Federal Register, Volume 78 Issue 19 (Tuesday, January 29, 2013)

[Federal Register Volume 78, Number 19 (Tuesday, January 29, 2013)]
[Rules and Regulations]
[Pages 6027-6033]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2013-01757]

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DEPARTMENT OF HOMELAND SECURITY

U.S. Customs and Border Protection

19 CFR Part 162

[Docket No. USCBP-2011-0022; CBP Dec. 13-04]
RIN 1651-AA94

Internet Publication of Administrative Seizure and Forfeiture
Notices

AGENCIES: U.S. Customs and Border Protection, Department of Homeland
Security.

ACTION: Final rule.

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SUMMARY: This final rule adopts, with one change, a notice of proposed
rulemaking (NPRM) published in the Federal Register on February 8,
2012, that proposed to allow for publication of notices of seizure and
intent to forfeit on an official U.S. Government forfeiture Web site.
CBP anticipates that this rule's amendments will reduce administrative
costs and improve the effectiveness of CBP's notice procedures as
Internet publication will reach a broader range of the public and
provide access to more parties who may have an interest in the seized
property.

DATES: Final Rule effective February 28, 2013.

FOR FURTHER INFORMATION CONTACT: Dennis McKenzie, Director, Fines,
Penalties and Forfeitures Division, Office of Field Operations, U.S.
Customs and Border Protection, (202) 344-1808.

SUPPLEMENTARY INFORMATION:

Background

On February 8, 2012, CBP published in the Federal Register (77 FR
6527) a proposed rule to amend title 19 of the Code of Federal
Regulations (19 CFR) regarding the manner by which CBP provides notice
of intent to forfeit seized property appraised at more than $5,000 and
seized property appraised at $5,000 or less. CBP proposed to utilize
the Department of Justice (DOJ) forfeiture Web site, located at
www.forfeiture.gov, to post seizure and forfeiture notices for property
appraised in excess of $5,000 in value for 30 consecutive days,
including seizures by the U.S. Border Patrol,\1\ where appropriate. The
DOJ forfeiture Web site currently contains a list of pending notices of
civil and criminal forfeiture actions in various district courts and
Federal Government agencies. Under the proposed regulation, CBP would
no longer be required to publish administrative seizure and forfeiture
notices for three successive weeks in a newspaper circulated at the CBP
port and in the judicial district where CBP seized the property. CBP
would continue to provide direct written notice to all known parties-
in-interest of the seizure/forfeiture action and include the Web site
posting address and the expected dates of publication in that notice.
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\1\ Please note that the agency's formal designation is the U.S.
Border Patrol (or USBP), while the CBP Headquarters element of the
Border Patrol is known as the Office of Border Patrol (OBP).
Officers of the USBP are commonly referred to as either Border
Patrol agents or Border Patrol officers.
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To retain flexibility in the process pertaining to the higher-
valued merchandise (appraised at more than $5,000), CBP proposed to
retain the discretion, as circumstances warrant, to publish additional
notice in a print medium for at least three successive weeks. For
example, CBP would have the discretion to publish a notice of seizure
and forfeiture in a newspaper in general circulation at the port and
the judicial district nearest the seizure, or with wider or national
circulation, when recommended by the pertinent U.S. Attorney's office
or court of jurisdiction. Also, CBP would have the discretion to
publish notice of seizure and forfeiture in a non-English language or
other community newspaper to ensure reaching a particular community
that may have a particular interest in or connection to the seizure.
Similarly, CBP would have the discretion to publish notice of seizure
and forfeiture in a trade or industry publication that serves a
particular commercial community to ensure reaching a party when it is
difficult to identify a vessel or other conveyance owner.
Under the proposed rule, CBP also would publish seizure and
forfeiture notices on the DOJ forfeiture Web site for 30 consecutive
days for seized property appraised at $5,000 or less. This additional
notice would not replace the current procedure of CBP posting notice at
the customhouse nearest the place of seizure. However, the proposed
amendment would specify that in situations where Border Patrol agents
make the seizure, the posting would be at the appropriate Border Patrol
sector office.

Benefits of Internet Posting

As explained in the NPRM, CBP believes that using the Internet to
publish CBP seizure and forfeiture notices will provide notice to a
broader range of the public without the geographical limitations that
exist under the current procedure's reliance solely on local print
publications or customhouse postings. Under this final rule, Internet
posting will be available

[[Page 6028]]

for a longer period of time (30 days) compared to the minimum statutory
requirement of three weeks (21 days). This final rule provides CBP the
discretion to publish notice in a print medium when CBP determines that
additional outreach would be appropriate. In addition to these
advantages, CBP expects that Internet publishing will provide savings
to the Government.

Discussion of Comments

CBP solicited public comments on the proposed rulemaking and ten
commenters responded. The comments are set forth and discussed in this
section.
CBP notes that, at the request of representatives from the
newspaper industry, DHS held a listening session on April 12, 2012.
Newspaper industry representatives orally presented the substance of
two written documents which are available in the docket for this rule
under ``Supporting and Related Materials.'' One of the documents is a
copy of a previously submitted comment (see Docket USCBP-2011-0022-
0012, dated April 9, 2012, which is discussed below).

Favorable Comments

Most of the comments were supportive of the proposed amendments,
citing several of the reasons that CBP set forth as the basis for the
proposal: reduced cost to the government and the ability to reach more
potentially interested persons. Also, these commenters identified, as
advantages of the proposal, the following factors: the increased
efficiency and wide availability of the Internet, enhanced government
transparency, the shrinking newspaper market (fewer newspapers and
newspaper consumers), the increasing costs associated with newspaper
advertising, and CBP's flexibility to use newspaper advertising in
appropriate circumstances. Two commenters pointed out how the proposed
amendment serves the purposes of Executive Order (E.O.) 13576, entitled
Delivering an Efficient, Effective, and Accountable Government, wherein
the President encourages Federal Government agencies to cut waste,
streamline structure and operations, and reinforce performance and
management reform. These commenters suggested that the switch to
Internet publishing would enhance government efficiency through use of
technology and thereby improve customer service.

Unfavorable Comments or Recommendations To Improve the Regulation

The following comments expressed objections to the proposed rule or
made recommendations to improve the effectiveness of the proposed rule.
A description of these comments, together with CBP's analyses, is set
forth below.
Comment: One commenter, agreeing that Internet posting is an
effective replacement for newspaper advertising of seizure and
forfeiture notices, recommended reducing the time period for posting
notice to less than 30 days. Another commenter recommended increasing
the posting time period to more than 30 days. The former commenter
identified speeding up the process as a worthy goal, and the latter
commenter favored providing more time so that unknown interested
parties could learn of the seizure and act on the posted information.
CBP Response: CBP believes that the proposed 30-day Internet post
time strikes the right balance, as it provides adequate notice to the
public and a reasonable time frame for responsibly resolving seizures
and forfeitures with appropriate dispatch. Both are important concerns
for CBP, interested parties, and the public. CBP notes that the 30-day
posting time period is more than a week longer than the previous
regulatory posting of three weeks for newspaper publication.
Comment: One commenter, agreeing with the proposal's provision to
allow CBP discretion to publish notice in a foreign language newspaper
when appropriate in the circumstances, recommended that this
publication option be included explicitly in the regulatory text.
CBP Response: CBP believes that it is not necessary to include in
the regulatory text the foreign language newspaper option or any of the
alternative print publication options discussed in the preamble of the
NPRM. CBP set forth these options as non-exclusive examples of
circumstances that might warrant, at CBP's discretion, additional
publication. As there may be other circumstances that recommend, on a
case-by-case basis, other print publication options, CBP believes that
the regulation need not be explicit in this respect.
Comment: One commenter recommended that known parties-in-interest
be notified prior to the 30-day Internet notice period so that they
will have adequate time to consult the DOJ forfeiture Web site for
information.
CBP Response: Under the current regulation and practice, CBP sends
a written seizure and forfeiture notice to known parties-in-interest in
advance of the notice's publication in a newspaper. Under the amended
regulation, CBP will continue to inform known parties-in-interest prior
to a notice's publication on the Internet. The direct written notice to
all known parties-in-interest provides these parties with the
information they need to respond, including information about the
seized merchandise and the place of seizure, alternative courses of
action from which to choose, relevant information with which to make an
informed decision, direction to the DOJ forfeiture Web site and the
dates of publication of the notice on the Web site and, if print
publication is appropriate, the name of the publication that will
publish the notice and the dates of the print publication.
Comment: Three commenters, including newspaper industry
representatives, expressed concern that the absence of notice in a
local newspaper would disadvantage people who would not know to consult
a Federal Government Web site. (Other comments by the newspaper
industry are discussed in more detail further below.) One of these
commenters recommended, in regard to seizures of higher-valued
merchandise, that CBP post the notice at the customhouse or the U.S.
Border Patrol sector office as a measure to alleviate the absence of
local newspaper notice.
CBP Response: CBP does not believe that the change to Internet
publishing will significantly disadvantage people living in the
locality of the seizure (the port district and court jurisdiction
nearest the place of seizure). In recent decades, the circulation of
printed newspapers has continued to decline. Research by The Pew
Research Center estimates that daily circulation of printed newspapers
has declined 30%, from 62.3 million in 1990 to 43.4 million in 2010.\2\
Additionally, a significant rise in Internet usage has coincided with
the decline in newspaper circulation. Since 2003, these trends have
accelerated. Statistics from a Department of Commerce report on the
subject show that ``an estimated 209 million Americans--about 72% of
all adults and children aged three years and older--use the Internet
somewhere, whether at home, the workplace, schools, libraries, or a
neighbor's house.'' \3\ Internet use through libraries

[[Page 6029]]

provides the most widespread availability of free regular Internet
access to the general public. The American Library Association's Public
Library Funds & Technology Access Study (2010-2011) reports that 99.3%
of public libraries offer public access to computers and the
Internet.\4\ According to a study by the University of Washington, a
third of Americans 14 years old and older, or about 77 million people,
use public library computers.\5\
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\2\ Pew Research Center, The State of the News Media 2011, at 8,
available at http://www.stateofthe media.org/2011/newspapers-essay/data-page-6.
\3\ U.S. Department of Commerce, National Telecommunications and
Information Administration, Digital Nation--Expanding Internet Usage
(Digital Nation), available at http://www.ntia.doc.gov/files/ntia/publications/ntia_internet_use_report_february_2011.pdf.
\4\ John Carlo Bertot, et al., Libraries Connect Communities:
Public Library Funding & Technology Access Study 2010-2011
(Libraries Connect Communities), at 3, available at http://viewer.zmags.com/publication/857ea9fd.
\5\ Samantha Becker, et al., Opportunity for All: How the
American Public Benefits From Internet Access at U.S. Libraries
(Opportunity for All), at 32, available at http://impact.ischool.washington.edu/documents/OPP4ALL_FinalReport.pdf.
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Thus, CBP believes that in those instances when Internet posting is
the sole notice provided, it will be fully adequate to meet
substantially the purpose for which administrative seizure and
forfeiture notice is intended--to provide, to as many of the public at
large as can reasonably be expected to be interested, access to
important information regarding seizures and forfeitures of imported
merchandise. In addition, Internet publishing provides the potential to
reach unknown interested parties outside the local jurisdiction. Given
the widespread use of the Internet in our mobile society, CBP believes
that this expansion of the seizure and forfeiture notice's reach will
enhance the process and yield positive results.
Also, CBP retains the discretion to publish additional notice in
print media, including local newspapers, in appropriate circumstances.
Non-exclusive examples include when the U.S. Attorney's Office or the
local court of jurisdiction recommends such publication or when
publication in a foreign language paper or a trade or industry
publication is deemed appropriate in a given situation. CBP is not
precluded from using print media in other circumstances it deems
appropriate to meet a legitimate public outreach purpose that justifies
the expense. Further, the bulk of the cost attributable to additional
print publication will derive from the highest profile cases (see
``Economic Analysis'' section). This means that notice in most higher-
interest seizure/forfeiture cases will likely be published in both
Internet and newspaper formats. Thus, collectively, these instances of
additional print/newspaper publication in the exercise of CBP
discretion will generally reduce the local impact, should there be any,
of moving away from routine newspaper publication to routine Internet
publication.
In addition, the CBP Web site, which provides general information
on seizures and forfeitures, among other things, will provide advance
notice of the change to Internet publishing of seizure and forfeiture
notices and include a link to the DOJ forfeiture Web site. A person who
may not be aware of a government Web site specifically devoted to
seizures and forfeitures may think of consulting the CBP Web site for
information on this subject, as CBP is widely known as the government
agency that administers and enforces laws pertaining to imported
merchandise. CBP believes that much of the audience that has for many
years consulted the legal notice section of local newspapers to view
information on seizures and forfeitures is almost certainly aware of
the CBP Web site.
Also, while CBP is not adopting in this final rule the commenter's
suggestion to post notice of specific higher-valued seizure/forfeiture
cases at the appropriate customhouse or U.S. Border Patrol sector
office, CBP will post information at these places, in a conspicuous
place accessible to the public, to inform the local public of the DOJ
forfeiture Web site and its listing of specific CBP seizure/forfeiture
actions, regardless of the value of the seized merchandise. This will
provide, in all CBP ports and U.S. Border Patrol sectors, a locally
posted source of information relative to the higher-valued seizures,
albeit without information specific to individual cases. This posting
may additionally reduce the impact of reduced local newspaper
publication of seizure and forfeiture notices. Language regarding the
placement of this general notice at the customhouses and sector offices
has been added to the regulatory text in this final rule.
Further, after publication of this final rule, CBP intends to
publish notice for five successive weeks in all newspapers it currently
uses for publishing seizure and forfeiture notices in 42 CBP ports, and
in newspapers local to 20 U.S. Border Patrol sector offices, to inform
the readership of those newspapers that information regarding CBP
seizures and forfeitures may be obtained through the DOJ forfeiture Web
site on and after January 2, 2013.
Finally, CBP expects that, on the whole, the amended regulation's
``Internet plus'' procedure, as explained above, will be more efficient
and productive than the print media-only procedure.

Comments by Newspaper Industry Representatives

The most extensive comments expressing opposition to the proposed
rule were submitted collectively by representatives of the newspaper
industry.
Initially, it is noted that, in their collective comments, the
newspaper industry representatives (hereinafter referred to as the
``newspaper industry'') acknowledged that publishing seizure and
forfeiture notices through the Internet would be a positive development
that would expand access to more people. The thrust of the newspaper
industry's arguments is that Internet publication by itself does not
provide adequate notice and should be employed only to supplement
newspaper publication for maximum outreach, just as many newspapers
have supplemented their print coverage with Internet publication. The
specific newspaper industry comments are set forth and responded to in
this subsection.
Comment: The representatives of the newspaper industry stated that
Internet notice is an inadequate substitute for a printed, fixed
newspaper notice. They contended that government Internet Web sites do
not have a strong readership and that notice published in a newspaper
is more likely to be read than notice published on the DOJ forfeiture
Web site. They argued that access to the Internet remains limited, with
minority, poor, and senior communities particularly underrepresented as
Internet users and the sick, infirm, and residents of rural areas also
facing limited access. They contended that Internet publication
presents due process concerns for courts, historians, researchers, and
archivists, and that, unlike newspapers, Internet publications are
difficult to preserve and maintain in updated fashion without
sufficient continuous funding. They questioned the ability of DHS to
ensure that CBP will be appropriated adequate resources to both
maintain use of the DOJ forfeiture Web site and publish notices in a
print medium in special circumstances. They pointed to a government-
wide initiative to eliminate agency Web sites for budget reasons. They
also questioned the proposed rule's conclusion that use of the DOJ
forfeiture Web site will be ``virtually cost-free'' and faulted the
proposal's failure to consider the cost and resources CBP will need to
update, verify, manage, and secure notice information on the DOJ
forfeiture Web

[[Page 6030]]

site. They pointed out that government Web sites have been attacked and
temporarily removed, presenting security and accessibility issues. The
newspaper industry concluded by asserting that the proposed regulation
leaves substantial doubt about the manner and method of providing
notice and creates potential gaps in information that should be
available to the public.
CBP Response: Initially, CBP notes that any discussion regarding
the effectiveness or reach of CBP's Internet forfeiture notice
procedure must be informed by the fact that all known parties with an
interest in the seized property will be notified directly in writing,
with details of the seizure and forfeiture proceeding clearly
explained. This notice will cover most of those, and most often all of
those, who will or may be affected by the forfeiture action. Remaining
persons the procedure targets for notice are those not known to have an
interest or those so known but unable to be located. With CBP's access
to import information, and the cooperation of known interested parties,
instances when there will be unknown interested parties, or such
parties who cannot be located, will be few.
Regarding the newspaper industry's broad claim that Internet
publication of forfeiture notices is inadequate, CBP disagrees. During
the last decade, the Federal Government and many State governments have
been continually gravitating toward more and more Internet publishing
of important notices, announcements, and other information. In the
Federal sphere, this trend is exemplified by the E-Government Act of
2002 \6\ which generally requires and encourages Federal Government
agencies to better manage and promote Internet and information
technology use to bring about improvements in government operations and
customer service. With this and other laws, Congress has demonstrated
its interest in making government more efficient and effective through
information technology. As discussed above, the growing trend in public
sector Internet use was preceded by an explosion of Internet usage by
private sector and other non-government entities over the last two
decades. Thus, this expanding movement to Internet usage, inside and
outside government, underscores the impressive success of the Internet
as a medium that serves well the interests and purposes of its users.
Contrary to the newspaper industry's expression of ``substantial
doubt'' concerning Internet publication of notices, this expanding use
of Internet publishing indicates widespread acceptance of the medium,
including acceptance by Congress, as an effective communications tool
for both public and private purposes.
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\6\ Public Law 107-347, 116 Stat. 2899. The E-Government Act of
2002 establishes in the Office of Management and Budget an Office of
Electronic Government and imposes responsibilities on various high-
level government officials including heads of Federal Government
agencies. The Act defines ``electronic Government'' as ``the use by
the Government of web-based Internet applications and other
information technologies, combined with processes that implement
these technologies, to: (A) Enhance the access to and delivery of
Government information and services to the public, other agencies,
and other Government entities; or (B) bring about improvements in
Government operations that may include effectiveness, efficiency,
service quality, or transformation.'' 44 U.S.C. 3601(3). While the
Act does not mandate Internet publication of CBP's or other
agencies' seizure and forfeiture notices, it evidences the
inexorable movement to broader Internet use by the Federal
Government under Congressional direction.
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More specifically, regarding increasing Internet use by Federal
Government agencies and, particularly, Internet use in forfeiture
actions taken under Federal law, CBP notes Rule G of the Supplemental
Rules for Admiralty or Maritime Claims and Asset Forfeiture Actions
(the Supplemental Rules), a part of the Federal Rules of Civil
Procedure, which became effective on December 1, 2006. The rule governs
civil asset forfeiture actions in the Federal courts. Under Rule
G(4)(a)(iv)(C) of the Supplemental Rules, the Federal Government may
employ the option of providing public notice through the Internet
rather than in a newspaper. This rule was adopted for criminal
forfeiture cases as well.\7\ Thus, the use of Internet publishing for
seizure and forfeiture notices has been adopted by the Federal courts.
Significantly, the Advisory Committee on Civil Rules that drafted Rule
G(4)(a)(iv)(C) acknowledged that the Internet, by its nature, provides
far greater access to forfeiture notices than newspapers.\8\ In the
Advisory Committee Note to Rule G, the Committee stated the following:
\9\
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\7\ According to the DOJ Web site, Rule 32.2(b)(6) of the
Federal Rules of Criminal Procedure, which became effective on
December 1, 2009, incorporated the forfeiture notice procedures of
Rule G, including Internet publishing, for criminal judicial
forfeitures.
\8\ Under the Rules Enabling Act, 28 U.S.C. 2071-2077, the
Supreme Court prescribes general rules of practice and procedure for
the Federal Courts, and, pursuant to the Act's procedures, advisory
committees may be appointed to recommend new and amended procedural
rules.
\9\ Report of Civil Rules Advisory Committee, 92 (May 17, 2004),
available at http://www.uscourts.gov/uscourts/RulesAndPolicies/rules/reports/CV5-2004.pdf; see also Fed. R. Civ. P. Supp. R. G
Advisory Committee's Note.

Newspaper publication is not a particularly effective means of
notice for most potential claimants. Its traditional use is best
defended by want of affordable alternatives. Paragraph
[(4)(a)(iv)(C)] of Supplemental Rule G contemplates a government-
created internet forfeiture site that would provide a single easily
identified means of notice. Such a site would allow much more direct
access to notice as to any specific property than [newspaper]
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publication provides.

With use of the Internet for publication of forfeiture notices
firmly established by the Federal courts, DOJ amended its seizure and
forfeiture regulations to, among other things, allow Internet
publishing of forfeiture notices. The DOJ final rule (77 FR 56093;
September 12, 2012), cited the Supplemental Rules' Internet publishing
provision as a parallel to its amendment and submitted that publication
of seizure and forfeiture notices through the DOJ forfeiture Web site
provides the Bureau of Alcohol, Tobacco, Firearms, and Explosives, the
Drug Enforcement Administration, and the Federal Bureau of
Investigation with an ``effective and cost-efficient means of providing
public notice of thousands of federal civil and criminal judicial
forfeiture proceedings'' (Id. at 56097). The DOJ reported impressive
levels of usage by the public of the DOJ forfeiture Web site for the
period the Web site has been publishing these notices (Id.). Also, the
Centers for Medicare & Medicaid Services (CMS) within the Department of
Health and Human Services (HHS) published a rule (76 FR 26342; May 6,
2011) proposing to allow for Internet publishing, through State Web
sites, of required public notices announcing changes in methods and
standards for setting payment rates. The HHS proposed rule indicated
that the States were consulted and convinced CMS that Internet
publishing ``will reduce State costs and allow for a more efficient
means to notify the public of changes to Medicaid payment methods and
standards'' (Id. at 26352).\10\ (A final rule has not yet been
published.)
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\10\ While the notice provided for in the HHS-CMS proposed rule
is not directly analogous to the CBP seizure/forfeiture notice, as
the former process does not involve private property interests and a
deadline that can be harmful to a potential claimant if missed, the
move to Internet publishing by HHS-CMS supports the view that
government publication by Internet posting is cost advantageous,
generally effective, and capable of reaching a wide audience.
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This pattern of government entities changing to Internet publishing
is supportive of CBP's effort to likewise update its seizure and
forfeiture notice regulations, as well as its rationale that the Agency
can reduce costs while meeting its obligation under applicable law to
provide effective notice to the public. In this regard, CBP notes that
due process requires only that ``the Government's effort be `reasonably

[[Page 6031]]

calculated' to apprise a party of the pendency of the action.''
Dusenbery v. United States, 534 U.S. 161, 170 (2002) (quoting Mullane
v. Central Hanover Bank & Trust Co., 339 U.S. 306, 315, (1950). This
principle applies to direct notice and published notice procedures.
United States v. Young, 421 Fed. Appx. 229, 231, 2011 WL 1206664 (3d
Cir. Apr. 11, 2011). CBP believes that publication of forfeiture
notices via the Internet, with its widespread and broad availability
within and well beyond the limits of the local jurisdiction (site of
the seizure), is clearly in compliance with this standard.\11\
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\11\ CBP believes that the Internet's ability to provide access
to public forfeiture notices is, in this Internet era, much less
limiting than that of local print publishing which has long been
held to meet standards of due process.
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Regarding the newspaper industry's claim that certain segments of
the public will be disenfranchised if notice is published through the
Internet rather than a local newspaper, CBP is not convinced that the
Internet would be less capable of providing access to forfeiture
notices for minorities, senior citizens, the poor, rural residents,
prison inmates, the ill and disabled in or outside of hospitals, etc.,
than would local newspapers. For any group of persons the newspaper
industry claims will be disenfranchised, there is insufficient
convincing evidence that Internet publication would be a disadvantage
with respect to these groups as compared to newspaper publication.
Moreover, the due process standard requires a means of notice
reasonably calculated to apprise a party of the action; it does not
require the most effective means of doing so, maximally tailored to
each particular situation. It is reiterated that those targeted by
notice through publication are unknown interested parties. CBP believes
that Internet publication of forfeiture notices for this purpose
constitutes a reasonable effort to provide notice to the general
public, including the groups of society raised by the newspaper
industry.
Regarding the newspaper industry's comments about costs, CBP
iterates that replacing newspaper publishing with Internet publishing
will reduce its advertising costs. As noted in its proposal, CBP spent
over $1 million in 2010 for advertising notices of seizure and
forfeiture in newspapers. In contrast, providing notice through
postings on the DOJ forfeiture Web site will cost CBP approximately
$25,000 per year (see the ``Economic Analysis'' section). This
comparatively minor annual expense justifies the (figurative)
description ``virtually cost-free'' and, in any case, represents a very
substantial cost reduction. However, upon reexamining its costs, CBP
recognizes that there are additional one-time costs to modify
government systems that CBP did not include in the proposal's economic
analysis. CBP has amended the ``Economic Analysis'' section in this
final rule to add $693,000 in up-front costs for the first year. CBP
notes that, with these costs, CBP effectively (but not quite) breaks
even in the first year the rule is in effect and experiences large
savings each subsequent year.
Regarding the newspaper industry's reservations about
appropriations and funds to maintain CBP's notice publications through
the DOJ forfeiture Web site and, at the same time, its publication of
notices in newspapers in special circumstances, CBP is confident that
funding will not be a concern, especially given the savings generated
by the switch to Internet publishing. There is no basis for supposing
that this cost savings will result in budget decisions that undermine
CBP's important fundamental policies. Likewise, CBP is not concerned
that a government-wide reduction in agency Web sites for budget
purposes will result in the government closing down Web sites that are
critical to its enforcement mission.
Comment: The newspaper industry asserted that removing CBP seizure
and forfeiture notices from newspapers would be against CBP's interest
regarding the selling of seized and forfeited merchandise at auction.
According to the newspaper industry, the published notices generate
interest in the auction, and the absence of these notices would result
in fewer bidders.
CBP Response: The procedure for publication of seizure and
forfeiture notices and the procedure for conducting auctions of
forfeited merchandise are not connected functions. CBP does not publish
seizure and forfeiture notices to generate interest in an auction that
may or may not take place at a later time and place. (It is noted that
the final resolution of the case may render an auction unnecessary.)
The notice contains no information about the auction procedure.\12\ CBP
is not concerned that its ability to auction seized and forfeited
merchandise will be compromised and is confident that its auctions will
continue to be conducted as successfully as in the past. The changes
made in this document will have no effect on auction procedures or the
advertising of auctions.
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\12\ CBP's auctions of forfeited merchandise are handled by the
Treasury Executive Office for Asset Forfeiture, an office of the
Treasury Department that administers the Treasury Forfeiture Fund.
Under applicable procedures, a contractor is hired to take care of
the auction and all related advertising.
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Comment: The newspaper industry asserted that Internet publication
lacks four elements that ensure the validity of public notice. The
publication must be: independently sourced, capable of being archived,
accessible to the public, and verifiable. The newspaper industry claims
that Internet publishing does not meet these elements to the
disadvantage of the public.
CBP Response: First, CBP notes that these elements are not legal
standards that an agency is required to meet under applicable law and
regulation. The newspaper industry did not cite to a law or regulation
for its proposition. CBP disagrees that notice must be independently
sourced (that is, from outside the government) to be effective and
reliable. DOJ and the Federal Rules of Civil Procedure administered by
the Federal courts are in accord. The CBP seizure and forfeiture
notice, whether published in the newspaper (currently) or on the DOJ
forfeiture Web site (as adopted in this final rule), describes the
property seized and the details of the seizure (time, place, reason)
and informs a prospective claimant of the procedural options available
to resolve the matter, including taking no action or electing either
judicial or administrative proceedings. As set forth previously, CBP is
satisfied that the published notice meets the requirements of due
process whether published in a newspaper or on the DOJ forfeiture Web
site. Regarding the archiving of records pertaining to the seizure/
forfeiture action and the notice procedure, and verification of such
records, CBP is confident that appropriate records will be maintained
in accordance with applicable law, regulations, and procedures.\13\
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\13\ All records relating to CBP's processing of forfeiture
cases will be stored in an official system of records maintained by
CBP that meets the requirements of Presidential Circular A-127
(pursuant to the Federal Financial Management Improvement Act of
1996).
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Conclusion

Based on the foregoing analysis of the comments, and CBP's further
consideration of the matter, CBP is adopting the proposed amendments as
published in the Federal Register (77 FR 6527) on February 8, 2012 as
final with a change to the regulatory text, as follows. CBP is adding
to the regulation that the DOJ forfeiture Web site address will be
posted in a conspicuous place available to the public at all
customhouses and sector offices. This posting will not provide case-
specific

[[Page 6032]]

information relative to seizures/forfeitures, but will inform any local
persons visiting the customhouse or sector office of a means by which
one may learn of these actions, including case-specific information.
CBP also makes some slight editorial changes to the regulatory text to
enhance general readability.

Economic Analysis

Executive Orders 12866 and 13563

Executive Orders 12866 and 13563 direct agencies to assess the
costs and benefits of available regulatory alternatives and, if
regulation is necessary, to select regulatory approaches that maximize
net benefits (including potential economic, environmental, public
health and safety effects, distributive impacts, and equity). Executive
Order 13563 emphasizes the importance of quantifying both costs and
benefits, of reducing costs, of harmonizing rules, and of promoting
flexibility. This final rule has not been designated a ``significant
regulatory action,'' under section 3(f) of Executive Order 12866.
Accordingly, the rule has not been reviewed by the Office of Management
and Budget. However, CBP has prepared the following analysis to help
inform stakeholders of the potential impacts of this final rule's
amendments.
This final rule will provide a less costly alternative for
publishing notices of seizure and forfeiture for seized property
appraised at more than $5,000 in value. The current regulation requires
CBP to publish such notices in a local newspaper for at least three
successive weeks. Historically, there have been some instances where
the cost of advertising exceeds the value of the seized property, and
these occurrences have increased as the cost of newspaper advertising
has increased.
Under this rule, CBP will publish the great majority of seizure and
forfeiture notices for property valued at more than $5,000 (estimated
at 90 percent) for 30 consecutive days solely by posting on an existing
U.S. Government Web site. In some cases, including at CBP's sole
discretion based on the particular circumstances involved or where a
court or a U.S. Attorney instructs or recommends, CBP will publish
notice via both print (newspaper or other publication) and Internet
methods. CBP will use an existing DOJ Web site that lists forfeiture
actions by various Federal Government agencies at an approximate cost
to CBP of $25,000 per year in system maintenance and contract costs. In
addition, CBP and DOJ will need to spend a total of $693,000 in one-
time costs to modify their systems as a result of this rule.
In 2010, CBP spent over $1 million advertising more than 6,000
lines of property. Under this rule, CBP will advertise the vast
majority of items using the DOJ forfeiture Web site. CBP will advertise
a comparatively small number of items both on the Internet and in a
traditional newspaper or other publication. Because these items will be
the highest profile items, CBP will likely advertise these items in
newspapers of large circulation or national newspapers. Such
advertising will make up a disproportionate amount of the costs. CBP
estimates that it will cost $300,000 to continue to advertise these
items in print. Therefore, CBP estimates that advertising on the
Internet instead of in print for most items will save approximately
$700,000 per year in print advertising costs. The net effect of this
change will be a loss to CBP of $18,000 ($700,000 savings-$693,000 one-
time system modification costs-$25,000 recurring costs) in the first
year and a savings to CBP of $675,000 ($700,000 savings-$25,000
recurring costs) in future years. Over a ten-year period of analysis,
this final rule is estimated to save CBP over $4 million at a 7%
discount rate.
This rule also provides that CBP will publish seizure and
forfeiture notices for seized property appraised at $5,000 or less on
the DOJ forfeiture Web site for 30 consecutive days. This change will
simply add low-cost Internet publication to the current requirement
that CBP post notice at the customhouse or U.S. Border Patrol sector
office, as provided in this rule for seized property appraised at
$5,000 or less. This change will be virtually costless to the
Government and will expand the reach of the seizure and forfeiture
notice to the benefit of unknown parties-in-interest and the public.
Finally, under this final rule, CBP will post general information
at all customhouses and sector offices, in the conspicuous place that
lower-valued seizure and forfeiture notices are posted for public
viewing, to inform the public that seizure and forfeiture notices,
regardless of the value of the merchandise, will be posted to the DOJ
forfeiture Web site. This will be done at de minimis cost to CBP.

Regulatory Flexibility Act

This section examines the impact of the final rule on small
entities as required by the Regulatory Flexibility Act (5 U.S.C. 603),
as amended by the Small Business Regulatory Enforcement and Fairness
Act of 1996. A small entity may be a small business (defined as any
independently owned and operated business not dominant in its field
that qualifies as a small business per the Small Business Act); a small
not-for-profit organization; or a small governmental jurisdiction
(locality with fewer than 50,000 people).
This final rule moves most notices of seizure and forfeiture valued
at more than $5,000 from local print media to a Federal Government
forfeiture Web site. It also allows CBP to post notices of seizures and
forfeitures valued at $5,000 or less on the forfeiture Web site in
addition to posting at the customhouse nearest the place of seizure or
the appropriate Border Patrol sector office. This rule does not impose
any requirements on the general public or small businesses. As provided
under the current procedure, CBP will continue to contact, in writing,
any small business that is a known party-in-interest. Because this rule
imposes no direct costs on small entities, we believe that this rule
does not have a significant economic impact on a substantial number of
small entities. Consequently, DHS certifies this rule does not have a
significant economic impact on a substantial number of small entities
within the meaning of the Regulatory Flexibility Act.

Unfunded Mandates Reform Act of 1995

This final rule does not impose an unfunded mandate under the
Unfunded Mandates Reform Act of 1995. It does not result in costs of
$100 million or more (adjusted for inflation), in the aggregate, to any
of the following: State, local, or Native American Tribal governments,
or the private sector.

Executive Order 13132

In accordance with the principles and criteria contained in
Executive Order 13132 (Federalism), this final rule has no substantial
effect on the States, the current Federal-State relationship, or on the
current distribution of power and responsibilities among local
officials.

Signing Authority

This document is being issued in accordance with 19 CFR 0.1(b)(1).

List of Subjects in 19 CFR Part 162

Administrative practice and procedure, Law enforcement, Seizures
and forfeitures.

Amendment to CBP Regulations

For the reasons set forth above, part 162 of title 19 of the Code
of Federal Regulations (19 CFR part 162), is amended as set forth
below.

[[Page 6033]]

PART 162--INSPECTION, SEARCH, AND SEIZURE

0
1. The general authority citation for part 162 and the specific
authority citation for Sec. 162.45 continue to read as follows:

Authority: 5 U.S.C. 301; 19 U.S.C. 66, 1592, 1593a, 1624; 6
U.S.C. 101; 8 U.S.C. 1324(b).
* * * * *
Section 162.45 also issued under 19 U.S.C. 1607, 1608;
* * * * *

0
2. In Sec. 162.45, paragraphs (b)(1) and (b)(2) are revised to read as
follows:

Sec. 162.45 Summary forfeiture; Property other than Schedule I and
Schedule II controlled substances; Notice of seizure and sale.

* * * * *
(b) Publication. (1) If the appraised value of any property in one
seizure from one person, other than Schedule I and Schedule II
controlled substances (as defined in 21 U.S.C. 802(6) and 812), exceeds
$5,000, the notice will be published by its posting on an official
Government forfeiture Web site for at least 30 consecutive days.
Information pertaining to the Government forfeiture Web site will be
posted in a conspicuous place that is accessible to the public at all
customhouses and all sector offices of the U.S. Border Patrol. In CBP's
sole discretion, and as circumstances warrant, additional publication
for at least three successive weeks in a print medium may be provided.
All known parties-in-interest will be notified in writing of the
Government Web site address and the date of Internet publication (and
pertinent information regarding print publication, when appropriate).
(2) In all other cases, except for Schedule I and Schedule II
controlled substances (see Sec. 162.45a), the notice will be published
by its posting on an official Government forfeiture Web site for at
least 30 consecutive days and by its posting for at least three
successive weeks in a conspicuous place that is accessible to the
public at the customhouse located nearest the place of seizure or the
appropriate sector office of the U.S. Border Patrol. All known parties-
in-interest will be notified in writing of the Government Web site
address and the date of Internet publication (and pertinent information
regarding print publication, when appropriate). The posting at the
customhouse or sector office will contain the date of on-site posting.
Articles of small value of the same class or kind included in two or
more seizures will be advertised as one unit.
* * * * *

Dated: January 23, 2013.
Janet Napolitano,
Secretary.
[FR Doc. 2013-01757 Filed 1-28-13; 8:45 am]
BILLING CODE 9111-14-P