[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: 19CFR163.12]



[Page 279-281]

 

                        TITLE 19--CUSTOMS DUTIES

 

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

        HOMELAND SECURITY; DEPARTMENT OF THE TREASURY (CONTINUED)

 

PART 163_RECORDKEEPING--Table of Contents

 

Sec.  163.12  Recordkeeping Compliance Program.



    (a) General. The Recordkeeping Compliance Program is a voluntary 

Customs program under which certified recordkeepers may be eligible for 

alternatives to penalties (see paragraph (d) of this section) that might 

be assessed under Sec.  163.6 for failure to produce a demanded entry 

record. However, even where a certified recordkeeper is eligible for an 

alternative to a penalty, participation in the Recordkeeping Compliance 

Program has no limiting effect on the authority of Customs to use a 

summons, court order or other legal process to compel the production of 

records by that certified recordkeeper.

    (b) Certification procedures--(1) Who may apply. Any person 

described in Sec.  163.2(a) who is required to maintain and produce 

entry records under this part may apply to participate in the 

Recordkeeping Compliance Program.

    (2) Where to apply. An application for certification to participate 

in the Recordkeeping Compliance Program shall be submitted to the 

Director, Regulatory Audit Division, U.S. Customs Service, 909 S.E. 

First Avenue, Miami, Florida 33131. The application shall be submitted 

in accordance with the guidelines contained in the Customs Recordkeeping 

Compliance Handbook which may be obtained by downloading it from the 

Customs Electronic Bulletin Board (703-921-6155) or by writing to the 

Recordkeeping Compliance Program, Regulatory Audit Division, Office of 

Strategic Trade, U.S. Customs Service, 909 S.E. First Avenue, Suite 710, 

Miami, Florida 33131.

    (3) Certification requirements. A recordkeeper may be certified as a 

participant in the Recordkeeping Compliance Program after meeting the 

general recordkeeping requirements established under this section or 

after negotiating an alternative program suited to the needs of the 

recordkeeper and Customs. To be certified, a recordkeeper must be in 

compliance with Customs laws and



[[Page 280]]



regulations. Customs will take into account the size and nature of the 

importing business and the volume of imports and Customs workload 

constraints prior to granting certification. In order to be certified, a 

recordkeeper must meet the applicable requirements set forth in the 

Customs Recordkeeping Compliance Handbook and must be able to 

demonstrate that it:

    (i) Understands the legal requirements for recordkeeping, including 

the nature of the records required to be maintained and produced and the 

time periods relating thereto;

    (ii) Has in place procedures to explain the recordkeeping 

requirements to those employees who are involved in the preparation, 

maintenance and production of required records;

    (iii) Has in place procedures regarding the preparation and 

maintenance of required records, and the production of such records to 

Customs;

    (iv) Has designated a dependable individual or individuals to be 

responsible for recordkeeping compliance under the program and whose 

duties include maintaining familiarity with the recordkeeping 

requirements of Customs;

    (v) Has a record maintenance procedure acceptable to Customs for 

original records or has an alternative records maintenance procedure 

adopted in accordance with Sec.  163.5(b); and

    (vi) Has procedures for notifying Customs of any occurrence of a 

variance from, or violation of, the requirements of the Recordkeeping 

Compliance Program or negotiated alternative program, as well as 

procedures for taking corrective action when notified by Customs of 

violations or problems regarding such program. For purposes of this 

paragraph, the term ``variance'' means a deviation from the 

Recordkeeping Compliance Program that does not involve a failure to 

maintain or produce records or a failure to meet the requirements set 

forth in this section. For purposes of this paragraph, the term 

``violation'' means a deviation from the Recordkeeping Compliance 

Program that involves a failure to maintain or produce records or a 

failure to meet the requirements set forth in this section.

    (c) Application review and approval and certification process--(1) 

Review of applications. The Miami regulatory audit field office will 

process the application and will coordinate and consult, as may be 

necessary, with the appropriate Customs Headquarters and field 

officials. The Miami regulatory audit field office will review and 

verify the information contained in the application and may initiate an 

on-site verification prior to approval and certification. If an on-site 

visit is warranted, the Miami regulatory audit field office shall inform 

the applicant. If additional information is necessary to process the 

application, the applicant shall be notified. Customs requests for 

information not submitted with the application or for additional 

explanation of details will cause a delay in the application approval 

and certification of applicants and may result in the suspension of the 

application approval and certification process until the requested 

information is received by Customs.

    (2) Approval and certification. If, upon review, Customs determines 

that the application should be approved and that certification should be 

granted, the Director of the Miami regulatory audit field office shall 

issue the certification with all the applicable conditions stated 

therein.

    (d) Alternatives to penalties--(1) General. If a certified 

participant in the Recordkeeping Compliance Program does not produce a 

demanded entry record for a specific release or provide the information 

contained in the demanded entry record by acceptable alternate means, 

Customs shall, in lieu of a monetary penalty provided for in Sec.  

163.6(b), issue a written notice of violation to the person as described 

in paragraph (d)(2) of this section, provided that the certified 

participant is generally in compliance with the procedures and 

requirements of the program and provided that the violation was not a 

willful violation and was not a repeat violation. A willful failure to 

produce demanded entry records or repeated failures to produce demanded 

entry records may result in the issuance of penalties under Sec.  

163.6(b) and removal of certification under the program (see Sec.  

163.13) until corrective action satisfactory to Customs is taken.



[[Page 281]]



    (2) Contents of notice. A notice of violation issued to a 

participant in the Recordkeeping Compliance Program for failure to 

produce a demanded entry record or information contained therein shall:

    (i) State that the recordkeeper has violated the recordkeeping 

requirements;

    (ii) Identify the record or information which was demanded and not 

produced;

    (iii) Warn the recordkeeper that future failures to produce demanded 

entry records or information contained therein may result in the 

imposition of monetary penalties and could result in the removal of the 

recordkeeper from the Recordkeeping Compliance Program.

    (3) Response to notice. Within a reasonable time after receiving 

written notice under paragraph (d)(1) of this section, the recordkeeper 

shall notify Customs of the steps it has taken to prevent a recurrence 

of the violation.