[Federal Register Volume 67, Number 110 (Friday, June 7, 2002)]
[Proposed Rules]
[Pages 39322-39324]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 02-14286]
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DEPARTMENT OF THE TREASURY
Customs Service
19 CFR Parts 141 and 151
RIN 1515-AD05
Conditional Release Period and Customs Bond Obligations for Food,
Drugs, Devices, and Cosmetics
AGENCY: Customs Service, Department of the Treasury.
ACTION: Notice of proposed rulemaking.
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SUMMARY: This document proposes to amend the Customs Regulations to
clarify the responsibilities of importers of food, drugs, devices, and
cosmetics under Customs entry bond and to provide a reasonable period
of time to allow the Food and Drug Administration to perform its
enforcement functions with respect to these articles. The proposed
amendments provide for a specific conditional release period for any
food, drug, device, or cosmetic which has been released under bond and
for which admissibility is to be determined under the provisions of the
Food, Drug and Cosmetic Act. The proposed amendment also clarifies the
amount of liquidated damages that may be assessed when there is a
breach of the terms and conditions of the Customs bond. The document
also proposes to amend the Customs Regulations to authorize any
representative of the Food and Drug Administration (FDA) to obtain a
sample of any food, drug, device, or cosmetic, the importation of which
is governed by section 801 of the Food, Drug and Cosmetic Act, as
amended (21 U.S.C. 381).
DATES: Comments must be received on or before August 6, 2002.
ADDRESSES: Written comments (preferably in triplicate) may be addressed
to the Regulations Branch, Office of Regulations and Rulings, U.S.
Customs Service, 1300 Pennsylvania Avenue, NW, Washington, DC 20229.
Comments submitted may be inspected at the Regulations Branch, Office
of Regulations and Rulings, U.S. Customs
[[Page 39323]]
Service, 1300 Pennsylvania Avenue, NW, 3rd Floor, Washington, DC.
FOR FURTHER INFORMATION CONTACT: Jeremy Baskin, Office of Regulations
and Rulings, Penalties Branch (202-927-2344).
SUPPLEMENTARY INFORMATION:
Background
Section 801 of the Food, Drug and Cosmetic Act, as amended (21
U.S.C. 381), and the regulations promulgated under that statute,
provide the basic legal framework governing the importation of
foodstuffs into the United States. Under 21 U.S.C. 381(a), the
Secretary of the Treasury will deliver to the Secretary of Health and
Human Services, upon request, samples of food, drugs, devices, and
cosmetics which are being imported or offered for import. The Secretary
of Health and Human Services is authorized under section 381(a) to
refuse admission of, among other things, any article that appears from
the examination or otherwise to be adulterated or misbranded or to have
been manufactured, processed, or packed under insanitary conditions. In
addition, the Secretary of the Treasury is required by section 381(a)
to cause the destruction of any article refused admission unless the
article is exported, under regulations prescribed by the Secretary of
the Treasury, within 90 days of the date of notice of the refusal or
within such additional time as may be permitted pursuant to those
regulations.
Under 21 U.S.C. 381(b), pending decision as to the admission of an
article being imported or offered for import, the Secretary of the
Treasury may authorize delivery of that article to the owner or
consignee upon the execution by him of a good and sufficient bond
providing for the payment of liquidated damages in the event of
default, as may be required pursuant to regulations of the Secretary of
the Treasury. In addition, section 381(b) allows the owner or consignee
in certain circumstances to take action to bring an imported article
into compliance for admission purposes under such bonding requirements
as the Secretary of the Treasury may prescribe by regulation.
Based upon the above statutory provisions, imported foods, drugs,
devices, and cosmetics are conditionally released under bond while
determinations as to admissibility are made; see Sec. 12.3 of the
Customs Regulations (19 CFR 12.3). Under current Sec. 141.113(c) of the
Customs Regulations (19 CFR 141.113(c)), Customs may demand the return
to Customs custody of most types of merchandise that fail to comply
with the laws or regulations governing their admission into the United
States (also referred to as the redelivery procedure).
The condition of the basic importation and entry bond contained in
Sec. 113.62(d) of the Customs Regulations (19 CFR 113.62(d)) sets forth
the obligation of the importer of record to timely redeliver released
merchandise to Customs on demand and provides that a demand for
redelivery will be made no later than 30 days after the date of release
of the merchandise or 30 days after the end of the conditional release
period, whichever is later. Under current procedures, when imported
merchandise is refused admission by the FDA, Customs issues a notice of
redelivery in order to establish liquidated damages if the importer of
record fails to export, destroy, or redeliver the refused merchandise
in the time period prescribed in that notice of redelivery.
Customs has taken the position in C.S.D. 86-21 that the term ``end
of the conditional release period'' in 19 CFR 113.62(d) has reference
to a set time limitation that is either established by regulation (see,
for example, 19 CFR 141.113(b) which prescribes a 180-day conditional
release period for purposes of determining the correct country of
origin of imported textiles and textile products) or is established by
express notification to the importer of record. The end of the
conditional release period does not refer to the liquidation of the
entry covering the imported merchandise.
In light of the above authorities, Customs now proposes to amend
the regulations to provide for a specific conditional release period
for merchandise for which the FDA is authorized to determine
admissibility. The proposed changes will clarify importers'
responsibilities under the bond, provide a reasonable period of time to
allow the FDA to perform its enforcement functions, and provide
finality to the process.
Proposed Regulatory Changes
This document proposes to make the following specific changes to
the Customs Regulations to address these points:
1. It is proposed to redesignate some paragraphs in Sec. 141.113
due to the addition of a new paragraph (c), which will provide for a
specific conditional release period of 180 days for any food, drug,
device, or cosmetic. The FDA will have this time period to make its
determination of admissibility. Similar to the case of textiles and
textile products mentioned above, the proposed amendment specifies a
180-day conditional release period but also provides for a shorter
period if FDA makes a determination of inadmissibility before the
expiration of that 180-day period. It is noted that as a consequence of
this new text, under 19 CFR 113.62(d), a demand for redelivery could be
made up to 210 days (that is, 180 days plus 30 days) after the date of
release of the merchandise. The proposed regulation will also make
clear that the failure to redeliver merchandise will result in the
assessment of liquidated damages equal to three times the value of the
merchandise or equal to the domestic value of merchandise in those
instances where the port director has required a bond equal to the
domestic value as permitted by current Sec. 12.3.
2. It is proposed to amend Sec. 151.10 of the Customs Regulations
(19 CFR 151.10) to authorize a representative of the FDA to obtain
samples of food, drugs, devices, and cosmetic products covered by the
Food, Drug and Cosmetic Act.
Comments
Before adopting these proposed regulatory amendments as a final
rule, consideration will be given to any written comments timely
submitted to Customs, including comments on the clarity of this
proposed rule and how it may be made easier to understand. Comments
submitted will be available for public inspection in accordance with
the Freedom of Information Act (5 U.S.C. 552), Sec. 1.4, Treasury
Department Regulations (31 CFR 1.4), and Sec. 103.11(b), Customs
Regulations (19 CFR 103.11(b)), on regular business days between the
hours of 9:00 a.m. and 4:30 p.m. at the Regulations Branch, Office of
Regulations and Rulings, U.S. Customs Service, 1300 Pennsylvania
Avenue, N.W., 3rd Floor, Washington, DC.
Regulatory Flexibility Act and Executive Order 12866
Pursuant to the provisions of the Regulatory Flexibility Act (5
U.S.C. 601 et seq.), it is certified that the proposed amendments, if
adopted, will not have a significant economic impact on a substantial
number of small entities. The proposed regulatory amendments reflect
current statutory requirements, and they will not require any
additional action on the part of the public but rather are intended to
facilitate Customs enforcement efforts involving existing import
requirements. Accordingly, the proposed amendments are not subject to
[[Page 39324]]
the regulatory analysis or other requirements of 5 U.S.C. 603 and 604.
Furthermore, this document does not meet the criteria for a
``significant regulatory action'' as specified in E.O. 12866.
List of Subjects
19 CFR Part 141
Bonds, Customs duties and inspection, Entry procedures, Imports,
Prohibited merchandise, Release of merchandise.
19 CFR Part 151
Customs duties and inspection, Examination, Sampling and testing,
Imports, Laboratories, Penalties, Reporting and recordkeeping
requirements.
Proposed Amendments to the Regulations
For the reasons stated above, it is proposed to amend parts 141 and
151 of the Customs Regulations (19 CFR part 141 and 151) as set forth
below.
PART 141--ENTRY OF MERCHANDISE
1. The authority citation for part 141 continues to read in part as
follows:
Authority: 19 U.S.C. 66, 1448, 1484, 1624.
* * * * *
Section 141.113 also issued under 19 U.S.C. 1499, 1623.
2. Section 141.113 is amended as follows:
a. Redesignate current paragraphs (c) through (h) as paragraphs (d)
through (i),
b. Add a new paragraph (c), and
c. Amend redesignated paragraph (d) by removing the words ``(a) or
(b)'' and adding ``(a), (b), or (c)'' after the words ``for any reason
not enumerated in paragraph.'' New paragraph (c) reads as follows:
Sec. 141.113 Recall of merchandise released from Customs custody.
* * * * *
(c) Food, drugs, and cosmetics. For purposes of determining the
admissibility of any food, drug, device, and cosmetic imported pursuant
to section 801 of the Food, Drug and Cosmetic Act (21 U.S.C. 381), as
amended, the release from Customs custody of any such product will be
deemed conditional during the 180-day period following the date of
release. If before the end of the 180-day period the Food and Drug
Administration (FDA) finds that a food, drug, device, or cosmetic is
not entitled to admission into the commerce of the United States, it
will communicate that fact to the port director who will demand the
redelivery of the product to Customs custody. Customs will issue a
notice of redelivery within 30 days from the date the product was
refused admission by the FDA. The demand for redelivery may be made
contemporaneously with the notice of refusal issued by the FDA. A
failure to comply with a demand for return to Customs custody made
under this paragraph will result in the assessment of liquidated
damages equal to three times the value of the merchandise involved
unless the port director has prescribed a bond equal to the domestic
value of the merchandise pursuant to section 12.3(b) of this Chapter.
* * * * *
PART 151--EXAMINATION, SAMPLING, AND TESTING OF MERCHANDISE
1. The general authority citation for part 151 is revised, and a
specific authority citation for Sec. 151.10 is added, to read as
follows:
Authority: 19 U.S.C. 66, 1202 (General Notes 23 and 24,
Harmonized Tariff Schedule of the United States (HTSUS)), 1624.
Section 151.10 also issued under 21 U.S.C. 381;
* * * * *
2. In Sec. 151.10, add a sentence at the end of the text to read as
follows:
Sec. 151.10 Sampling.
* * * For purposes of determining admissibility, representatives of
the Food and Drug Administration may obtain samples of any food, drug,
device, or cosmetic, the importation of which is governed by section
801 of the Food, Drug and Cosmetic Act, as amended (21 U.S.C. 381).
Robert C. Bonner,
Commissioner of Customs.
Approved: June 3, 2002.
Timothy E. Skud,
Deputy Assistant Secretary of the Treasury.
[FR Doc. 02-14286 Filed 6-6-02; 8:45 am]
BILLING CODE 4820-02-P