facility must be equipped with all of the
instruments and equipment needed to conduct approved services. The
gauger must ensure that all instruments and equipment are properly
calibrated, checked, and maintained.
(B) Facilities. The facility must have, at a minimum, adequate
space, lighting, and environmental controls to ensure compliance with
the conditions prescribed for appropriate measurements.
(C) Personnel. The facility must be staffed with persons having the
necessary education, training, knowledge, and experience for their
assigned functions (e.g., maintaining equipment, calibrating
instruments, performing gauging services, evaluating gauging results,
and signing gauging reports on behalf of the commercial gauger). In
general, each technical staff member should have, at a minimum, six
months training and experience in gauging.
(e) How will an applicant be notified concerning approval?
(1) Notice of approval or nonselection. When Customs evaluation of
a gauger's credentials is completed, the Executive Director will notify
the gauger in writing of its preliminary approval or nonselection.
(Final approval determinations will not be made until the applicant has
satisfied all bond requirements and made payment on all assessed
charges and the balance of the applicable accreditation fee). Notices
of nonselection will state the specific grounds for the determination.
All final notices of approval, reapproval, or extension of existing
Customs approval will be published in the Federal Register and Customs
Bulletin.
(2) Grounds for nonselection. The Executive Director may deny a
gauger's application for any of the following reasons:
(i) The application contains false or misleading information
concerning a material fact;
(ii) The gauger, a principal of the gauging facility, or a person
the Executive Director determines is exercising substantial ownership
or control over the gauger operation is indicted for, convicted of, or
has committed acts which would:
(A) Under United States federal or state law, constitute a felony
or misdemeanor involving misstatements, fraud, or a theft-related
offense; or
(B) Reflect adversely on the business integrity of the applicant;
(iii) A determination is made that the gauger-applicant does not
possess the technical capability, have adequate facilities, or
management to perform the approved methods of measurement for Customs
purposes;
(iv) A determination is made that the gauger has submitted false
reports or statements concerning the measurement of merchandise, or
that the applicant was subject to sanctions by state, local, or
professional administrative bodies for such conduct;
(v) Nonpayment of assessed charges and the balance of the fixed
approval fee; or
(vi) Failure to execute a bond in accordance with part 113 of this
chapter.
(3) Adverse approval decisions; appeal procedures.--(i) Preliminary
notice. A gauger which is not selected for approval will be sent a
preliminary notice of action which states the specific grounds for
nonselection and advises that the gauger may file a response with the
Executive Director within 30 calendar days of receipt of the
preliminary notice addressing the grounds for nonselection.
(ii) Final notice. If the gauger does not respond to the
preliminary notice, a final notice of nonselection will be issued by
the Executive Director after 30 calendar days of receipt of the
preliminary notice which states the specific grounds for the
nonselection and advises that the gauger may administratively appeal
the final notice of nonselection to the Assistant Commissioner within
30 calendar days of receipt of the final notice. If the gauger files a
timely response, then the Executive Director, within 30 calendar days
of receipt of the response, will issue a final determination regarding
the gauger's approval. If this final determination is adverse to the
gauger, then the final notice of nonselection will state the specific
grounds for nonselection and advise the gauger that it may
administratively appeal the final notice of nonselection to the
Assistant Commissioner within 30 calendar days of receipt of the final
notice.
(iii) Appeal decision. The Assistant Commissioner will issue a
decision on the appeal within 30 calendar days of receipt of the
appeal. If the appeal decision is adverse to the gauger, then the
gauger may choose to pursue one of the following two options:
(A) Submit a new application for approval to the Executive Director
after waiting 90 days from the date of the Executive Director's last
decision; or
(B) File an action with the Court of International Trade, pursuant
to chapter 169 of title 28, United States Code,
[[Page 48541]]
within 60 days after the issuance of the Executive Director's final
decision.
(f) What are the approval/reapproval fee requirements?
(1) In general. A fixed fee, representing Customs administrative
overhead expense, will be assessed for each application for approval or
reapproval. In addition, associated assessments, representing the
actual costs associated with travel and per diem of Customs employees
related to verification of application criteria and background
investigations will be charged. The combination of the fixed fee and
associated assessments represent reimbursement to Customs for costs
related to approval and reapproval. The fixed fee will be published in
the Customs Bulletin and the Federal Register. Based on a review of the
actual costs associated with the program, the fixed fee may be adjusted
periodically; any changes will be published in the Customs Bulletin and
the Federal Register.
(i) Approval fees. A nonrefundable pre-payment equal to 50 percent
of the fixed approval fee to cover preliminary processing costs must
accompany each application for approval. Before a gauger will be
approved, it must submit to Customs, at the address specified in the
billing, within the 30 day billing period the associated charges
assessed for the approval and the balance of the fixed approval fee.
(ii) Reapproval fees. Before a gauger will be reapproved, it must
submit to Customs, at the billing address specified, within the 30 day
billing period, the fixed reapproval fee.
(2) Disputes. In the event a gauger disputes the charges assessed
for travel and per diem costs associated with scheduled inspection
visits, it may file an appeal within 30 calendar days of the date of
the assessment with the Executive Director. The appeal letter must
specify which charges are in dispute and provide such supporting
documentation as may be available for each allegation. The Executive
Director will make findings of fact concerning the merits of an appeal
and communicate the agency decision to the gauger in writing within 30
calendar days of the date of the appeal.
(g) Can existing Customs-approved gaugers continue to operate?
Commercial gaugers approved by the Executive Director prior to December
8, 1993, will retain approval under these regulations provided that
they conduct their business in a manner consistent with the
administrative portions of this section. This paragraph does not
pertain to any gauger which has had its approval suspended or revoked.
Gaugers which have had their approvals continued under this section
will have their status reevaluated on their next triennial inspection
date which is no earlier than three years after the effective date of
this regulation. At the time of reapproval, these gaugers must meet the
requirements of this section and remit to Customs, at the address
specified in the billing, within the 30 day billing period the fixed
reapproval fee. Failure to meet these requirements will result in
revocation or suspension of the approval.
(h) How will Customs-approved gaugers operate?
(1) Reports. (i) Contents of reports. The measurement results from
a Customs-approved gauger that are submitted by an importer of record
with respect to merchandise in an entry, in the absence of measurements
conducted by Customs, will be accepted by Customs, provided that the
importer of record certifies that the measurement was of the
merchandise in the entry. All reports must measure net landed quantity,
except in the case of crude petroleum of Heading 2709, Harmonized
Tariff Schedule of the United States (HTSUS), which may be measured by
gross quantity. Reports must use the appropriate HTSUS units of
quantity, e.g., liters, barrels, or kilograms.
------------------------------------------------------------------------
HTSUS Product Unit of quantity
------------------------------------------------------------------------
Headings 1501-1515.......... Animal and vegetable Kilogram.
oils.
Subheadings 2707.10-2707.30 Benzene, toluene and Liter.
and 2902.20-2902.44. xylene.
Heading 2709................ Crude Petroleum..... Barrel.
Heading 2710 (various Fuel oils, motor Barrel.
subheadings). oils, kerosene,
naphtha,
lubricating oils.
Chapter 29 (various Organic compounds in Kilogram, liter,
subheadings). bulk and liquid etc.
form.
------------------------------------------------------------------------
(ii) Status of commercial reports where Customs also gauges
merchandise. Nothing in these regulations will preclude Customs from
gauging a shipment which has been gauged by a Customs-approved gauger
at the request of an importer. In cases where a shipment has been
gauged by both Customs and a Customs-approved gauger, all Customs
actions will be based upon the gauging reports issued by Customs,
unless the Executive Director advises other actions. If Customs gauges
merchandise, it will release the report of its measurements to the
importer of record or its agent upon request unless the gauging
information is proprietary to the holder of a copyright or patent, or
developed by Customs for enforcement purposes.
(2) Recordkeeping requirements. Customs-approved gaugers must
maintain records of the type normally kept in the ordinary course of
business in accordance with the provisions of this chapter and any
other applicable provisions of law, and make them available during
normal business hours for Customs inspection. In addition, these
gaugers must maintain all records necessary to permit the evaluation
and verification of all Customs-related work, including, as
appropriate, those described below. All records must be maintained for
five years, unless the gauger is notified in writing by Customs that a
longer retention time is necessary for particular records. Electronic
data storage and transmission may be approved by Customs.
(i) Transaction records. Records for each Customs-related
transaction must be readily accessible and have the following:
(A) A unique identifying number;
(B) The date and location where the transaction occurred;
(C) The identity of the product (e.g. crude oil);
(D) The name of the client;
(E) The source of the product (e.g., name of vessel, flight number
of airline); and
(F) If available, the Customs entry date, entry number, and port of
entry and the names of the importer, exporter, manufacturer, and
country-of-origin.
(ii) Major equipment records. Records for each major piece of
equipment used in Customs-related work must identify the name and type
of instrument, the manufacturer's name, the instrument's model and any
serial numbers, and the occurrence of all servicing performed on the
equipment or instrument, to include recalibration and any repair work,
[[Page 48542]]
identifying who performed the service and when.
(iii) Records of gauging procedures. The Customs-approved gauger
must maintain complete and up-to-date copies of all approved gauging
procedures, calibration methods, etc., and must document the procedures
that each staff member is authorized to perform. These procedures must
be readily available to appropriate staff.
(iv) Gauging records. The Customs-approved gauger must identify
each transaction by transaction record number (see paragraph (h)(2)(i)
of this section) and must maintain all information or data (such as
temperatures, etc.) associated with each Customs-related gauging
transaction. Each gauging record (i.e., the complete file of all data
for each separate transaction) must be dated and initialed or signed by
the staff member(s) who did the work.
(v) Gauging reports. Each gauging report submitted to Customs must
include:
(A) The name and address of the Customs-approved gauger;
(B) A description and identification of the transaction, including
its unique identifying number;
(C) The designations of each gauging procedure used;
(D) The gauging report itself (i.e., the quantity of the
merchandise);
(E) The date of the report; and
(F) The typed name and signature of the person accepting technical
responsibility for the gauging report (i.e., an approved signatory).
(3) Representation of Customs-approved status. Commercial gaugers
approved by Customs must limit statements or wording regarding their
approval to an accurate description of the commodities for which
approval has been obtained. Use of terms other than those appearing in
the notice of approval (see paragraph (e) of this section) is
prohibited.
(4) Subcontracting prohibited. Customs-approved gaugers must not
subcontract Customs-related work to non Customs-approved gaugers or non
Customs-accredited laboratories, but may subcontract to other
facilities that are Customs-approved/accredited and in good standing.
(i) How can a gauger have its approval suspended or revoked or be
required to pay a monetary penalty?
(1) Grounds for suspension, revocation, or assessment of a monetary
penalty. (i) In general. The Executive Director may immediately suspend
or revoke a gauger's approval only in cases where the gauger's actions
are intentional violations of any Customs law or when required by
public health or safety. In other situations where the Executive
Director has cause, the Executive Director will propose the suspension
or revocation of a gauger's approval or propose a monetary penalty and
provide the gauger with the opportunity to respond to the notice of
proposed action.
(ii) Specific grounds. A gauger's approval may be suspended or
revoked, or a monetary penalty may be assessed because:
(A) The selection was obtained through fraud or the misstatement of
a material fact by the gauger;
(B) The gauger, a principal of the gauging facility, or a person
the port director determines is exercising substantial ownership or
control over the gauger operation is indicted for, convicted of, or has
committed acts which would: under United States federal or state law,
constitute a felony or misdemeanor involving misstatements, fraud, or a
theft-related offense; or reflect adversely on the business integrity
of the applicant. In the absence of an indictment, conviction, or other
legal process, the port director must have probable cause to believe
the proscribed acts occurred;
(C) Staff gauger personnel refuse or otherwise fail to follow any
proper order of a Customs officer or any Customs order, rule, or
regulation;
(D) The gauger fails to operate in accordance with the obligations
of paragraph (b) of this section;
(E) A determination is made that the gauger is no longer
technically or operationally proficient at performing the approved
methods of measurement for Customs purposes;
(F) The gauger fails to remit to Customs, at the billing address
specified, within the 30 day billing period the associated charges
assessed for the approval and the balance of the fixed approval fee;
(G) The gauger fails to maintain its bond;
(H) The gauger fails to remit to Customs, at the billing address
specified, within the 30 day billing period the fixed reapproval fee;
or
(I) The gauger fails to remit any monetary penalty assessed under
this section.
(iii) Assessment of monetary penalties. The assessment of a
monetary penalty under this section, may be in lieu of, or in addition
to, a suspension or revocation of approval under this section. The
monetary penalty may not exceed $100,000 per violation and will be
assessed and administered pursuant to published guidelines. Any
monetary penalty under this section can be in addition to the recovery
of:
(A) Any loss of revenue, in cases where the gauger intentionally
falsified the gauging report in collusion with the importer, pursuant
to 19 U.S.C. 1499(b)(1)(B)(i); or
(B) Liquidated damages assessed under the gauger's Customs bond.
(2) Notice. When a decision to suspend or revoke approval, and/or
assess a monetary penalty is made, the Executive Director will
immediately notify the gauger in writing of the decision, indicating
whether the action is effective immediately or is proposed.
(i) Immediate suspension or revocation. Where the suspension or
revocation of approval is immediate, the Executive Director will issue
a notice of determination which will state the specific grounds for the
immediate suspension or revocation and advise the gauger that, in
accordance with paragraph (i)(3) of this section, it may
administratively appeal the determination to the Assistant Commissioner
with 30 calendar days of the notice of determination. The gauger may
not perform any Customs-approved functions during the appeal period.
(ii) Proposed suspension, revocation, or assessment of monetary
penalty.--(A) Preliminary notice. Where the suspension or revocation of
approval, and/or the assessment of a monetary penalty is proposed, the
Executive Director will issue a preliminary notice of action which will
state the specific grounds for the proposed action and advise the
gauger that it has 30 calendar days to respond. The gauger may respond
by accepting responsibility, explaining extenuating circumstances, and/
or providing rebuttal evidence. The gauger also may ask for a meeting
with the Executive Director or his designee to discuss the proposed
action. The gauger may continue to perform functions requiring Customs-
approval during this 30-day period. If the gauger does not respond to
the preliminary notice, a notice of adverse determination, in
accordance with paragraph (i)(2)(ii)(B) of this section, will be issued
by the Executive Director after 30 calendar days of receipt of the
preliminary notice. If the gauger files a timely response, then the
Executive Director, within 30 calendar days of receipt of the response,
will issue a notice of determination. If this determination is adverse
to the gauger, a notice of adverse determination, in accordance with
paragraph (i)(2)(ii)(B) of this section, will be issued by the
Executive Director after 30 calendar days of receipt of the response.
[[Page 48543]]
(B) Notice of adverse determination. A notice of adverse
determination will state the action being taken, specific grounds for
the determination, and advise the gauger that it may administratively
appeal the adverse determination to the Assistant Commissioner, in
accordance with paragraph (i)(3) of this section. The gauger may not
continue to perform any Customs-approved functions upon receiving a
notice of adverse determination that its approval has been suspended or
revoked.
(3) Appeal. A Customs-approved gauger receiving an adverse
determination from the Executive Director that its approval has been
suspended or revoked, and/or that it has been assessed a monetary
penalty may file an administrative appeal to the Assistant Commissioner
within 30 calendar days of the notice of determination. If the gauger
does not file an administrative appeal, the determination made by the
Executive Director in paragraph (i)(2) of this section will become a
final agency decision which will be communicated to the gauger by a
notice of final action issued 30 days after the notice of
determination. If the gauger does file a timely appeal, then the
Assistant Commissioner, within 30 calendar days of receipt of the
appeal, will make a final agency decision regarding the gauger's
suspension or revocation of approval, and/or assessment of a monetary
penalty. If the final agency decision is adverse to the gauger, the
decision will be communicated to the gauger by a notice of final
action. Any adverse final agency decision will be communicated to the
public by a publication in the Federal Register and Customs Bulletin,
giving the effective date, duration, and scope of the decision. Any
notice of adverse final action communicated to a gauger will state the
action taken, the specific grounds for the action, and advise the
gauger that it may choose to:
(i) If suspended or revoked, submit a new application to the
Executive Director after waiting 90 days from the date of the Executive
Director's notice of final action; or
(ii) File an action with the Court of International Trade, pursuant
to chapter 169 of title 28, United States Code, within 60 days after
issuance of the Executive Director's notice of final action.
Sec. 151.14 [Amended]
4. In Sec. 151.14, the first sentence is amended by removing the
words `` `sediment and water' characteristic as set out in
Sec. 151.13(a)(2)'' and adding, in its place, the words ``analysis
method for crude petroleum contained in ASTM D96 or other approved
analysis method''.
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 removing the entry for
Sec. 151.13(i), and adding, in its place, separate listings for
Secs. 151.12(f) and 151.13(d) to read as follows:
Sec. 178.2 Listing of OMB control numbers.
------------------------------------------------------------------------
OMB control
19 CFR section Description no.
------------------------------------------------------------------------
* * * *
* * *
Sec. 151.12(f)............ Application and other 1515-0155
documents pertaining to
accreditation of
commercial laboratories..
Sec. 151.13(d)............ Application and other 1515-0155
documents pertaining to
approval of commercial
gaugers.
------------------------------------------------------------------------
Raymond W. Kelly,
Commissioner of Customs.
Approved: July 30, 1999
John P. Simpson,
Deputy Assistant Secretary of the Treasury.
[FR Doc. 99-23033 Filed 9-3-99; 8:45 am]
BILLING CODE 4820-02-P
