[Code of Federal Regulations]
[Title 19, Volume 2]
[Revised as of April 1, 2003]
From the U.S. Government Printing Office via GPO Access
[CITE: 19CFR163.6]

[Page 274-276]
 
                        TITLE 19--CUSTOMS DUTIES
 
  CHAPTER I--UNITED STATES CUSTOMS SERVICE, DEPARTMENT OF THE TREASURY
 
PART 163--RECORDKEEPING--Table of Contents
 
Sec. 163.6  Production and examination of entry and other records and witnesses; penalties.

    (a) Production of entry records. Pursuant to written, oral, or 
electronic notice, any Customs officer may require the production of 
entry records by any person listed in Sec. 163.2(a) who is required 
under this part to maintain such records, even if the entry records were 
required at the time of entry. Any oral demand for entry records shall 
be followed by a written or electronic demand. The entry records shall 
be produced within 30 calendar days of receipt of the demand or within 
any shorter period as Customs may prescribe when the entry records are 
required in connection with a determination regarding the admissibility 
or release of merchandise. Should any person from whom Customs has 
demanded entry records encounter a problem in timely complying with the 
demand, such person may submit a written or electronic request to 
Customs for approval of a specific additional period of time in which to 
produce the records; the request must be received by Customs before the 
applicable due date for production of the records and must include an 
explanation of the circumstances giving rise to the request. Customs 
will promptly advise the requesting person electronically or in writing 
either that the request is denied or that the requested additional time 
period, or such shorter period as Customs may deem appropriate, is 
approved. The mere fact that a request for additional time to produce 
demanded entry records was submitted under this section shall not by 
itself preclude the imposition of a monetary penalty or other sanction 
under this part for failure to timely produce the records, but no such 
penalty or other sanction will be imposed if the request is approved and 
the records are produced before expiration of that additional period of 
time.
    (b) Failure to produce entry records--(1) Monetary penalties 
applicable. The following penalties may be imposed if a person fails to 
comply with a lawful demand for the production of an entry record and is 
not excused from a penalty pursuant to paragraph (b)(3) of this section:
    (i) If the failure to comply is a result of the willful failure of 
the person to maintain, store, or retrieve the demanded record, such 
person shall be subject to a penalty, for each release of merchandise, 
not to exceed $100,000, or an amount equal to 75 percent of the

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appraised value of the merchandise, whichever amount is less; or
    (ii) If the failure to comply is a result of negligence of the 
person in maintaining, storing, or retrieving the demanded record, such 
person shall be subject to a penalty, for each release of merchandise, 
not to exceed $10,000, or an amount equal to 40 percent of the appraised 
value of the merchandise, whichever amount is less.
    (2) Additional actions--(i) General. In addition to any penalty 
imposed under paragraph (b)(1) of this section, and except as otherwise 
provided in paragraph (b)(2)(ii) of this section, if the demanded entry 
record relates to the eligibility of merchandise for a column 1 special 
rate of duty in the Harmonized Tariff Schedule of the United States 
(HTSUS), the entry of such merchandise:
    (A) If unliquidated, shall be liquidated at the applicable HTSUS 
column 1 general rate of duty; or
    (B) If liquidated within the 2-year period preceding the date of the 
demand, shall be reliquidated, notwithstanding the time limitation in 19 
U.S.C. 1514 or 1520, at the applicable HTSUS column 1 general rate of 
duty.
    (ii) Exception. Any liquidation or reliquidation under paragraph 
(b)(2)(i)(A) or (b)(2)(i)(B) of this section shall be at the applicable 
HTSUS column 2 rate of duty if Customs demonstrates that the merchandise 
should be dutiable at such rate.
    (3) Avoidance of penalties. No penalty may be assessed under 
paragraph (b)(1) of this section if the person who fails to comply with 
a lawful demand for entry records can show:
    (i) That the loss of the demanded record was the result of an act of 
God or other natural casualty or disaster beyond the fault of such 
person or an agent of the person;
    (ii) On the basis of other evidence satisfactory to Customs, that 
the demand was substantially complied with;
    (iii) That the record demanded was presented to and retained by 
Customs at the time of entry or submitted in response to an earlier 
demand; or
    (iv) That he has been certified as a participant in the 
Recordkeeping Compliance Program (see Sec. 163.12), that he is generally 
in compliance with the appropriate procedures and requirements of that 
program, and that the violation in question is his first violation and 
was a non-willful violation.
    (4) Penalties not exclusive. Any penalty imposed under paragraph 
(b)(1) of this section shall be in addition to any other penalty 
provided by law except for:
    (i) A penalty imposed under 19 U.S.C. 1592 for a material omission 
of any information contained in the demanded record; or
    (ii) Disciplinary action taken under 19 U.S.C. 1641.
    (5) Remission or mitigation of penalties. A penalty imposed under 
this section may be remitted or mitigated under 19 U.S.C. 1618.
    (6) Customs summons. The assessment of a penalty under this section 
shall not limit or preclude the issuance or enforcement of a summons 
under this part.
    (c) Examination of entry and other records--(1) Reasons for 
examination. Customs may initiate an investigation or compliance 
assessment, audit or other inquiry for the purpose of:
    (i) Ascertaining the correctness of any entry, determining the 
liability of any person for duties, taxes and fees due or duties, taxes 
and fees which may be due, or determining the liability of any person 
for fines, penalties and forfeitures; or
    (ii) Ensuring compliance with the laws and regulations administered 
or enforced by Customs.
    (2) Availability of records. During the course of any investigation 
or compliance assessment, audit or other inquiry, any Customs officer, 
during normal business hours, and to the extent possible at a time 
mutually convenient to the parties, may examine, or cause to be 
examined, any relevant entry or other records by providing the person 
responsible for such records with reasonable written, oral or electronic 
notice that describes the records with reasonable specificity. The 
examination of entry records shall be subject to the notice and 
production procedures set forth in paragraph (a) of this section, and a 
failure to produce entry records may result in the imposition of 
penalties or the taking of other action

[[Page 276]]

as provided in paragraph (b) of this section.
    (3) Examination notice not exclusive. In addition to, or in lieu of, 
issuance of an examination notice under paragraph (c)(2) of this 
section, Customs may issue a summons pursuant to Sec. 163.7, and seek 
its enforcement pursuant to Secs. 163.9 and 163.10, to compel the 
production of any records required to be maintained and produced under 
this chapter.

[T.D. 98-56, 63 FR 32946, June 16, 1998; 63 FR 34808, June 26, 1998]