[Federal Register Volume 64, Number 1 (Monday, January 4, 1999)]
[Rules and Regulations]
[Pages 27-34]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 98-34675]
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DEPARTMENT OF THE TREASURY
Customs Service
19 CFR Parts 123, 142, and 178
[T.D. 99-2]
RIN 1515-AC16
Land Border Carrier Initiative Program
AGENCY: Customs Service, Treasury.
ACTION: Final rule.
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SUMMARY: This document amends the Customs Regulations to provide for
the Land Border Carrier Initiative Program (LBCIP), a program designed
to prevent smugglers of illicit drugs from utilizing commercial land
conveyances for their contraband. The program provides for agreements
between carriers and Customs in which the carrier agrees to increase
its security measures and cooperate more closely with Customs, and
Customs agrees to apply, commensurate with the degree of carrier
compliance with the terms of the agreement, special administrative
provisions pertaining to penalty amounts and expedited processing of
penalty actions if illegal drugs are found on a conveyance belonging to
the participating carrier. Further, at certain, high-risk locations
along the land border, an importer's continued use of the Line Release
method of processing entries of merchandise is conditioned on the use
of carriers that participate in the LBCIP. These regulatory changes are
designed to improve Customs enforcement of Federal drug laws along the
land border by enhancing its ability to interdict illicit drug
shipments through additional trade movement information provided by
common carriers that voluntarily choose to participate in the LBCIP.
EFFECTIVE DATE: February 3, 1999.
FOR FURTHER INFORMATION CONTACT: Jim Kelly, Office of Field Operations,
Anti-Smuggling Division, (202) 927-0458.
SUPPLEMENTARY INFORMATION:
Background
In 1984 Customs began an air and sea Carrier Initiative Program
(CIP), in part because of Customs growing awareness of an increase in
the smuggling of marijuana and cocaine in the South Florida area.
Developed under Customs remission and mitigation of penalties authority
pursuant to section 618 of the Tariff Act of 1930 (19 U.S.C. 1618), the
CIP was grounded in the execution of written Carrier Initiative
Agreements between Customs and the common carrier, whereby the carrier
agrees to improve cargo and conveyance security, and Customs provides
security and drug awareness training.
In 1986, Congress enacted the Anti-Drug Abuse Act of 1986 (Pub. L.
99-570, 100 Stat. 3207; 21 U.S.C. 801 note) (the 1986 Act) to, among
other things, strengthen Federal efforts to improve the enforcement of
Federal drug laws and enhance the interdiction of illicit drug
shipments. Pursuant to the drug interdiction mandates contained in the
1986 Act, in 1995 Customs decided to expand the CIP to land border
carriers to address the increasing drug smuggling threat along the
southwest border.
This new Land Border Carrier Initiative Program (LBCIP) is designed
to prevent smugglers of illicit drugs from utilizing commercial land
conveyances for their contraband. The program solicits land and rail
carriers to voluntarily enter into agreements with Customs in which the
carrier agrees to increase its security measures and cooperate more
closely with Customs in identifying and reporting suspected smuggling
conduct in exchange for
[[Page 28]]
which Customs agrees to provide training to carrier employees and
drivers in the areas of cargo and personnel security, document review
techniques, drug awareness, and conveyance search. Further, should
illegal drugs be found aboard a conveyance belonging to a participating
carrier, Customs agrees to apply, commensurate with the degree of
carrier compliance with the terms of the agreement, special
administrative provisions pertaining to penalty amounts and expedited
processing of penalty actions.
In conjunction with implementing the LBCIP, Customs decided to tie
the mutual benefits of Line Release processing to the security offered
by the LBCIP at certain, high-risk locations along the southwest
border. Thus, Customs planned to require at these designated locations
that an importer's continued use of the Line Release method of
processing entries of merchandise is conditioned on the use of carriers
that participate in the LBCIP. Customs planned to publish a list of
these high-risk locations along the southwest border in the Federal
Register.
On December 30, 1997, Customs published a Notice of Proposed
Rulemaking (NPRM) in the Federal Register (62 FR 67765) that proposed
to amend the Customs Regulations to provide for the LBCIP and to
require that merchandise be transported by a LBCIP participant for
merchandise to be processed through use of Line Release at certain
high-risk locations. Customs stated in the BACKGROUND portion of the
document its intention that the LBCIP would be implemented at the
southwest border. Comments were solicited on the proposal. The comment
period closed March 2, 1998; four comments were received. The comments
and Customs responses are set forth below.
Analysis of Comments
Concerns With the LBCIP, in General
Comment: All of the commenters inquired if the LBCIP would be
limited to the southwest border. Acknowledging that Customs stated its
intention to limit the LBCIP to the Mexican border in the BACKGROUND
portion of the NPRM, these commenters pointed out that the proposed
regulations did not contain such a limitation and that Customs should
clearly indicate in the regulatory text portion of the Final Rule
document that the LBCIP will apply only to the Mexican border.
Customs Response: The whole reason for expanding the Carrier
Initiative Program (CIP) to include land border carriers is to address
the increased drug-smuggling threat to the United States. While that
threat presently comes primarily from the southwest border, should that
threat find other avenues for entering the U.S., i.e., along the
northern border, and if the regulations expressly restrict the LBCIP's
application to the southern border, then Customs would not be able to
employ the LBCIP as a law enforcement tool to counter the threat from
the different direction. On reconsideration of the scope and benefits
of the program, it makes more sense to make the program available to
all interested carriers than to restrict the program's availability to
one border area.
Accordingly, although it was Customs intention at the time it
published the NPRM to implement the LBCIP only along the southwest
border--where the drug threat to the United States is greatest--because
of the interest raised in the comments concerning the application of
special administrative provisions (see below), Customs will now make
the program available to interested carriers at any Customs land border
crossing point. Thus, no change will be made to Sec. 123.71, which
describes the LBCIP in general terms, to expressly limit the
application of the LBCIP to the southwest border.
Comment: Two commenters inquired that if the LBCIP Agreements are
only entered into with carriers on the southwest border, will the
accompanying special administrative provisions pertaining to the
assessment and mitigation of penalties for carriage of controlled
substances apply only at the Mexican border, and not the Canadian
border?
Customs Response: As mentioned above, because of comments concerned
about the application of special administrative provisions, Customs has
decided to expand the availability of the LBCIP to interested carriers
at any land border crossing location. Accordingly, the issues of
limited LBCIP participation and application of special administrative
provisions are rendered moot.
Comment: One commenter wanted Customs to define a ``high-risk''
area in the regulations, stating that carriers need to know whether
they are operating in such areas, which can effect carrier safety and
security and impact operational efficiency. This commenter also
inquired that should Canadian land border ports ever be designated as
``high risk'', will Customs afford Canadian carriers fair and
appropriate notice so that they can meet the requirements of the LBCIP.
Along this line of inquiry, another commenter stated that
compliance with the LBCIP is only a requirement for carriers
participating in Line Release and that the LBCIP should remain a
voluntary program for carriers not participating in Line Release.
Customs Response: These comments reveal a certain confusion
concerning how the LBCIP is designed to operate as a voluntary, stand-
alone program and how it interrelates with the Line Release-method of
processing certain merchandise. As provided in proposed Sec. 123.71,
the LBCIP is a voluntary program--for carriers--designed to assist
Customs in preventing the smuggling of controlled substances into the
United States. The LBCIP is independent of Line Release processing,
which is an automated method to expedite the release of certain
shipments--for importers. However, at certain land border crossing
locations, designated ``high risk'' by Customs, an importer's continued
use of Line Release processing will be contingent on the importer's use
of carriers that participate in the LBCIP. Accordingly, if there are no
carriers at a designated high-risk area that participate in the LBCIP,
then the importer cannot use the Line Release program.
``High-risk'' locations--where continued use of Line Release will
be conditioned on the importer's use of carriers that participate in
the LBCIP-- currently designated by Customs are:
1. Calexico, CA;
2. Otay Mesa, CA;
3. Tecate, CA;
4. Douglas, AZ;
5. Nogales, AZ;
6. Brownsville, TX;
7. Del Rio, TX
8. Eagle Pass, TX;
9. El Paso, TX;
10. Hidalgo, TX, the cargo-processing center at Pharr;
11. Laredo, TX; and
12. Progreso, TX.
These ports of entry are designated as ``high risk'' based on seizure
statistics. Additional areas designated by Customs as high risk will be
identified in General Notices that will be published in the Federal
Register. These notices will normally be published with a 30-day
delayed effective date to give affected importers time to restructure
their business interests.
Concerns With the Written Agreement; Sec. 123.72
Comment: One commenter stated that a standard agreement should be
used throughout the entire southwest border, and another commenter
stated that port
[[Page 29]]
directors should not have the ability to change the language in an
agreement.
Customs Response: Since the drug threat is the focus of the program
and not regional/local conditions, one standard agreement will be used
in the LBCIP, and port directors will not have the ability to modify
the language employed in agreements.
Comment: One commenter stated that Customs should clarify whether
they want carriers or individual train crews, to enter into agreements
with Customs. This commenter suggested that Customs should revise
Sec. 123.71 to make this clear.
Customs Response: As provided at proposed Sec. 123.72, which
pertains to the written agreement requirement, it is the commercial
carriers (not the drivers of the conveyance) that are to enter into the
written agreement with Customs. The statement in proposed Sec. 123.71
that the LBCIP is a program designed to enlist the voluntary
cooperation of the designated drivers of commercial entities as well as
the commercial entities was merely to reflect that a participating
carrier's commitment to the LBCIP includes the carrier being
responsible, after designating drivers (or crews) for program
participation, for adequately training the drivers (or crews) on how to
identify and report suspected smuggling attempts. Accordingly, the
carriers are, in effect, responsible for enlisting the cooperation of
the drivers (or crews) they designate to be in the program. However,
because language regarding drivers in Secs. 123.71, 123.72, and 123.74
confused readers concerning whether Customs intends to enter into
individual agreements with the drivers (or crew), these provisions will
be revised to remove references to designated drivers.
However, because the cooperation of drivers is such an integral
part of the program and with the revisions discussed above to
Secs. 123.71, 123.72, and 123.74, a new Sec. 123.76 will be added that
more fully explains how drivers fit into the program.
Comment: One commenter wants Customs to modify the written
agreement provision (Sec. 123.72) to acknowledge that the training of
railroad crews might impact existing labor agreements.
Customs Response: Since the LBCIP is a voluntary program, Customs
finds the issue of labor agreements between carriers and its employees
outside the scope of these regulations. Accordingly, no change will be
made to Sec. 123.72.
Comment: Concerned with the written agreement provision that
requires carrier-participants to establish security procedures aimed at
restricting access to transporting conveyances and preventing the
unauthorized lading of illegal drugs while the conveyance is en route
to the U.S., one commenter suggested that Sec. 123.72(b) be revised to
acknowledge the national limits incumbent on establishing such security
measures.
Customs Response: Customs is well aware of the national limits/
physical restraints faced by carrier-applicants in establishing the
security measures provided for at Sec. 123.72(b) and does not expect
the carriers to do what is beyond their control. With the LBCIP being a
cooperative venture between participant-carriers and Customs, Customs
will of course work with particular carriers to establish those
security procedures that are necessary and within the ability of the
LBCIP participant to implement. Since the scope of the security burden
on the carrier-participant is substantially less than that envisioned
by the commenter, Customs sees no reason to revise the security
requirements of Sec. 123.72(b).
Comment: Two commenters wanted Customs to clarify what background
checks need to be performed and on which employees. These commenters
questioned which criminal records have to be checked--presumably this
relates to records maintained by the resident country of the
participant-carrier--and whether the ``all personnel designated to
participate in the LBCIP'' language encompasses all employees who will
handle a shipment from the time it crosses one border, traverses the
U.S., and arrives at another border, and all employees in between.
These commenters argued that the scope of such a provision would affect
thousands, if not tens of thousands, of employees, and that the
provision should be limited to new hires. Based on the magnitude of
these concerns, two commenters stated that Customs paperwork
assessment/recordkeeping burden is understated.
Customs Response: Section 123.72(c) provides, in part, that, to the
extent permitted by law, participant-carriers are to conduct employment
and criminal history record checks on all (not just newly hired)
employees who will be designated to participate in the LBCIP. Customs
contemplates within this context that a carrier-employer need not check
the criminal histories of all employees as all employees will not be
designated to be involved with the LBCIP. Involvement with the LBCIP
would mean involvement with physically processing/transporting the
merchandise that is to be exported to the United States. Further,
Customs contemplates that the criminal records of all potential
employees who may be involved with physically processing/ transporting
merchandise for export to the United States may not be accessible to
the carrier-exporter despite the carrier-employer's best efforts. Thus,
concerning the question of which criminal records have to be checked, a
carrier-employer would be required to report to Customs any criminal
activity concerning employees that are directly involved with the
physical processing/transporting of merchandise exported to the United
States, which the employer learns either through a search of accessible
criminal records maintained by the country in which the employee is
hired or through communication by the employee to the employer. Given
the above, no change to Sec. 123.72(c) will be made.
Regarding Customs assessment of the paperwork burden in applying
for the LBCIP, since the scope of the background checks is more limited
and reasonable than understood by the commenters, Customs does not
believe that the time an average carrier will spend completing the
application for LBCIP participation, providing background information
on drivers designated for inclusion in the program, completing an
affidavit of business character, and listing the conveyances that will
be used will exceed one hour. However, because some carrier-applicants
will experience a significant turnover in drivers, conveyances, and
ownership, those applicants may have a greater paperwork burden--as
much as 2 hours a week--in complying with the continuing reporting
obligations of the program. Other carrier-applicants are so large and
have so many drivers, they may fall outside the average. Accordingly,
Customs will revise its paperwork estimates to fully account for this
secondary reporting burden. The collection of information data
previously submitted to the Office of Management and Budget has been
revised to reflect an increase of 3 more hours per respondent. This
increase is based on increased applicants and business turnover
estimates, which impact both the initial paperwork requirement and the
secondary reporting obligation.
Comment: One commenter wanted Customs to clarify the terms
``properly registered conveyances,'' i.e., does it pertain to railcars
or locomotives, and two commenters suggested that locomotive engineers
be separately enumerated, rather than be collectively included with
drivers.
Customs Response: For purposes of the written agreement, the term
``conveyance'' would include
[[Page 30]]
locomotives--being the powered unit--rather than the railcars, which
are non-powered, and the term ``drivers'' would include locomotive
engineers--being the drivers of the powered conveyance. Concerning the
``proper registration'' of such conveyances, what is envisioned here is
that the conveyance is registered with the appropriate government
agency responsible for registering such conveyances in the country
where the conveyance operates.
Customs believes that no change to Sec. 123.72(d) is necessary.
Comment: One commenter wanted Customs to define the term
``dishonest conduct'' in the regulations.
Customs Response: Although not a term of art, the term ``dishonest
conduct'' has been defined as an absence of integrity; a disposition to
betray, cheat, deceive, lie, or defraud; and being untrustworthy. The
meaning of the term extends beyond acts which would be criminal, and is
not restricted to such conduct as would be criminal. However, the term
does not necessarily include ``wrongful acts''. For example, a speeding
violation in an automobile would be a wrongful act in law, but it does
not constitute ``dishonest conduct''. The term ``dishonest conduct'' is
designed, but not limited, to include any conduct or activity that
bears on an individual's veracity, such as allegations/complaints of
lying, misleading, or perjury. Examples of such conduct would include
writing bad checks, misrepresenting employment history, and deceiving
government agencies as to the nature of information. Customs does not
believe that it is appropriate to define the term in the regulations.
Comment: Three commenters requested that Sec. 123.72 be revised to
delete references to principals, drivers, and conveyances, because such
information is irrelevant. Further, these commenters stated that the
five-day notification period for advising Customs concerning material
changes in business organization, drivers, or conveyances serves no
useful purpose and that this time-frame is too short anyway.
Customs Response: Customs believes that by receiving the names of
the drivers and principal officers of the companies who apply to join
the LBCIP, Customs is better able to make a determination about the
threat posed by the drivers and companies and to make an informed
decision about the suitability of the carriers and specific drivers for
the program. Customs also believes that the five-day notification
period is sufficient time for a carrier to advise Customs in writing by
mail of material changes affecting a carrier's business organization,
designated drivers or registered conveyances. Accordingly, no change to
Sec. 123.72 will be made.
Comment: One commenter wanted to delete language regarding the
requirement to provide information about past business relations, and
the necessity of providing information about ``dishonest conduct''.
Another commenter wanted clearer language regarding the ``affidavit of
business character'' requirement.
Customs Response: Because of the high-risk environment in which
transportation companies sometime operate, Customs believes that it is
imperative that principals of participating carriers submit an
``affidavit of business character'' and that information concerning
``dishonest conduct'' on the part of all designated participants be
provided to Customs. This information will assist Customs in making
informed decisions about a carrier's suitability for the program.
Concerns With the Revocation Procedure; Sec. 123.75
Comment: One commenter argued that carriers should be provided with
advance notice of revocation and given the opportunity to cure defaults
prior to revocations. This commenter also questioned the scope of
revocations, wanting to know if all Customs land border ports will be
notified in the case of a revocation.
Customs Response: Because the LBCIP is a cooperative venture
between Customs and participant-carriers, the on-going dialogue between
Customs and the carrier will enable a carrier to be aware of Customs
concerns regarding the carrier's operations and allow a carrier to
explain or take remedial action to resolve a deficiency in the
carrier's operations. However, in cases where immediate revocation is
necessary, proposed Sec. 123.75(c) details the appeal process to be
followed by the subject carrier once a decision to immediately revoke
the carrier's participation in the LBCIP has been made by a port
director. Under this process, the subject participant-carrier may file
a written appeal directly with the Assistant Commissioner of Field
Operations within 10 days and receive a determination within 30 days of
the appeal's receipt by the Assistant Commissioner. Customs believes
that these time frames provide carriers with ample time to cure
operational defects noted by Customs, and that the process will ensure
uniformity regarding revocations.
Concerning the scope of revocations, decisions to immediately
revoke a carrier-participant or individual driver would be effective at
the national level; all land border ports would be notified.
Comment: One commenter felt that some misdemeanors, such as drunk
driving, should not result in revocation.
Customs Response: Offenses such as drunk driving will not
automatically result in revocation. The circumstances of such conduct,
i.e., did it occur as an incident to employment, will be fully
considered by Customs before any action to institute revocation
procedures is initiated.
Comment: One commenter wanted Customs to define ``misuse''
regarding authorized conveyances.
Customs Response: The term ``misuse'' of authorized conveyances
means the unauthorized use of a carrier's conveyance by a designated
driver, e.g., making unscheduled stops/trips, and such other use as
goes beyond the scope of the agreement entered into between the carrier
and Customs.
Concerns Over Tying Line Release to LBCIP; Secs. 123.71, 142.41, and
142.41
Comment: Two commenters did not see the value of linking the LBCIP
to Line Release at ``high-risk'' areas.
Customs Response: Linking the LBCIP with Line Release at designated
``high-risk'' areas will aid Customs invaluably in its endeavor to
thwart the smuggling of illicit drugs into the United States. The LBCIP
is based on a mutual exchange of business information between a
participant carrier and Customs: Customs receives participant-specific
information regarding the participant's facilities, conveyances,
drivers, and business structure; the carrier receives special training
in the areas of cargo and personnel security standards, document
review, drug awareness, and container/conveyance searches. Line
Release, on the other hand, requires an importer to provide Customs
with information regarding the merchandise being imported, the
importer, and the shipper or manufacturer. Linking the LBCIP with Line
Release merges the merchandise, importer, carrier, driver, and
conveyance data together, thereby enhancing Customs ability to assess
the threat of each Line Release-type commercial shipment more
effectively. Accordingly, since Customs scrutiny of Line Release
transactions would be enhanced if it possesses the information that
LBCIP participants provide, it makes perfect sense at those LBCIP
locations designated as ``high risk'' to condition an importer's
continued use of Line Release on the use of carriers/drivers that
participate in the LBCIP.
[[Page 31]]
Conclusion
After careful consideration of all the comments received and
further review of the matter, Customs has decided to adopt as a final
rule with the modifications and changes discussed above and set forth
below, the amendments to implement the LBCIP and tying Line Release
privileges to LBCIP carriers/drivers at certain, high-risk locations.
The document also identifies the high-risk locations where merchandise
must be transported by carriers who are participants in the LBCIP in
order for the merchandise to be processed through Line Release.
To reflect the paperwork requirements contained at Sec. 123.73,
part 178 of the Customs Regulations is also amended.
Regulatory Flexibility Act and Executive Order 12866
Pursuant to provisions of the Regulatory Flexibility Act (5 U.S.C.
601 et seq.), it is certified that the amendments will not have a
significant economic impact on a substantial number of small entities,
because the amendments concern a voluntary program that will confer a
benefit on the trade community. Accordingly, the amendments are not
subject to the regulatory analysis or other requirements of 5 U.S.C.
603 and 604. This amendment does not meet the criteria for a
``significant regulatory action'' as specified in Executive Order
12866.
Paperwork Reduction Act
The collection of information contained in these final regulations
has been revised, reviewed, and approved by the Office of Management
and Budget (OMB) in accordance with the requirements of the Paperwork
Reduction Act of 1995 (44 U.S.C. 3507) under control number 1515-0217.
An agency may not conduct or sponsor, and a person is not required to
respond to, a collection of information unless the collection of
information displays a valid control number assigned by OMB.
The collection of information in this final rule is at Sec. 123.73.
This information is required to improve Customs ability to interdict
illicit drug shipments along the land border in cooperation with common
carriers and their designated drivers who voluntarily participate in
the LBCIP. This information will be used to process applications for
voluntary participation in the Land Border Carrier Initiative Program.
The likely respondents are commercial carrier organizations that engage
in foreign commerce and trade along the land border of the United
States.
The estimated average burden associated with the collection of
information in this final rule is four hours per respondent or
recordkeeper. Comments concerning the accuracy of this burden estimate
and suggestions for reducing this burden should be directed to the U.S.
Customs Service, Information Services Group, Office of Finance, 1300
Pennsylvania Ave., N.W., Washington, D.C. 20229; and to OMB, Attention:
Desk Officer for the Department of the Treasury, Office of Information
and Regulatory Affairs, Washington, D.C. 20503.
Drafting Information
The principal author of this document was Gregory R. Vilders,
Attorney, Regulations Branch. However, personnel from other offices
participated in its development.
List of Subjects
19 CFR Part 123
Administrative practice and procedure, Aliens, Canada, Common
carriers, Customs duties and inspection, Forms, Imports, International
boundaries, Mexico, Motor carriers, Railroads, Reporting and
recordkeeping requirements, Vehicles.
19 CFR Part 142
Bonds, Common carriers, Customs duties and inspection, Entry of
merchandise, Forms, Reporting and recordkeeping requirements.
19 CFR Part 178
Administrative practice and procedure, Collections of information,
Exports, Imports, Paperwork requirements, Reporting and recordkeeping
requirements.
Amendments To the Regulations
For the reasons stated above, parts 123, 142, and 178 of the
Customs Regulations (19 CFR parts 123, 142, and 178) are amended as set
forth below:
PART 123--CUSTOMS RELATIONS WITH CANADA AND MEXICO
1. The general authority citation for part 123 continues to read as
follows, the specific authority citation for Sec. 123.71 is removed,
and specific authority citations for Secs. 123.71 through 123.76 and
for Sec. 123.81 are added, to read as follows:
Authority: 19 U.S.C. 66, 1202 (General Note 20, Harmonized
Tariff Schedule of the United States (HTSUS)), 1431, 1433, 1624.
* * * * *
Sections 123.71-123.76 also issued under 19 U.S.C. 1618; Section
123.81 also issued under 19 U.S.C. 1595.
2. Subpart H is redesignated as subpart I and Secs. 123.71 and
123.72 are redesignated as Secs. 123.81 and 123.82 therein,
respectively, and a new subpart H, consisting of Secs. 123.71 through
123.76, is added to read as follows:
Subpart H--Land Border Carrier Initiative Program
Sec.
123.71 Description of program.
123.72 Written agreement requirement.
123.73 Application to participate.
123.74 Notice of selection; appeal of determination.
123.75 Notice of revocation; appeal of decision.
123.76 Authorization by Customs for participants to use certain
drivers.
Subpart H--Land Border Carrier Initiative Program
Sec. 123.71 Description of program.
The Land Border Carrier Initiative Program (LBCIP) is a program
designed to enlist the voluntary cooperation of commercial conveyance
entities in Customs effort to prevent the smuggling of controlled
substances into the United States. Participation in the LBCIP requires
the land or rail commercial carrier to enter into a written agreement
with Customs that describes the responsibilities of participants in the
LBCIP. The agreement generally provides that the carrier agrees to
enhance the security of its facilities and the conveyances employed to
transport merchandise. The carrier also agrees to cooperate closely
with Customs in identifying and reporting suspected smuggling attempts.
In exchange for this cooperation, Customs agrees to provide training to
carrier personnel in the areas of cargo and personnel security,
document review techniques, drug awareness, and conveyance searches.
Customs also agrees that should a controlled substance be found aboard
a conveyance owned or operated by a participating carrier, special
administrative procedures relating to the assessment and mitigation of
drug-related penalties will be followed; the degree of compliance with
the terms of the agreement will be considered as an additional positive
mitigating factor in any seizure or penalties decision or
recommendation. Lastly, at certain high-risk locations, for the use of
Line Release, imported merchandise, which otherwise qualifies for Line
Release entry (see, subpart D of part 142 of this chapter), must be
transported over the border by carriers that participate in the LBCIP.
The locations where the use of Line Release will be conditioned on
participation in the LBCIP will be published in the Federal Register.
[[Page 32]]
Sec. 123.72 Written agreement requirement.
Commercial carriers desiring to participate in the LBCIP shall
enter into a written agreement with Customs regarding the mutual
obligations of the carrier-participant and Customs. The terms and
conditions in the written agreement shall generally provide that the
carrier-applicant agrees:
(a) To participate in Customs training regarding cargo and
personnel security, document review techniques, drug awareness, and
conveyance searches;
(b) To establish security systems at the place of business for the
safe storage and handling of cargo intended to be imported into the
United States; and security procedures aimed at restricting access to
transporting conveyances and preventing the unauthorized lading of
illegal drugs while the conveyance is en route to the United States;
(c) To conduct, to the extent allowed by law, employment and
criminal history record checks on all personnel designated to
participate in the LBCIP and to exercise responsible supervision and
control over those personnel;
(d) To ensure that only authorized drivers and properly registered
conveyances are utilized in the transportation of merchandise into the
United States, and to maintain current lists of such drivers and
conveyances for Customs inspection upon request;
(e) To immediately report to the appropriate port director any
criminal or dishonest conduct on the part of drivers designated to
participate in the LBCIP, or attempts by others to impede, influence,
or coerce the carrier or drivers into violating any United States law,
including Customs regulations, especially those concerned with
trafficking in illegal drugs; and
(f) To notify the appropriate port director in writing by mail
within 5 days of any change in legal name, business address, business
principals, ownership, drivers, or conveyances that affects the basis
for continued participation in the LBCIP.
Sec. 123.73 Application to participate.
To request participation in the LBCIP, the carrier-applicant must
submit an application containing the information requested in this
section. The application must be accompanied by two copies of a LBCIP
written agreement (see Sec. 123.72 of this part; upon request, the
local port director will provide copies of an unsigned written
agreement) containing original signatures of corporate officers or
owners of the common carrier. The application shall be prepared by the
common carrier, be signed by corporate officers or owners, and
submitted to the port director. If a submitted application does not
provide all of the information specified in this section, the
processing of the application will either be delayed or the application
will be rejected. The application shall include the following
information:
(a) General business identification and site condition information.
The name and address of the commercial conveyance entity, the names of
all principals or corporate officers, the name and telephone number of
an individual to be contacted for further information, and a complete
and detailed description of the premises where business operations are
conducted, to include all working/storage areas and security features
employed;
(b) Designated driver information. A listing of the drivers
designated by the carrier who will be transporting merchandise into the
U.S. The listing shall set forth the name(s), address(es), date of
birth, nationality, driver's license number, and any other personal
identifying information regarding the drivers listed, e.g., social
security number (if available), to enable Customs to conduct background
checks and to aid Customs officers at the border crossing point in
identifying individual LBCIP-authorized drivers;
(c) Conveyance identification information. A listing of the
conveyances, e.g., trucks and locomotives, that the carrier will
utilize to transport merchandise into the U.S. The listing shall set
forth the type and make of conveyances, country of registration and
license number(s), conveyance-specific identifying markings, e.g.,
vehicle identification numbers (VINs), and any other general conveyance
identifying information, e.g., weight, color, recognizable
modifications, etc., to aid Customs officers at the border crossing
point in identifying particular LBCIP-registered conveyances; and
(d) Affidavit of business character. A statement signed by the
carrier-applicant which attests to each principal's or corporate
officer's past and present business relations, e.g., a list of past
companies worked for and positions held, which fully explains the
presence of any past or present crime involving theft or smuggling or
investigations into such crimes, or other dishonest conduct on the part
of a principal.
Sec. 123.74 Notice of selection; appeal of determination.
The information provided pursuant to paragraphs (b) through (d) of
Sec. 123.73 shall constitute the criteria used to evaluate the
competency of the carrier-applicant to participate in the LBCIP.
Following Customs evaluation of the information provided, Customs shall
notify the carrier-applicant in writing of Customs determination as to
whether the carrier-applicant is qualified to participate in the LBCIP.
In cases of selection, Customs will sign and return one of the copies
of the written agreement. In cases of nonselection, the written notice
shall clearly state the reason(s) for denial and recite the applicant's
appeal rights under paragraph (b) of this section.
(a) Grounds for nonselection. The port director may deny a
carrier's application to participate in the LBCIP for any of the
following reasons:
(1) Evidence of any criminal or dishonest conduct involving the
carrier, a corporate officer, designated drivers, or other person the
port director determines is exercising substantial ownership or control
over the carrier operation or corporate officer;
(2) Evidence of improper use of designated conveyances;
(3) Evidence that the written agreement was entered into by fraud
or misstatement of a material fact; or
(4) A determination is made that the grant of LBCIP privileges
would endanger the revenue or security of the Customs area.
(b) Appeal of determination. Carrier-applicants not selected to
participate in the LBCIP and who wish to appeal the decision shall
either:
(1) Appeal the adverse determination in accordance with the appeal
procedure set forth in Sec. 123.75(c) of this part; or
(2) Cure any deficiency in the first application by submitting a
new application to the port director who denied the previous
application after waiting 60 days from the date of issuance of the
first determination.
Sec. 123.75 Notice of revocation; appeal of decision.
(a) Revocation. The port director may immediately revoke a
carrier's participation in the LBCIP and cancel the written agreement
for any of the following applicable reasons:
(1) The selection and written agreement were obtained through fraud
or the misstatement of a material fact by the carrier;
(2) The carrier, a corporate officer, or other person the port
director determines is exercising substantial ownership or control over
the carrier operation or corporate officer, is indicted for, convicted
of, or has committed acts which would constitute any felony or
misdemeanor under
[[Page 33]]
United States Federal or State law. In the absence of an indictment,
conviction, or other legal process, the port director must have
probable cause to believe the proscribed acts occurred;
(3) The carrier-participant allows an unauthorized person or entity
to use its LBCIP certificate or other approved form of identification;
(4) The carrier-participant misuses authorized conveyances;
(5) The carrier-participant refuses or otherwise fails to follow
any proper order of a Customs officer or any Customs order, rule, or
regulation;
(6) The carrier-participant fails to operate in accordance with the
terms of the written agreement; or
(7) Continuation of LBCIP privileges would endanger the revenue or
security of the Customs area in the judgment of the port director.
(b) Notice. When a decision revoking participation has been made,
the port director shall notify the carrier-participant of the decision
in writing. The notice of revocation shall clearly state the reason(s)
for revocation and recite the applicant's appeal rights under paragraph
(c) of this section.
(c) Appeal of decision. Carrier-participants that receive a notice
of revocation and who wish to appeal the decision shall file a written
appeal with the Assistant Commissioner, Office of Field Operations,
U.S. Customs Service, Washington, D.C. 20229, within 10 calendar days
of receipt of the notice. The appeal shall be filed in duplicate and
shall set forth the carrier's responses to the grounds specified by the
port director in the notice. Within 30 working days of receipt of the
appeal, the Assistant Commissioner, or his designee, shall make a
determination regarding the appeal and notify the applicant in writing.
Sec. 123.76 Authorization by Customs for participants to use certain
drivers.
(a) Responsibilities of LBCIP participants. An LBCIP participant is
required, pursuant to Sec. 123.73 of this part, to list the drivers
designated to transport merchandise into the United States for the
carrier to enable Customs to conduct background checks. An LBCIP
participant is also required, pursuant to Sec. 123.72 of this part, to
conduct, to the extent allowed by law, employment and criminal history
checks on all personnel designated to participate in the LBCIP; these
personnel include drivers.
(b) Authorization of drivers by Customs. Customs may not approve a
carrier for participation in the LBCIP if it determines that there is
evidence that a driver designated by a carrier has been involved in
criminal or dishonest conduct or it may request that the carrier not
use that driver before approving the carrier for participation. Once a
carrier has been accepted in the LBCIP, Customs may determine to cancel
a particular driver's authorization to transport merchandise for a
LBCIP carrier for the reasons set forth in paragraph (c) of this
section.
(c) Reasons for cancellation of driver's authorization. Customs may
cancel a driver's authorization to transport merchandise for an LBCIP
participant for any of the following reasons:
(1) The designated driver is indicted for, convicted of, or has
committed acts which would constitute any felony or misdemeanor under
United States Federal or State law. In the absence of an indictment,
conviction, or other legal process, the port director must have
probable cause to believe the proscribed acts occurred;
(2) The designated driver allows an unauthorized person or entity
to use his LBCIP certificate or other approved form of identification;
(3) The designated driver misuses authorized conveyances;
(4) The designated driver refuses or otherwise fails to follow any
proper order of a Customs officer or any Customs order, rule, or
regulation; or
(5) The designated driver fails to operate in accordance with the
terms of the written agreement.
(d) Notice; rights of driver. (1) If driver not acceptable to
Customs at time of review of carrier's application. When Customs
notifies a carrier-applicant, pursuant to Sec. 123.74 of this part, of
its nonselection into the LBCIP because of conduct committed by a
driver designated by the carrier or when Customs conditionally approves
a carrier-applicant's participation in the LBCIP, but does not approve
a driver designated on the application to be authorized to transport
merchandise under the LBCIP, Customs will also notify the driver of the
decision in writing and recite the driver's appeal rights under
paragraph (e) of this section.
(2) If driver's authorization cancelled. When Customs makes a
determination to cancel the authorization of a particular designated
driver, pursuant to Sec. 123.76(b) of this section, Customs will notify
both the carrier-participant and the driver of the decision in writing;
the notice to the driver will recite the driver's appeal rights under
paragraph (e) of this section.
(e) Appeal rights of drivers. Drivers who receive a notice of
nonselection or cancellation and who wish to appeal the decision shall
file a written appeal with the Assistant Commissioner, Office of Field
Operations, U.S. Customs Service, Washington, D.C. 20229, within 10
calendar days of receipt of the notice. The appeal shall be filed in
duplicate and shall set forth the driver's responses to the grounds
specified by the port director in the notice. Within 30 working days of
receipt of the appeal, the Assistant Commissioner, or his designee,
shall make a determination regarding the appeal and notify the
applicant in writing.
PART 142--ENTRY PROCESS
1. The authority citation for part 142 continues to read as
follows:
Authority: 19 U.S.C. 66, 1448, 1484, 1624.
2. Section 142.41 is amended by adding a sentence at the end to
read as follows:
Sec. 142.41 Line Release.
* * * At certain high-risk locations along the land borders of the
United States (the locations to be published in the Federal Register),
which are approved by Customs for handling Line Release, the use of
Line Release for particular shipments may be denied by Customs unless
the imported merchandise is transported by carriers that participate in
the Land Border Carrier Initiative Program (see, subpart H of part 123
of this chapter).
Sec. 142.47 [Amended]
3. In Sec. 142.47, the first sentence of paragraph (b) is amended
by removing the words ``because of an examination'' and adding, in
their place, the words ``for the following reasons: because of an
examination, because a carrier transporting the Line Release
merchandise is not a participant in the Land Border Carrier Initiative
Program (LBCIP), or because a driver or conveyance is not authorized in
accordance with the LBCIP''.
PART 178--APPROVAL OF INFORMATION COLLECTION REQUIREMENTS
1. The authority citation for part 178 continues to read as
follows:
Authority: 5 U.S.C. 301; 19 U.S.C. 1624; 44 U.S.C. 3501 et seq.
2. Section 178.2 is amended by adding, in appropriate numerical
order, a listing for Sec. 123.73 to read as follows:
Sec. 178.2 Listing of OMB control numbers.
------------------------------------------------------------------------
OMB control
19 CFR Section Description No.
------------------------------------------------------------------------
[[Page 34]]
* * * * *
Sec. 123.73................ Application to participate in 1515-0217
the Land Border Carrier
Initiative Program.
* * * * *
------------------------------------------------------------------------
Raymond W. Kelly,
Commissioner of Customs.
Approved: November 4, 1998.
Dennis M. O'Connell,
Acting Deputy Assistant Secretary of the Treasury.
[FR Doc. 98-34675 Filed 12-31-98; 8:45 am]
BILLING CODE 4820-02-P
