[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: 19CFR162.74]



[Page 261-264]

 

                        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.  162.74  Prior disclosure.



    (a) In general--(1) A prior disclosure is made if the person 

concerned discloses the circumstances of a violation (as defined in 

paragraph (b) of this section) of 19 U.S.C. 1592 or 19 U.S.C. 1593a, 

either orally or in writing to a Customs officer before, or without 

knowledge of, the commencement of a formal investigation of that 

violation, and makes a tender of any actual loss of duties, taxes and 

fees or actual loss of revenue in accordance with paragraph (c) of this 

section. A Customs officer who receives such a tender in connection with 

a prior disclosure shall ensure that the tender is deposited with the 

concerned local Customs entry officer.

    (2) A person shall be accorded the full benefits of prior disclosure 

treatment if that person provides information orally or in writing to 

Customs with respect to a violation of 19 U.S.C. 1592 or 19 U.S.C. 1593a 

if the concerned Fines, Penalties, and Forfeitures Officer is satisfied 

the information was provided before, or without knowledge of, the 

commencement of a formal investigation, and the information provided 

includes substantially the information specified in paragraph (b) of 

this section. In the case of an oral disclosure, the disclosing party 

shall confirm the oral disclosure by providing a written record of the 

information conveyed to Customs in the oral disclosure to the concerned 

Fines, Penalties, and Forfeitures Officer within 10 days of the date of 

the oral disclosure. The concerned Fines, Penalties and Forfeiture 

Officer may, upon request of the disclosing party which establishes a 

showing of good cause, waive the oral disclosure written confirmation 

requirement. Failure to provide the written confirmation of the oral 

disclosure or obtain a waiver of the requirement may result in denial of 

the oral prior disclosure.

    (b) Disclosure of the circumstances of a violation. The term 

``discloses the circumstances of a violation'' means the act of 

providing to Customs a statement orally or in writing that:

    (1) Identifies the class or kind of merchandise involved in the 

violation;

    (2) Identifies the importation or drawback claim included in the 

disclosure by entry number, drawback claim number, or by indicating each 

concerned Customs port of entry and the approximate dates of entry or 

dates of drawback claims;

    (3) Specifies the material false statements, omissions or acts 

including an explanation as to how and when they occurred; and

    (4) Sets forth, to the best of the disclosing party's knowledge, the 

true and accurate information or data that should have been provided in 

the entry or drawback claim documents, and states that the disclosing 

party will provide any information or data unknown at the time of 

disclosure within 30 days of the initial disclosure date. Extensions of 

the 30-day period may be requested by the disclosing party from the 

concerned Fines, Penalties, and



[[Page 262]]



Forfeitures Officer to enable the party to obtain the information or 

data.

    (c) Tender of actual loss of duties, taxes and fees or actual loss 

of revenue. A person who discloses the circumstances of the violation 

shall tender any actual loss of duties, taxes and fees or actual loss of 

revenue. The disclosing party may choose to make the tender either at 

the time of the claimed prior disclosure, or within 30 days after 

Customs notifies the person in writing of Customs calculation of the 

actual loss of duties, taxes and fees or actual loss of revenue. The 

Fines, Penalties, and Forfeitures Officer may extend the 30-day period 

if there is good cause to do so. The disclosing party may request that 

the basis for determining Customs asserted actual loss of duties, taxes 

or fees be reviewed by Headquarters, provided that the actual loss of 

duties, taxes or fees determined by Customs exceeds $100,000 and is 

deposited with Customs, more than 1 year remains under the statute of 

limitations involving the shipments covered by the claimed disclosure, 

and the disclosing party has complied with all other prior disclosure 

regulatory provisions. A grant of review is within the discretion of 

Customs Headquarters in consultation with the appropriate field office, 

and such Headquarters review shall be limited to determining issues of 

correct tariff classification, correct rate of duty, elements of 

dutiable value, and correct application of any special rules (GSP, CBI, 

HTS 9802, etc.). The concerned Fines, Penalties, and Forfeitures Officer 

shall forward appropriate review requests to the Chief, Penalties 

Branch, Customs Headquarters, Office of Regulations and Rulings. After 

Headquarters renders its decision, the concerned Fines, Penalties, and 

Forfeitures Officer will be notified and the concerned Customs port will 

recalculate the loss, if necessary, and notify the disclosing party of 

any actual loss of duties, taxes or fees increases. Any increases must 

be deposited within 30 days, unless the local Customs office authorizes 

a longer period. Any reductions of the Customs calculated actual loss of 

duties, or and fees shall be refunded to the disclosing party. Such 

Headquarters review decisions are final and not subject to appeal. 

Further, disclosing parties requesting and obtaining such a review waive 

their right to contest either administratively or judicially the actual 

loss of duties, taxes and fees or actual loss of revenue finally 

calculated by Customs under this procedure. Failure to tender the actual 

loss of duties, taxes and fees or actual loss of revenue finally 

calculated by Customs shall result in denial of the prior disclosure.

    (d) Effective time and date of prior disclosure--(1) If the 

documents that provide the disclosing information are sent by registered 

or certified mail, return-receipt requested, and are received by 

Customs, the disclosure shall be deemed to have been made at the time of 

mailing.

    (2) If the documents are sent by other methods, including in-person 

delivery, the disclosure shall be deemed to have been made at the time 

of receipt by Customs. If the documents are delivered in person, the 

person delivering the documents will, upon request, be furnished a 

receipt from Customs stating the time and date of receipt.

    (3) The provision of information that is not in writing but that 

qualifies for prior disclosure treatment pursuant to paragraph (a)(2) of 

this section shall be deemed to have occurred at the time that Customs 

was provided with information that substantially complies with the 

requirements set forth in paragraph (b) of this section.

    (e) Addressing and filing prior disclosure--(1) A written prior 

disclosure should be addressed to the Commissioner of Customs, have 

conspicuously printed on the face of the envelope the words ``prior 

disclosure,'' and be presented to a Customs officer at the Customs port 

of entry of the disclosed violation.

    (2) In the case of a prior disclosure involving violations at 

multiple ports of entry, the disclosing party may orally disclose or 

provide copies of the disclosure to all concerned Fines, Penalties, and 

Forfeitures Officers. In accordance with internal Customs procedures, 

the officers will then seek consolidation of the disposition and 

handling of the disclosure. In the event that the claimed ``multi-port'' 

disclosure is made to a Customs officer other than the concerned Fines, 

Penalties,



[[Page 263]]



and Forfeitures Officer, the disclosing party must identify all ports 

involved to enable the concerned Customs officer to refer the disclosure 

to the concerned Fines, Penalties, and Forfeitures Officer for 

consolidation of the proceedings.

    (f) Verification of disclosure. Upon receipt of a prior disclosure, 

the Customs officer shall notify Customs Office of Investigations of the 

disclosure. In the event the claimed prior disclosure is made to a 

Customs officer other than the concerned Fines, Penalties, and 

Forfeitures Officer, it is incumbent upon the Customs officer to provide 

a copy of the disclosure to the concerned Fines, Penalties, and 

Forfeitures Officer. The disclosing party may request, in the oral or 

written prior disclosure, that the concerned Fines, Penalties, and 

Forfeitures Officer request that the Office of Investigations withhold 

the initiation of disclosure verification proceedings until after the 

party has provided the information or data within the time limits 

specified in paragraph (b)(4) of this section. It is within the 

discretion of the concerned Fines, Penalties and Forfeitures Officer to 

grant or deny such requests.

    (g) Commencement of a formal investigation. A formal investigation 

of a violation is considered to be commenced with regard to the 

disclosing party on the date recorded in writing by the Customs Service 

as the date on which facts and circumstances were discovered or 

information was received that caused the Customs Service to believe that 

a possibility of a violation existed. In the event that a party 

affirmatively asserts a prior disclosure (i.e., identified or labeled as 

a prior disclosure) and is denied prior disclosure treatment on the 

basis that Customs had commenced a formal investigation of the disclosed 

violation, and Customs initiates a penalty action against the disclosing 

party involving the disclosed violation, a copy of a ``writing'' 

evidencing the commencement of a formal investigation of the disclosed 

violation shall be attached to any required prepenalty notice issued to 

the disclosing party pursuant to 19 U.S.C. 1592 or 19 U.S.C. 1593a.

    (h) Scope of the disclosure and expansion of a formal investigation. 

A formal investigation is deemed to have commenced as to additional 

violations not included or specified by the disclosing party in the 

party's original prior disclosure on the date recorded in writing by the 

Customs Service as the date on which facts and circumstances were 

discovered or information was received that caused the Customs Service 

to believe that a possibility of such additional violations existed. 

Additional violations not disclosed or covered within the scope of the 

party's prior disclosure that are discovered by Customs as a result of 

an investigation and/or verification of the prior disclosure shall not 

be entitled to treatment under the prior disclosure provisions.

    (i) Knowledge of the commencement of a formal investigation--(1) A 

disclosing party who claims lack of knowledge of the commencement of a 

formal investigation has the burden to prove that lack of knowledge. A 

person shall be presumed to have had knowledge of the commencement of a 

formal investigation of a violation if before the claimed prior 

disclosure of the violation a formal investigation has been commenced 

and:

    (i) Customs, having reasonable cause to believe that there has been 

a violation of 19 U.S.C. 1592 or 19 U.S.C. 1593a, so informed the person 

of the type of or circumstances of the disclosed violation; or

    (ii) A Customs Special Agent, having properly identified himself or 

herself and the nature of his or her inquiry, had, either orally or in 

writing, made an inquiry of the person concerning the type of or 

circumstances of the disclosed violation; or

    (iii) A Customs Special Agent, having properly identified himself or 

herself and the nature of his or her inquiry, requested specific books 

and/or records of the person relating to the disclosed violation; or

    (iv) Customs issues a prepenalty or penalty notice to the disclosing 

party pursuant to 19 U.S.C. 1592 or 19 U.S.C. 1593a relating to the type 

of or circumstances of the disclosed violation; or

    (v) The merchandise that is the subject of the disclosure was 

seized; or

    (vi) In the case of violations involving merchandise accompanying 

persons



[[Page 264]]



entering the United States or commercial merchandise inspected in 

connection with entry, the person has received oral or written 

notification of Customs finding of a violation.

    (2) The presumption of knowledge may be rebutted by evidence that, 

notwithstanding the foregoing notice, inquiry or request, the person did 

not have knowledge that an investigation had commenced with respect to 

the disclosed information.



[T.D. 98-49, 63 FR 29131, May 28, 1998; 63 FR 35798, July 1, 1998; T.D. 

99-27, 64 FR 13676, Mar. 22, 1999; T.D. 99-64, 64 FR 43267, Aug. 10, 

1999; T.D. 00-5, 65 FR 3809, Jan. 25, 2000; T.D. 00-57, 65 FR 53575, 

Sept. 5, 2000]