[Federal Register Volume 67, Number 40 (Thursday, February 28, 2002)]
[Rules and Regulations]
[Pages 9188-9191]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 02-4746]
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DEPARTMENT OF THE TREASURY
Customs Service
19 CFR Parts 162, 171 and 178
[T.D. 02-08]
RIN 1515-AC69
Civil Asset Forfeiture
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, the
interim rule amending the Customs Regulations that was published in the
Federal Register on December 14, 2000, as T.D. 00-88. The interim rule
implemented the provisions of the Civil Asset Forfeiture Reform Act of
2000 (CAFRA), insofar as these provisions were applicable to laws
enforced by Customs. The CAFRA created general rules governing civil
forfeiture proceedings. However, CAFRA specifically exempted from
certain of its requirements forfeitures that were made under a number
of statutes, among these being: the Tariff Act of 1930 or any other
provision of law codified in title 19, United States Code; the Internal
Revenue Code of 1986; the Federal Food, Drug, and Cosmetic Act; the
International Emergency Economic Powers Act; and the Trading with the
Enemy Act. In addition, this final rule adopts certain minor conforming
changes to the Customs Regulations that were made in the interim rule
in order to reflect a recodification of existing statutory law.
EFFECTIVE DATE: February 28, 2002.
FOR FURTHER INFORMATION CONTACT: Jeremy Baskin, Penalties Branch, (202-
927-2344).
SUPPLEMENTARY INFORMATION:
Background
Section 2 of the Civil Asset Forfeiture Reform Act of 2000 (CAFRA),
Public Law (Pub. L.) 106-185, 114 Stat. 202, enacted on April 25, 2000,
and codified at title 18, United States Code, section 983 (18 U.S.C.
983), created general rules for civil forfeiture proceedings. This
section of the CAFRA, however, specifically exempts from certain of its
requirements forfeitures undertaken pursuant to the following statutes:
the Tariff Act of 1930 or any other provision of law codified in title
19, United States Code; the Internal Revenue Code of 1986; the Federal
Food, Drug, and Cosmetic Act (21 U.S.C. 301 et seq.); the Trading with
the Enemy Act (50 U.S.C. App. 1 et seq.); and section 1 of title VI of
the Act of June 15, 1917 (40 Stat. 233; 22 U.S.C. 401). In addition,
Public Law 107-56, enacted October 26, 2001, the title of which is the
Uniting and Strengthening America by Providing Appropriate Tools
Required to Intercept and Obstruct Terrorism (USA PATRIOT Act) Act of
2001, exempted from the requirements of CAFRA the International
Emergency Economic Powers Act (IEEPA) (50 U.S.C. 1701 et seq.).
Under section 2 of the CAFRA, specified duties and obligations
[[Page 9189]]
concerning civil forfeiture proceedings are placed upon Government
officials who were to be designated by the seizing agencies.
By a document published in the Federal Register (65 FR 78090) on
December 14, 2000, as T.D. 00-88, Customs announced an interim rule to
clarify and implement the law in this regard. It was determined that
interim regulations were appropriate because no additional requirements
were imposed upon the public. Rather, the interim regulations conferred
certain additional rights on property owners or interested parties, and
provided clear guidance to Customs officials in the processing of
property seized for forfeiture under the CAFRA.
The interim rule identified the particular Customs official who
will grant extensions of time for sending notices of seizure, as
authorized by 18 U.S.C. 983(a)(1)(B), and it identified those Customs
officials who will rule on requests for immediate release of seized
property, as authorized by 18 U.S.C. 983(f)(2). The interim regulations
also provided guidance to Customs officials in the processing of
property seized for forfeiture under the CAFRA.
In addressing these matters, the interim rule added a new subpart H
to part 162 of the Customs Regulations (19 CFR part 162, subpart H).
Furthermore, the interim regulations made clear that acceptance of
an administrative forfeiture remission does not make the Government
liable for fees, costs or interest pursuant to 28 U.S.C. 2465. In this
respect, a new Sec. 171.24 was added to the Customs Regulations (19 CFR
171.24) to provide that, in the case of any seizure for forfeiture that
is remitted or mitigated under 19 U.S.C. 1618 or 31 U.S.C. 5321, the
person who accepts such a remission or mitigation decision will not be
considered to have substantially prevailed in a civil forfeiture
proceeding for purposes of being able to collect any fees, costs or
interest from the Government.
With the exception of the provision in new Sec. 171.24, seizures
exempted from the requirements of section 2 of the CAFRA will be
processed in accordance with existing regulations.
Lastly, Pub. L. 103-272, 108 Stat. 745, dated July 5, 1994,
reenacted and recodified the provisions of title 49, United States
Code. To this end, the interim rule removed the reference to 49 U.S.C.
App. appearing in part 171, subpart F, of the Customs Regulations (19
CFR part 171, subpart F), and added in its place a reference to 49
U.S.C. 80303, in accordance with the recodification of the statutory
provision specifically made by section 1(e) of Pub. L. 103-272.
Before adopting the interim regulations as a final rule, Customs
solicited comments from the public. Three commenters responded to the
interim rule. A description of the issues that were raised by the
commenters together with Customs response to these issues is set forth
below.
Discussion of Comments
Comment: One commenter declares that currently, at international
airports, there are signs warning passengers to declare the currency
they are carrying if it exceeds $10,000. The commenter recommends that
information be added to this warning that if currency is seized for
nonreporting, the person whose money is seized has a right to file a
claim and to be represented by an attorney, even if the person cannot
afford an attorney. The claimant indicates that section 983(b) of title
18 specifies the right to legal representation.
Customs Response: The informational content of warnings posted at
airports notifying passengers of the obligation to file monetary
instrument reports falls outside the scope of this regulation.
Comment: One commenter states that clarification is required of the
meaning of 18 U.S.C. 981(d) of the CAFRA. In particular, the commenter
notes that administrative proceedings for violation of the Customs laws
are inconsistent with section 981.
Customs Response: Customs disagrees. Administrative proceedings for
processing seizures made for violation of the Customs laws are governed
by the statutory provisions of 19 U.S.C. 1602 through 1619. Further,
the provisions of 19 U.S.C. 1600 state that these procedures will apply
to seizures of any property effected by Customs officers under any law
enforced or administered by the Customs Service unless such law
specifies different procedures. Because section 981 specifically
authorizes the application of the Customs laws to these seizures, we
find no inconsistencies.
Comment: One commenter asks why the interim regulations refer to
``calendar days'' when the statute only refers to ``days.''
Customs Response: Customs used the term ``calendar days'' in the
interim rule for purposes of clarity.
Comment: One commenter observes that Sec. 162.92(a) in the interim
rule states that Customs will send a written notice of seizure ``as
soon as practicable'' yet an existing regulatory provision (19 CFR
162.21(a)) states that a receipt for seized property shall be given at
the time of seizure to the person from whom the property was seized.
The commenter suggests that these provisions are clearly in conflict.
The commenter avers that immediate notification of seizure must occur,
because extending the time for issuance of a receipt creates a
situation where none of the parties directly involved with the
shipment, i.e., shipper, consignee or carrier, would know the
disposition for an extended period of time. It is asserted that seizure
of a shipment with no notice from Customs for 60 days or more does not
allow the importer to conduct his normal business and will cause the
carrier to expend needless time and effort in searching for the seized
articles.
Customs Response: There is no conflict presented between
Secs. 162.21 and 162.92. Further, Customs believes that adequate
safeguards regarding notices of seizure already exist.
The commenter incorrectly equates providing a receipt for seized
property, which is merely an indication that the Government has taken
possession of the property, with issuance of a formal notice of
seizure, which explains the rights, both administrative and judicial,
that a claimant to that property has with regard to challenging the
forfeiture. The issuance of a notice of seizure is already governed by
the provisions of Sec. 162.31 of the Customs Regulations (19 CFR
162.31). Those requirements of notice have not changed. In fact, the
regulation with which the commenter takes issue, Sec. 162.92,
specifically references the requirements of Sec. 162.31 governing
information to be included in a notice of seizure. By contrast, the
provisions of Sec. 162.21 only speak to the responsibilities and
authority of the Customs officer actually making a seizure. Section
162.21 does not deal with the notification of seizure and explanation
of the forfeiture processes as do the notices of seizure.
Comment: One commenter notes that, as a carrier, delay in
notification of seizures under Sec. 162.92(a) can result in claims
being made against the carrier for ``lost'' merchandise which has, in
fact, been seized by Customs.
The commenter suggests numerous possible procedures that Customs
could implement by regulation to assist carriers when claims are filed
due to seizure. Specifically, these procedures include: (1) The
provision by Customs of a list of all shipments seized from a carrier's
custody not more than 60 days following seizure, without exception so
as to allow the carrier to process claims; (2) the review by Customs,
every 30 days, of a list of all claims submitted to the carrier for
loss in order to allow the carrier to determine which shipments
[[Page 9190]]
have been seized by Customs; (3) the empowerment of the carrier to
require any party filing a claim against the carrier to obtain from
Customs written confirmation that the shipment was not seized in order
to perfect that claim; and (4) the empowerment of the carrier to
require the party filing a claim to assign ownership of the shipment to
the carrier should it be found to have been seized and then released by
Customs.
Customs Response: Customs disagrees that any changes as proposed by
the commenter are needed under the circumstances. The provisions of
Sec. 162.31 already require Customs to provide written notice of any
liability to forfeiture to each party that the facts of record indicate
has an interest in the claim or seized property. To this effect, as
stated above, Sec. 162.92(a) in the interim rule specifically
references the requirements of Sec. 162.31 governing information to be
included in a notice of seizure.
It is not the responsibility of Customs to match each notice of
seizure provided to a carrier with any claims of loss that have been
filed against the carrier. Nor is it the province of the Customs
Regulations to include provisions regarding business practices of a
carrier or to empower that carrier to require information from its
clients under the authority of federal regulation. The requirements of
CAFRA require notification to known parties-in-interest as provided in
the interim regulations and as adopted in these final regulations.
Comment: One commenter states, in connection with Sec. 162.92(d),
that only the Assistant Commissioner, Office of Investigations, may
extend the period for sending notices, not his designee. It is claimed
that 18 U.S.C. 983 makes no provision for designees.
Customs Response: The provisions of 18 U.S.C. 983(a)(1)(B) require
the decision as to any extension to be made by a supervisory official
in the Headquarters office of the seizing agency. Section 162.92(d) in
the interim rule complies with this statutory requirement. There is no
statutory prohibition on allowing a designee of a supervisory official
from making this decision.
Comment: One commenter notes, with respect to Sec. 162.93, that if
notice of seizure is not provided timely under CAFRA, and the seized
property must be returned to the person from whom the property was
seized, the interim regulations provide no audit or check to assure
that return of the property occurs. It is averred that no party other
than Customs will know that the seizure occurred because no notice has
been issued. Accordingly, the commenter suggests that articles should
be returned to the owner within 60 days, the same time period as
originally required to issue the notice.
Customs Response: Customs disagrees. The provisions of Sec. 162.93
in the interim rule require Customs to return property to any person
from whom property is seized if the notice of seizure is not sent
within the time period prescribed in Sec. 162.92. Also, the provisions
of Sec. 162.21 of the Customs Regulations (19 CFR 162.21) require
Customs to provide a receipt for seized property to the party from whom
the property has been seized. Contrary to the commenter's assertion,
the party from whom the property is seized will know of the seizure
based upon regulatory requirements that predate the CAFRA regulations
which are the subject of this document.
Comment: One commenter states, in relation to filing a claim for
seized property under Sec. 162.94, that 18 U.S.C. 983(a)(2)(D) requires
Customs to make claim forms generally available upon request. The
commenter also indicates that the provisions of section 983(a)(2)(E)
should make clear that a claim can be filed without the posting of a
bond. Thus, the commenter implies that this language should be included
in Sec. 162.94.
Customs Response: Customs agrees. Section 162.94(c) in the interim
rule is revised in this final rule to include a provision that Customs
will make claim forms generally available upon request. Also,
Sec. 162.94 in the interim rule is amended in this final rule by adding
a new paragraph (e) to make clear that a claim may be filed without the
posting of a bond. Section 162.94(e) in the interim rule is
redesignated as Sec. 162.94(f) in this final rule.
Comment: One commenter states that Customs field offices need
guidance on what is meant by the phrase ``legitimate business'' as it
appears in Sec. 162.95(b)(1) in the interim rule, which states that
immediate release of seized property for hardship purposes will not
apply if the seized property is currency or monetary instruments or
electronic funds unless such property comprises the assets of a
legitimate business. To this end, the commenter states that if a person
from whom currency or negotiable instruments have been seized can
demonstrate that the money had just been withdrawn from a bank account
or can provide sales slips for merchandise sold, that seized property
should be returned on site.
Customs Response: Customs disagrees that Sec. 162.95(b)(1) in the
interim rule needs any change as suggested by the commenter.
The commenter asks that Customs in effect expand the statute to
include situations that are not contained in the statute. The statute
allows for the immediate return of seized property to a claimant if
continuing possession of the seized property by Customs, pending the
final disposition of the forfeiture proceedings, would cause
substantial hardship and that likely hardship outweighs the risk that
the property will be lost, concealed or transferred if it is returned
to the claimant during the pendency of the proceeding. See 18 U.S.C.
983(f)(1).
However, the statute excepts from immediate release, as provided
above, currency, or other monetary instruments, or electronic funds
unless that currency, other monetary instruments or electronic funds
constitute the assets of a legitimate business which has been seized.
If the claimant to property can show that the seized currency or
monetary instruments are the assets of a legitimate business that has
been seized, he would still need to show under the statute that he has
a possessory interest in the property, that he has sufficient ties to
the community, and that continuing possession by Customs would cause
substantial hardship.
Against this backdrop, the providing of ``slips showing sale of
merchandise'' hardly rises to the level of proof needed in order for
the Government to allow the immediate release of the seized property,
as described by the commenter.
Nevertheless, in one sense Sec. 162.95(b)(1) in the interim rule
does not accurately reflect the statute. It states that immediate
release of seized property for hardship purposes will not apply if the
seized property is currency or monetary instruments or electronic funds
unless such property comprises the assets of a legitimate business. In
fact, the statute at 18 U.S.C. 983(f)(8) states that the provision
governing the release of seized property will not apply if the seized
property is contraband, currency, or other monetary instrument, or
electronic funds unless such currency or other monetary instrument or
electronic funds constitutes the assets of a legitimate business which
has been seized. Accordingly, Sec. 162.95(b)(1) in the interim rule is
amended in this final rule to more accurately reflect the statute in
this respect.
Additional Changes
As previously noted, Public Law 107-56, enacted on October 26,
2001, and known as the Uniting and Strengthening
[[Page 9191]]
America by Providing Appropriate Tools Required to Intercept and
Obstruct Terrorism (USA PATRIOT ACT) Act of 2001, exempted from the
requirements of CAFRA the International Emergency Economic Powers Act
(IEEPA) (50 U.S.C. 1701 et seq.). Section 162.91 in this final rule
document is revised to reflect this statutory change.
Also, section 3 of Public Law 106-561, enacted on December 21,
2000, and known as The Paul Coverdell National Forensic Sciences
Improvement Act of 2000, amended 18 U.S.C. 983(a)(2)(C)(ii) by
eliminating the requirement that a party filing a CAFRA claim provide
customary documentary evidence of an interest in the property, if such
evidence is available; and by eliminating the requirement that the
party state that the claim is not frivolous. Thus, Sec. 162.94(d)(2) in
the interim rule, which contained both of these requirements, is
amended to reflect the change.
Conclusion
After careful consideration of the comments received and further
review of the matter, Customs has concluded that the interim rule
amending parts 162, 171 and 178, Customs Regulations (19 CFR parts 162,
171 and 178) that was published in the Federal Register (65 FR 78090)
on December 14, 2000, as T.D. 00-88, should be adopted as a final rule
with the modifications discussed above.
Regulatory Flexibility Act, Executive Order 12866 and
Inapplicability of Delayed Effective Date
This final rule document does not impose any additional
requirements upon the public. Rather, the regulations are intended both
to confer certain additional rights on property owners or interested
parties, and to provide clear guidance to Customs officials in the
processing of property seized for forfeiture under the CAFRA.
Accordingly, it has been determined, pursuant to 5 U.S.C. 553(d)(3),
that a delayed effective date is not required. Because no notice of
proposed rulemaking was required, the provisions of the Regulatory
Flexibility Act (5 U.S.C. 601 et seq.) do not apply. This final rule
does not result in a ``significant regulatory action'' as specified in
E.O. 12866.
Paperwork Reduction Act
The collection of information involved in this final rule document
has already been approved by the Office of Management and Budget (OMB)
in accordance with the Paperwork Reduction Act of 1995 (44 U.S.C. 3507)
and assigned OMB Control Number 1515-0052 (Petition for remission or
mitigation of forfeitures and penalties incurred). This collection
encompasses a claim for seized property in a non-judicial civil
forfeiture proceeding. This rule does not present any material change
to the existing approved information collection. An agency may not
conduct, 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.
To this end, part 178, Customs Regulations (19 CFR part 178),
containing the list of approved information collections, was previously
revised by the interim rule to make appropriate reference to OMB
Control Number 1515-0052.
List of Subjects
19 CFR Part 162
Administrative practice and procedure, Customs duties and
inspection, Drug traffic control, Imports, Inspection, Law enforcement,
Penalties, Prohibited merchandise, Reporting and recordkeeping
requirements, Seizures and forfeitures.
19 CFR Part 171
Administrative practice and procedure, Customs duties and
inspection, Law enforcement, Penalties, Seizures and forfeitures.
19 CFR Part 178
Administrative practice and procedure, Collections of information,
Imports, Paperwork requirements, Reporting and recordkeeping
requirements.
Amendments to the Regulations
Accordingly, the interim rule amending parts 162, 171 and 178,
Customs Regulations (19 CFR parts 162, 171 and 178), which was
published at 65 FR 78090 on December 14, 2000, is adopted as a final
rule with the following changes to part 162:
PART 162--INSPECTION, SEARCH, AND SEIZURE
1. The general authority and relevant specific authority citations
for part 162 continue to read as follows:
Authority: 5 U.S.C. 301; 19 U.S.C. 66, 1592, 1593a, 1624.
* * * * *
Sections 162.91 through 162.96 also issued under 18 U.S.C. 983.
2. Section 162.91 is revised to read as follows:
Sec. 162.91 Exemptions.
The provisions of this subpart will apply to all seizures of
property for civil forfeiture made by Customs officers except for those
seizures of property to be forfeited under the following statutes: The
Tariff Act of 1930 or any other provision of law codified in title19,
United States Code; the Internal Revenue Code of 1986 (26 U.S.C. 1 et
seq.); the Federal Food, Drug, and Cosmetic Act (21 U.S.C. 301 et
seq.); the Trading with the Enemy Act (50 U.S.C. App. 1 et seq.); the
International Emergency Economic Powers Act (IEEPA) (50 U.S.C. 1701 et
seq.); and section 1 of title VI of the Act of June 15, 1917 (40 Stat.
233; 22 U.S.C. 401).
3. Section 162.94 is amended by adding a sentence at the end of
paragraph (c) and by revising paragraph (d)(2) to read as set forth
below; by redesignating existing paragraph (e) as paragraph (f); and by
adding a new paragraph (e) to read as set forth below:
Sec. 162.94 Filing of a claim for seized property.
* * * * *
(c) Form of claim. * * * Claim forms will be made generally
available upon request.
(d) Content of claim. * * *
(2) State the claimant's interest in the property; and
* * * * *
(e) No bond required. Any person may make a claim under this
section without posting a bond.
* * * * *
4. Section 162.95 is amended by revising paragraph (b)(1) to read
as follows:
Sec. 162.95 Release of seized property.
* * * * *
(b) Exceptions. * * *
(1) Is contraband, currency or other monetary instrument, or
electronic funds, unless, in the case of currency, other monetary
instrument or electronic funds, such property comprises the assets of a
legitimate business which has been seized;
* * * * *
Robert C. Bonner,
Commissioner of Customs.
Approved: February 25, 2002.
Timothy E. Skud,
Acting Deputy Assistant Secretary of the Treasury.
[FR Doc. 02-4746 Filed 2-27-02; 8:45 am]
BILLING CODE 4820-02-P