00-24099. Endorsement of Checks Deposited by Customs

AGENCY:

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

ACTION:

Final rule.

SUMMARY:

This document amends the Customs Regulations to reflect changes concerning information that authorized Customs employees are required to place on instruments (such as checks) tendered for payment of duties, taxes, and other fees and charges. These changes are designed to avoid a conflict with Federal Reserve System regulations that govern the endorsement of checks by banks.

EFFECTIVE DATE:

October 20, 2000.

FOR FURTHER INFORMATION CONTACT:

Gregory L. Pence, Branch Chief, Financial Policy Branch, Office of Finance ([phone]).

SUPPLEMENTARY INFORMATION:

Background

Under § 24.1 of the Customs Regulations (19 CFR 24.1), procedures for the collection of Customs duties, taxes, charges, and fees are set forth. Under § 24.1(b), applicable to noncommercial importations at piers, terminals, bridges, airports, and other similar places, Customs employees authorized to collect payments may accept a personal check and must ensure that certain information is recorded on the check. Under § 24.1(b)(1), with respect to personal checks received under § 24.1(b) and certain other checks and money orders received under § 24.1(a), Customs employees must show, on the reverse side of the check or money order, their name, badge number, and the serial or other identification number from the collection voucher.

Requirements applicable to banks endorsing checks are set forth under regulations of the Federal Reserve System (12 CFR 229.35) Appendix D to Part 229 of the Federal Reserve System regulations (Title 12, Chapter II)(entitled “Indorsement Standards”) pertains to the endorsements of depositary, collecting, and returning banks. It sets forth the specific information that must or may be provided and requires that such information must be recorded on the reverse side of checks. The Appendix also provides that the readability, identifiability, and legibility of the depositary bank's endorsement must be protected. It cautions the depositary bank not to interfere with the readability of the endorsement, and it carefully sets forth specific requirements for collecting and returning banks to follow for the purpose of protecting that endorsement.

The requirement under the Customs Regulations that Customs employees must place information on the reverse side of monetary instruments conflicts with the purpose and intent of the requirements of 12 CFR 229.35 and App. D of Part 229 of Title 12 CFR regarding the protection of bank endorsements. For this reason, Customs issued a Notice of Proposed Rulemaking, published in the Federal Register (64 FR 62619) on November 17, 1999, proposing that required information be placed on the face side of monetary instruments accepted for Customs payments. The notice requested comments on the proposed amendments. No comments were received. After further consideration of this matter, Customs has determined to adopt the proposed changes as a final rule. This document amends §§ 24.1(b) and 24.1(b)(1) of the Customs Regulations, accordingly.

Executive Order 12866

This document does not meet the criteria for a “significant regulatory action” as specified in Executive Order 12866.

Regulatory Flexibility Act

Pursuant to the provisions of the Regulatory Flexibility Act (5 U.S.C. 601 et seq.), it is certified that the amendments to the Customs Regulations set forth in this document will not have a significant economic impact on a substantial number of small entities. These amendments regarding the endorsement of checks and other instruments will improve the processing of these instruments, without any additional burden on businesses or individuals. Accordingly, these amendments are not subject to the regulatory analysis or other requirements of 5 U.S.C. 603 and 604.

Drafting Information

The principal author of this document was Bill Conrad, Office of Regulations and Rulings, U.S. Customs Service. Personnel from other offices contributed in its development.

List of Subjects in 19 CFR Part 24

• Accounting
• Claims
• Customs duties and inspection
• Fees
• Financial and accounting procedures
• Imports
• Taxes

Amendments to the Regulations

For the reasons stated in the preamble, part 24 of the Customs Regulations (19 CFR part 24) is amended as follows:

PART 24—CUSTOMS FINANCIAL AND ACCOUNTING PROCEDURE

1. The general authority citation for part 24 and the relevant specific authority citation continue to read as follows:

Authority: 5 U.S.C. 301; 19 U.S.C. 58a-58c, 66, 1202 (General Note 20, Harmonized Tariff Schedule of the United States), 1505, 1624; 26 U.S.C. 4461, 4462; 31 U.S.C. 9701.

Section 24.1 also issued under 19 U.S.C. 197, 198, 1648;

* * * * *

2. In § 24.1, the second and third sentences of introductory paragraph (b) and all of paragraph (b)(1) are revised to read as follows:

§ 24.1

Collection of Customs duties, taxes, and other charges.

* * * * *

(b) * * * Where the amount of the check is over $25, the Customs cashier or other employee authorized to receive Customs collections will ensure that the payor's name, home and business telephone number (including area code), and date of birth are recorded on the face (front) side of the monetary instrument. In addition, one of the following will be recorded on the face side of the instrument: preferably, the payor's social security number or, alternatively, a current passport number or current driver's license number (including issuing state). * * *

(1) Where the amount is less than $100 and the identification requirements of paragraph (a)(4) of this section have been met, the Customs employee accepting the check or money order will place his name and badge number on the collection voucher and place the serial number or other form of voucher identification on the face side of the check or money order so that the check or money order can be easily associated with the voucher.

* * * * *

Dated: Approved: July 18, 2000.

Raymond W. Kelly,

Commissioner of Customs.

John P. Simpson,

Deputy Assistant Secretary of the Treasury.