US Laws, Codes, Statutes & Cases

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[Laws in effect as of January 24, 2002]
[Document not affected by Public Laws enacted between
  January 24, 2002 and December 19, 2002]
[CITE: 19USC1509]

 
                        TITLE 19--CUSTOMS DUTIES
 
                      CHAPTER 4--TARIFF ACT OF 1930
 
                 SUBTITLE III--ADMINISTRATIVE PROVISIONS
 
       Part III--Ascertainment, Collection, and Recovery of Duties
 
Sec. 1509. Examination of books and witnesses


(a) Authority

    In any investigation or inquiry conducted for the purpose of 
ascertaining the correctness of any entry, for determining the liability 
of any person for duty, fees and taxes due or duties, fees and taxes 
which may be due the United States, for determining liability for fines 
and penalties, or for insuring compliance with the laws of the United 
States administered by the United States Customs Service, the Secretary 
(but no delegate of the Secretary below the rank of district director or 
special agent in charge) may--
        (1) examine, or cause to be examined, upon reasonable notice, 
    any record (which for purposes of this section, includes, but is not 
    limited to, any statement, declaration, document, or electronically 
    generated or machine readable data) described in the notice with 
    reasonable specificity, which may be relevant to such investigation 
    or inquiry, except that--
            (A) if such record is required by law or regulation for the 
        entry of the merchandise (whether or not the Customs Service 
        required its presentation at the time of entry) it shall be 
        provided to the Customs Service within a reasonable time after 
        demand for its production is made, taking into consideration the 
        number, type, and age of the item demanded; and
            (B) if a person of whom demand is made under subparagraph 
        (A) fails to comply with the demand, the person may be subject 
        to penalty under subsection (g) of this section;

        (2) summon, upon reasonable notice--
            (A) the person who--
                (i) imported, or knowingly caused to be imported, 
            merchandise into the customs territory of the United States,
                (ii) exported merchandise, or knowingly caused 
            merchandise to be exported, to a NAFTA country (as defined 
            in section 3301(4) of this title) or to Canada during such 
            time as the United States-Canada Free-Trade Agreement is in 
            force with respect to, and the United States applies that 
            Agreement to, Canada,
                (iii) transported or stored merchandise that was or is 
            carried or held under customs bond, or knowingly caused such 
            transportation or storage, or
                (iv) filed a declaration, entry, or drawback claim with 
            the Customs Service;

            (B) any officer, employee, or agent of any person described 
        in subparagraph (A);
            (C) any person having possession, custody or care of records 
        relating to the importation or other activity described in 
        subparagraph (A); or
            (D) any other person he may deem proper;

    to appear before the appropriate customs officer at the time and 
    place within the customs territory of the United States specified in 
    the summons (except that no witness may be required to appear at any 
    place more than one hundred miles distant from the place where he 
    was served with the summons), to produce records, as defined in 
    subsection (d)(1)(A) of this section, and to give such testimony, 
    under oath, as may be relevant to such investigation or inquiry; and
        (3) take, or cause to be taken, such testimony of the person 
    concerned, under oath, as may be relevant to such investigation or 
    inquiry.

(b) Regulatory audit procedures

    (1) In conducting a regulatory audit under this section (which does 
not include a quantity verification for a customs bonded warehouse or 
general purpose foreign trade zone), the Customs Service auditor shall 
provide the person being audited, in advance of the audit, with a 
reasonable estimate of the time to be required for the audit. If in the 
course of an audit it becomes apparent that additional time will be 
required, the Customs Service auditor shall immediately provide a 
further estimate of such additional time.
    (2) Before commencing an audit, the Customs Service auditor shall 
inform the party to be audited of his right to an entry conference at 
which time the purpose will be explained and an estimated termination 
date set. Upon completion of on-site audit activities, the Customs 
Service auditor shall schedule a closing conference to explain the 
preliminary results of the audit.
    (3) Except as provided in paragraph (5), if the estimated or actual 
termination date for an audit passes without the Customs Service auditor 
providing a closing conference to explain the results of the audit, the 
person being audited may petition in writing for such a conference to 
the officer designated pursuant to regulations, who, upon receipt of 
such a request, shall provide for such a conference to be held within 15 
days after the date of receipt.
    (4) Except as provided in paragraph (5), the Customs Service auditor 
shall complete the formal written audit report within 90 days following 
the closing conference unless the officer designated pursuant to 
regulations provides written notice to the person being audited of the 
reason for any delay and the anticipated completion date. After 
application of any exemption contained in section 552 of title 5, a copy 
of the formal written audit report shall be sent to the person audited 
no later than 30 days following completion of the report.
    (5) Paragraphs (3) and (4) shall not apply after the Customs Service 
commences a formal investigation with respect to the issue involved.
    (6)(A) If during the course of any audit concluded under this 
subsection, the Customs Service identifies overpayments of duties or 
fees or over-declarations of quantities or values that are within the 
time period and scope of the audit that the Customs Service has defined, 
then in calculating the loss of revenue or monetary penalties under 
section 1592 of this title, the Customs Service shall treat the 
overpayments or over-declarations on finally liquidated entries as an 
offset to any underpayments or underdeclarations also identified on 
finally liquidated entries, if such overpayments or over-declarations 
were not made by the person being audited for the purpose of violating 
any provision of law.
    (B) Nothing in this paragraph shall be construed to authorize a 
refund not otherwise authorized under section 1520 of this title.

(c) Service of summons

    A summons issued pursuant to this section may be served by any 
person designated in the summons to serve it. Service upon a natural 
person may be made by personal delivery of the summons to him. Service 
may be made upon a domestic or foreign corporation or upon a partnership 
or other unincorporated association which is subject to suit under a 
common name, by delivering the summons to an officer, or managing or 
general agent, or to any other agent authorized by appointment or by law 
to receive service of process. The certificate of service signed by the 
person serving the summons is prima facie evidence of the facts it 
states on the hearing of an application for the enforcement of the 
summons. When the summons requires the production of records, such 
records shall be described in the summons with reasonable specificity.

(d) Special procedures for third-party summonses

    (1) For purposes of this subsection--
        (A) The term ``records'' includes those--
            (i) required to be kept under section 1508 of this title; or
            (ii) regarding which there is probable cause to believe that 
        they pertain to merchandise the importation of which into the 
        United States is prohibited.

        (B) The term ``summons'' means any summons issued under 
    subsection (a) of this section which requires the production of 
    records or the giving of testimony relating to records. Such term 
    does not mean any summons issued to aid in the collection of the 
    liability of any person against whom an assessment has been made or 
    judgment rendered.
        (C) The term ``third-party recordkeeper'' means--
            (i) any customhouse broker, unless such customhouse broker 
        is the importer of record on an entry;
            (ii) any attorney; and
            (iii) any accountant.

    (2) If--
        (A) any summons is served on any person who is a third-party 
    recordkeeper; and
        (B) the summons requires the production of, or the giving of 
    testimony relating to, any portion of records made or kept of the 
    transactions described in section 1508 of this title of any person 
    (other than the person summoned) who is identified in the 
    description of the records contained in such summons;

then notice of such summons shall be given to any persons so identified 
within a reasonable time before the day fixed in the summons as the day 
upon which such records are to be examined or testimony given. Such 
notice shall be accompanied by a copy of the summons which has been 
served and shall contain directions for staying compliance with the 
summons under paragraph (5)(B) of this subsection.
    (3) Any notice required under paragraph (2) of this subsection shall 
be sufficient if such notice is served in the manner provided in 
subsection (b) of this section upon the person entitled to notice, or is 
mailed by certified or registered mail to the last known address of such 
person.
    (4) Paragraph (2) of this subsection shall not apply to any 
summons--
        (A) served on the person with respect to whose liability for 
    duties, fees, or taxes the summons is issued, or any officer or 
    employee of such person; or
        (B) to determine whether or not records of the transactions 
    described in section 1508 of this title of an identified person have 
    been made or kept.

    (5) Notwithstanding any other law or rule of law, any person who is 
entitled to notice of a summons under paragraph (2) of this subsection 
shall have the right--
        (A) to intervene in any proceeding with respect to the 
    enforcement of such summons under section 1510 of this title; and
        (B) to stay compliance with the summons if, not later than the 
    day before the day fixed in the summons as the day upon which the 
    records are to be examined or testimony given--
            (i) notice in writing is given to the person summoned not to 
        comply with the summons; and
            (ii) a copy of such notice not to comply with the summons is 
        mailed by registered or certified mail to such person and to 
        such office as the Secretary may direct in the notice referred 
        to in paragraph (2) of this subsection.

    (6) No examination of any records required to be produced under a 
summons as to which notice is required under paragraph (2) of this 
subsection may be made--
        (A) before the expiration of the period allowed for the notice 
    not to comply under paragraph (5)(B) of this subsection, or
        (B) if the requirements of such paragraph (5)(B) have been met, 
    except in accordance with an order issued by a court of competent 
    jurisdiction authorizing examination of such records or with the 
    consent of the person staying compliance.

    (7) The provisions of paragraphs (2) and (5) of this subsection 
shall not apply with respect to any summons if, upon petition by the 
Secretary, the court determines, on the basis of the facts and 
circumstances alleged, that there is reasonable cause to believe the 
giving of notice may lead to attempts to conceal, destroy, or alter 
records relevant to the examination, to prevent the communication of 
information from other persons through intimidation, bribery, or 
collusion, or to flee to avoid prosecution, testifying, or production of 
records.

(e) List of records and information

    The Customs Service shall identify and publish a list of the records 
or entry information that is required to be maintained and produced 
under subsection (a)(1)(A) of this section.

(f) Recordkeeping compliance program

                           (1) In general

        After consultation with the importing community, the Customs 
    Service shall by regulation establish a recordkeeping compliance 
    program which the parties listed in section 1508(a) of this title 
    may participate in after being certified by the Customs Service 
    under paragraph (2). Participation in the recordkeeping compliance 
    program by recordkeepers is voluntary.

                          (2) Certification

        A recordkeeper may be certified as a participant in the 
    recordkeeping compliance program after meeting the general 
    recordkeeping requirements established under the program or after 
    negotiating an alternative program suited to the needs of the 
    recordkeeper and the Customs Service. Certification requirements 
    shall take into account the size and nature of the importing 
    business and the volume of imports. In order to be certified, the 
    recordkeeper must be able to demonstrate that it--
            (A) understands the legal requirements for recordkeeping, 
        including the nature of the records required to be maintained 
        and produced and the time periods involved;
            (B) has in place procedures to explain the recordkeeping 
        requirements to those employees who are involved in the 
        preparation, maintenance, and production of required records;
            (C) has in place procedures regarding the preparation and 
        maintenance of required records, and the production of such 
        records to the Customs Service;
            (D) 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 the Customs Service;
            (E) has a record maintenance procedure approved by the 
        Customs Service for original records, or, if approved by the 
        Customs Service, for alternative records or recordkeeping 
        formats other than the original records; and
            (F) has procedures for notifying the Customs Service of 
        occurrences of variances to, and violations of, the requirements 
        of the recordkeeping compliance program or the negotiated 
        alternative programs, and for taking corrective action when 
        notified by the Customs Service of violations or problems 
        regarding such program.

(g) Penalties

                     (1) ``Information'' defined

        For purposes of this subsection, the term ``information'' means 
    any record, statement, declaration, document, or electronically 
    stored or transmitted information or data referred to in subsection 
    (a)(1)(A) of this section.

            (2) Effects of failure to comply with demand

        Except as provided in paragraph (4), if a person fails to comply 
    with a lawful demand for information under subsection (a)(1)(A) of 
    this section the following provisions apply:
            (A) If the failure to comply is a result of the willful 
        failure of the person to maintain, store, or retrieve the 
        demanded information, such person shall be subject to a penalty, 
        for each release of merchandise, not to exceed $100,000, or an 
        amount equal to 75 percent of the appraised value of the 
        merchandise, whichever amount is less.
            (B) If the failure to comply is a result of the negligence 
        of the person in maintaining, storing, or retrieving the 
        demanded information, such person shall be subject to a penalty, 
        for each release of merchandise, not to exceed $10,000, or an 
        amount equal to 40 percent of the appraised value of the 
        merchandise, whichever amount is less.
            (C) In addition to any penalty imposed under subparagraph 
        (A) or (B) regarding demanded information, if such information 
        related to the eligibility of merchandise for a column 1 special 
        rate of duty under title I, the entry of such merchandise--
                (i) if unliquidated, shall be liquidated at the 
            applicable column 1 general rate of duty; or
                (ii) if liquidated within the 2-year period preceding 
            the date of the demand, shall be reliquidated, 
            notwithstanding the time limitation in section 1514 or 1520 
            of this title, at the applicable column 1 general rate of 
            duty;

        except that any liquidation or reliquidation under clause (i) or 
        (ii) shall be at the applicable column 2 rate of duty if the 
        Customs Service demonstrates that the merchandise should be 
        dutiable at such rate.

                      (3) Avoidance of penalty

        No penalty may be assessed under this subsection if the person 
    can show--
            (A) that the loss of the demanded information was the result 
        of an act of God or other natural casualty or disaster beyond 
        the fault of such person or an agent of the person;
            (B) on the basis of other evidence satisfactory to the 
        Customs Service, that the demand was substantially complied 
        with; or
            (C) the information demanded was presented to and retained 
        by the Customs Service at the time of entry or submitted in 
        response to an earlier demand.

                     (4) Penalties not exclusive

        Any penalty imposed under this subsection shall be in addition 
    to any other penalty provided by law except for--
            (A) a penalty imposed under section 1592 of this title for a 
        material omission of the demanded information, or
            (B) disciplinary action taken under section 1641 of this 
        title.

                     (5) Remission or mitigation

        A penalty imposed under this section may be remitted or 
    mitigated under section 1618 of this title.

                         (6) Customs summons

        Nothing in this subsection shall limit or preclude the Customs 
    Service from issuing, or seeking the enforcement of, a customs 
    summons.

                    (7) Alternatives to penalties

        (A) In general

            When a recordkeeper who--
                (i) has been certified as a participant in the 
            recordkeeping compliance program under subsection (f) of 
            this section; and
                (ii) is generally in compliance with the appropriate 
            procedures and requirements of the program;

        does not produce a demanded record or information for a specific 
        release or provide the information by acceptable alternative 
        means, the Customs Service, in the absence of willfulness or 
        repeated violations, shall issue a written notice of the 
        violation to the recordkeeper in lieu of a monetary penalty. 
        Repeated violations by the recordkeeper may result in the 
        issuance of penalties and removal of certification under the 
        program until corrective action, satisfactory to the Customs 
        Service, is taken.

        (B) Contents of notice

            A notice of violation issued under subparagraph (A) shall--
                (i) state that the recordkeeper has violated the 
            recordkeeping requirements;
                (ii) indicate the record or information which was 
            demanded; and
                (iii) warn the recordkeeper that future failures to 
            produce demanded records or information may result in the 
            imposition of monetary penalties.

        (C) Response to notice

            Within a reasonable time after receiving written notice 
        under subparagraph (A), the recordkeeper shall notify the 
        Customs Service of the steps it has taken to prevent a 
        recurrence of the violation.

        (D) Regulations

            The Secretary shall promulgate regulations to implement this 
        paragraph. Such regulations may specify the time periods for 
        compliance with a demand for information and provide guidelines 
        which define repeated violations for purposes of this paragraph. 
        Any penalty issued for a recordkeeping violation shall take into 
        account the degree of compliance compared to the total number of 
        importations, the nature of the demanded records and the 
        recordkeeper's cooperation.

(June 17, 1930, ch. 497, title IV, Sec. 509, 46 Stat. 733; June 25, 
1948, ch. 646, Sec. 26, 62 Stat. 990; Pub. L. 91-271, title III, 
Sec. 301(n), June 2, 1970, 84 Stat. 289; Pub. L. 95-410, title I, 
Sec. 105, Oct. 3, 1978, 92 Stat. 889; Pub. L. 99-570, title III, 
Sec. 3117, Oct. 27, 1986, 100 Stat. 3207-84; Pub. L. 103-182, title II, 
Sec. 205(b), title VI, Sec. 615, Dec. 8, 1993, 107 Stat. 2094, 2175; 
Pub. L. 104-295, Sec. 3(a)(1), (10), Oct. 11, 1996, 110 Stat. 3515, 
3516; Pub. L. 107-210, div. A, title III, Sec. 382, Aug. 6, 2002, 116 
Stat. 992.)

                       References in Text

    Title I, referred to in subsec. (g)(2)(C), means title I of act June 
17, 1930, ch. 497, as amended, which contains the Harmonized Tariff 
Schedule of the United States and which is not set out in the Code. See 
notes preceding section 1202 of this title and Publication of Harmonized 
Tariff Schedule note set out under section 1202 of this title.


                            Prior Provisions

    Provisions substantially the same, in most respects, as those in 
this section, were contained in act Oct. 3, 1913, ch. 16, Sec. III, O, 
38 Stat. 188, which substantially reenacted the provisions of Customs 
Administrative Act of June 10, 1890, ch. 407, Sec. 16, 26 Stat. 138, as 
renumbered and reenacted without other change by the Payne-Aldrich 
Tariff Act of Aug. 5, 1909, ch. 6, Sec. 28, 36 Stat. 100. Section III of 
the 1913 act was superseded and more closely assimilated to this section 
by act Sept. 21, 1922, ch. 356, title IV, Sec. 508, 42 Stat. 968, and 
repealed by section 643 thereof. Section 508 of the 1922 act was 
superseded by section 509 of act June 17, 1930, comprising this section, 
and repealed by section 651(a)(1) of the 1930 act.
    Prior provisions similar to those in this section and section 1510 
of this title were made by R.S. Secs. 2922-2924, repealed by section 29 
of the Customs Administrative Act of 1890, 26 Stat. 141.


                               Amendments

    2002--Subsec. (b)(6). Pub. L. 107-210 added par. (6).
    1996--Subsec. (a)(2). Pub. L. 104-295, Sec. 3(a)(1), substituted 
``(d)(1)(A)'' for ``(c)(1)(A)'' in concluding provisions.
    Subsec. (b)(3), (4). Pub. L. 104-295, Sec. 3(a)(10), substituted 
``officer designated pursuant to regulations'' for ``appropriate 
regional commissioner''.
    1993--Subsec. (a). Pub. L. 103-182, Sec. 615(1)(A), substituted ``, 
fees and taxes'' for ``and taxes'' in two places in introductory 
provisions.
    Subsec. (a)(1). Pub. L. 103-182, Sec. 615(1)(B), amended par. (1) 
generally. Prior to amendment, par. (1) read as follows: ``examine, or 
cause to be examined, upon reasonable notice, any record, statement, 
declaration or other document, described in the notice with reasonable 
specificity, which may be relevant to such investigation or inquiry;''.
    Subsec. (a)(2)(A). Pub. L. 103-182, Sec. 615(1)(C), amended subpar. 
(A) generally. Prior to amendment, subpar. (A) read as follows: ``the 
person who imported, or knowingly caused to be imported, merchandise 
into the customs territory of the United States,''. See Construction of 
1993 Amendment note below.
    Subsec. (a)(2)(A)(ii). Pub. L. 103-182, Sec. 205(b), amended 
generally cl. (ii), as amended by Pub. L. 103-182, Sec. 615(1)(C). Prior 
to amendment, cl. (ii) read as follows: ``exported merchandise, or 
knowingly caused merchandise to be exported, to Canada,''. See 
Construction of 1993 Amendment note below.
    Subsec. (a)(2)(B), (C). Pub. L. 103-182, Sec. 615(1)(C), amended 
subpars. (B) and (C) generally. Prior to amendment, subpars. (B) and (C) 
read as follows:
    ``(B) any officer, employee, or agent of such person,
    ``(C) any person having possession, custody, or care of records 
relating to such importation, or''.
    Subsec. (a)(2)(D). Pub. L. 103-182, Sec. 615(1)(D), substituted a 
semicolon for comma at end.
    Subsecs. (b), (c). Pub. L. 103-182, Sec. 615(2), (3), added subsec. 
(b) and redesignated former subsec. (b) as (c). Former subsec. (c) 
redesignated (d).
    Subsec. (d). Pub. L. 103-182, Sec. 615(2), redesignated subsec. (c) 
as (d).
    Subsec. (d)(1)(A). Pub. L. 103-182, Sec. 615(4)(A), substituted 
``those'' for ``statements, declarations, or documents'' in introductory 
provisions.
    Subsec. (d)(1)(C)(i). Pub. L. 103-182, Sec. 615(4)(B), inserted ``, 
unless such customhouse broker is the importer of record on an entry'' 
after ``broker''.
    Subsec. (d)(2)(B). Pub. L. 103-182, Sec. 615(4)(C), (D), substituted 
``the transactions described in section 1508 of this title'' for ``the 
import transactions''.
    Subsec. (d)(4)(A). Pub. L. 103-182, Sec. 615(4)(E), inserted ``, 
fees,'' after ``duties''.
    Subsec. (d)(4)(B). Pub. L. 103-182, Sec. 615(4)(C), (D), substituted 
``the transactions described in section 1508 of this title'' for ``the 
import transactions''.
    Subsecs. (e) to (g). Pub. L. 103-182, Sec. 615(5), added subsecs. 
(e) to (g).
    1986--Subsec. (a)(2). Pub. L. 99-570, Sec. 3117(1), substituted ``as 
defined in subsection (c)(1)(A) of this section'' for ``required to be 
kept under section 1508 of this title'' in concluding provisions.
    Subsec. (c)(1)(A). Pub. L. 99-570, Sec. 3117(2), amended subpar. (A) 
generally. Prior to amendment, subpar. (A) read as follows: ``The term 
`records' includes statements, declarations, or documents required to be 
kept under section 1508 of this title.''
    1978--Pub. L. 95-410 substituted subsec. (a) to (c) provisions for 
examination of books and witnesses for prior provisions for examination 
of importer and others, which authorized appropriate customs officers to 
issue citations for examination under oath of any owner, importer, 
consignee, agent, or other person upon any material matter or thing 
respecting any imported merchandise then under consideration or 
previously imported within one year, in ascertaining the classification 
or the value thereof or the rate or amount of duty and to require 
production of any letters, accounts, contracts, invoices, or other 
documents relating to the merchandise, and the reduction of the 
testimony to writing, required the testimony to be filed and preserved 
under Customs Court rules, and authorized consideration of the evidence 
in subsequent proceedings relating to the merchandise.
    1970--Pub. L. 91-271 substituted ``Appropriate customs officer'' for 
``Collectors and appraisers''.
    1948--Act June 25, 1948, struck out ``and judges and divisions of 
the United States Customs Court'' after ``Collectors and appraisers'' in 
first sentence.


                    Effective Date of 1996 Amendment

    Amendment by Pub. L. 104-295 applicable as of Dec. 8, 1993, see 
section 3(b) of Pub. L. 104-295, set out as a note under section 1321 of 
this title.


                    Effective Date of 1993 Amendment

    Amendment by section 205(b) of Pub. L. 103-182 effective on the date 
the North American Free Trade Agreement enters into force with respect 
to the United States [Jan. 1, 1994], see section 213(b) of Pub. L. 103-
182, set out as an Effective Date note under section 3331 of this title.


                    Effective Date of 1970 Amendment

    For effective date of amendment by Pub. L. 91-271, see section 203 
of Pub. L. 91-271, set out as a note under section 1500 of this title.


                    Effective Date of 1948 Amendment

    Section 38 of act June 25, 1948, provided that the amendment made by 
that act is effective Sept. 1, 1948.


                     Construction of 1993 Amendment

    Amendment by section 205(b) of Pub. L. 103-182 to be made after 
amendment by section 615 of Pub. L. 103-182 is executed, see section 212 
of Pub. L. 103-182, set out as a note under section 58c of this title.

                          Transfer of Functions

    For transfer of functions, personnel, assets, and liabilities of the 
United States Customs Service of the Department of the Treasury, 
including functions of the Secretary of the Treasury relating thereto, 
to the Secretary of Homeland Security, and for treatment of related 
references, see sections 203(1), 551(d), 552(d), and 557 of Title 6, 
Domestic Security, and the Department of Homeland Security 
Reorganization Plan of November 25, 2002, as modified, set out as a note 
under section 542 of Title 6.

                  Section Referred to in Other Sections

    This section is referred to in sections 1508, 1510, 1553a of this 
title; title 26 section 6103.