Issue 272, September 13, 2000
The Customs Service recently issued Treasury Decisions 00-57 and 00-58. The former revises the Customs Regulations (19 CFR ?? 171, 172) that deal with the filing of petitions for relief in penalty, liquidated damages, and seizure cases. The latter is a general notice to the importing community informing it that the authority to decide petitions and supplemental petitions is to be delegated to a number of different decision makers, depending on the type of matter and the amount claimed. Importers currently involved in, or those who become involved in, penalty cases, liquidated damages or seizures must be aware of the changes brought about by these Treasury Decisions and the impact of these changes upon a petition for relief. Some highlights of the T.D.s are listed below.

Fines, Penalties and Forfeitures (FP&F) officers have been delegated the authority to decide penalty cases arising out of fraud, gross negligence and negligence, including false drawback claims, where the total fine, penalty or forfeiture does not exceed $50,000, and breach of Customs bonds issues where the claim for liquidated damages does not exceed $200,000. These dollar amounts represent an increase from $25,000 and $100,000 respectively. Authority to decided most other cases will be delegated to the Chief of the Penalties Branch, Office of Regulations and Rulings, Customs Headquarters, and matters within its jurisdiction will be forwarded to it by FP&F.

Under the revised regulations, payments made in conjunction with a mitigated decision will act as an accord and satisfaction of the government?s claim. The payment will dispose of the case and the petitioner will be required to waive any right it may have had under Trayco Inc. v. United States, 994 F.2d 832 (Fed. Cir. 1993) to sue for a refund of the payment of the mitigated amount. Likewise the revised regulations clarify that a petitioner cannot protest the mitigation of a penalty or claim for liquidated damages. Such payment, however, does not prevent the petitioner from filing a supplemental petition if not previously filed.

The right to file a second supplemental petition is eliminated. Previously, if a petitioner was dissatisfied with the decision on its petition or supplemental petition, it had an additional two years to file a second supplemental petition.

Certain aspects of the petition's form have changed as well. The petition for relief must be addressed to and filed with the FP&F officer designated in the notice. In the past, the petition was addressed to the Commissioner of Customs and filed at the port where the alleged violation occurred. On the other hand, supplemental petitions are to be filed at the port where the violation occurred. If the petition seeks remission or mitigation in a seizure case, then the petitioner must allege and offer proof of its interest in the seized merchandise. These changes are scheduled to go into effect on October 5, 2000.

Our contributing writer, F.D. "Rick" Van Arnam, is a Partner at the Customs and international trade law firm of Barnes, Richardson & Colburn in New York, and can be reached at (212) 725-0200. Feel free to contact him if you would like copies of, or have questions about, the Treasury Decisions and their impact on importers.

Please note that due to the complex nature of the subject matter, Danzas AEI cannot be responsible for actions taken by the reader in reliance on the information contained herein without prior consultation with Danzas AEI.