Disclosure of Information Regarding Abandoned Merchandise, 44790-44792 [2019-18317]

Agencies

• DEPARTMENT OF HOMELAND SECURITY
• U.S. Customs and Border Protection
• DEPARTMENT OF THE TREASURY

[Federal Register Volume 84, Number 166 (Tuesday, August 27, 2019)]
[Proposed Rules]
[Pages 44790-44792]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2019-18317]


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Proposed Rules
                                                Federal Register
________________________________________________________________________

This section of the FEDERAL REGISTER contains notices to the public of 
the proposed issuance of rules and regulations. The purpose of these 
notices is to give interested persons an opportunity to participate in 
the rule making prior to the adoption of the final rules.

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Federal Register / Vol. 84, No. 166 / Tuesday, August 27, 2019 / 
Proposed Rules

[[Page 44790]]



DEPARTMENT OF HOMELAND SECURITY

U.S. Customs and Border Protection

DEPARTMENT OF THE TREASURY

19 CFR Parts 127 and 133

[USCBP-2019-0031]
RIN 1515-AE35


Disclosure of Information Regarding Abandoned Merchandise

AGENCY: U.S. Customs and Border Protection, Department of Homeland 
Security; Department of the Treasury.

ACTION: Notice of proposed rulemaking.

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SUMMARY: This document proposes to amend the U.S. Customs and Border 
Protection (CBP) regulations pertaining to disclosure of information 
regarding merchandise bearing suspected counterfeit trademarks. The 
proposed amendment would create a procedure for the disclosure of 
information otherwise protected by the Trade Secrets Act to a trademark 
owner when merchandise bearing suspected counterfeit trademarks has 
been voluntarily abandoned.

DATES: Comments on the proposed rule must be received on or before 
October 28, 2019.

ADDRESSES: You may submit comments, identified by docket number, by one 
of the following methods:
     Federal eRulemaking Portal: https://www.regulations.gov. 
Follow the instructions for submitting comments via docket number USCBP 
2019-0031.
     Mail: Trade and Commercial Regulations Branch, Office of 
Trade, Regulations and Rulings, U.S. Customs and Border Protection, 90 
K Street NE, 10th Floor, Washington, DC 20229-1177.
    Instructions: All submissions received must include the agency name 
and docket number for this proposed rulemaking. All comments received 
will be posted without change to https://www.regulations.gov, including 
any personal information provided. For detailed instructions on 
submitting comments and additional information on the proposed 
rulemaking process, see the ``Public Participation'' heading of the 
SUPPLEMENTARY INFORMATION section of this document.
    Docket: For access to the docket to read background documents or 
comments received, go to https://www.regulations.gov. Submitted comments 
may also be inspected during regular business days between the hours of 
9 a.m. and 4:30 p.m. at the Trade and Commercial Regulations Branch, 
Regulations and Rulings, Office of Trade, U.S. Customs and Border 
Protection, 90 K Street NE, 10th Floor, Washington, DC. Arrangements to 
inspect submitted comments should be made in advance by calling Joseph 
Clark at (202) 325-0118.

FOR FURTHER INFORMATION CONTACT: Alex Bamiagis, Intellectual Property 
Rights Branch, Regulations and Rulings, Office of Trade, U.S. Customs 
and Border Protection, (202) 325-0415.

SUPPLEMENTARY INFORMATION: 

Public Participation

    Interested persons are invited to participate in this rulemaking by 
submitting written data, views, or arguments on all aspects of the 
proposed rule. CBP also invites comments that relate to the economic, 
environmental, or federalism effects that might result from this 
proposed rule. If appropriate to a specific comment, the commenter 
should reference the specific portion of the proposed rule, explain the 
reason for any recommended change, and include data, information, or 
authority that support such recommended change.

Background

    Among other responsibilities, U.S. Customs and Border Protection 
(CBP) enforces intellectual property rights (IPR) laws and regulations 
at the border. The majority of the CBP regulations prescribing these 
efforts are found in part 133 of title 19 of the Code of Federal 
Regulations (19 CFR part 133). Part 133 provides for the recordation of 
trademarks, trade names, and copyrights with CBP and prescribes the 
enforcement procedures applicable to suspected infringing merchandise. 
Part 133 also sets forth procedures for the detention, seizure, and 
disposition of articles violating certain IPR laws and regulations, 
including information disclosure to right owners in appropriate 
circumstances. Consistent with Executive Order 13785, this proposed 
regulatory amendment would allow the disclosure of certain information 
to a trademark owner in circumstances where goods have been voluntarily 
abandoned as described in 19 CFR 127.12(b), if CBP suspects that the 
successful importation of the merchandise would have violated United 
States trade laws prohibiting the importation of merchandise bearing 
counterfeit marks.

I. The Trade Secrets Act and Disclosure of Information Pertaining to 
Certain Intellectual Property Rights Enforced at the Border

    The Trade Secrets Act (18 U.S.C. 1905) bars the unauthorized 
disclosure by government officials of any information received in the 
course of their employment or official duties when such information 
``concerns or relates to the trade secrets, processes, operations, 
style of work, or apparatus, or to the identity, confidential 
statistical data, amount or source of any income, profits, losses, or 
expenditures of any person, firm, partnership, corporation, or 
association.'' 18 U.S.C. 1905.
    Specifically, the Trade Secrets Act protects those required to 
furnish confidential commercial or financial information to the 
government by shielding them from the competitive disadvantage that 
could result from disclosure of that information by the government. In 
turn, this protection encourages those providing information to the 
government to furnish accurate and reliable information that is useful 
to the government.
    The Trade Secrets Act, however, permits those government officials 
covered by the Act to disclose protected information when the 
disclosure is otherwise ``authorized by law,'' which includes both 
statutes expressly authorizing disclosure and properly promulgated 
substantive agency regulations authorizing disclosure based on a valid 
statutory interpretation. See Chrysler v. Brown, 441 U.S. 281, 294-316 
(1979).
    The Secretary of the Treasury thus has authority to disclose 
information otherwise protected under the Trade Secrets Act when such 
disclosures are authorized by law. Disclosures meeting

[[Page 44791]]

the ``authorized by law'' standard of the Trade Secrets Act include 
those made pursuant to regulations that: (1) Are in compliance with the 
provisions of the Administrative Procedure Act (5 U.S.C. 551 et seq.); 
and (2) implement a valid statute. Chrysler, 441 U.S. at 294-96, 301-
03.
    Several provisions in titles 15 and 19 of the United States Code 
give CBP authority to promulgate regulations to enforce prohibitions 
against the importation of merchandise bearing infringing and 
counterfeit trademarks. The Lanham Trademark Act (15 U.S.C. 1124) 
authorizes the Secretary of the Treasury to promulgate regulations 
regarding trademarks and to aid CBP officers in enforcing the 
prohibitions against importation. Additionally, sections 526(e) and 596 
of the Tariff Act of 1930, as amended (19 U.S.C. 1526(e), and 19 U.S.C. 
1595a(c)), prohibit the importation of merchandise bearing a 
counterfeit mark and the introduction or attempted introduction into 
the United States of merchandise or packaging in which, inter alia, 
trademark protection violations are involved. Moreover, section 526(e) 
of the Tariff Act of 1930, as amended (19 U.S.C. 1526(e)), requires CBP 
to notify the owner of the trademark when merchandise bearing a 
counterfeit mark is seized. Section 624 of the Tariff Act of 1930, as 
amended (19 U.S.C. 1624), authorizes the Secretary of the Treasury to 
promulgate regulations to carry out the provisions of the Tariff Act of 
1930, as amended. Collectively, these statutes authorize the Secretary 
of the Treasury to disclose certain importation information to right 
owners to assist CBP in its IPR enforcement efforts. Disclosure of this 
information to right owners can help CBP prevent the importation of 
infringing and counterfeit merchandise by identifying sources or 
channels of violative shipments.
    If CBP suspects that an article imported into the United States 
bears a counterfeit mark, it may detain the article for up to 30 days 
from the date on which the merchandise is presented for examination. 19 
U.S.C. 1499; 19 CFR 133.21(b). During the detention period, and in 
accordance with 19 CFR 133.21(b)(4), CBP may disclose to the owner of 
the mark limited importation information if CBP concludes that the 
disclosure would assist CBP in determining whether the imported article 
bears a counterfeit mark. CBP also discloses to the owner of the mark 
comprehensive importation information after CBP seizes merchandise for 
bearing a counterfeit mark in accordance with 19 CFR 133.21(e).

II. Voluntary Abandonment of Merchandise Suspected of Bearing 
Counterfeit Marks

    As noted in a 2018 report issued by the Government Accountability 
Office (GAO), ``the growth of e-commerce has provided additional 
opportunities for counterfeiters to deceive consumers . . .'' and 
challenged CBP's ability to prohibit the importation of counterfeit 
merchandise. U.S. Gov't Accountability Office, GAO 18-216, 
``Intellectual Property: Agencies Can Improve Efforts to Address Risks 
Posed by Changing Counterfeits Market,'' Report to the Chairman, 
Committee on Finance, U.S. Senate, p. 10-11 (2018). The report notes 
that e-commerce merchandise is increasingly imported in low-value 
shipments arriving via express consignment or international mail. Id. 
Such shipments often are voluntarily abandoned if CBP detains the 
merchandise on suspicion of an IPR violation. The cost of demonstrating 
to CBP that a shipment is legitimate may outweigh the importation's 
value, and importers frequently fail to respond to CBP inquiries. 
Instead, some of these importations may be voluntarily abandoned (see 
19 CFR 127.12(b)) after CBP has detained the merchandise on suspicion 
of an IPR violation.
    Section 302 of the Trade Facilitation and Trade Enforcement Act of 
2015 (Pub. L. 114-125; 130 Stat. 149; Section 628a of the Tariff Act of 
1930 (19 U.S.C. 1628a)) provides CBP with authority to disclose 
information to right holders in certain situations when it would assist 
CBP in determining if the merchandise is being imported in violation of 
the copyright or trademark laws. Under the current regulations in part 
133, however, when merchandise is voluntarily abandoned, trademark 
owners do not receive the importation information that would be 
provided if merchandise bearing a counterfeit trademark were seized. In 
fact, the regulations in part 133 are silent with respect to IPR 
enforcement against merchandise that has been voluntarily abandoned.

III. Explanation of Proposed Amendment to Part 133

    Executive Order 13785, ``Establishing Enhanced Collection and 
Enforcement of Antidumping and Countervailing Duties and Violations of 
Trade and Customs Laws,'' instructs CBP to ensure that it can share 
information regarding voluntarily abandoned merchandise with right 
owners ``to ensure the timely and efficient enforcement of laws 
protecting [IPR] holders from the importation of counterfeit goods.'' 
82 FR 16719 (March 31, 2017). As a result, CBP is proposing to add a 
new paragraph to 19 CFR 133.21. CBP is proposing to disclose the same 
comprehensive importation information provided to trademark owners when 
merchandise has been seized in cases where merchandise has been 
voluntarily abandoned, if CBP suspects the successful importation of 
the merchandise would have violated United States trade laws 
prohibiting importation of merchandise bearing counterfeit marks, and 
that disclosure would assist CBP in its IPR enforcement mission.
    Under those conditions, the amendment would allow CBP to disclose 
the following information: The date of importation, the port of entry, 
the description of the merchandise, the quantity of the merchandise, 
the country of origin of the merchandise, the name and address of the 
manufacturer, the name and address of the exporter, and the name and 
address of the importer. As in the seizure context, trademark owners 
may use this importation information to help CBP prevent IPR violations 
by identifying sources or channels of violative shipments.

IV. Other Conforming Amendments

    Sections 133.21 to 133.25 currently cite to section 818(g) of the 
National Defense Authorization Act (NDAA) for Fiscal Year 2012 (Pub. L. 
112-81; 125 Stat. 1496; 10 U.S.C. 2302 note) as specific authority. 
Section 302(b) of the Trade Facilitation and Trade Enforcement Act of 
2015 (Pub. L. 114-125; 130 Stat. 122; Section 628a of the Tariff Act of 
1930 (19 U.S.C. 1628a), as amended) terminated and replaced the NDAA 
authority. Because of these statutory changes, CBP is proposing to 
revise the specific authority citation for sections 133.21 to 133.25.
    CBP is also proposing to add a new paragraph (c) in 19 CFR 127.12, 
cross-referencing the detention and disclosure provisions of 19 CFR 
133.21(b) which may be applicable to voluntarily abandoned merchandise 
suspected of bearing a counterfeit mark.

Statutory and Regulatory Requirements

I. Executive Orders 13563, 12866, and 13771

    Executive Orders 13563 and 12866 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

[[Page 44792]]

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. 
Executive Order 13771 (``Reducing Regulation and Controlling Regulatory 
Costs'') directs agencies to reduce regulation and control regulatory 
costs and provides that ``for every one new regulation issued, at least 
two prior regulations be identified for elimination, and that the cost 
of planned regulations be prudently managed and controlled through a 
budgeting process.''
    This rule is not a ``significant regulatory action,'' under section 
3(f) of Executive Order 12866. Accordingly, OMB has not reviewed this 
regulation. As this rule is not a significant regulatory action, this 
rule is exempt from the requirements of Executive Order 13771. See 
OMB's Memorandum titled ``Guidance Implementing Executive Order 13771, 
Titled `Reducing Regulation and Controlling Regulatory Costs' '' (April 
5, 2017).

II. Regulatory Flexibility Act

    The Regulatory Flexibility Act (5 U.S.C. 601 et seq.), as amended 
by the Small Business Regulatory Enforcement and Fairness Act of 1996, 
requires agencies to assess the impact of regulations on small 
entities. 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).
    Importers who voluntarily abandon merchandise consist of all types 
of businesses and individuals, including small businesses, so it is 
likely that a substantial number of small businesses are affected. 
However, the impact is not significant, because this rule would impose 
no new monetary costs to these importers. If they do not wish to have 
their merchandise's information shared with the right owner, they may 
choose not to voluntarily abandon these goods. Therefore, CBP certifies 
that this rule will not have a significant economic impact on a 
substantial number of small entities. Notwithstanding this 
certification, CBP invites comments about the impact of this rule, if 
adopted, on small entities.

Signing Authority

    This rulemaking is being issued in accordance with 19 CFR 
0.1(a)(1), pertaining to the authority of the Secretary of the Treasury 
(or that of his or her delegate) to approve regulations concerning 
trademark enforcement.

List of Subjects

19 CFR Part 127

    Exports, Freight, Imports.

19 CFR Part 133

    Counterfeit trademarks, Detentions, Disclosure, Restricted 
merchandise, Trademarks, Trade names.

    For the reasons stated above in the preamble, CBP proposes to amend 
parts 127 and 133 of title 19 of the Code of Federal Regulations (19 
CFR parts 127 and 133) as set forth below.

PART 127--GENERAL ORDER, UNCLAIMED, AND ABANDONED MERCHANDISE

0
1. The general authority citation for part 127 continues to read as 
follows:

    Authority:  19 U.S.C. 66, 1311, 1312, 1484, 1485, 1490, 1491, 
1492, 1493, 1506, 1559, 1563, 1623, 16241646a; 26 U.S.C. 5753.

0
2. Section 127.12 is amended by adding paragraph (c), to read as 
follows:


Sec.  127.12   Abandoned merchandise.

* * * * *
    (c) If merchandise voluntarily abandoned pursuant to paragraph (b) 
of this section is suspected of bearing a counterfeit mark, it also may 
be subject to the detention and disclosure provisions of Sec.  
133.21(b) of this chapter.

PART 133--TRADEMARKS, TRADE NAMES, AND COPYRIGHTS

0
3. The general authority citations for part 133 continue to read as 
follows and the specific authority citations for Sec. Sec.  133.21 
through 133.25 are revised to read as follows:

    Authority: 15 U.S.C. 1124, 1125, 1127; 17 U.S.C. 101, 601, 602, 
603; 19 U.S.C. 66, 1202, 1499, 1526, 1624; 31 U.S.C. 9701.
    Sections 133.21 through 133.25 also issued under 19 U.S.C. 
1628a; Sec. 302, Public Law 114-125.

0
4. In Sec.  133.21, paragraph (b)(6) is added to read as follows:


Sec.  133.21   Articles suspected of bearing counterfeit marks.

* * * * *
    (b) * * *
    (6) Voluntary abandonment and disclosure to owner of the mark of 
comprehensive importation information. When merchandise that bears a 
mark suspected by CBP of being a counterfeit version of a mark that is 
registered with the U.S. Patent and Trademark Office and recorded with 
CBP pursuant to subpart A of this part has been voluntarily abandoned 
under Sec.  127.12(b) of this chapter, CBP may disclose to the owner of 
the mark the following comprehensive importation information, if CBP 
determines the disclosure will assist in CBP's trademark enforcement:
    (i) The date of importation;
    (ii) The port of entry;
    (iii) The description of the merchandise;
    (iv) The quantity of the merchandise;
    (v) The country of origin of the merchandise;
    (vi) The name and address of the manufacturer;
    (vii) The name and address of the exporter; and
    (viii) The name and address of the importer.
* * * * *

Mark A. Morgan,
Acting Commissioner, U.S. Customs and Border Protection.
    Approved: August 21, 2019.
Timothy E. Skud,
Deputy Assistant Secretary of the Treasury.
[FR Doc. 2019-18317 Filed 8-26-19; 8:45 am]
 BILLING CODE 9111-14-P