2010-6387. Prohibitions and Conditions for Importation of Burmese and Non-Burmese Covered Articles of Jadeite, Rubies, and Articles of Jewelry Containing Jadeite or Rubies

AGENCY:

U.S. Customs and Border Protection, Department of Homeland Security; Department of the Treasury.

ACTION:

Final rule.

SUMMARY:

This document adopts as a final rule, interim amendments to title 19 of the Code of Federal Regulations (“19 CFR”) which were published in the Federal Register on January 16, 2009, as CBP Dec. 09-01 to implement the prohibitions and conditions for importation of Burmese and non-Burmese covered articles of jadeite, rubies, and articles of jewelry containing jadeite or rubies.

DATES:

Final rule effective April 22, 2010.

FOR FURTHER INFORMATION CONTACT:

Cathy Sauceda, Director, Import Safety and Interagency requirements Division, Office of International Trade [phone], or Brenda Brockman Smith, Executive Director, Trade Policy and Programs, Office of International Trade [phone].

SUPPLEMENTARY INFORMATION:

Background

On July 29, 2008, the President signed into law the Tom Lantos Block Burmese JADE (Junta's Anti-Democratic Efforts) Act of 2008 (Pub. L. 110-286) (the “JADE Act”). Section 6 of the JADE Act amends the Burmese Freedom and Democracy Act of 2003 (Pub. L. 108-61) (as so amended, the “BFDA”) by adding a new section 3A that prohibits the importation of jadeite and rubies mined or extracted from Burma, and articles of jewelry containing jadeite or rubies mined or extracted from Burma (Burmese covered articles). Section 3A of the JADE Act also regulates the importation of jadeite and rubies mined or extracted from a country other than Burma, and articles of jewelry containing jadeite or rubies mined or extracted from a country other than Burma (non-Burmese covered articles). Presidential Proclamation 8294 of September 26, 2008, implements the prohibitions and conditions of the JADE Act. (See Annex of Presidential Proclamation 8294 for Additional U.S. Note 4 to Chapter 71, Harmonized Tariff Schedule of the United States (“HTSUS”)).

On January 16, 2009, U.S. Customs and Border Protection (“CBP”) published CBP Dec. 09-01 in the Federal Register (74 FR 2844), setting forth interim amendments to implement certain provisions of the JADE Act and Presidential Proclamation 8294 by prohibiting the importation of “Burmese covered articles” (jadeite, rubies, and articles of jewelry containing jadeite or rubies, mined or extracted from Burma), and by setting forth conditions for the importation of “non-Burmese covered articles” (jadeite, rubies, and articles of jewelry containing jadeite or rubies, mined or extracted from a country other than Burma).

Although the interim regulations were promulgated without prior public notice and comment procedures and took effect on January 16, 2009, CBP Dec. 09-01 provided for the submission of public comments that would be considered before adopting the interim regulations as a final rule. The prescribed public comment period closed on March 17, 2009.

Discussion of Comment Received in Response to CBP Dec. 09-01

One commenter responded to the solicitation of comments on the interim regulations set forth in CBP Dec. 09-01. The commenter stated that the interim final rule provided “an excellent platform that offers both very workable and realistic means to uphold the law as written and to support the spirit of the law drafted by U.S. Congress.” The commenter offered a few suggestions. A description of the commenter's suggestions and CBP's analysis are set forth below.

Comment

The commenter recommended that in order to support the importer certification under Additional U.S. Note 4(a), Chapter 71, HTSUS, importers be required, at their sole expense, to confirm the veracity of their certification of non-Burmese covered articles by conducting random spot checks utilizing lab testing by an independent gemological laboratory accredited by CBP. The commenter also recommends requiring the importer to maintain records showing a history of the auditing process for a period of at least five years, and to make such records available to CBP upon request.

CBP's Response

Requiring an importer to conduct lab testing on the merchandise to be imported goes beyond the explicit statutory requirements and the importer certification requirement of 19 CFR 12.151(d). Additional U.S. Note 4(a), Chapter 71, HTSUS, provides that the presentation of an entry for any good under heading 7103, 7113, or 7116 is deemed to be a certification by the importer that any jadeite or rubies contained in such good were not mined in or extracted from Burma. As such, the presentation of an entry serves as the importer certification. If an importer elects to test the imported gems to bolster the information provided by the exporter, the results of the testing will serve to reflect upon the importer's level of reasonable care used and will be objective evidence that the goods were not mined in or extracted from Burma. CBP concurs with the commenter regarding retaining the 5-year record retention period in the final rule as set forth in § 12.151(e) as well as the requirement in § 12.151(f) that the importer must provide, upon CBP's request, all documentation to support the importer and exporter certifications.

Comment

The commenter recommended that only government-validated certificates of origin from the country in which the jadeite or rubies are mined or extracted be accepted as verifiable evidence, and that protocols related to the issuance of the exporter's government-validated certification guaranteeing non-Burmese origin should require random spot testing by an independent gemological laboratory accredited by CBP to verify non-Burmese origin.

CBP's Response

The commenter's recommendations with respect to foreign government certification and validation of exporter certificates cannot be enforced by CBP because no international arrangement, similar to the Kimberley Process Certification Scheme for conflict diamonds, currently exists for jadeite or rubies from Burma.

Comment

The commenter recommended that as a condition for export with the intent of re-importation into the United States, CBP should require that any Burmese covered article be detailed in such a way so as to ensure the same article is the one considered for re-importation to prevent circumvention of the JADE sanctions. Further, the commenter recommended that for the re-importation of non-Burmese covered articles, the original country of origin certificate be required, including a statement detailing any transformation that may have occurred.

CBP's Response

On CBP Form 4457, Certificate of Registration for Personal Effects Taken Abroad, CBP collects information from the owner in advance of departure concerning articles that will be re-imported into the United States. In addition, on CBP Form 4455, Certificate of Registration, CBP collects information about articles that are exported from the United States via a carrier for alteration, repairs, use abroad, replacement, or processing that will be re-imported into the United States and that may be subject to duty for the cost or value of the alteration, repair, or processing. Completion of this form is mandatory. Although CBP cannot ensure that the item being re-imported is the actual item that was exported unless the article has permanent identifying information such as etched or engraved serial numbers, CBP will endeavor to use the information contained on these forms to prevent the circumvention of the JADE sanctions when a covered article is exported with the intention of re-importation. As is the case with all CBP forms, the importer is responsible for the truthfulness of the information submitted on the form.

Comment

The commenter asserts that there is a risk that the personal-use exemption will be used as a means to circumvent the prohibitions and conditions for the importation of non-Burmese covered articles. The commenter recommended increased scrutiny be placed on individuals claiming a personal-use exemption and that random spot-testing be conducted to verify the imported goods are in fact non-Burmese covered articles.

CBP's Response

CBP appreciates the commenter's concerns and the underlying rationale. Any Burmese covered articles or non-Burmese covered articles that are imported into the United States in violation of any prohibition of the JADE Act are subject to all applicable seizure and forfeiture laws to the same extent as any other violation of the customs laws.

Comment

The commenter stated that the reliance on a “paper-only” system of verifiable controls without built-in safeguards such as random spot lab testing to verify authenticity and accuracy of documentation is susceptible to the risk for fraud.

CBP's Response

CBP acknowledges that until there is an international certification scheme in place, the authenticity and accuracy of documentation in the required “system of verifiable controls” is susceptible to fraud. CBP will enforce the JADE Act through the use of an importer's and exporter's certification and the other applicable customs laws.

Comment

The commenter recommended that importers should be required to provide a written warranty to each buyer or ultimate consignee of non-Burmese covered articles, affirming that an established system of verified controls from the mine to the supplier is in place and that officially validated certification has accompanied the articles at all stages.

CBP's Response

The commenter's suggestion that the importer issue a written warranty to the ultimate consumer goes beyond what is required by the JADE Act. Accordingly, CBP cannot prescribe in this final rule such entry requirements that are not mandated by the Act.

Conclusion

As indicated in the above discussion, CBP is unable to adopt the commenter's suggestions given the current statutory scheme. Accordingly, the interim rule published as CBP Dec. 09-01 is being adopted as a final rule.

Executive Order 12866

CBP has determined that this document does not meet the criteria for a “significant regulatory action” as specified in Executive Order 12866 of September 30, 1993 (58 FR 51735, October 1993).

Regulatory Flexibility Act

CBP Dec. 09-01 was issued as an interim rule rather than a notice of proposed rulemaking because CBP had determined that, pursuant to the provisions of 5 U.S.C. 553(b)(B) of the Administrative Procedure Act, prior public notice and comment procedures on the interim regulations were impracticable and contrary to public interest, and that there was good cause for the rule to become effective immediately upon publication since the JADE Act is already in effect. Because no notice of proposed rulemaking was required, the provisions of the Regulatory Flexibility Act, as amended (5 U.S.C. 601 et seq.), do not apply to this rulemaking. Accordingly, this final rule is not subject to the regulatory analysis requirements or other requirements of 5 U.S.C. 603 and 604.

Paperwork Reduction Act

The collections of information in this final rule have previously been reviewed and approved by the Office of Management and Budget in accordance with the requirements of the Paperwork Reduction Act (44 U.S.C. 3507) under control number 1651-0133.

The collections of information in these regulations are contained in § 12.151(d) (19 CFR 12.151(d)). This information is used by CBP to fulfill its information collection obligations under section 3A(c)(1) of the BFDA, as amended, and Additional U.S. Note 4, Chapter 71, HTSUS, required in connection with entry of non-Burmese covered articles. The likely respondents are business organizations, including importers and brokers.

The estimated average annual burden associated with the collection of information in this final rule is 0.2 hours per respondent or record keeper. Under the Paperwork Reduction Act, an agency may not conduct or sponsor, and a person is not required to respond to, a collection of information unless it displays a valid OMB control number.

Signing Authority

This document is being issued in accordance with § 0.1(a)(1) of the CBP regulations (19 CFR 0.1(a)(1)) pertaining to the authority of the Secretary of the Treasury (or his/her delegate) to approve regulations related to certain customs revenue functions.

List of Subjects

19 CFR Part 12

• Customs duties and inspection
• Economic sanctions
• Entry of merchandise
• Foreign assets control
• Imports
• Licensing
• Prohibited merchandise
• Reporting and recordkeeping requirements
• Restricted merchandise
• Sanctions

19 CFR Part 163

• Administrative practice and procedure
• Customs duties and inspection
• Exports
• Imports
• Penalties
• Reporting and recordkeeping requirements

Amendments to the CBP Regulations

Accordingly, the interim rule amending parts 12 and 163 of the CBP regulations (19 CFR parts 12 and 163), which was published at 74 FR 2844 on January 16, 2009, is adopted as a final rule.

Approved: March 10, 2010.

Timothy E. Skud,

Deputy Assistant Secretary of the Treasury.

David V. Aguilar,

Acting Deputy Commissioner, U.S. Customs and Border Protection.