ceived by the Office of Investigations as the date on which such information was received;

(iv) In the case of an ongoing investigation of a possible violation of 19 U.S.C. 1592 not involving the disclosing party and the information disclosed, on the date recorded in writing by an investigating agent as the date on which he discovered facts and circumstances which caused him to believe that the possibility of a violation of 19 U.S.C. 1592 existed with respect to the disclosing party and the disclosed information;

(v) In the case of a general ongoing investigation of a specific class of goods or industry, on the date recorded by the Office of Investigations as the date on which it determined to direct its investigation specifically to the disclosing party and the disclosed information; and

(vi) In all other cases, on the date recorded in a Report of Investigation as the date on which an investigator was assigned to investigate possible violations of 19 U.S.C. 1592 by the disclosing party with respect to the disclosed information. Although a notice of penalty shall be issued with respect to a disclosed violation, as required by law, it shall be the established policy of the Customs Service, upon the filing of a petition for relief from such penalty, to mitigate the statutory liability to an amount not to exceed one time the total loss of revenue, provided the actual loss of revenue is deposited as withheld duties, regardless of whether the disclosed violation was intentional when committed. Further mitigation beyond the foregoing maximumn may be justified in individual cases on the basis of relevant circumstances, such as diligence in disclosing a violation following its discovery.

(2) Detection of undisclosed violations resulting from a voluntary disclosure. Undisclosed violations discovered by Customs as a result of the investigation of a voluntary disclosure and tender will be treated in the same manner as set forth above unless it is determined that such other violations were intentional when committed.

(3) Inapplicability of voluntary disclosure procedure. (i) If the district di

rector determines that a voluntarilydisclosed revenue loss is attributable to inadvertent errors or circumstances such as technical or petty violations not amounting to negligence and that the establishment of a penalty case under 19 U.S.C. 1592 would be inappropriate, the district director shall not refer the matter under the voluntary disclosure program or establish a penalty case, provided any duties due and withheld duties have been deposited.

(ii) Where the district director determines that the voluntarily disclosed violation involves a loss of revenue of $250 or less, that any duties due and withheld duties have been deposited and that the violation disclosed either does not extend to other ports or has already been disclosed at other ports, the district director shall not refer the matter under the voluntary disclosure program or establish a penalty case, unless there are compelling reasons for doing so, such as similar violations.

(b) Prepenalty notice procedure. (1) Issuance of prepenalty notice. Prior to the issuance of a claim for forfeiture value under § 162.31 of this chapter in excess of $25,000 for violation of section 592, Tariff Act of 1930, as amended (19 U.S.C. 1592), with respect to the entry, or attempted entry, of merchandise the district director shall notify the owner, importer, consignee, agent, or other person entering, or attempting to enter, the merchandise, in writing, of his intention to issue such a claim. The notice shall set forth the information required by section 162.31(b) of this chapter. In the event one year or less remains prior to the expiration of the 5-year statute of limitations with respect to such an alleged violation, the prepenalty notice procedure shall not be utilized.

(2) Reply to prepenalty notice. The person to whom the district director's prepenalty notice is addressed shall have a period of 30 days from the date of its issuance to file a written reply with the district director showing why the claim for forfeiture value should not be issued. The reply should answer the allegations made in the prepenalty notice and should set forth evidence either refuting the allegations or es

tablishing that reasonable cause existed for believing that the acts or omissions described in the allegations were proper. In addition to a written reply, the district director may, upon request, allow an oral presentation of arguments as to why a claim for forfeiture value should not be issued. Absent a showing of extraordinary circumstances, an extension of time to reply beyond the 30-day period shall not be granted.

(3) Action on reply. Each reply to a prepenalty notice shall be carefully considered by the district director. In those cases in which the district director determines that the allegations set forth in the prepenalty notice have been disproved or that the issuance of a claim for forfeiture value would otherwise be inappropriate, he shall notify the person to whom the prepenalty notice was addressed that the issuance of the claim for forfeiture value is no longer contemplated. In all other cases, including those in which no reply is received, the claim shall be issued.

(4) Exception to prepenalty notice procedure. The procedure described in this paragraph does not apply in any case in which criminal prosecution is under consideration.

(R.S. 251, as amended, secs. 592, 618, 624, 46 Stat. 750, as amended, 757, as amended, 759 (5 U.S.C. 301, 19 U.S.C. 66, 1592, 1618, 1624)) (T.D. 75-21, 40 FR 2797, Jan. 16, 1975, as amended by T.D. 75-234, 40 FR 43894, Sept. 24, 1975; T.D. 76-212, 41 FR 31529, July 29, 1976; T.D. 78-38, 43 FR 4255, Feb. 1, 1978]

(2) It is a petition for restoration of proceeds of sale filed in accordance with Subpart E of this part.

[T.D. 75-21, 40 FR 2798, Jan. 16, 1975]

Subpart B-Application for Relief

§ 171.11 Petition for relief.

(a) To whom addressed. Petitions for the remission or mitigation of a fine, penalty, or forfeiture incurred under any law administered by Customs shall be addressed to the Commissioner of Customs.

(b) Signature. The petition for remission or mitigation shall be signed by the petitioner, his attorney at law, or a customhouse broker representing the petitioner. If the petitioner is a corporation, the petition may be signed by an officer or responsible supervisory employee thereof, an attorney at law, or a customhouse broker representing the corporation.

(c) Form. The petition for remission or mitigation need not be in any particular form. It shall set forth the following:

(1) A description of the property involved;

(2) The date and place of the violation or seizure; and

(3) The facts and circumstances relied upon by the petitioner to justify the remission or mitigation.

(d) Petition for relief from forfeiture. When the petition is for relief from a forfeiture, it shall show the interest of the petitioner in the property and in appropriate cases shall be supported by bills of sale, contracts, mortgages, or other satisfactory evidence.

(e) False statement in petition. A false statement contained in a petition may subject the petitioner to prosecution under the provisions of 18 U.S.C. 1001.

[T.D. 70-249, 35 FR 18265, Dec. 1, 1970, as amended by T.D. 72-107, 37 FR 7592, Apr. 18, 1972; T.D. 73-141, 38 FR 13556, May 23, 1973]

§ 171.12 Filing of petition.

(a) Where filed. A petition for relief shall be filed with the district director for the district in which the property

was seized or the fine or penalty imposed.

(b) When filed. Petitions for relief shall be filed within 60 days from the date of mailing of the notice of fine, penalty, or forfeiture incurred, unless additional time has been authorized as provided in § 162.32(a) of this chapter.

(c) Number of copies. The petition shall be filed in triplicate.

[T.D. 70-249, 35 FR 18265, Dec. 1, 1970, as amended by T.D. 75-232, 40 FR 43488, Sept. 22, 1975)

§ 171.13 Additional evidence required with certain petitions.

(a) Seized property in possession of another responsible for act. If the seized property was in the possession of another who was responsible for or caused the act which resulted in the seizure, evidence shall be produced by the petitioner as to the manner in which the property came into the possession of such other person. The petitioner shall also submit evidence that prior to parting with the property he did not know, nor have reasonable cause to believe, that the property would be used to violate Customs or other laws, and that he did not know or have reason to believe that the violator had a criminal record or general reputation for commercial crime. In the case of a family member having an interest in property seized while in possession of another family member, evidence shall be submitted that the petitioning family member did not know or have reason to know that the property was likely to be used in the act which resulted in the seizure.

(b) Petitioner holding chattel mortgage or conditional sales contract. A petitioner holding a chattel mortgage or conditional sales contract covering the seized property shall submit with his petition evidence showing that:

(1) He has an interest in such property, as owner or otherwise, which he acquired in good faith; and

(2) He had at no time any knowledge or reason to believe that the property was being or would be used in violation of Customs or other laws of the United States.

[T.D. 70-249, 35 FR 18265, Dec. 1, 1970, as amended by T.D. 72-67, 37 FR 4077, Feb. 26, 1972]

Subpart C-Action on Petitions

§ 171.21 Petitions acted on by district director.

The district director may mitigate or remit fines, penalties, and forfeitures incurred under any law administered by the United States Customs Service on such terms and conditions as, under the law and in view of the circumstances, he shall deem appropriate, when the total amount of the fines and penalties incurred with respect to any one offense, together with the total value of any merchandise or other article subject to forfeiture or to a claim for forfeiture value, does not exceed $25,000.

[T.D. 73-308, 38 FR 30549, Nov. 6, 1973]

§ 171.22 Special cases acted upon by district director.

(a) Forfeitures of merchandise illegally transported coastwise. Forfeiture of merchandise under title 46, United States Code, section 883, for having been illegally transported coastwise, regardless of the value of the merchandise, may be remitted if the petition for relief establishes to the satisfaction of the district director that the violation occurred as a direct result of an arrival of the transporting vessel in distress.

(b) Forfeiture of imported liquor or compound. When any package of or package containing any spirituous, vinous, malted, or other fermented liquor, or any compound containing any spirituous, vinous, malted, or other fermented liquor fit for use for beverage purposes, or any vessel or vehicle in which the same has been transported has become subject to forfeiture under the provisions of 18 U.S.C. 3615, for noncompliance with 18 U.S.C. 1263, and the U.S. attorney has advised the district director that there is not sufficient evidence of intent to violate the law to warrant criminal prosecution thereunder, the forfeiture incurred shall be remitted pursuant to the authority of section

7327, Internal Revenue Code of 1954 (26 U.S.C. 7327), and section 618, Tariff Act of 1930 (19 U.S.C. 1618), upon the condition that the expenses of seizure, if any, shall be paid.

(c) Claim for property stolen in Canada and seized by U.S. Customs. Under the provisions of Executive Order 4306, dated September 19, 1925 (T.D. 41110), any person claiming to be the owner of property stolen in Canada, brought into the United States and seized by Customs authorities for violation of law, may file with the district director having custody of the property a petition for its release, addressed to the Secretary of the Treasury. The petition shall be supported by evidence of ownership in the claimant and shall contain a waiver and release of all possible claims against the United States or any officer thereof for compensation or damages incident to the seizure and detention of the property. If the district director is satisfied that the claimant is the owner of the property and that it was brought into the United States without collusion on the part of the claimant, the district director may release the property for return to Canada upon the payment of all expenses incident to its seizure and detention. In the event of conflicting claims for the property or any doubt as to the claimant's interest in or right to the property, the district director shall submit the matter to the Commissioner of Customs for decision.

Subpart D-Disposition of Petitions

§ 171.31 Act or omission did not occur. If it is definitely determined that the act or omission forming the basis of a penalty or forfeiture claim did not in fact occur, the claim shall be canceled by the district director. When the determination of whether or not the claim was erroneously made depends upon a construction of law, the claim shall not be canceled without the approval of the Commissioner of Customs unless there is in force a ruling by the Commissioner of Customs decisive of the issue.

§ 171.32 Limitation on time decision effective.

A decision to mitigate a penalty or to remit a forfeiture upon condition that a stated amount is paid shall be effective for not more than 60 days from the date of notice to the petitioner of such decision, unless the decision itself prescribes a different effective period or the decision is later amended to change the effective period. If payment of the stated amount is not received within the effective period, or arrangements made for delayed payment or installment payments, or a supplemental petition filed within the effective period, the full penalty or forfeiture shall be deemed applicable and shall be enforced by promptly referring the matter to the U.S. attorney for appropriate attention, unless other action has been directed by the Commissioner of Customs.

§ 171.33 Supplemental petitions for relief.

(a) Time and place of filing. If the petitioner is not satisfied with a decision of the district director or the Commissioner of Customs, a supplemental petition may be filed with the district director. Such a petition shall be filed either:

(1) Within 60 days from the date of notice to the petitioner of the decision on the initial petition for relief if no effective period is prescribed in the decision; or

(2) Within the time prescribed in the decision on the initial petition for relief as the effective period of the decision.

(b) Consideration—(1) Decisions of the district director. Where the district director has the authority to grant relief in accordance with the provisions of §§ 171.21 and 171.22, he may grant additional relief if he believes it is warranted. If there has been a specific request on the part of the petitioner for review by the regional commissioner, or if the district director believes no additional relief is warranted, or if the petitioner is not satisfied with the additional relief granted by the district director, the supplemental petition, together with all pertinent documents, shall be forwarded to the regional commissioner

§ 171.43 Evidence required.

In addition to such other evidence as may be required under the provisions of Subpart B of this part, the petition for restoration of proceeds of sale under section 613, Tariff Act of 1930, as amended (19 U.S.C. 1613), shall show the interest of the petitioner in the property, supported in appropriate cases by bills of sale, contracts, mortgages, or other satisfactory documentary evidence. The petition shall be supported by satisfactory proof that the petitioner did not know of the seizure prior to the declaration or decree of forfeiture and was in such circumstances as prevented him from knowing of it.

§ 171.44 Forfeited property authorized for official use.

If forfeited property the subject of a claim under section 613, Tariff Act of 1930, as amended (19 U.S.C. 1613), has been authorized for official use, retention or delivery shall be regarded as the sale thereof for the purposes of section 613. The appropriation available to the receiving agency for the purchase, hire, operation, maintenance, and repair of property of the kind so received is available for the granting of relief to the claimant and for the satisfaction of liens for freight charges and contributions in general average that may have been filed.