[Federal Register Volume 65, Number 240 (Wednesday, December 13, 2000)]
[Rules and Regulations]
[Pages 77813-77816]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 00-31699]
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DEPARTMENT OF THE TREASURY
Customs Service
19 CFR Parts 12, 113, 163 and 178
[T.D. 00-87]
RIN 1515-AC43
Amended Bond Procedures for Articles Subject to an Exclusion
Order Issued by the U.S. International Trade Commission
AGENCY: Customs Service, Department of the Treasury.
ACTION: Final rule.
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SUMMARY: This document adopts as a final rule, with some changes,
proposed amendments to the Customs Regulations regarding bond
procedures for the entry of articles subject to an exclusion order
issued by the U.S. International Trade Commission (``Commission'').
Merchandise that is subject to a Commission exclusion order may be
entitled to entry under a special bond
[[Page 77814]]
prescribed by the Secretary of the Treasury in an amount determined by
the Commission to be sufficient to protect the complainant from any
injury. If the Commission later determines that the respondent has
violated the provisions of section 337, the bond may be forfeited to
the complainant. This document adds the text of this special
importation and entry bond to the Customs Regulations, and makes
conforming changes to other regulatory provisions that are impacted by
the addition of the new bond text.
EFFECTIVE DATE: January 12, 2001.
FOR FURTHER INFORMATION CONTACT: Glen Vereb, Entry Procedures and
Carriers Branch, (202) 927-1327.
SUPPLEMENTARY INFORMATION:
Background
Under section 337 of the Tariff Act of 1930, as amended (19 U.S.C.
1337), the U.S. International Trade Commission (``Commission'') has the
authority to conduct investigations into certain alleged unfair
practices in import trade. Most complaints filed under this provision
involve allegations of patent infringement, trademark infringement, or
misappropriation of trade secrets. The Commission may determine that
section 337 has been violated or, during the course of an
investigation, that there is reason to believe that section 337 has
been violated.
If the Commission finds a violation, or reason to believe there is
a violation, of section 337, it may direct the Secretary of the
Treasury to exclude the subject articles from entry into the U.S.
During the period the Commission's exclusion order remains in effect,
and prior to the date that the Commission's determination of a
violation of section 337 becomes final, articles otherwise excluded may
be entered under a single entry bond prescribed by the Secretary of the
Treasury.
Certain statutory changes to section 337 of the Tariff Act of 1930
were enacted pursuant to the Uruguay Round Agreements Act (URAA),
Public Law 103-465, 108 Stat. 4809 (December 8, 1994). Paragraphs
(e)(1) and (j)(3) of section 337, as respectively amended by sections
321(a)(3) and (6) of the URAA, provide that articles subject to a
Commission exclusion order may be entered under bond prescribed by the
Secretary of the Treasury in an amount determined by the Commission to
be sufficient to protect the complainant from any injury and that if
the Commission later determines that the respondent has violated the
provisions of section 337, the bond may be forfeited to the
complainant.
On February 8, 2000, Customs published a document in the Federal
Register (65 FR 6062) that proposed to amend the Customs Regulations to
implement the statutory changes to section 337 effected by section 321
of the URAA.
In that document, it was proposed to create a new single entry bond
that must be filed for articles subject to a Commission exclusion
order. It was proposed that the amount of the single entry bond would
be determined by the Commission to be sufficient to protect the
complainant from any injury. It was proposed that if the Commission
later determines that the respondent has violated the provisions of
section 337, the bond may be forfeited to the 3 complainant. The
procedures for importing merchandise subject to the bonding
requirements of section 337 were proposed to be set forth in
Sec. 12.39, Customs Regulations. The new bond conditions were proposed
to be set forth in part 113, Customs Regulations.
Further, it was proposed to remove any reference to Commission
exclusion orders from Sec. 113.62, as this section pertains to basic
importation and entry bonds. The newly proposed bond to indemnify the
complainant under section 337 is applicable where merchandise is
subject to a Commission exclusion order and is set forth in appendix B
to part 113. Customs wishes to emphasize that the proposed special
importation and entry bond is in addition to, not in lieu of, the basic
importation and entry bond (Sec. 113.62) and any other Customs
requirements for the importation of merchandise subject to a Commission
exclusion order.
It was also noted in the proposal that the ``(a)(1)(A)'' list of
documents required for entry, set forth in the appendix to part 163 of
the Customs Regulations, would be amended if the proposal were adopted.
The (a)(1)(A) list would be amended to reflect the fact that the new
bond would be required as an entry document for entry of merchandise
covered by a Commission exclusion order.
In addition, it was noted in the proposal that part 178, which
lists the information collections contained in the regulations and the
control numbers assigned by OMB, would be amended accordingly if the
proposal were adopted.
Comments were solicited on the proposal.
Discussion of Comment
One comment was received by Customs in response to the solicitation
of comments.
Comment: The commenter recommended four changes to the text of the
proposed bond, as follows:
(1) Bond Obligee: That additional text be included in the bond to
better identify the actual complainant. This is suggested to be
achieved by including a blank space for the complainant's name to be
typed on the bond and by including a blank space in which to type the
specific Commission case or investigation number;
(2) Description of the Merchandise: That the bond text require the
entry date and entry number for the merchandise so that there is
certainty as to which merchandise is secured by which bond;
(3) Prompt Notice to the Principal from the Port Director Regarding
the Commission Exclusion Determination: That a condition of the bond be
that the port director's notice to redeliver to the importer be
promptly issued after the Commission investigation; and
(4) Agreement to Pay Face Value of the Bond Upon Default of the
Principal's Obligation to Export/Destroy the Merchandise: That the
seventh paragraph of the proposed bond text be clarified to indicate
that the principal and the surety, ``jointly and severally,'' agree to
pay an amount equal to the face value of the bond in the event of
default.
Customs Response: With respect to these four recommendations,
Customs agrees with the adoption of all but the third (i.e., ``Prompt
Notice to the Principal from the Port Director regarding the Commission
Exclusion Determination''). Unlike the previous Commission bond that
indemnified the Government, the new Commission bond indemnifies the
complainant. Consequently, the new bond should impose as few
preconditions as possible on the Government. Since a Commission order
is either served on the principal, or made by general announcement in
the Federal Register, there is no need to add, as a condition of the
bond, the requirement that a port director issue a notice to redeliver,
let alone impose a requirement that such a notice be issued
``promptly'' within a specified time period.
Conclusion
After review of the comment and further consideration, Customs has
decided that the proposed amendments, with the changes to the text of
the proposed special importation and entry bond discussed above, should
be adopted as a final rule.
The Regulatory Flexibility Act and Executive Order 12866
Because these amendments conform the Customs Regulations to reflect
the
[[Page 77815]]
terms of an existing statute regarding bond procedures for articles
subject to an exclusion order issued by the Commission, pursuant to the
provisions of the Regulatory Flexibility Act, 5 U.S.C. 601 et seq., it
is certified that these amendments will not have a significant impact
on a substantial number of small entities. Further, these amendments do
not meet the criteria for a ``significant regulatory action'' as
specified in Executive Order 12866.
Paperwork Reduction Act
The collection of information contained in this final rule has been
reviewed and approved by the Office of Management and Budget (OMB) in
accordance with the requirements of the Paperwork Reduction Act of 1995
(44 U.S.C. 3507) under control number 1515-0222. 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 in appendix B
to part 113. Although other parts of the Customs Regulations are being
amended, all information required by these amendments is contained or
identified in appendix B to part 113. The information requested is
necessary to enable Customs to permit the entry of merchandise the
subject of a Commission exclusion order under a bond to indemnify a
complainant under section 337 of the Tariff Act of 1930, as amended.
The likely respondents are individuals or commercial organizations that
seek to import merchandise that is the subject of a section 337
exclusion order into the U.S.
The estimated average annual burden associated with the collection
of information in this final rule is 30 minutes per respondent or
recordkeeper. Comments concerning the accuracy of this burden estimate
and suggestions for reducing this burden should be sent to the U.S.
Customs Service, Information Services Group, Office of Finance, 1300
Pennsylvania Avenue, 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. A copy
should also be sent to the Regulations Branch at the address set forth
above.
Drafting Information
The principal author of this document was Suzanne Kingsbury, Office
of Regulations and Rulings, U.S. Customs Service. However, personnel
from other offices participated in its development.
List of Subjects
19 CFR Part 12
Bonds, Customs duties and inspection, Entry of merchandise,
Imports, Restricted merchandise, Unfair competition.
19 CFR Part 113
Bonds, Customs duties and inspection, Imports.
19 CFR Part 163
Administrative practice and procedure, Customs duties and
inspection, Imports, Reporting and recordkeeping requirements.
19 CFR Part 178
Administrative practice and procedure, Collections of information,
Imports, Paperwork requirements, Reporting and recordkeeping
requirements.
Amendments to the Regulations
For the reasons stated in the preamble, parts 12, 113, 163 and 178
of the Customs Regulations (19 CFR parts 12, 113, 163 and 178) are
amended as follows:
PART 12--SPECIAL CLASSES OF MERCHANDISE
1. The general authority citation for part 12 and the specific
authority citation for Sec. 12.39 continue 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 (HTSUS)), 1624.
* * * * *
Section 12.39 is also issued under 19 U.S.C. 1337, 1623.
* * * * *
2. Section 12.39(b)(2) is revised to read as follows:
Sec. 12.39 Imported articles involving unfair methods of competition
or practices.
* * * * *
(b) * * *
(2) During the period the Commission's exclusion order remains in
effect, excluded articles may be entered under a single entry bond in
an amount determined by the International Trade Commission to be
sufficient to protect the complainant from any injury. On or after the
date that the Commission's determination of a violation of section 337
becomes final, as set forth in paragraph (a) of this section, articles
covered by the determination will be refused entry. If a violation of
section 337 is found, the bond may be forfeited to the complainant
under terms and conditions prescribed by the Commission. To enter
merchandise that is the subject of a Commission exclusion order,
importers must: 9
(i) File with the port director prior to entry a bond in the amount
determined by the Commission that contains the conditions identified in
the special importation and entry bond set forth in appendix B to part
113 of this chapter; and
(ii) Comply with the terms set forth in 19 CFR 210.50(d) in the
event of a forfeiture of this bond.
* * * * *
PART 113--CUSTOMS BONDS
1. The general authority citation for part 113 continues to read as
follows, and a new authority citation is added for Sec. 113.74:
Authority: 19 U.S.C. 66, 1623, 1624.
* * * * *
Sec. 113.74 also issued under 19 U.S.C. 1337.
Sec. 113.62 [Amended]
2. In Sec. 113.62:
a. The introductory paragraph is amended by removing that portion
of the text which reads ``, except that a bond taken in the case of
merchandise subject to an exclusion order of the International Trade
Commission under 19 U.S.C. 1337 shall be a single entry bond''; and
b. Paragraph (l)(1) is amended by removing the words ``except that
in the case of merchandise subject to an exclusion order of the
International Trade Commission under 19 U.S.C. 1337 which has been
released before such order becomes final, the obligors agree to pay
liquidated damages in the amount specified in the order for failure to
redeliver such merchandise'';
3. A new Sec. 113.74 is added to read as follows:
Sec. 113.74 Bond conditions to indemnify a complainant under section
337 of Tariff Act of 1930, as amended.
A bond to indemnify a complainant under section 337 of the Tariff
Act of 1930, as amended, must contain the conditions listed in appendix
B to this part. The bond must be a single entry bond and must be filed
in accordance with the provisions set forth in 19 CFR 12.39(b)(2). For
the forfeiture or return of this bond, the provisions of 19 CFR
210.50(d) will apply.
4. A new appendix B is added to part 113 to read as follows:
Appendix B to Part 113--Bond to Indemnify Complainant Under Section
337, Tariff Act of 1930, as Amended
This appendix contains the bond to indemnify a complainant under
section
[[Page 77816]]
337 of the Tariff Act of 1930, as amended. The provisions contained in
11 Secs. 12.39(b)(2) and 113.74 of the Customs Regulations (19 CFR
Chapter I) and Sec. 210.50(d) of the U.S. International Trade
Commission Regulations (19 CFR Chapter II) apply.
Bond to Indemnify Complainant Under Section 337, Tariff Act of 1930, As
Amended
____________ as principal and ________ as surety, are held and
bound to ____________, as the complainant in U.S. International
Trade Commission case/investigation number ________, of unfair
practices or methods of competition in import trade in violation of
section 337, Tariff Act of 1930, as amended, in the sum of ________
dollars ($________), for payment of which we bind ourselves, our
heirs, executors, administrators, successors, and assigns, jointly
and severally, by these conditions.
Pursuant to the provisions of section 337, Tariff Act of 1930,
as amended, the principal and surety recognize that the Commission
has, according to the conditions described in its order, excluded
from, or authorized, entry into the United States of the following
merchandise ________________ ________________________ under entry
number ____________, dated ____________.
The principal and surety recognize that the Commission has
excluded that merchandise from entry until its investigation is
completed, or until its decision that there is a violation of
section 337 becomes final.
The principal and surety recognize that certain merchandise
excluded from entry by the Commission was, or may be, offered for
entry into the United States while the Commission's prohibition is
in effect.
The principal and surety recognize that the principal desires to
obtain a release of that merchandise pending a final determination
of the merchandise's admissibility into the United States, as
provided under section 337, and, for that purpose, the principal and
surety execute this stipulation:
If it is determined, as provided in section 337 of the Tariff
Act of 1930, as amended, to exclude that merchandise from the United
States, then, on notification from the port director of Customs, the
principal is obligated to export or destroy under Customs
supervision the merchandise released under this stipulation within
30 days from the date of the port director's notification.
The principal and surety, jointly and severally, agree that if
the principal defaults on that obligation, the principal and surety
shall pay to the complainant an amount equal to the face value of
the bond as may be demanded by him/her under the applicable law and
regulations.
Witness our hands and seals this ________ day of ____________
(month), ________ (year).
________________ (seal)
Principal
________________ (seal)
Surety
PART 163--RECORDKEEPING
1. The authority citation for part 163 continues to read as
follows:
Authority: 5 U.S.C. 301; 19 U.S.C. 66, 1484, 1508, 1509, 1510,
1624.
2. In the appendix to part 163--Interim (a)(1)(A) List, under
section ``IV.,'' the list of documents/records or information required
for entry of special categories of merchandise is amended by adding the
following new listing in the appropriate numerical order:
* * * * *
Part 113, Appendix B--Bond to Indemnify Complainant Under Section
337, Tariff Act of 1930, as Amended
* * * * *
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 a new listing to the table in
numerical order to read as follows:
Sec. 178.2 Listing of OMB control numbers.
----------------------------------------------------------------------------------------------------------------
19 CFR section Description OMB control no.
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* * * * * *
*
Part 113--Appendix B..................... Bond to Indemnify Complainant 1515-0222
Under Section 337, Tariff Act
of 1930, as Amended.
* * * * * *
*
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Raymond W. Kelly,
Commissioner of Customs.
Approved: December 7, 2000.
Timothy E. Skud,
Acting Deputy Assistant Secretary of the Treasury.
[FR Doc. 00-31699 Filed 12-12-00; 8:45 am]
BILLING CODE 4820-02-U