[Code of Federal Regulations]
[Title 19, Volume 2]
[Revised as of April 1, 2002]
From the U.S. Government Printing Office via GPO Access
[CITE: 19CFR162.73a]

[Page 257-258]
 
                        TITLE 19--CUSTOMS DUTIES
 
  CHAPTER I--UNITED STATES CUSTOMS SERVICE, DEPARTMENT OF THE TREASURY
 
PART 162--INSPECTION, SEARCH, AND SEIZURE--Table of Contents
 
          Subpart G--Special Procedures for Certain Violations
 
Sec. 162.73a  Penalties under section 593A, Tariff Act of 1930, as amended.

    (a) Maximum penalty without prior disclosure for a drawback 
compliance program nonparticipant. If the person concerned has not made 
a prior disclosure as provided in Sec. 162.74 and has not been certified 
as a participant in the drawback compliance program under part 191 of 
this chapter, the monetary penalty under section 593A, Tariff Act of 
1930, as amended (19 U.S.C. 1593a), cannot exceed:
    (1) For fraudulent violations, three times the loss of revenue; and
    (2) For negligent violations,

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    (i) 20 percent of the loss of revenue for the first violation,
    (ii) 50 percent of the loss of revenue for the first repetitive 
violation, or
    (iii) One times the loss of revenue for the second and each 
subsequent repetitive violation.
    (b) Maximum penalty without prior disclosure for a drawback 
compliance program participant----(1) General. If the person concerned 
has not made a prior disclosure as provided in Sec. 162.74 and has been 
certified as a participant in, and is generally in compliance with the 
procedures and requirements of, the drawback compliance program provided 
for in part 191 of this chapter, the monetary penalty or other sanction 
under section 593A, Tariff Act of 1930, as amended (19 U.S.C. 1593a), 
cannot exceed:
    (i) For fraudulent violations, three times the loss of revenue; and
    (ii) For negligent violations,
    (A) Issuance of a written notice of a violation (warning letter) for 
the first violation and for any other violation that is not repetitive 
or that is repetitive but does not occur within three years from the 
date of the violation of which it is repetitive,
    (B) 20 percent of the loss of revenue for the first repetitive 
violation that occurs within three years from the date of the violation 
of which it is repetitive,
    (C) 50 percent of the loss of revenue for the second repetitive 
violation that occurs within three years from the date of the first of 
two violations of which it is repetitive, or
    (D) One times the loss of revenue for the third and each subsequent 
repetitive violation that occurs within three years from the date of the 
first of three or more violations of which it is repetitive.
    (2) Notice of violation and required response to notice(i) The 
notice issued by Customs under paragraph (b)(1)(ii)(A) of this section 
will:
    (A) State that the person concerned has violated section 593A;
    (B) Explain the nature of the violation; and
    (C) Warn the person concerned that future violations of section 593A 
may result in the imposition of monetary penalties. The notice will also 
warn the person concerned that repetitive violations may result in 
removal of certification under the drawback compliance program provided 
for in part 191 of this chapter until the person takes corrective action 
that is satisfactory to Customs.
    (ii) Within 30 days from the date of mailing of the notice issued 
under paragraph (b)(1)(ii)(A) of this section:
    (A) The person concerned must notify Customs in writing of the steps 
that have been taken to prevent a recurrence of the violation; or
    (B) If the person concerned believes that no violation took place, 
he may advise Customs in writing of the basis for that position. If 
Customs agrees on further review that no violation in fact took place, 
Customs will in writing advise the person concerned and rescind the 
notice of violation. If on further review Customs remains of the opinion 
that the violation took place as alleged in the notice of violation, 
Customs will issue a written affirmation of the notice of violation 
advising the person concerned that the notice requirement of paragraph 
(b)(2)(ii)(A) of this section remains applicable and must be complied 
with either within the remainder of the prescribed 30-day period or 
within 15 days after issuance of the written affirmation, whichever 
period is longer.
    (c) Maximum penalty with prior disclosure. If the person concerned 
has made a prior disclosure as provided in Sec. 162.74, whether or not 
such person has been certified as a participant in the drawback 
compliance program under part 191 of this chapter, the monetary penalty 
under section 593A, Tariff Act of 1930, as amended (19 U.S.C. 1593a), 
cannot exceed:
    (1) For fraudulent violations, one times the loss of revenue; and
    (2) For negligent violations, an amount equal to the interest 
accruing on the actual loss of revenue during the period from the date 
of overpayment of the claim to the date on which the person concerned 
tenders the amount of the overpayment based on the prevailing rate of 
interest under 26 U.S.C. 6621.

[T.D. 00-5, 65 FR 3808, Jan. 25, 2000]

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