[Federal Register Volume 63, Number 186 (Friday, September 25, 1998)]
[Rules and Regulations]
[Pages 51283-51291]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 98-25634]
=======================================================================
-----------------------------------------------------------------------
DEPARTMENT OF THE TREASURY
Customs Service
19 CFR Parts 4, 18, 122, 123, 127, 148, 178 and 192
[T.D. 98-74]
RIN 1515-AB99
Lay Order Period; General Order; Penalties
AGENCY: U.S. Customs Service, Department of the Treasury.
ACTION: Final rule.
-----------------------------------------------------------------------
SUMMARY: This document adopts as a final rule, with some changes,
proposed amendments to the Customs Regulations regarding the obligation
of the owner, master, pilot, operator, or agent of an arriving carrier
to provide notice to Customs and to a bonded warehouse of the presence
of merchandise or baggage that has remained at the place of arrival or
unlading beyond the time period provided by regulation without entry
having been completed. The document requires one of the arriving
carrier's obligated parties, or any subsequent in-bond carrier or party
who accepts custody under a Customs-authorized permit to transfer, to
provide notice of the unentered merchandise or baggage to a bonded
warehouse. The notice to the bonded warehouse proprietor initiates his
obligation to arrange for transportation and storage of the unentered
merchandise or baggage at the risk and expense of the consignee. The
document also amends the Customs Regulations to provide for penalties
or liquidated damages against the owner or master of any conveyance, or
agent thereof, for failure to provide the required notice to Customs or
to a bonded warehouse proprietor. The document also provides for the
assessment of liquidated damages against any subsequent in-bond carrier
or other party who accepts custody of the merchandise or baggage under
a Customs-authorized permit to transfer and who fails to notify Customs
and a bonded warehouse of the presence of such unentered merchandise or
baggage and also against the warehouse operator who fails to take
required possession of the merchandise or baggage. These regulatory
changes reflect amendments to the underlying statutory authority
enacted as part of the Customs Modernization provisions of the North
American Free Trade Agreement Implementation Act. In addition, this
document makes certain conforming changes to the Customs Regulations in
order to reflect a number of other statutory amendments and repeals
enacted by the Customs Modernization provisions and in order to reflect
the recent recodification and reenactment of title 49, United States
Code.
EFFECTIVE DATE: October 26, 1998.
FOR FURTHER INFORMATION CONTACT: For legal matters: Jeremy Baskin,
Penalties Branch, Office of Regulations and Rulings (202) 927-2344. For
operational matters: Steven T. Soggin, Office of Field Operations,
(202) 927-0765.
SUPPLEMENTARY INFORMATION:
Background
On December 8, 1993, amendments to certain Customs and navigation
laws became effective as the result of enactment of the North American
Free Trade Agreement Implementation Act, Public Law 103-182, 107 Stat.
2057. Title VI of that Act sets forth Customs Modernization provisions
that are popularly referred to as the Mod Act.
Section 656 of the Mod Act amended section 448(a) of the Tariff Act
of 1930 (19 U.S.C. 1448(a)) to provide, inter alia, that: (1) the owner
or master of any vessel or vehicle, or the agent thereof, shall notify
Customs of any merchandise or baggage unladen for which entry is not
made within the time prescribed by law or regulation; (2) the Secretary
of the Treasury shall by regulation prescribe administrative penalties
not to exceed $1,000 for each bill of lading for which notice is not
given; (3) any such administrative penalty shall be subject to
mitigation and remission under section 618 of the Tariff Act of 1930,
as amended (19 U.S.C. 1618); and (4) such unentered merchandise or
baggage shall be the responsibility of the master or person in charge
of the importing vessel or vehicle, or agent thereof, until it is
removed from the carrier's control in accordance with section 490 of
the Tariff Act of 1930, as amended (19 U.S.C. 1490). On July 31, 1997,
Customs published a notice of proposed rulemaking in the Federal
Register (62 FR 40992) proposing to revise paragraph (a) of Sec. 4.37
of the Customs Regulations (19 CFR 4.37) and add new Sec. 122.50 and
Sec. 123.10 (19 CFR 122.50 and 19 CFR 123.10) to implement these Mod
Act statutory changes for air, land and sea carriers. Under the
proposed regulatory text, importing carriers were to be afforded a
five-working-day lay order period after the conclusion of an initial
five-working-day period after unlading or arrival of merchandise to
notify Customs, in writing or by any Customs-authorized electronic data
interchange system, of the presence of the unentered merchandise or
baggage. Penalties could be imposed if, after the five-day lay order
period, Customs had not been notified of the presence of the unentered
merchandise.
Section 658 of the Mod Act amended section 490 of the Tariff Act of
1930 (19 U.S.C. 1490) to provide that: (1) except in the case of U.S.
government importations, the carrier shall notify the bonded warehouse
of any imported merchandise for which entry is not made within the time
prescribed by law or regulation, or for which entry is incomplete
because of failure to pay estimated duties, fees or interest, or for
which entry cannot be made for want of proper documents or other cause,
or which Customs believes is not correctly and legally invoiced; and
(2) after such notification from the carrier, the bonded warehouse
shall arrange for the transportation and storage of the merchandise at
the risk and expense of the consignee. The July 31, 1997, notice of
proposed rulemaking also proposed to revise paragraph (b) of Sec. 4.37
of the Customs Regulations (19 CFR 4.37) and to include in new
Secs. 122.50 and 123.10 provisions to implement these Mod Act statutory
changes. The proposed regulatory text would have required the carrier
to provide the appropriate notification, in writing or by any Customs-
authorized electronic data interchange system, and also would have
required that the bonded warehouse operator take possession of the
merchandise within five working days after receipt of such notification
or else be liable for liquidated damages under the terms and conditions
of his custodial bond. The proposed regulatory changes also included a
cross-reference to Sec. 113.63(a)(1) of the Customs Regulations (19 CFR
113.63(a)(1)) so as to reflect the existing basis for such custodial
bond liability. In addition, the document proposed to amend paragraph
(d) of Sec. 4.37 by replacing the word ``owner'' with ``consignee'' to
align on the corresponding statutory language.
Section 611 of the Mod Act amended section 436 of the Tariff Act of
1930 (19 U.S.C. 1436), inter alia, by including
[[Page 51284]]
therein a reference to 46 U.S.C. App. 91, with the result that
penalties for violations of outbound vessel manifest filing
requirements would be incurred under the provisions of 19 U.S.C. 1436
rather than under 46 U.S.C. App. 91. The July 31, 1997, document also
proposed to amend Sec. 192.4 of the Customs Regulations (19 CFR 192.4)
to reflect this change.
Section 690 of the Mod Act provided for the repeal of a number of
statutory provisions, some of which are still referred to in Parts 4
and 122 of the Customs Regulations (19 CFR Parts 4 and 122). The July
31, 1997, document also proposed to correct those outdated references
by removing them or replacing them with references to their successor
statutory provisions.
Finally, Public Law 103-272, 108 Stat. 745, dated July 5, 1994,
reenacted and recodified the provisions of title 49, United States
Code. Section 2(b) thereof reenacted as a new section (19 U.S.C. 1644a)
certain title 49 provisions dealing with the application, to civil
aircraft, of the laws and regulations regarding the entry and clearance
of vessels. The July 31, 1997, document proposed to amend Parts 122,
123 and 148 of the Customs Regulations (19 CFR Parts 122, 123 and 148)
by updating the ``49 U.S.C. App.'' statutory references therein to
reflect the changes made by section 2(b) or other provisions of Public
Law 103-272.
The July 31, 1997, notice of proposed rulemaking made provision for
the submission of public comments on the proposed regulatory changes
for consideration before adoption of those changes as a final rule, and
the prescribed public comment period closed on September 29, 1997. A
total of 56 responses to this solicitation of comments were received by
Customs. The comments submitted are summarized and responded to below.
Discussion of Comments
Comment: Forty-one commenters suggested that the proposed five-day
period after landing of merchandise, during which the carrier was
required to notify Customs of unentered merchandise, was too short and
did not reflect current commercial reality. One of the 41 commenters
opposed to the five-day time period indicated that, under current
procedures, approximately 3 percent of arriving merchandise remains
unentered and qualifies for general order. That same commenter
indicated that, under the proposed rule, some 60 percent of cargo would
qualify for general order. If that were to be the case, general order
space would be overtaxed, unnecessary extra paperwork would ensue, and
damage to cargo moving unnecessarily to general order would occur.
One commenter suggested that while 5 working days was too short, 10
working days recognized commercial realities and would be sufficient
time to allow for unentered merchandise to remain in the custody of the
arriving carrier.
Customs response: Customs notes that many of the comments opposed
to the proposed five-day period indicated that the current regulations
provide for a 30-day lay order period, and those commenters objected
that the proposed rule involved a drastic reduction in that regulation-
mandated lay order period. However, these commenters are operating
under a misconception that the current regulations provide for a 30-day
lay order period. They do not. The current regulation addressing lay
order (19 CFR 4.37) requires that merchandise remaining on the wharf or
pier after the fifth working day after unlading shall be deposited in
the public stores or a general order warehouse, except that, at the
written request of the owner, agent, or master of the vessel, the port
director may issue a lay order allowing such merchandise or baggage to
remain on the wharf or pier properly protected for a further period
which shall be specified in the order. As a matter of practice, many
port directors allow for a lay order period of 30 days, but such
practice is discretionary with the port director and is not required by
regulation.
After review of these comments, Customs agrees that there should be
an increase in the proposed time period during which unentered
merchandise may remain at the place of unlading before notification to
Customs of the presence of such merchandise so that it can be moved
into general order. In order to establish uniformity and in
consideration of these comments, the final regulatory texts set forth
below provide for 15 calendar days, rather than the proposed five
working days, during which unentered merchandise may remain at the
place of unlading without notification to Customs. Accordingly, Customs
must be notified of the presence of merchandise that remains unentered
at the wharf, pier, or place of unlading after the fifteenth calendar
day after unlading. In addition, the headings of Sec. 4.37 and of
proposed new Secs. 122.50 and 123.10 have been changed to read
``[g]eneral order'' as there will no longer be a lay order period for
unentered merchandise beyond the original 15-calendar-day time period
after its unlading. The final regulatory texts refer to calendar days
for ease of use of current electronic systems. Additionally, port
directors will not have discretion to extend the time period during
which unentered merchandise may remain on the wharf, pier or place of
unlading.
Comment: Three commenters stated that the proposed regulatory
provision for penalties for the carrier's failure to notify Customs of
landed cargo not covered by a permit for its release is unnecessary and
should be removed.
Customs response: Customs does not agree. As previously noted,
section 656 of the Mod Act amended section 448(a) of the Tariff Act of
1930 (19 U.S.C. 1448(a)) to provide that the owner or master of any
vessel or vehicle, or the agent thereof, shall notify Customs of any
merchandise or baggage unladen for which entry is not made within the
time prescribed by law or regulation. Section 656 also provides that
the Secretary of the Treasury shall by regulation prescribe
administrative penalties not to exceed $1,000 for each bill of lading
for which notice is not given. The language of the statute is clear.
The proposed regulatory texts merely reflected that which is required
by statute.
Comment: Two commenters objected to the wording of the proposed
regulations that stated that Customs ``may'' issue penalties for
failure to notify. The commenters argued that the language of the
statute was mandatory.
Customs response: Customs disagrees. The language of the statute is
mandatory in that the Secretary ``shall'' promulgate regulations.
Assessment of the monetary penalties remains a matter of enforcement
discretion, and the proposed regulatory language therefore should not
be changed from the discretionary ``may'' to the mandatory ``shall.''
As noted above, in addition to the notification to Customs by the
master, owner, or agent thereof of the presence of unentered cargo
pursuant to 19 U.S.C. 1448(a), the carrier, pursuant to 19 U.S.C. 1490,
except in the case of U.S. government importations, is required to
notify the bonded warehouse of any imported merchandise for which entry
is not made within the time prescribed by law or regulation, or for
which entry is incomplete because of failure to pay estimated duties,
fees, or interest, or for which entry cannot be made for want of proper
documents or other cause, or which Customs believes is not correctly
and legally invoiced; and after such notification from the importing
carrier, the bonded warehouse shall arrange for the transportation and
storage of the merchandise at the risk and expense of the consignee.
Thus, the regulatory proposals in the July 31, 1997, document placed an
obligation on the
[[Page 51285]]
carrier to notify Customs of the presence of unentered merchandise
within five working days after the initial five-day period; they also
placed an additional obligation on the carrier to notify the bonded
warehouse within a third consecutive five-day period. However, the
proposed regulations were confusing as to the time periods in which the
carrier or its master or owner or agent was required to act.
Accordingly, the final regulatory texts as set forth below have been
simplified to require the owner or master of any vessel or agent
thereof, the owner or pilot of any aircraft or agent thereof, or the
owner or operator of a vehicle or agent thereof to notify Customs and a
bonded warehouse of all merchandise that remains unentered after a 15-
calendar-day period after its landing. This notification must be
provided within 20 calendar days after landing of the merchandise.
Although not specifically stated in the regulatory texts, it should be
understood that if the 20th calendar day is a Saturday, Sunday, or
holiday, the deadline for notice automatically will be extended to the
next working day after that 20th calendar day. As provided in the
statute and in the proposed regulatory texts, the final texts set forth
below state that a failure to provide timely notification to Customs
may result in the assessment of monetary penalties of up to $1,000 per
bill of lading; however, the final regulatory texts have been modified
to allow for penalties equal to the value of the merchandise on the
bill of lading when that value is less than $1,000.
Comment: One commenter raised a question as to the obligation to
notify Customs of unentered merchandise or baggage that travels under
an immediate transportation (IT) entry to a port of destination or
moves within a port under a permit to transfer to a bonded facility
such as a container station and remains unreleased or unentered after
arrival at the port of destination or bonded facility.
Customs response: Customs agrees that the proposed regulations did
not specifically reflect the obligation of a party to notify Customs
and a Customs-authorized bonded warehouse of such merchandise or
baggage when it remained unreleased and unentered, even though there
was nothing in the statute or proposed texts to distinguish the
merchandise or baggage described by the commenter from any other
merchandise or baggage that was landed from the arriving carrier and
remained unreleased and unentered. In order to clarify this point, a
new paragraph (b) text has been included in Sec. 4.37 and in new
Secs. 122.50 and 123.10 to specify the obligation to notify Customs and
a bonded warehouse of the party who initiates a bonded movement or who
receipts for merchandise or baggage under a permit to transfer when the
merchandise or baggage remains unentered and becomes eligible for
general order. If the party fails to notify Customs or a bonded
warehouse of the unentered or unreleased merchandise or baggage within
the applicable 20-day period, he may be liable for liquidated damages
under the terms and conditions of his custodial bond. See 19 CFR
113.63(c)(4). It should be noted that a claim for liquidated damages
arising from the failure to provide this notification is not considered
to constitute a claim involving merchandise and therefore the
liquidated damages must be assessed at $1,000 per violation.
Comment: Several commenters averred that while the proposed
paragraph (b) text of Sec. 4.37 and of new Secs. 122.50 and 123.10
indicated that Customs may impose a penalty against the owner, master,
or agent for the failure to notify Customs of the presence of the
unentered merchandise, no comparable penalty or liquidated damages
action are stated with regard to the failure to provide notification to
the bonded warehouse. The commenters suggested that penalties or
liquidated damages against the carrier for the failure to notify the
bonded warehouse should be stated.
Customs response: Customs agrees that the carrier should be subject
to claims for liquidated damages for failure to provide notification to
the bonded warehouse. The underlying statute (19 U.S.C. 1490) states
that a carrier ``shall notify'' the bonded warehouse of such
merchandise or baggage. Inasmuch as the carrier retains such
obligation, it is the view of Customs that claims for liquidated
damages in such circumstances are consistent with the basic intent and
requirement of the statute. In this regard, it should be noted that the
carrier remains responsible for the loss or theft of any such unentered
merchandise or baggage until it is properly transferred from the
carrier's control. Moreover, Customs notes that, as in the case of the
proposed paragraph (a) texts discussed above, the proposed paragraph
(b) texts did not address the obligation of a custodian of unentered
merchandise or baggage to provide notification when the merchandise or
baggage travels under an IT entry or moves under a permit to transfer.
Accordingly, the proposed paragraph (b) texts (redesignated below as
paragraph (c) in the texts of Secs. 4.37, 122.50 and 123.10 as a
consequence of the addition of new paragraph (b)) have been modified to
place the obligation to notify the bonded warehouse on the carrier or
any other party to whom custody of the unentered merchandise has been
transferred by a Customs authorized permit to transfer or in-bond
entry. For purposes of clarification, those texts have also been
modified to indicate that the claim for liquidated damages arising for
failure to notify the bonded warehouse shall be assessed at $1,000 per
bill of lading for which notification is not given.
Comment: Several commenters indicated that no provision exists to
allow for the warehouse proprietor to refuse cargo. One of these
commenters pointed out that there may be instances where local
ordinances would prohibit a warehouse proprietor from taking possession
of certain classes of merchandise, such as hazardous merchandise. That
same commenter indicated that there must be a provision in the
regulations to allow the proprietor to have a say over what cargo may
be accepted.
Customs response: Customs agrees that there may be situations where
the general order warehouse may be incapable of storing certain types
of merchandise that require specialized storage facilities. Customs
also acknowledges that no general order warehouse facilities exist at
certain ports. Accordingly, new paragraph (e) texts have been added to
Sec. 4.37 and have been included in new Secs. 122.50 and 123.10 as set
forth below to allow the port director, in ports where there is no
bonded warehouse to accept general order merchandise or if merchandise
requires specialized storage facilities which are unavailable in a
bonded facility, to direct the storage of merchandise by the carrier or
by any other appropriate means. However, Customs does not agree with
the suggestion that the regulations be amended to allow the bonded
warehouse operator to decline to accept merchandise he is capable of
storing. The underlying general order statute does not allow for such
discretion on the part of the general order warehouse operator.
Comment: Two commenters inquired as to whether carriers can delay
delivery of freight to bonded warehouses if freight charges have not
been satisfied.
Customs response: Customs notes that the regulations do not
authorize such delay. The current applicable regulation (19 CFR 127.31)
provides for the payment of liens for freight from the proceeds of sale
of the unentered merchandise.
[[Page 51286]]
Comment: One commenter indicated that a bonded warehouse operator
should not be subject to liquidated damages for untimely taking
possession of such merchandise unless he has given consent to handle
the merchandise.
Customs response: Customs disagrees. The underlying statutory
authority does not mention that bonded warehouse operators must consent
to the acceptance of any merchandise. Customs is unwilling to impose
such a condition by regulation.
Additional Changes to the Regulations
In addition to, or as a consequence of, the changes mentioned above
in the discussion of the public comments, the final regulatory text
amendments set forth below reflect the following changes that were not
included in the July 31, 1997, proposals.
1. Section 4.37 is set forth as an entirely revised section in
order to accommodate the changes discussed above as well as the
following further changes:
a. The texts of present paragraphs (e) and (f) have been omitted
from the revised section because they are not consistent with the
current statutory responsibilities as reflected elsewhere in the
section text;
b. The text of the last sentence of proposed paragraph (b) is set
forth separately as a new paragraph (d) in the revised section text;
c. The text of present paragraph (c) is designated as paragraph (f)
in the revised section and the text of the paragraph has been modified
to be more consistent with the language of the underlying statutory
authority (19 U.S.C. 1457); and
d. The text of present paragraph (d) is designated as paragraph (g)
in the revised section and the text of the paragraph has been modified
by removing the reference to the public stores.
2. The organizational and other changes described above in the case
of revised Sec. 4.37 are also reflected in new Secs. 122.50 and 123.10
except that the two new sections have no counterpart to paragraph (f)
of revised Sec. 4.37. Thus, paragraphs (a) through (f) of new
Secs. 122.50 and 123.10 correspond to paragraphs (a) through (e) and
(g) of revised Sec. 4.37.
3. In Part 18 of the regulations (19 CFR Part 18): the reference to
a lay order period has been removed from the first sentence of
paragraph (a)(1) of Sec. 18.2; paragraph (d) of Sec. 18.12 is revised
in order to conform to the new requirements relating to the arrival of
IT entry merchandise at the port of destination; paragraph (e) of
Sec. 18.12 is removed because it is superseded by the new general order
regulatory provisions; and, in Sec. 18.25, the cross-reference to the
regulatory provision covering the import bond is corrected to refer to
the custodial bond provision.
4. Section 659 of the Mod Act amended section 491 of the Tariff Act
of 1930 (19 U.S.C. 1491) to provide that any entered or unentered
merchandise which shall remain in a bonded warehouse pursuant to 19
U.S.C. 1490 for 6 months (rather than 1 year) from the date of
importation thereof, without all estimated duties having been paid,
shall be considered unclaimed and abandoned to the Government and shall
be appraised and sold by Customs at public auction or retained for
official use by a government agency. This document modifies the
provisions of 19 CFR 18.11(a), 18.12(a), 127.2, 127.4, 127.11 and
127.28(d) to reflect the 6-month period set forth in the statute.
5. Finally, in Secs. 122.117(b)(1) and 122.120(d)(1), the
references to lay order are replaced by references to general order in
order to reflect the change in terminology discussed above in
connection with the comments on Sec. 4.37 and new Secs. 122.50 and
123.10.
Conclusion
Accordingly, based on the comments received and the analysis of
those comments as set forth above, and after further review of this
matter, Customs believes that the proposed regulatory amendments should
be adopted as a final rule with certain changes thereto as discussed
above and as set forth below. This document also includes an
appropriate update of the list of information collection approvals
contained in Sec. 178.2 of the Customs Regulations (19 CFR 178.2).
The Regulatory Flexibility Act and Executive Order 12866
For the reasons set forth above and because the amendments conform
the Customs Regulations to statutory requirements that are already in
effect, 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 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. Further, this document
does not meet the criteria for a ``significant regulatory action'' as
specified in E.O. 12866.
Paperwork Reduction Act
The collection of information contained in this final rule was not
proposed in the preceding notice of proposed rulemaking. The collection
of information has been reviewed and, pending receipt and evaluation of
public comments, approved by the Office of Management and Budget (OMB)
under 44 U.S.C. 3507(j) and assigned control number 1515-0220. 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
control number assigned by OMB.
Comments concerning the collection of information should be
directed to OMB, Attention: Desk Officer for the Department of the
Treasury, Office of Information and Regulatory Affairs, Washington,
D.C. 20503, with a copy to the U.S. Customs Service, Information
Services Group, Office of Finance, 1300 Pennsylvania Avenue, N.W.,
Washington, D.C. 20229. Any such comments should be submitted not later
than 60 days after the date of publication of this document in the
Federal Register. Comments are specifically requested concerning: (a)
whether the collection of information is necessary for the proper
performance of the functions of the U.S. Customs Service, including
whether the information will have practical utility; (b) the accuracy
of the estimated burden associated with the collection of information
(see below); (c) how to enhance the quality, utility, and clarity of
the information to be collected; (d) how to minimize the burden of
complying with the collection of information, including the application
of automated collection techniques or other forms of information
technology; and (e) estimates of capital or start-up costs and costs of
operation, maintenance, and purchase of services to provide
information.
The collection of information in this regulation is in Secs. 4.37,
122.50 and 123.10. This information is required to ensure that
merchandise and baggage imported into the United States is properly
entered or otherwise accounted for in accordance with statutory
requirements. This information will be used by Customs to determine
whether private parties have carried out their statutory
responsibilities, and to assess monetary penalties or liquidated damage
claims for failure to meet those responsibilities, and this information
also will be used by private parties in order to enable them to carry
out their statutory responsibilities and thus avoid a liability for
monetary penalties or
[[Page 51287]]
liquidated damages for failing to do so. The collection of information
is mandatory. The likely respondents and/or recordkeepers are
individuals and business organizations, including importers and
carriers.
Estimated total annual reporting and/or recordkeeping burden: 7,500
hours.
Estimated average annual burden per respondent/ recordkeeper: .25
hours.
Estimated number of respondents and/or recordkeepers: 30,000.
Estimated annual frequency of responses: 1.
List of Subjects
19 CFR Part 4
Cargo vessels, Common carriers, Customs duties and inspection,
Entry, Exports, Fishing vessels, Imports, Maritime carriers, Passenger
Vessels, Penalties, Reporting and recordkeeping requirements, Shipping,
Vessels, Yachts.
19 CFR Part 18
Bonded transportation, Bonds, Common carriers, Customs duties and
inspection, Exports, Imports, Reporting and recordkeeping requirements.
19 CFR Part 122
Air carriers, Aircraft, Airports, Air transportation, Baggage,
Bonds, Customs duties and inspection, Foreign commerce and trade
statistics, Freight, Imports, Penalties, Reporting and recordkeeping
requirements.
19 CFR Part 123
Aircraft, Canada, Customs duties and inspection, Imports,
International boundaries, International traffic, Mexico, Motor
carriers, Railroads, Reporting and recordkeeping requirements, Trade
agreements, Vehicles, Vessels.
19 CFR Part 127
Customs duties and inspection, Exports, Reporting and recordkeeping
requirements.
19 CFR Part 148
Aliens, Baggage, Crewmembers, Customs duties and inspection,
Declarations, Foreign officials, Government employees, International
organizations, Privileges and Immunities, Reporting and recordkeeping
requirements.
19 CFR Part 178
Administrative practice and procedure, Reporting and recordkeeping
requirements.
19 CFR Part 192
Aircraft, Customs duties and inspection, Export Control, Penalties,
Reporting and recordkeeping requirements, Seizures and forfeiture,
Vehicles, Vessels.
Amendments to the Regulations
Accordingly, for the reasons stated in the preamble, Parts 4, 18,
122, 123, 127, 148, 178 and 192 of the Customs Regulations (19 CFR
Parts 4, 18, 122, 123, 127, 148, 178 and 192) are amended as set forth
below:
PART 4--VESSELS IN FOREIGN AND DOMESTIC TRADES
1. The general authority citation for Part 4 and the specific
authority citations for Secs. 4.7a, 4.36 and 4.37 continue to read, and
the specific authority citations for Secs. 4.9 and 4.68 are revised to
read, as follows:
Authority: 5 U.S.C. 301; 19 U.S.C. 66, 1431, 1433, 1434, 1624;
46 U.S.C. App. 3, 91.
* * * * *
Section 4.7a also issued under 19 U.S.C. 1498, 1584;
* * * * *
Section 4.9 also issued under 42 U.S.C. 269;
* * * * *
Section 4.36 also issued under 19 U.S.C. 1431, 1457, 1458, 46
U.S.C. App. 100;
Section 4.37 also issued under 19 U.S.C. 1448, 1457, 1490;
* * * * *
Section 4.68 also issued under 46 U.S.C. App. 817d, 817e;
* * * * *
2. Part 4 is amended by removing and reserving footnotes 17, 24,
71, and 74 in Secs. 4.7a(a), 4.12(a)(3), 4.36(c) and 4.37(d).
Sec. 4.6 [Amended]
3. In Sec. 4.6, paragraph (c) is amended by removing the reference
``19 U.S.C. 1585'' and adding, in its place, the reference ``19 U.S.C.
1436''.
Sec. 4.7a [Amended]
4. In Sec. 4.7a, the first sentence of paragraph (a) is amended by
removing the words ``, required by section 432, Tariff Act of 1930, to
be separately specified''.
Sec. 4.36 [Amended]
5. In Sec. 4.36, paragraph (c) is amended by removing the words ``a
cargo within the purview of the proviso to the first subdivision of
section 431, Tariff Act of 1930'' and adding, in their place, the word
``cargo''.
6. The heading and text of Sec. 4.37 are revised to read as
follows:
Sec. 4.37 General order.
(a) Any merchandise or baggage regularly landed but not covered by
a permit for its release shall be allowed to remain at the place of
unlading until the fifteenth calendar day after landing. No later than
20 calendar days after landing, the master or owner of the vessel or
the agent thereof shall notify Customs of any such merchandise or
baggage for which entry has not been made. Such notification shall be
provided in writing or by any appropriate Customs-authorized electronic
data interchange system. Failure to provide such notification may
result in assessment of a monetary penalty of up to $1,000 per bill of
lading against the master or owner of the vessel or the agent thereof.
If the value of the merchandise on the bill is less than $1,000, the
penalty shall be equal to the value of such merchandise.
(b) Any merchandise or baggage that is taken into custody from an
arriving carrier by any party under a Customs-authorized permit to
transfer or in-bond entry may remain in the custody of that party for
15 calendar days after receipt under such permit to transfer or 15
calendar days after arrival at the port of destination. No later than
20 calendar days after receipt under the permit to transfer or 20
calendar days after arrival under bond at the port of destination, the
party shall notify Customs of any such merchandise or baggage for which
entry has not been made. Such notification shall be provided in writing
or by any appropriate Customs-authorized electronic data interchange
system. If the party fails to notify Customs of the unentered
merchandise or baggage in the allotted time, he may be liable for the
payment of liquidated damages under the terms and conditions of his
custodial bond (see Sec. 113.63(c)(4) of this chapter).
(c) In addition to the notification to Customs required under
paragraphs (a) and (b) of this section, the carrier (or any other party
to whom custody of the unentered merchandise has been transferred by a
Customs authorized permit to transfer or in-bond entry) shall provide
notification of the presence of such unreleased and unentered
merchandise or baggage to a bonded warehouse certified by the port
director as qualified to receive general order merchandise. Such
notification shall be provided in writing or by any appropriate
Customs-authorized electronic data interchange system and shall be
provided within the applicable 20-day period specified in paragraph (a)
or (b) of this section. It shall then be the responsibility of the
bonded warehouse proprietor to arrange for the transportation and
storage of the merchandise or baggage at the risk and expense of the
consignee. Any unentered merchandise or baggage shall remain the
responsibility of the carrier,
[[Page 51288]]
master, or person in charge of the importing vessel or the agent
thereof or party to whom the merchandise has been transferred under a
Customs authorized permit to transfer or in-bond entry, until it is
properly transferred from his control in accordance with this
paragraph. If the party to whom custody of the unentered merchandise or
baggage has been transferred by a Customs-authorized permit to transfer
or in-bond entry fails to notify a Customs-approved bonded warehouse of
such merchandise or baggage within the applicable 20-calendar-day
period, he may be liable for the payment of liquidated damages of
$1,000 per bill of lading under the terms and conditions of his
international carrier or custodial bond (see Secs. 113.63(b), 113.63(c)
and 113.64(b) of this chapter).
(d) If the bonded warehouse operator fails to take possession of
unentered and unreleased merchandise or baggage within five calendar
days after receipt of notification of the presence of such merchandise
or baggage under this section, he may be liable for the payment of
liquidated damages under the terms and conditions of his custodial bond
(see Sec. 113.63(a)(1) of this chapter).
(e) In ports where there is no bonded warehouse authorized to
accept general order merchandise or if merchandise requires specialized
storage facilities which are unavailable in a bonded facility, the port
director, after having received notice of the presence of unentered
merchandise or baggage in accordance with the provisions of this
section, shall direct the storage of the merchandise by the carrier or
by any other appropriate means.
(f) Whenever merchandise remains on board any vessel from a foreign
port more than 25 days after the date on which report of arrival of
such vessel was made, the port director, as prescribed in section 457,
Tariff Act of 1930, as amended (19 U.S.C. 1457), may take possession of
such merchandise and cause it to be unladen at the expense and risk of
the owners of the merchandise. Any merchandise so unladen shall be sent
forthwith by the port director to a general order warehouse and stored
at the risk and expense of the owners of the merchandise.
(g) Merchandise taken into the custody of the port director
pursuant to section 490(b), Tariff Act of 1930, as amended (19 U.S.C.
1490(b)), shall be sent to a general order warehouse after 1 day after
the day the vessel was entered, to be held there at the risk and
expense of the consignee.
PART 18--TRANSPORTATION IN BOND AND MERCHANDISE IN TRANSIT
1. The general authority citation for Part 18 and the specific
authority citation for Secs. 18.11 and 18.12 are revised to read as
follows:
Authority: 5 U.S.C. 301; 19 U.S.C. 66, 1202 (General Note 20,
Harmonized Tariff Schedule of the United States), 1551, 1552, 1553,
1623.
* * * * *
Section 18.11 also issued under 19 U.S.C. 1484;
Section 18.12 also issued under 19 U.S.C. 1448, 1484, 1490;
* * * * *
Sec. 18.2 [Amended]
2. In Sec. 18.2(a)(1), the first sentence is amended by removing
the words ``any lay order period and extension thereof have expired
and''.
Sec. 18.11 [Amended]
3. Section 18.11(a) is amended by removing the words ``1 year'' and
adding, in their place, the words ``6 months''.
4. In Sec. 18.12(a), the first and second sentences are amended by
removing the words ``1 year has'' and adding, in their place, the words
``6 months have''.
5. Section 18.12(d) is revised to read as follows:
Sec. 18.12 Entry at port of destination.
* * * * *
(d) All merchandise included in an immediate transportation without
appraisement entry (including carnets) not entered within 15 calendar
days after delivery at the port of destination shall be disposed of in
accordance with the applicable procedures in Sec. 4.37 or Sec. 122.50
or Sec. 123.10 of this chapter.
* * * * *
6. Section 18.12(e) is removed.
Sec. 18.25 [Amended]
7. Section 18.25(b) is amended by removing the reference
``Sec. 113.62'' and adding, in its place, the reference
``Sec. 113.63''.
PART 122--AIR COMMERCE REGULATIONS
1. The authority citation for Part 122 is revised to read as
follows:
Authority: 5 U.S.C. 301; 19 U.S.C. 58b, 66, 1433, 1436, 1448,
1459, 1590, 1594, 1623, 1624, 1644, 1644a.
Sec. 122.2 [Amended]
2. Section 122.2 is amended by removing the reference ``49 U.S.C.
App. 1509(c)'' and adding, in its place, the reference ``19 U.S.C. 1644
and 1644a''.
Sec. 122.49 [Amended]
3. Section 122.49(f) is amended by removing the words ``sections
440 (concerning post entry) and 584 (concerning manifest violations),
Tariff Act of 1930, as amended (19 U.S.C. 1440, 1584), apply'' and
adding, in their place, the words ``section 584 (concerning manifest
violations), Tariff Act of 1930, as amended (19 U.S.C. 1584),
applies''.
4. In Subpart E, Sec. 122.50 is added to read as follows:
Sec. 122.50 General order.
(a) Any merchandise or baggage regularly landed but not covered by
a permit for its release shall be allowed to remain at the place of
unlading until the fifteenth calendar day after landing. No later than
20 calendar days after landing, the pilot or owner of the aircraft or
the agent thereof shall notify Customs of any such merchandise or
baggage for which entry has not been made. Such notification shall be
provided in writing or by any appropriate Customs-authorized electronic
data interchange system. Failure to provide such notification may
result in assessment of a monetary penalty of up to $1,000 per bill of
lading against the pilot or owner of the aircraft or the agent thereof.
If the value of the merchandise on the bill is less than $1,000, the
penalty shall be equal to the value of such merchandise.
(b) Any merchandise or baggage that is taken into custody from an
arriving carrier by any party under a Customs-authorized permit to
transfer or in-bond entry may remain in the custody of that party for
15 calendar days after receipt under such permit to transfer or 15
calendar days after arrival at the port of destination. No later than
20 calendar days after receipt under the permit to transfer or 20
calendar days after arrival under bond at the port of destination, the
party shall notify Customs of any such merchandise or baggage for which
entry has not been made. Such notification shall be provided in writing
or by any appropriate Customs-authorized electronic data interchange
system. If the party fails to notify Customs of the unentered
merchandise or baggage in the allotted time, he may be liable for the
payment of liquidated damages under the terms and conditions of his
custodial bond (see Sec. 113.63(c)(4) of this chapter).
(c) In addition to the notification to Customs required under
paragraphs (a) and (b) of this section, the carrier (or any other party
to whom custody of the unentered merchandise has been transferred by a
Customs authorized permit to transfer or in-bond entry) shall
[[Page 51289]]
provide notification of the presence of such unreleased and unentered
merchandise or baggage to a bonded warehouse certified by the port
director as qualified to receive general order merchandise. Such
notification shall be provided in writing or by any appropriate
Customs-authorized electronic data interchange system and shall be
provided within the applicable 20-day period specified in paragraph (a)
or (b) of this section. It shall then be the responsibility of the
bonded warehouse proprietor to arrange for the transportation and
storage of the merchandise or baggage at the risk and expense of the
consignee. Any unentered merchandise or baggage shall remain the
responsibility of the carrier, pilot, or person in charge of the
importing aircraft, or the agent thereof, or party to whom the
merchandise has been transferred under a Customs authorized permit to
transfer or in-bond entry, until it is properly transferred from his
control in accordance with this paragraph. If the party to whom custody
of the unentered merchandise or baggage has been transferred by a
Customs-authorized permit to transfer or in-bond entry fails to notify
a Customs-approved bonded warehouse of such merchandise or baggage
within the applicable 20-calendar-day period, he may be liable for the
payment of liquidated damages of $1,000 per bill of lading under the
terms and conditions of his international carrier or custodial bond
(see Secs. 113.63(b), 113.63(c) and 113.64(b) of this chapter).
(d) If the bonded warehouse operator fails to take possession of
unentered and unreleased merchandise or baggage within five calendar
days after receipt of notification of the presence of such merchandise
or baggage under this section, he may be liable for the payment of
liquidated damages under the terms and conditions of his custodial bond
(see Sec. 113.63(a)(1) of this chapter).
(e) In ports where there is no bonded warehouse authorized to
accept general order merchandise, or if merchandise requires
specialized storage facilities that are unavailable in a bonded
facility, the port director, after having received notice of the
presence of unentered merchandise or baggage in accordance with the
provisions of this section, shall direct the storage of the merchandise
by the carrier or by any other appropriate means.
(f) Merchandise taken into the custody of the port director
pursuant to section 490(b), Tariff Act of 1930, as amended (19 U.S.C.
1490(b)), shall be sent to a general order warehouse after 1 day after
the day the aircraft arrived, to be held there at the risk and expense
of the consignee.
Sec. 122.117 [Amended]
5. In Sec. 122.117(b)(1), the second sentence is amended by
removing the words ``lay order period, or an authorized extension
period (see Sec. 4.37 of this chapter)'' and adding, in their place,
the words ``general order period (see Sec. 122.50)''.
Sec. 122.120 [Amended]
6. In Sec. 122.120(d)(1), the third sentence is amended by removing
the words ``lay order'' and adding, in their place, the words ``general
order''.
Sec. 122.161 [Amended]
7. In Sec. 122.161, the first sentence is amended by removing the
reference ``Sec. 122.14'' and adding, in its place, the words ``subpart
S of this part'' and by removing the reference ``49 U.S.C. App. 1474''
and adding, in its place, the reference ``19 U.S.C. 1644 and 1644a''.
Sec. 122.165 [Amended]
8. In Sec. 122.165, the first sentence of paragraph (a) is amended
by removing the parenthetical reference ``(49 U.S.C. App. 1508(b))''
and adding, in its place, the parenthetical reference ``(49 U.S.C.
41703)'', and the second sentence of paragraph (b) is amended by
removing the reference ``49 U.S.C. App. 1471'' and adding, in its
place, the reference ``49 U.S.C. Chapter 463''.
PART 123--CUSTOMS RELATIONS WITH CANADA AND MEXICO
1. The general authority citation for Part 123 and the specific
authority citation for Sec. 123.8 are revised to read, and the specific
authority citation for Sec. 123.1 continues to read, as follows:
Authority: 19 U.S.C. 66, 1202 (General Note 20, Harmonized
Tariff Schedule of the United States (HTSUS)), 1431, 1433, 1436,
1448, 1624.
Section 123.1 also issued under 19 U.S.C. 1459;
* * * * *
Section 123.8 also issued under 19 U.S.C. 1450-1454, 1459;
* * * * *
Sec. 123.11 [Amended]
2. The specific authority citation for Sec. 123.11 is removed.
Sec. 123.1 [Amended]
3. In Sec. 123.1, paragraph (a)(2) is amended by removing the words
``sections 1433 or 1644 of title 19, United States Code (19 U.S.C.
1433, 1644), or section 1509 of title 49, United States Code App. (49
U.S.C. App. 1509),'' and adding, in their place, the words ``section
1433, 1644 or 1644a of title 19, United States Code (19 U.S.C. 1433,
1644, 1644a),''.
4. In Subpart A, Sec. 123.10 is added to read as follows:
Sec. 123.10 General order.
(a) Any merchandise or baggage regularly landed but not covered by
a permit for its release shall be allowed to remain at the place of
unlading until the fifteenth calendar day after landing. No later than
20 calendar days after landing, the owner or operator of the vehicle or
the agent thereof shall notify Customs of any such merchandise or
baggage for which entry has not been made. Such notification shall be
provided in writing or by any appropriate Customs-authorized electronic
data interchange system. Failure to provide such notification may
result in assessment of a monetary penalty of up to $1,000 per bill of
lading against the owner or operator of the vehicle or the agent
thereof. If the value of the merchandise on the bill is less than
$1,000, the penalty shall be equal to the value of such merchandise.
(b) Any merchandise or baggage that is taken into custody from an
arriving carrier by any party under a Customs-authorized permit to
transfer or in-bond entry may remain in the custody of that party for
15 calendar days after receipt under such permit to transfer or 15
calendar days after arrival at the port of destination. No later than
20 calendar days after receipt under the permit to transfer or 20
calendar days after arrival under bond at the port of destination, the
party shall notify Customs of any such merchandise or baggage for which
entry has not been made. Such notification shall be provided in writing
or by any appropriate Customs-authorized electronic data interchange
system. If the party fails to notify Customs of the unentered
merchandise or baggage in the allotted time, he may be liable for the
payment of liquidated damages under the terms and conditions of his
custodial bond (see Sec. 113.63(c)(4) of this chapter).
(c) In addition to the notification to Customs required under
paragraphs (a) and (b) of this section, the carrier (or any other party
to whom custody of the unentered merchandise has been transferred by a
Customs authorized permit to transfer or in-bond entry) shall provide
notification of the presence of such unreleased and unentered
merchandise or baggage to a bonded warehouse certified by the port
director as qualified to receive general order merchandise. Such
notification shall be provided in writing or by any appropriate
Customs-authorized
[[Page 51290]]
electronic data interchange system and shall be provided within the
applicable 20-day period specified in paragraph (a) or (b) of this
section. It shall then be the responsibility of the bonded warehouse
proprietor to arrange for the transportation and storage of the
merchandise or baggage at the risk and expense of the consignee. Any
unentered merchandise or baggage shall remain the responsibility of the
carrier, master, or person in charge of the importing vehicle or the
agent thereof or party to whom the merchandise has been transferred
under a Customs authorized permit to transfer or in-bond entry until it
is properly transferred from his control in accordance with this
paragraph. If the party to whom custody of the unentered merchandise or
baggage has been transferred by a Customs-authorized permit to transfer
or in-bond entry fails to notify a Customs-approved bonded warehouse of
such merchandise or baggage within the applicable 20-calendar-day
period, he may be liable for the payment of liquidated damages of
$1,000 per bill of lading under the terms and conditions of his
international carrier or custodial bond (see Secs. 113.63(b), 113.63(c)
and 113.64(b) of this chapter).
(d) If the bonded warehouse operator fails to take possession of
unentered and unreleased merchandise or baggage within five calendar
days after receipt of notification of the presence of such merchandise
or baggage under this section, he may be liable for the payment of
liquidated damages under the terms and conditions of his custodial bond
(see Sec. 113.63(a)(1) of this chapter).
(e) In ports where there is no bonded warehouse authorized to
accept general order merchandise, or if merchandise requires
specialized storage facilities which are unavailable in a bonded
facility, the port director, after having received notice of the
presence of unentered merchandise or baggage in accordance with the
provisions of this section, shall direct the storage of the merchandise
by the carrier or by any other appropriate means.
(f) Merchandise taken into the custody of the port director
pursuant to section 490(b), Tariff Act of 1930, as amended (19 U.S.C.
1490(b)), shall be sent to a general order warehouse after 1 day after
the day the vehicle arrived, to be held there at the risk and expense
of the consignee.
PART 127--GENERAL ORDER, UNCLAIMED, AND ABANDONED MERCHANDISE
1. The authority citation for part 127 continues to read as
follows:
Authority: 19 U.S.C. 66, 1311, 1312, 1484, 1485, 1490, 1491,
1492, 1506, 1559, 1563, 1623, 1624, 1646a; 26 U.S.C. 7553.
Sec. 127.2 [Amended]
2. Section 127.2 is amended by removing the words ``1 year''
wherever they appear and adding, in their place, the words ``6 months''
and by removing the words ``1-year period'' in paragraph (b) and
adding, in their place, the words ``6-month period''.
Sec. 127.4 [Amended]
3. In Sec. 127.4, the second sentence is amended by removing the
words ``1 year'' and adding, in their place, the words ``6 months''.
Sec. 127.11 [Amended]
4. Section 127.11 is amended by removing the words ``1 year'' and
adding, in their place, the words ``6 months''.
Sec. 127.28 [Amended]
5. Section 127.28(d) is amended by removing the words ``1 year''
and adding, in their place, the words ``6 months''.
PART 148--PERSONAL DECLARATIONS AND EXEMPTIONS
1. The authority citation for part 148 continues to read in part as
follows:
Authority: 19 U.S.C. 66, 1496, 1498, 1624. The provisions of
this part, except for subpart C, are also issued under 19 U.S.C.
1202 (General Note 20, Harmonized Tariff Schedule of the United
States).
* * * * *
Sec. 148.67 [Amended]
2. In Sec. 148.67, paragraph (b) is amended by removing the words
``section 453, Tariff Act of 1930, as amended (19 U.S.C. 1453), or
section 1474 of title 49, United States Code,'' and adding, in their
place, the references ``19 U.S.C. 1453 or 19 U.S.C. 1644 and 1644a''.
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 new listings to the table in
numerical order to read as follows:
Sec. 178.2 Listing of OMB control numbers.
------------------------------------------------------------------------
OMB control
19 CFR section Description No.
------------------------------------------------------------------------
* * * *
* * *
Sec. 4.37........................ Notification 1515-0220
regarding imported
merchandise or
baggage for which
entry has not been
made.
* * * *
* * *
Sec. 122.50...................... Notification 1515-0220
regarding imported
merchandise or
baggage for which
entry has not been
made.
* * * *
* * *
Sec. 123.10...................... Notification 1515-0220
regarding imported
merchandise or
baggage for which
entry has not been
made.
* * * *
* * *
------------------------------------------------------------------------
PART 192--EXPORT CONTROL
1. The authority citation for Part 192 continues to read as
follows:
Authority: 19 U.S.C. 66, 1624, 1627a, 1646a.
Sec. 192.4 [Amended]
2. In Sec. 192.4, the first sentence is amended by removing the
reference ``46 U.S.C. App. 91'' and adding, in its place, the reference
``19 U.S.C. 1436'' and the second sentence is amended by removing the
words ``a liability of not more than $1,000 nor less than $500 will be
incurred'' and adding, in their
[[Page 51291]]
place, the words ``a liability for penalties may be incurred''.
Samuel H. Banks,
Acting Commissioner of Customs.
Approved: August 3, 1998.
Dennis M. O'Connell,
Acting Deputy Assistant Secretary of the Treasury.
[FR Doc. 98-25634 Filed 9-24-98; 8:45 am]
BILLING CODE 4820-02-P
