CSMS Message: 94-000333

TO : ALL ABI BROKERS.

FROM : JUDY SCHOENY

SUBJECT : MOD ACT-PENALTIES/CORRECTION

DATE : 04/04/94

THIS DOCUMENT AMENDS THE BULLETIN MESSAGE OF JANUARY 14, 1994, BY
RENUMBERING PARAGRAPH 2(E) AS 2(F) AND INSERTING A NEW PARAGRAPH 2(E)
TO READ AS FOLLOWS:

"(E) IT IS MERCHANDISE WHICH IS MARKED INTENTIONALLY IN VIOLATION
OF SECTION 304; OR"

TODAY (12-8-93) PRESIDENT CLINTON IS EXPECTED TO SIGN INTO
LAW H.R. 3450, THE "NORTH AMERICAN FREE TRADE AGREEMENT
IMPLEMENTATION ACT". TITLE VI OF THE BILL IS ENTITLED "CUSTOMS
MODERNIZATION" (PREVIOUSLY KNOWN AS THE CUSTOMS MODERNIZATION AND
INFORMED COMPLIANCE ACT, AND THE "MOD ACT"). TITLE VI TAKES
EFFECT ON THE DATE THAT PRESIDENT CLINTON SIGNS THE BILL INTO
LAW.

EFFECTIVE ON THAT DATE, THERE IS A STATUTE OF LIMITATIONS
APPLICABLE TO 19 U.S.C. 1592(D) DEMANDS FOR THE RECOVERY OF
DUTIES WHICH THE UNITED STATES WAS DEPRIVED AS A RESULT OF A
VIOLATION OF 19 U.S.C. 1592. THIS NEW STATUTE OF LIMITATIONS
PARALLELS THE STATUTE OF LIMITATIONS APPLICABLE TO PENALTIES
UNDER SECTION 1592(A) AND THEREFORE, IS BASED UPON THE LEVEL OF
CULPABILITY OF FRAUD, GROSS NEGLIGENCE, OR NEGLIGENCE. THIS
MEANS THAT SUIT MUST BE COMMENCED IN COURT FOR BOTH THE DUTIES
AND THE PENALTIES WITHIN THE APPROPRIATE 5 YEAR PERIOD BASED UPON
THE APPROPRIATE LEVEL OF CULPABILITY. CONSEQUENTLY, SECTION
1592(D) DEMANDS FOR RECOVERY OF ACTUAL LOSSES OF REVENUE SHALL NO
LONGER BE MADE INVOLVING ENTRIES FOR WHICH THE SECTION 1592
PENALTY STATUTE OF LIMITATIONS HAS EXPIRED.

EFFECTIVE ON THAT DATE, THE BASES FOR SEIZURE UNDER 19
U.S.C. 1595A(C) ARE SET FORTH IN THE STATUTE. (SEE ATTACHED
SECTION 624 WHICH AMENDS 19 U.S.C. 1595A(C)). IT IS NOTED THAT
MERCHANDISE MAY BE SEIZED AND FORFEITED IF IT IS MERCHANDISE
WHICH IS MARKED INTENTIONALLY IN VIOLATION OF 19 U.S.C. 1304, OR
MERCHANDISE WHICH IS REPETITIVELY MARKED IN VIOLATION OF SECTION
1304. THIS MEANS THAT CUSTOMS SHALL NO LONGER MAKE ORIGIN
MARKING VIOLATIONS CITING 19 U.S.C. 1595A(C) FOR FALSE
DESIGNATION OF COUNTRY OF ORIGIN MARKING VIOLATIONS CITING 15
U.S.C. 1124 OR 1125 AS THE LAW VIOLATED. HOWEVER, SECTIONS 1124
AND 1125 STILL MAY BE CITED AS A BASIS FOR SEIZURE UNDER SECTION
1595A(C) FOR VIOLATIONS OF LAW RELATING TO HEALTH, SAFETY, OR
CONSERVATION, OR FOR IPR VIOLATIONS.

ALL INFORMATION WHICH MAY BE MADE AVAILABLE PURSUANT TO THIS
SUBSECTION SHALL BE SUBJECT TO ANY EXEMPTION FROM DISCLOSURE
PROVIDED BY SECTION 552 OF TITLE 5, UNITED STATES CODE.

SEC. 624 SEIZURE AUTHORITY

SECTION 596(C) (19 U.S.C. 1595A(C)) IS AMENDED TO READ
AS FOLLOWS:

"(C) MERCHANDISE WHICH IS INTRODUCED OR ATTEMPTED TO BE
INTRODUCED INTO THE UNITED STATES CONTRARY TO LAW SHALL BE
TREATED AS FOLLOWS:

"(1) THE MERCHANDISE SHALL BE SEIZED AND FORFEITED
IF IT -

"(A) IS STOLEN, SMUGGLED, OR CLANDESTINELY
IMPORTED OR INTRODUCED,

"(B) IS A CONTROLLED SUBSTANCE, AS DEFINED IN
THE CONTROLLED SUBSTANCES ACT (21 U.S.C. 801 ET
SEQ.), AND IS NOT IMPORTED IN ACCORDANCE WITH
APPLICABLE LAW; OR

"(C) IS A CONTRABAND ARTICLE, AS DEFINED IN
SECTION 1 OF THE ACT OF AUGUST 9, 1939 (49 U.S.C.
APP. 781).

"(2) THE MERCHANDISE MAY BE SEIZED AND FORFEITED
IF -
"(A) ITS IMPORTATION OR ENTRY IS SUBJECT TO
ANY RESTRICTION OR PROHIBITION WHICH IS IMPOSED BY
LAW RELATING TO HEALTH, SAFETY, OR CONSERVATION
AND THE MERCHANDISE IS NOT IN COMPLIANCE WITH THE
APPLICABLE RULE, REGULATIONS OR STATUTE;

"(B) ITS IMPORTATION OR ENTRY REQUIRES A
LICENSE, PERMIT OR OTHER AUTHORIZATION OF AN
AGENCY OF THE UNITED STATES GOVERNMENT AND THE
MERCHANDISE IS NOT ACCOMPANIED BY SUCH LICENSE,
PERMIT, OR AUTHORIZATION;

"(C) IT IS MERCHANDISE OR PACKAGING IN WHICH
COPYRIGHT, TRADEMARK, OR TRADE NAME PROTECTION
VIOLATIONS ARE INVOLVED (INCLUDING, BUT NOT
LIMITED TO, VIOLATIONS OF SECTION 42, 43, OR 45 OF
THE ACT OF JULY 5, 1946 (15 U.S.C. 1124, 1125 AND
1127), SECTION 506 OR 509 OF TITLE 17, UNITED
STATES CODE, OR SECTION 2318 OR 2320 OF TITLE 18,
UNITED STATES CODE);

"(D) IT IS TRADE DRESS MERCHANDISE INVOLVED
IN THE VIOLATION OF A COURT ORDER CITING SECTION
43 OF SUCH ACT OF JULY 5, 1946 (15 U.S.C. 1125);

"(E) IT IS MERCHANDISE WHICH IS MARKED
INTENTIONALLY IN VIOLATION OF SECTION 304; OR

"(F) IT IS MERCHANDISE FOR WHICH THE IMPORTER
HAS RECEIVED WRITTEN NOTICES THAT PREVIOUS
IMPORTATION OF IDENTICAL MERCHANDISE FROM THE SAME
SUPPLIER WERE FOUND TO HAVE BEEN MARKED IN
VIOLATION OF SECTION 304.

"(3) IF THE IMPORTATIONS OR ENTRY OF THE
MERCHANDISE IS SUBJECT TO QUANTITIVE RESTRICTIONS
REQUIRING A VISA, PERMIT, LICENSE, OR OTHER SIMILAR
DOCUMENT, OR STAMP FROM THE UNITED STATES GOVERNMENT OR
FROM A FOREIGN GOVERNMENT OR ISSUING AUTHORITY PURSUANT
TO A BILATERAL OR MULTILATERAL AGREEMENT, THE
MERCHANDISE SHALL BE SUBJECT TO DETENTION IN ACCORDANCE
WITH SECTION 499 UNLESS THE APPROPRIATE VISA, LICENSE,
PERMIT, OR SIMILAR DOCUMENT OR STAMP IS PRESENTED TO
THE CUSTOMS SERVICE; BUT IF THE VISA, PERMIT, LICENSE,
OR SIMILAR DOCUMENT OR STAMP WHICH IS PRESENTED IN
CONNECTION WITH THE IMPORTATION OR ENTRY OF THE
MERCHANDISE IS COUNTERFEIT, THE MERCHANDISE MAY BE
SEIZED AND FORFEITED.

"(4) IF THE MERCHANDISE IS IMPORTED OR INTRODUCED
CONTRARY TO A PROVISION OF LAW WHICH GOVERNS THE
CLASSIFICATION OR VALUE OF MERCHANDISE AND THERE ARE NO
ISSUES AS THE ADMISSIBILITY OF THE MERCHANDISE INTO THE
UNITED STATES, IT SHALL NOT BE SEIZED EXCEPT IN
ACCORDANCE WITH SECTION 592.

"(5) IN ANY CASE WHERE THE SEIZURE AND FORFEITURE
OF MERCHANDISE ARE REQUIRED OR AUTHORIZED BY THIS
SECTION, THE SECRETARY MAY -

"(A) REMIT THE FORFEITURE UNDER SECTION 618,
OR

"(B) PERMIT THE EXPORTATION OF THE
MERCHANDISE, UNLESS ITS RELEASE WOULD
ADVERSELY AFFECT, HEALTH, SAFETY, OR
CONSERVATION OR BE IN CONTRAVENTION OF A
BILATERAL OR MULTILATERAL AGREEMENT OR
TREATY".

FOR FURTHER INFORMATION CONTACT STUART P. SEIDEL, DIRECTOR,
INTERNATIONAL TRADE COMPLIANCE DIVISION - (202) 482-6920.