of any bond posted with Customs, the filing of petitions for relief from liquidated damages incurred, and the consideration of such petitions.

Subpart A-General Provisions

§ 172.1 Notice of liquidated damages incurred and right to petition for relief. (a) Notice of liquidated damages incurred. When there is a failure to meet the conditions of any bond posted with Customs, the principal shall be notified in writing of any liability for liquidated damages incurred by him and a demand shall be made for payment. The sureties on such bond shall also be advised in writing, at the same time as the principal, of the liability for liquidated damages incurred by the principal.

(b) Notice of right to petition for relief. The notice shall also inform the principal and his sureties on the bond that application may be made for relief from payment of liquidated damages under section 623(c), Tariff Act of 1930, as amended (19 U.S.C. 1623(c)), or any other applicable statute authorizing the cancellation of any bond or of any bond charge that may have been made against such bond.

§ 172.2 Failure to petition for relief.

(a) Referral of claim to U.S. attorney. If the parties liable for liquidated damages incurred fail to petition for relief or to pay or make arrangements to pay the liquidated damages within 60 days from the date of mailing of the notice of the liquidated damages incurred as provided for in § 172.1, or within such additional time as may have been granted, the district director of Customs shall refer the claim immediately to the U.S. attorney for collection.

(b) Absence from the United States. If it appears that the parties liable for liquidated damages are absent from the United States or during the 60-day period referred to in paragraph (a) of this section were absent for more than 30 days, the district director may withhold such referral for a reasonable time unless other action is expressly

authorized by the Commissioner of Customs.

Subpart B-Application for Relief

§ 172.11 Petition for relief.

(a) To whom addressed. Petitions for relief shall be addressed to the Commissioner of Customs.

(b) Form. A petition for relief need not be in any particular form. Such petition shall set forth the facts relied upon by the petitioner to justify cancellation of the claim for liquidated damages, and 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.

[T.D. 70-249, 35 FR 18267, Dec. 1, 1970, as amended by T.D. 73-141, 38 FR 13556, May 23, 1973]

§ 172.12 Filing of petition for relief.

(a) Where filed. A petition for relief shall be filed with the district director of Customs for the district in which the liability for liquidated damage is incurred.

(b) When filed. A petition for relief shall be filed within 60 days from the date of mailing of the notice of the liability for liquidated damages incurred unless an extension of such period has been granted by the district director.

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

Subpart C-Action on Petitions

§ 172.21 Petitions acted on by district director of Customs.

The district director may cancel any claim for liquidated damages incurred on such terms and conditions as, under the law and in view of the circumstances, he shall deem appropriate when the claim is $50,000 or less.

[T.D. 73-308, 38 FR 30550, Nov. 6, 1973]

§ 172.22 Special cases acted on by district director of Customs.

(a) Nonproduction of documents in general. District directors are hereby authorized to treat any bond charge for the production of a missing document as satisfied upon payment by the principal or surety of the sum of $25 as liquidated damages for each missing declaration of the consignee or other document, except shippers' export declarations and special Customs and commercial invoices, not produced within the time prescribed by law or regulations or any lawful extension of such time.

(b) Nonproduction of special Customs or commercial invoices. When a required special Customs or commercial invoice is not produced on the date of entry or within 6 months thereafter, unless such production is waived under the provisions of § 141.92 of this chapter, the bond charge for the production thereof may be canceled by the district director upon the payment of $25 as liquidated damages, if:

(1) The party who made the entry submits an application for relief explaining in detail why the special Customs or commercial invoice could not be produced within the prescribed period; and

(2) The district director of Customs is satisfied by such application or otherwise that the failure to produce the invoice within the prescribed period was due to causes wholly beyond the control of the party making the entry and not to any purpose of the foreign seller or shipper to withhold information required by law, regulation, or special instruction to be shown on the invoice.

(c) Nonproduction of free-entry or reduced-duty documents. When free entry or the application of a reduced rate of duty is dependent upon the production of a document which the importer fails to produce, or when a conditionally free or reduced duty provision claimed on entry is held to be inapplicable, the claim for free entry or reduced rate of duty shall be treated by the district director as abandoned upon the assessment and payment of duty and the bond (or, in the

case of a term bond, the charge against the bond) given for the production of the free-entry or reducedduty document may be cancelled without the collection of liquidated damages.

(d) Failure to file timely entry under immediate delivery procedure. When a timely entry for merchandise not subject to quota has not been filed after release under a special permit for immediate delivery, the district director may act upon an application for relief from liquidated damages assessed in accordance with § 142.15 of this chapter as follows:

(1) If he is satisfied that the delay was not deliberate, the district director may cancel such liquidated damages upon the payment of an appropriate sum which shall not exceed 10 percent of the duty assessed but not less than $25. In general, the district airector shall not cancel a claim for liquidated damages upon payment of an amount in the lower range of his discretion if the entry is late by more than 3 working days. In determining the appropriate amount the district director shall take into consideration the following:

(i) The circumstances causing the delay;

(ii) The extent of the lateness; (iii) The amount of duty involved; and

(iv) The past record of the importer with respect to the timeliness of filing entries.

(2) If he is satisfied that the violation was incurred solely because of a delay in the return by Customs to the importer of documents necessary to make entry, the district director may cancel such liquidated damages without payment.

(3) If collection of an amount greater than that provided by this paragraph appears warranted the case shall be forwarded to the Commissioner of Customs for disposition.

(R.S. 251, as amended, sec. 623, 624, 46 Stat. 759, as amended (19 U.S.C. 66, 1623, 1624).) [T.D. 70-249, 35 FR 18267, Dec. 1, 1970, as amended by T.D. 73-175, 38 FR 17487, July 2, 1973; T.D. 75-229, 40 FR 43026, Sept. 18, 1975; T.D. 77-27, 42 FR 3162, Jan. 17, 1977)

§ 172.23 Limitations on consideration of petitions.

No action looking to relief from the payment of full liquidated damages shall be taken on any petition, irrespective of the amount involved, if the claim has been referred to the U.S. attorney for collection as provided in § 172.2.

Subpart D-Disposition of Petitions

§ 172.31 Act or omission did not occur. (a) Definite. If it is definitely determined that the act or omission forming the basis for a claim for liquidated damages did not in fact occur, the claim shall be cancelled by the district director. If the liquidated damages have already been paid, they shall be refunded by the regional commissioner of Customs, and an appropriate notation shall be made on Customs Form 5955-A, if the transaction has already been recorded thereon.

(b) Dependent upon a construction of law. When the determination of whether or not the claim was erroneously made depends upon a construction of law, the claim shall not be cancelled without the approval of the Commissioner of Customs, unless there is in force a ruling decisive of the issue.

(c) Doubtful cases. Approval of the Ccmmissioner of Customs shall be requested in all doubtful cases.

[T.D. 74-227, 39 FR 32023, Sept. 4, 1974]

§ 172.32 Limitation on time decision effective.

A decision to cancel a claim for liquidated damages on condition that a stated amount be paid shall be effective for not more than 60 days from the date of notice to the parties 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 made, or arrangements made for delayed payment or installment payments, or a supplemental petition filed within the effective period, the full claim for liquidated damages shall be deemed applicable and shall be

promptly referred to the U.S. attorney for collection, unless other action has been directed by the Commissioner of Customs.

§ 172.33 Supplemental petitions for relief.

(a) Time and place of filing. If the interested parties are not satisfied with a decision of the district director or the Commissioner of Customs, a supplemental petition may be filed with the district director of Customs by the interested parties. 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 authority to grant relief in accordance with the provisions of §§ 172.21 and 172.22, 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 reconsideration 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 of the region in which the district lies for reconsideration and disposition of the case, except as provided in § 172.22(d)(3).

(2) Decisions of the Commissioner of Customs. A supplemental petition appealing a decision of the Commissioner of Customs shall be filed, together with all pertinent documents, with the district director who initiated the case for transmittal to the Commissioner of Customs for reconsideration.

[T.D. 70-249, 35 FR 18267, Dec. 1, 1970, as amended by T.D. 75-36; 40 FR 5146, Feb. 4, 1975]

PART 173-ADMINISTRATIVE REVIEW IN GENERAL

Sec.

173.0 Scope.

173.1 Authority to review for error.

173.2 Transactions which may be reviewed and corrected.

173.3 Voluntary reliquidation.

173.4 Correction of clerical error, mistake of fact, or inadvertence.

173.5 Review of entry covering household for personal effects.

173.6 Review of entry for fraud.

AUTHORITY: R.S. 251, secs. 501, 624, 46 Stat. 730, as amended, 759; 19 U.S.C. 66, 1501, 1624.

SOURCE: T.D. 70-181, 35 FR 13429, Aug. 22, 1970, unless otherwise noted.

§ 173.0 Scope.

This part deals with the general authority of review, the authority to reliquidate voluntarily, the authority to correct for clerical error, mistake of fact, or other inadvertence under section 520(c)(1), Tariff Act of 1930, as amended, the authority to review an entry of household or personal effects, and the power to reliquidate an entry on account of fraud.

§ 173.1 Authority to review for error.

District directors have broad responsibility and authority to review transactions to insure that the rate and amount of duty assessed on imported merchandise is correct and that the transaction is otherwise in accordance with the law. This authority extends to errors in the construction of a law and to errors adverse to the Government as well as the importer.

§ 173.2 Transactions which may be reviewed and corrected.

The district director may review transactions for correctness, and take appropriate action under his general authority to correct errors, including those in appraisement where appropriate, at the time of:

(a) Liquidation of an entry;

(b) Voluntary reliquidation completed within 90 days after liquidation;

(c) Voluntary correction of an exaction within 90 days after the exaction was made;

(d) Reliquidation made pursuant to a valid protest covering the particular merchandise as to which a change is in order; or

(e) Modification, pursuant to a valid protest, of a transaction or decision which is neither a liquidation or reliquidation.

§ 173.3 Voluntary reliquidation.

(a) Authority to reliquidate. The district director within 90 days from the date notice of the original liquidation is given to the importer, consignee, or agent, may reliquidate on his own initiative a liquidation or a reliquidation to correct errors in appraisement, classification, or any other element entering into the liquidation or reliquidation, including errors based on misconstruction of applicable law. A voluntary reliquidation may be made even though a protest has been filed, and whether the error is discovered by the district director or is brought to his attention by an interested party.

(b) Notice of reliquidation. Notice of a voluntary reliquidation shall be given in accordance with the requirements for giving notice of the original liquidation.

(Sec. 501, 46 Stat. 730, as amended; 19 U.S.C. 1501)

§ 173.4 Correction of clerical error, mistake of fact, or inadvertence.

(a) Authority to review and correct. Even though a valid protest was not filed, the district director, upon timely application, may correct pursuant to section 520(c)(1), Tariff Act of 1930, as amended (19 U.S.C. 1520(c)(1), a clerical error, mistake of fact, or other inadvertence meeting the requirements of paragraph (b) of this section, by reliquidation or other appropriate action.

(b) Transactions which may be corrected. Correction pursuant to section 520(c)(1), Tariff Act of 1930, as amended, may be made in any entry, liquidation, appraisement, or other Customs transaction if the clerical error, mistake of fact, or other inadvertence:

(1) Does not amount to an error in the construction of a law;

(2) Is adverse to the importer; and

(3) Is manifest from the record or established by documentary evidence.

(c) Limitation on time for application. A clerical error, mistake of fact, or other inadvertence meeting the requirements of paragraph (b) of this section, must be brought to the attention of the district director:

(1) Within 1 year after the date of entry, or other transaction (including liquidation, reliquidation, or exaction) if the error, mistake of fact, or other inadvertence is in the entry, or other transaction (including a liquidation, reliquidation, or exaction), or

(2) Within 90 days after liquidation or exaction when the liquidation or exaction is made more than 9 months after the date of entry, or other transaction, except that in cases where the error originates in the liquidation, reliquidation, or exaction, the 1-year limitation provided for in subparagraph (1) of this paragraph shall apply.

(Sec. 520, 46 Stat. 739, as amended; 19 U.S.C. 1520)

[T.D. 70-181, 35 FR 13429, Aug. 22, 1970, as amended by T.D. 72-25, 37 FR 782, Jan. 19, 1972]

§ 173.5 Review of entry covering household or personal effects.

An error in the liquidation of an entry covering household or personal effects may be corrected by the district director even though a timely protest was not filed if an application for refund is filed with the district director within 1 year after the date of the entry and no waiver of compliance with applicable regulations is involved other than a waiver which the district director has authority to grant. Where the district director has no authority to grant the waiver, the application shall be referred to the Commissioner of Customs.

(Sec. 520, 46 Stat. 739, as amended; 19 U.S.C. 1520)

§ 173.6 Review of entry for fraud.

The district director may review any entry in which fraud is suspected. Where probable cause to believe there is fraud in the case is found by the district director, he may reliquidate an entry within 2 years (exclusive of the time during which a protest is pend

174.29 Allowance or denial of protests. 174.30 Notice of denial of protest. 174.31 Judicial review of denial of protest.

AUTHORITY: R.S. 251, as amended, sec. 624, 46 Stat. 759; 19 U.S.C. 66, 1624. Subpart B also issued under sec. 514, 46 Stat. 736, as amended; 19 U.S.C. 1514. Subpart C also issued under sec. 515, 46 Stat. 736, as amended; 19 U.S.C. 1515.

SOURCE: T.D. 70-181, 35 FR, 13429, Aug. 22, 1970, unless otherwise noted.

§ 174.0 Scope.

This part deals with the administrative review of decisions of the district director, including the requirements for the filing of protests against such decisions, amendment of protests, review and accelerated disposition, and provisions dealing with further administrative review.