[Federal Register: August 22, 2003 (Volume 68, Number 163)]
[Proposed Rules]
[Page 50733-50734]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr22au03-26]
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DEPARTMENT OF HOMELAND SECURITY
Bureau of Customs and Border Protection
19 CFR Part 141
RIN 1515-AC15
Anticounterfeiting Consumer Protection Act: Entry Documentation
AGENCY: Customs and Border Protection, Department of Homeland Security.
ACTION: Notice of withdrawal of proposed rulemaking.
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SUMMARY: This document informs the public that the Bureau of Customs
and Border Protection (CBP) has decided to withdraw the proposal to
require importers to provide on the invoice a listing of all trademarks
appearing on imported merchandise and its packaging. The proposal was
intended to provide a means to determine whether imported merchandise
bears an infringing trademark in violation of law. The authority for
the proposal was section 12 of the Anticounterfeiting Consumer
Protection Act. Based on the comments received in response to the
proposal and further evaluation of the proposal, CBP has determined
that the proposed rule would not be an efficient and effective way to
combat counterfeiting and is withdrawing the proposal.
DATES: As of August 22, 2003, the proposed rule published on September
13, 1999 (64 FR 49423) is withdrawn.
FOR FURTHER INFORMATION CONTACT: George F. McCray, Esq., Chief,
Intellectual Property Branch, Office of Regulations and Rulings,
Customs and Border Protection, (202) 572-8710.
SUPPLEMENTARY INFORMATION:
Background
On September 13, 1999, Customs (then exclusively under the
Department of the Treasury; as of March 1, 2003, the U.S. Customs
Service was transferred to the Department of Homeland Security, and
became redesignated as the Bureau of Customs and Border Protection
(CBP)) published a document in the Federal Register (64 FR 49423)
proposing to amend the Customs Regulations to require all importers to
provide on each invoice of imported merchandise a listing of any
trademark information appearing on the imported merchandise, including
packaging. The proposal was intended to provide a means to determine
whether imported merchandise bears an infringing trademark in violation
of law. The authority for the proposal was section 12 of the
Anticounterfeiting Consumer Protection Act of 1996 (ACPA)(19 U.S.C.
1484(d)).
Comments on the proposed amendment were solicited for 60 days.
The comment period closed November 13, 1999. Fifty-seven comments
were received. Most were against the proposal. Among the reasons cited
were that this requirement would present an overwhelming burden to
importers, trademark owners, manufacturers and suppliers, and establish
unrealistic recordkeeping requirements. Further, the requirement would
likely not be complied with by counterfeiters. Additionally, it was
stated that the proposal would not provide Customs with any new
enforcement tools to combat the importation of infringing goods into
the United States.
The following summarized comments supporting the withdrawal of the
proposal are noted.
Costs of Compliance Would Be Enormous
The administrative costs associated with complying with this
requirement would be enormous. The proposed amendment would cause
severe and unreasonable burdens to trade and provide only minimal, if
any, benefit to CBP enforcement.
The statement in the notice that the proposal would require
importers to ``identify information of a sort that is already
maintained by the importer'' is incorrect. The proposal would require
importers to expend extraordinary efforts canvassing their suppliers--
and their suppliers' third-party suppliers--in order to develop
required trademark lists. Additionally, even more effort would be
required to ensure that the lists are up to date and accurately reflect
the components contained in the merchandise covered by each specific
invoice.
Creating and maintaining this database would force importers to
create new administrative procedures devoted solely to tracking
trademarks on components contained within final products. It would also
force importers to devote resources to policing suppliers of such
components.
[[Page 50734]]
Unrealistic Recordkeeping Requirements
The proposed requirement would also place difficult recordkeeping
obligations on foreign suppliers and importers who do not have direct
knowledge of product components or parts. It would be extremely
difficult to effectively monitor invoicing practices of thousands of
different foreign vendors to ensure that trademark information is
accurately listed on invoices. Additionally, many imported products
incorporate parts and components which are themselves trademarked
merchandise. Obtaining information as to the trademark status of parts
and components would require considerable effort from both vendors and
importers, and in certain instances would be unavailable in any event.
Most businesses (particularly those in the areas of high technology
and communications) have very rapidly changing product specifications,
often changing in-box components bearing trademarks during a production
run. The logistics of managing exactly which trademarks are included in
which box on which shipment would add enormous complexity and cost to
the supply chain.
No New Enforcement Tools
Furthermore, it was stated that the proposed regulation would do
nothing to enhance Customs ability to enforce ACPA. Requiring trademark
information to be printed on each invoice would not address the
principal problem, which is mis-declaration by counterfeiters. Listing
trademarks on an invoice does not help a Customs inspector determine
whether or not the merchandise bears an infringing trademark.
Generally, the only method of determining this is through actual
inspection of the merchandise; in fact, without such inspections,
substantiating the veracity of the information contained in these
commercial invoices is extremely difficult.
Trademarked Merchandise Will Be Identified for Criminals and
Counterfeiters Who Will Not Comply With New Requirements
The fact that a shipment consists of branded apparel is not
necessarily apparent from commercial and transportation documents and
the identity of the trademarks is not always apparent from the name of
the seller or consignee. This present circumstance makes it difficult
for criminals to identify shipments of interest. The proposed entry
documentation requirements would eliminate this margin of safety and
make it easier for this class of individual to target shipments.
Increased Penalties
The proposal creates the likelihood that importers of legitimate
product could be penalized for inadvertent omissions of some protected
trademarks from the invoice. The regulatory proposal would create an
affirmative obligation on the part of exporters and importers to list
all trademarks appearing on the merchandise to be imported into the
United States, and the omission of information on any trademarked goods
would impose liability, under 19 U.S.C. 1592(a) for any ``material
omission''.
Conclusion
CBP has determined that the proposed rulemaking should be
withdrawn. After consideration of the comments and further review, CBP
agrees with the majority of commenters that the proposed approach would
not be an effective or efficient way to combat counterfeiting. Since
section 12 of the ACPA does not mandate revision of the Customs
Regulations, but rather provides authority for CBP to require such
additional information as the agency determines ``may be necessary'' to
determine whether imported merchandise bears infringing trademarks, CBP
does not believe amendment of the Customs Regulations is required;
Customs already has access to information from other sources which
effectively serves to identify imported merchandise bearing violative
trademarks. Accordingly, CBP is withdrawing the proposal published in
the Federal Register (64 FR 49423) on September 13, 1999. If, in the
future, a more effective and efficient method of data collection is
developed to aid in determining whether imported merchandise bears an
infringing trademark, CBP will consider implementation of such measures
at that time.
Robert C. Bonner,
Commissioner, Customs and Border Protection.
Approved: August 18, 2003.
Timothy E. Skud,
Deputy Assistant Secretary of the Treasury.
[FR Doc. 03-21574 Filed 8-21-03; 8:45 am]
BILLING CODE 4820-02-P