[Federal Register Volume 78, Number 129 (Friday, July 5, 2013)]
[Rules and Regulations]
[Pages 40388-40391]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2013-16223]
[[Page 40388]]
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DEPARTMENT OF HOMELAND SECURITY
U.S. Customs and Border Protection
DEPARTMENT OF THE TREASURY
19 CFR Part 12
[Docket No. USCBP-2012-0004; CBP Dec. 13-12]
RIN 1515-AD82
Inadmissibility of Consumer Products and Industrial Equipment
Noncompliant With Applicable Energy Conservation or Labeling Standards
AGENCIES: U.S. Customs and Border Protection, Department of Homeland
Security; Department of the Treasury.
ACTION: Final rule.
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SUMMARY: This document adopts as a final rule, with changes, proposed
amendments to the U.S. Customs and Border Protection (CBP) regulations
that provide that CBP will refuse admission into the customs territory
of the United States to consumer products and industrial equipment
found to be noncompliant with energy conservation and labeling
standards pursuant to the Energy Policy and Conservation Act of 1975
(EPCA) and its implementing regulations. The final rule further
provides that, upon written or electronic notice from the Department of
Energy (DOE) or the Federal Trade Commission (FTC), CBP may
conditionally release under bond to the importer such noncompliant
products or equipment for purposes of reconditioning, re-labeling, or
other action so as to bring the subject product or equipment into
compliance. This regulation implements the mandate of the EPCA, as
amended.
DATES: Effective August 5, 2013.
FOR FURTHER INFORMATION CONTACT: Virginia H. McPherson, Trade
Processes, Trade Policy and Programs, Office of International Trade,
(202) 863-6563; William R. Scopa, Partner Government Agencies, Office
of International Trade, (202) 863-6544.
SUPPLEMENTARY INFORMATION:
Background
Title III, Part B of the Energy Policy and Conservation Act of 1975
(EPCA), Public Law 94-163 (42 U.S.C. 6291-6309), as amended,
established the Energy Conservation Program for Consumer Products Other
Than Automobiles, a program covering most major household appliances.
Similarly, Title III, Part C of the EPCA, (42 U.S.C. 6311-6317) as
amended, added by Public Law 95-619, Title IV, section 441(a),
established the Energy Conservation Program for Certain Industrial
Equipment, a program covering industrial equipment.
Section 6302(a) of title 42 of the United States Code (42 U.S.C.
6302(a)), and its implementing regulations, prescribe the specific
energy conservation and labeling standards applicable to manufacturers
and, in some instances, private labelers, distributors, and retailers.
Sections 6301 and 6316 of title 42 of the United States Code (42 U.S.C.
6301 and 6316) require the Secretary of the Treasury to issue
regulations refusing admission into the customs territory of the United
States to covered products or covered equipment offered for importation
in violation of 42 U.S.C. 6302. The statute also provides the Secretary
with the discretion to authorize the importation of covered products or
covered industrial equipment under terms and conditions (including the
furnishing of a bond) that ensure that the merchandise will not violate
42 U.S.C. 6302.
On March 26, 2012, U.S. Customs and Border Protection (CBP)
published in the Federal Register (77 FR 17364) a proposal to amend
part 12 of title 19 of the Code of Federal Regulations (19 CFR Part 12)
by adding a new Sec. 12.50, which provides that CBP will refuse
admission into the customs territory of the United States to imports of
products or equipment covered by the EPCA and its implementing
regulations, for which CBP has received a written determination of
noncompliance with 42 U.S.C. 6302 from the Department of Energy (DOE)
or the Federal Trade Commission (FTC), as applicable.
This proposed regulation's goal was to implement the mandate of the
EPCA to refuse admission into the United States of certain consumer
products and industrial equipment that do not meet applicable labeling
or energy conservation requirements.
Proposed Sec. 12.50 was drafted to be consistent with Sec.
429.5(b) of title 10 of the Code of Federal Regulations (10 CFR
429.5(b)), which is a DOE regulation that further notifies the
importing public that any covered product or equipment offered for
importation that does not meet the applicable energy conservation
standards set forth in 42 U.S.C. 6291-6317 will be refused admission
into the customs territory of the United States under CBP issued
regulations.
CBP solicited comments on the proposed rulemaking.
Discussion of Comments
Eight commenters responded to the solicitation of public comment. A
description of the comments received, together with CBP's analyses, is
set forth below.
Comment:
One commenter recommends that U.S. government agencies provide
training to importers on purchasing goods and industrial equipment that
meet relevant applicable energy conservation and labeling admissibility
standards.
CBP Response:
CBP agrees that importers should be aware of the EPCA requirements
applicable to their respective products and equipment and exercise
reasonable care in the importation thereof. While it is not within
CBP's purview to provide such training, we note that there is extensive
information on EPCA requirements at the Department of Energy Web site
http://www1.eere.energy.gov/buildings/appliance_standards. DOE has
provided training regarding DOE's appliance standards regulatory
program to groups of manufacturers through manufacturing trade
associations and will provide training upon request. Trade groups may
request EPCA compliance training by contacting DOE at
[email protected].
Comment:
Two commenters are of the view that the 30-day conditional release
period is not long enough for an importer to bring non-compliant
merchandise into compliance with 42 U.S.C. 6302 and its implementing
regulations.
CBP Response:
Non-compliant covered products and equipment that DOE or FTC deems
to be in violation of 42 U.S.C. 6302 will be refused admission, unless
DOE or FTC recommends release to the importer's premises to bring such
products and equipment into compliance in which case CBP may
conditionally release such products for such purpose. 77 FR 17365. In
addition, as noted in Sec. 12.50(d), conditionally released covered
imports are subject to the jurisdiction of DOE and/or FTC. Paragraph
(d)(2) of this section provides that the conditional release period may
be extended if CBP receives, within the initial 30-day conditional
release period or any subsequent authorized extension thereof, a
written or electronic recommendation from DOE or FTC stating the reason
for a further extension and the anticipated length of the extension.
Comment:
One commenter expresses concern that administering the proposed
rule
[[Page 40389]]
would be overly burdensome on CBP and detract from the agency's other
responsibilities under its mission.
CBP's Response:
As part of CBP's mission, CBP assists other government agencies in
enforcing their regulatory requirements on imports and exports. CBP's
administrative obligations under the rule will not cause an undue
burden on CBP's resources or importers, in part because CBP will have
access to substantive advice provided by DOE or FTC.
Comment:
One commenter is of the view that the proposed rule fails to comply
with the statutory requirement to ensure that non-compliant covered
products and equipment are refused admission into the customs territory
of the United States, noting that section 331 of the EPCA requires
implementation of an affirmative program to ensure at the time that a
covered product or equipment is proposed for importation that the goods
meet the applicable efficiency standards and labeling requirements.
Specifically, the commenter views the proposed rule as arbitrary and
capricious because it evades CBP's nondiscretionary statutory
responsibility to refuse admission to noncompliant products or
equipment by relying on DOE and FTC's discretionary authority to
identify products and equipment as noncompliant. The commenter notes
that even if those agencies had the resources to identify noncompliant
products and equipment, the statute does not require them to do so. The
commenter maintains that the proposed rule also fails to impose
measures appropriate to ensure that such products and equipment will
come into compliance or be exported or abandoned to the United States.
CBP Response:
CBP disagrees with the commenter's argument that the proposal did
not meet its obligation under the statute. The proposed rule does set
forth a regulatory scheme whereby CBP will refuse admission to covered
products and equipment that do not comply with the EPCA.
Nevertheless, in an effort to clarify the procedures by which a
refusal of admission may take place, this document adds language in the
final rule to 19 CFR 12.50(b) that states that CBP may make a finding
on its own that a covered product or equipment is noncompliant without
having received a prior written noncompliance notice from DOE or FTC.
In these situations, CBP will confer with DOE or FTC, as applicable, as
to disposition of the product or equipment.
Comment:
One commenter states that CBP cannot reasonably rely exclusively on
DOE or FTC to identify and notify CBP of noncompliant products and
equipment. The commenter further states that under 42 U.S.C. 6305, a
citizen may establish that products are noncompliant by bringing a
citizen's suit and yet, pursuant to the proposed rule, CBP would not
refuse admission to such products and equipment under these
circumstances.
CBP Response:
As noted above, CBP is adding language in Sec. 12.50(b) to include
a statement indicating that CBP will refuse admission to a covered
product or equipment found to be noncompliant with the EPCA even if DOE
or FTC has not issued a determination of noncompliance for the good.
Therefore, the agency's reliance on DOE and FTC is not exclusive.
Comment:
One commenter maintains that the proposed rule's requirement that
DOE and FTC not only name the regulated party that is in violation but
also describe the product or equipment in sufficient detail to enable
CBP to identify noncompliant covered articles has not been adequately
explained and could pose an irrational bar to enforcement.
CBP Response:
CBP does not agree that this requirement will preclude meaningful
enforcement. CBP notes, for example, that DOE's current notices of
noncompliance already typically provide far more information than
simply the name of the regulated party that is in violation. DOE has
access to CBP entry information, which includes parties involved in the
importation of products regulated by DOE, and which DOE can compare to
information in its DOE Compliance and Certification Management System.
Comment:
One commenter suggests that CBP must require importers to provide
proof of compliance or other information sufficient to enable the use
of existing DOE and FTC resources to identify noncompliant products and
facilitate their return to CBP. CBP should create a system that is
linked with the DOE Compliance and Certification Management System
database and require that importers identify their proposed import as
in compliance with applicable standards and labeling requirements and
certified as such in the database.
CBP Response:
CBP acknowledges that linked automated systems would facilitate
enforcement of the statute. In this regard, it is noted that CBP is
actively participating in the development of automated systems in which
participating government agencies, including DOE, can share data in
order to facilitate cargo processing and enhance supply chain security.
Comment:
One commenter expressed approval of the proposed rulemaking, noting
that it puts everyone on a level playing field.
CBP Response:
CBP agrees.
Comment:
One commenter suggests that CBP amend the proposed rule to include
an exception for products and equipment intended for export only or
transshipment.
CBP Response:
As noted above, the provisions of 42 U.S.C. 6301 empower the
Secretary of the Treasury to authorize the importation of such covered
products and equipment upon such terms and conditions (including the
furnishing of a bond) as may appear to him appropriate to ensure that
such covered products and equipment will not violate section 6302 of
this title. CBP agrees that imported products and equipment not entered
for consumption should be excluded from the definition of ``covered
import.'' For example, products and equipment may be entered into
customs bonded warehouses and withdrawn for exportation (see 19 U.S.C.
1557), admitted into Foreign Trade Zones and then transferred for
exportation in zone-restricted status (see 19 U.S.C. 81c), or entered
for transportation and exportation under bond (see 19 U.S.C. 1553).
Therefore, CBP is including language in the final rule in Sec.
12.50(a) to clarify that ``covered imports'' means those products and
equipment for which an entry for consumption has been filed, including
those products and equipment withdrawn from warehouse for consumption
or foreign merchandise entered for consumption from a foreign trade
zone.
Conclusion
After analysis of the comments and further review of the matter,
CBP has determined to adopt as final, with the changes noted above in
Sec. Sec. 12.50(a) and (b) (19 CFR 12.50(a) and (b)), the proposed
rule published in the Federal Register (77 FR 17364) on March 26, 2012.
This final rule also includes non-substantive editorial changes which
consist of: A merging of proposed paragraphs (b) and (c) to clarify the
fact that CBP's ``action'' is a ``refusal of admission''; a newly
redesignated
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paragraph (c) which sets forth the manner by which DOE or FTC will
notify CBP about noncompliant products and equipment; inclusion of a
reference to the relevant statutory authority in the definition of
``noncompliant covered import'' in 19 CFR 12.50(a); and a removal of
the reference to ``paragraph (b)'' in 19 CFR 12.50(d)(1)(i) to clarify
that CBP's refusal of admission as used in this context pertains to
conditional release. Lastly, this document amends proposed 19 CFR
12.50(d)(2) to reflect that an importer may request an extension of the
conditional release period from DOE or FTC if made within the initial
30-day conditional release period or any subsequent authorized
extension thereof. CBP may permit an extension of the conditional
release period if it receives a written or electronic recommendation to
that effect from DOE or FTC. If the noncompliant covered import is not
timely brought into compliance, and DOE or FTC has not recommended an
extension of the conditional release period, CBP will issue a refusal
of admission notice to the importer and demand the redelivery of the
specified covered product to CBP custody.
Executive Order 12866
Executive Orders 13563 and 12866 direct agencies to assess 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 rule has not been designated a ``significant regulatory action.''
The Regulatory Flexibility Act
This section examines the impact of the rule on small entities as
required by the Regulatory Flexibility Act (5 U.S.C. 601 et. seq.), 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 rule establishes a procedure whereby CBP will refuse admission
into the customs territory of the United States to consumer products
and industrial equipment deemed noncompliant with the EPCA and its
implementing regulations. Upon written or electronic notice by DOE or
FTC, CBP may conditionally release under bond to the importer such
noncompliant products or equipment for purposes of reconditioning, re-
labeling, or other action so that they may be brought into compliance
with applicable energy conservation and labeling standards.
DOE has identified only a small number of businesses importing
noncompliant articles, of which fewer than five were small entities.
When notified of their noncompliance, each of these businesses ceased
importation of these articles. Given the small number of small entities
identified by DOE as having been noncompliant and that the law
prohibiting the importation of these noncompliant articles within the
United States was enacted in 1975, CBP does not anticipate a
significant number of small entities attempting to import articles
which violate 42 U.S.C 6302 and its implementing regulations. If a
small entity does import an article in violation of 42 U.S.C 6302 and
its implementing regulations, the small entity can request DOE or FTC
to allow CBP to grant the imported article a conditional release. CBP
believes the cost associated with this conditional release to be
negligible because this request is virtually costless to the small
entity and the importer is already required to maintain a CBP basic
importation and entry bond.
No comments were submitted regarding this assessment. Accordingly,
based on the above analysis, CBP certifies that this rule will not have
a significant impact on a substantial number of small entities.
Paperwork Reduction Act
As there is no collection of information proposed in this document,
the provisions of the Paperwork Reduction Act of 1995 (44 U.S.C. 3507)
are inapplicable.
Signing Authority
This document is being issued in accordance with 19 CFR 0.1(a)(1)
of the CBP regulations (19 CFR 0.1(a)(1)) pertaining to the authority
of the Secretary of the Treasury (or his or her delegate) to approve
regulations related to certain customs revenue functions.
List of Subjects in 19 CFR Part 12
Customs duties and inspection, Electronic products, Entry of
merchandise, Imports, Prohibited merchandise, Reporting and
recordkeeping requirements, Restricted merchandise.
Amendments to the CBP Regulations
For the reasons stated above, part 12 of title 19 of the Code of
Federal Regulations (19 CFR Part 12) is amended as set forth below.
PART 12--SPECIAL CLASSES OF MERCHANDISE
0
1. The general authority citation for part 12 continues to read as
follows and the specific authority citation is revised to read as
follows:
Authority: 5 U.S.C. 301; 19 U.S.C. 66, 1202 (General Note 3(i),
Harmonized Tariff Schedule of the United States (HTSUS)), 1624;
* * * * *
Section 12.50 also issued under 42 U.S.C. 6301;
* * * * *
0
2. A center heading and Sec. 12.50 are added to read as follows:
Consumer Products and Industrial Equipment Subject to Energy
Conservation or Labeling Standards
Sec. 12.50 Consumer products and industrial equipment subject to
energy conservation or labeling standards.
(a) Definitions. For purposes of this section, the following terms
have the meanings indicated:
Covered import. The term ``covered import'' means a consumer
product or industrial equipment that is classified by the Department of
Energy as covered by an applicable energy conservation standard, or by
the Federal Trade Commission as covered by an applicable energy
labeling standard, pursuant to the Energy Policy and Conservation Act
of 1975, as amended (42 U.S.C. 6291-6317), and for which an entry for
consumption has been filed, including products and equipment withdrawn
from warehouse for consumption or foreign merchandise entered for
consumption from a foreign trade zone.
DOE. The term ``DOE'' means the Department of Energy.
Energy conservation standard. The term ``energy conservation
standard'' means any standard meeting the definitions of that term in
42 U.S.C. 6291(6) or 42 U.S.C. 6311(18).
FTC. The term ``FTC'' means the Federal Trade Commission.
Noncompliant covered import. The term ``noncompliant covered
import'' means a covered import determined to be in violation of 42
U.S.C. 6302 or 42 U.S.C. 6316 as not in compliance with applicable
energy conservation or energy labeling standards.
(b) CBP action; refusal of admission. CBP will refuse admission
into the customs territory of the United States to
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any covered import found to be noncompliant with applicable energy
conservation or energy labeling standards. If DOE or FTC notifies CBP
that a covered import does not comply with an applicable energy
conservation or energy labeling standard, CBP will refuse admission to
the covered import, or pursuant to paragraph (d) of this section, CBP
may allow conditional release of the covered import so that it may be
brought into compliance. CBP may make a finding that a covered import
is noncompliant without having received a prior written noncompliance
notice from DOE or FTC. In such a situation, CBP will confer with DOE
or FTC, as applicable, as to disposition of the import.
(c) DOE or FTC notice. Upon a determination that a covered import
is not in compliance with applicable energy conservation or labeling
standards, DOE or FTC, as applicable, will provide CBP with a written
or electronic notice that identifies the importer and contains a
description of the noncompliant covered import that is sufficient to
enable CBP to identify the subject merchandise and refuse admission
thereof into the customs territory of the United States.
(d) Conditional release. In lieu of immediate refusal of admission
into the customs territory of the United States, CBP, pursuant to a
written or electronic recommendation from DOE or FTC, may permit the
release of a noncompliant covered import to the importer of record for
purposes of reconditioning, re-labeling, or other modification. The
release from CBP custody of any such covered import will be deemed
conditional and subject to the bond conditions set forth in Sec.
113.62 of this chapter. Conditionally released covered imports are
subject to the jurisdiction of DOE and/or FTC.
(1) Duration. Unless extended in accordance with paragraph (d)(2)
of this section, the conditional release period will terminate upon the
earliest occurring of the following events:
(i) The date CBP issues a notice of refusal of admission to the
importer;
(ii) The date DOE or FTC issues a notice to CBP stating that the
covered import is in compliance and may proceed; or
(iii) At the conclusion of the 30-day period following the date of
release.
(2) Extension. An importer may request an extension of the
conditional release period from DOE or FTC if made within the initial
30-day conditional release period or any subsequent authorized
extension thereof. CBP may permit an extension of the conditional
release period if recommended electronically or in writing, by DOE or
FTC.
(3) Issuance of redelivery notice and demand for redelivery. If DOE
or FTC notifies CBP in writing or electronically that noncompliant
covered imports have not timely been brought into compliance, CBP will
issue a refusal of admission notice to the importer and, in addition,
CBP will demand the redelivery of the specified covered import to CBP
custody. The demand for redelivery may be made concurrently with the
notice of refusal of admission.
(4) Liquidated damages. A failure to comply with a demand for
redelivery made under this paragraph (d) will result in the assessment
of liquidated damages equal to three times the value of the covered
product. Value as used in this provision means value as determined
under 19 U.S.C. 1401a.
Thomas S. Winkowski,
Deputy Commissioner of CBP, Performing the Duties of the Commissioner
of CBP.
Approved: July 1, 2013.
Timothy E. Skud,
Deputy Assistant Secretary of the Treasury.
[FR Doc. 2013-16223 Filed 7-3-13; 8:45 am]
BILLING CODE 9111-14-P