[Code of Federal Regulations]

[Title 19, Volume 2]

[Revised as of April 1, 2006]

From the U.S. Government Printing Office via GPO Access

[CITE: 19CFR162.73a]



[Page 260-261]

 

                        TITLE 19--CUSTOMS DUTIES

 

   CHAPTER I--BUREAU OF CUSTOMS AND BORDER PROTECTION, DEPARTMENT OF 

        HOMELAND SECURITY; DEPARTMENT OF THE TREASURY (CONTINUED)

 

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,

    (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



[[Page 261]]



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]