Discussion of Comments on the Proposed Rule

The Service received a total of 15 written responses containing comments on the proposed rule. The respondents were classified as follows:

Fourteen respondents commented that the proposed methodology by which the Service will calculate the carrier's individual performance level (PL) and the acceptable performance levels (APL and APL2) are not accurate measures of a carrier performance. Many reasons were cited as follows:

One objection to the methodology was that the carriers were seen as being "pitted" against one another instead of being rated on individual merit. The Service does not intend for carriers to compete against each other. The Service does intend to use the APL as a measurement of individual carrier performance. To respond to several commenters on the recalculation of the PL, APL, and APL2 figures, the PL will be calculated annually for individual carriers. The 1994 APL and APL2 will be used as the standard for the past fines being held in abeyance and for the fiscal years 1995-1997 and possibly longer, based on Service discretion. Individual carrier performance is compared against this overall average performance level of all carriers (APL and APL2). Carriers will be rewarded by the mitigation of carrier fines of 25 or 50 percent, depending on a carrier's PL as compared to this overall average. Individual statistical performance needs a baseline to measure performance. Therefore, the Service has used the overall average of all carriers to create the necessary baseline.

Some commenters objected to FY 94 being used as the baseline. The Service chose FY 94 since it was the first year in which the Service was able to obtain the total number of documented nonimmigrant passengers per carrier from the Form I-92, Aircraft/Vessel Report. Prior to FY 94, this data was discarded.

Several commenters claimed that requiring carriers to meet or exceed an "arbitrary" APL is inconsistent with the intent of Congress and is unrelated to the basic concept of mitigation. Commenters argued that Congress "intended" that section 273(e) would result in complete relief from the fine procedures, so that if a carrier satisfies the screening requirements, the Service would be required to reduce the fine to zero. These commenters believe that the proposed rule is contrary to this "intent" because the proposed rule permits the Service to reduce the fine by a specified amount that is less than 100 percent. The Service disagrees with the commenters' claims about Congressional "intent." The intent of any statute is to be found in the text of the statute itself. See Mallard v. U.S. Dist. Ct. for the S. Dist. of Iowa , 490 U.S. 296, 300 [1989]; INS v. Phinpathya , 464 U.S. 183, 189 [1984]. Section 273(e) of the Act provides that the Attorney General "may * * * reduce[], refund[], or waive[]" a fine under section 273(a) and (b), " under such regulations as the Attorney General shall prescribe " [emphasis added]. Thus, the statute entrusts to the Attorney General's discretion the authority to determine under what circumstances the Service should reduce, refund, or mitigate a fine under section 273(a) and (b). Nothing in section 273(e) of the Act requires the Service, in the exercise of the Attorney General's discretion, either to reduce the fine to zero in every case or to leave the fine at the full statutory amount. Nor does the existing legislative history support the commenters' claims about the "intent" of section 273(e) of the Act. See 140 Cong. Rec. S14400-S14405 [daily ed. October 6, 1994]; id., H9272-H9281 [daily ed. September 20, 1994]. The Service contends that section 273, read as a whole, provides both a "positive" and a "negative" incentive for a carrier to ensure that it permits only aliens with proper documents to board airplanes and other vessels bound for the United States. The "negative" incentive is the risk of incurring the statutory fine. The "positive" incentive is that the amount of the fine may be reduced, if the carrier has acted reasonably in its effort s to screen passengers. The carrier demonstrates that it has properly screened its passengers by having a PL at or better than the APL as determined by the Service. Measuring the performance of carriers is basic to the concept of mitigation. The policy of imposing a monetary penalty, but mitigating the amount of the penalty if a carrier has taken appropriate steps to screen passengers is a reasonable way to implement section 273 as a whole. This policy is well within the authority of the Attorney General to promulgate regulations for the administration of the immigration laws.

It must be emphasized that the Service policy of strictly enforcing the fine provisions of section 273 of the Act in appropriate cases is a continuation of a more than 70-year-old policy of carrying out Congress' intent to hold carriers responsible for passengers they have transported to the United States. The Board of Immigration Appeals

(the Board) and the courts have consistently held that carriers must exercise reasonable diligence in boarding their passengers for transport to the United States and are subject to administrative fines for failure to do so, e.g., Matter of Eastern Airlines, Inc., Flight # 798 , 20 I&N Dec. 57 (BIA 1989); Matter of M/V Guadalupe , 13 I&N Dec. 67 (BIA 1968); New York & Porto Rico S.S. Co. v. United States , 66 F.2d 523, 525 (2d Cir. 1933).

The imposition of administrative fines in appropriate cases has long been an important tool in enforcing our immigration laws and safeguarding our borders. In enacting both section 273 of the Act of 1952 as well as section 16 of the Immigration Act of 1924, the precursor of section 273, Congress intended to make the carrier ensure compliance with the requirements of the respective statutory provisions. See Joint Hearings on the Revision of Immigration, Naturalization, and Nationality Laws, Senate and House Subcommittees on the Judiciary, Testimony of Stuart G. Tipton, General Counsel, Air Transport Association of America at p. 294 (March 14, 1951); Matter of M/V "Runaway" , 18 I&N Dec. at 128 (citing section 273 cases). Indeed, in enacting section 273 of the Act, Congress strengthened the previous penalty provisions, which only applied to carriers unlawfully transporting immigrants to this country, to include the unlawful transport of nonimmigrants as well. See Matter of S.S. Greystroke Castle and M/V Western Queen , 6 I&N Dec. 112, 114-15 (BIA, AG 1954); Legal Opinion of the INS General Counsel, 56336/273a at 6 (Sept. 3, 1953). The intent of Congress embodied in sections 273(e) is to reward carriers which properly screen their passengers prior to coming to the United States. By determining a carrier's PL and rewarding carriers with a satisfactory PL through fines mitigation, the Service fulfills the intent of Congress.

One commenter requested that "[t]he Service should expressly agree that it will not initiate legislation to increase the amount of the penalty for violation of [section 273 of the Act] for at least five years." As stated previously, the Service views the fines program as an important tool in enforcing our immigration laws by imposing financial penalties on those carriers which fail to properly screen passengers. The Executive Branch has a constitutional duty to recommend legislation that the Executive Branc h considers necessary or appropriate. Therefore, the Service does not agree with the commenter's request. The Service does note, however, that the Service is required by statute to adjust civil administrative fines by regulation to account for the effect of inflation. Federal Civil Penalty Inflation Adjustment Act of 1990, § 4, as amended by Debt Collection Improvement Act of 1996, Pub. L. No. 104-134, ch. 10, § 31001(s)(1)(A), 110 Stat. 1321, __________ (1996).

Some commenters claimed that the APL structure encourages the continuance of the "adversarial relationship" between the carriers and the Service. On the contrary, carrier organizations and the Service have conducted extensive dialogue on the formulation of this rule. The past collaboration between the carrier organizations and the Service led to the near-completion of the Carrier Cooperative Agreement. The Agreement was the precursor to the present fine mitigation regulation language and corresponding MOU. The Agreement had the endorsement of the major carrier organizations. The Service also actively enlisted carrier participation in the writing of the fines mitigation proposed rule. Meetings were held with the carrier organizations on several occasions to discuss the fines mitigation legislation and the mutual concerns of the Service and the carriers. The Service maintains a strong customer orientation within the boundaries of its mission as evidenced by the National Performance Review (NPR) initiatives at t he major Ports-of-Entry. The Service has actively involved the carriers, as major stakeholders, the re-engineering of the inspection process. The Service values its cooperative relationship with the carriers and their parent organizations. The Service believes the cooperative nature of the MOU to be signed with the carriers will lead to an even closer, mutually beneficial relationship. The ultimate customers, the American people and bona fide passengers, are better served by the carriers and the Service by preventing the transportation of improperly documented aliens to the United States. While none of these considerations eliminates the tension inherent in the relationship between a regulatory agency and the entities subject to regulation, they do bespeak as cooperative a relationship as possible.

Some commenters claimed that the variables used in calculating the PL, APL, and APL2 are not clearly defined while other variables, such as carrier size, market characteristics, risk factors at ports of embarkation, passenger nationalities, local government laws, etc., are not factored in the calculations. The Service contents the factors are clearly defined. The Service will calculate a carrier's PL by dividing the number of each carrier's violations of section 273 of the Act for a fiscal year by the numbe r of documented nonimmigrants transported by the carrier and multiplying the result by 1,000. This calculation will include only those aliens who are documented by the completion of an I-94 and statistically recorded on Form I-92. This calculation does not include violations for improperly documented first-time immigrants or lawful permanent residents, Canadian citizens, lawful residents of Canada, and any other class of nonimmigrant aliens not required to complete the Form I-94 as enumerated in 8 CFR 231.1 . In determining the number of passengers transported to the United States by each carrier, the passengers brought from contiguous territory have been omitted from the total number of passengers transported as requested by several commenters to the rule. They correctly pointed out that to include these numbers when section 273 of the Act specifically excludes fines levied for transporting improperly documented passengers from contiguous territory would unfairly alter the PL, APL, and APL2 calculations. The APL will be calculated by taking the total number of all carrier violations of section 273 of the Act for a fiscal year and dividing this by the total number of documented nonimmigrants transported by all carriers for the same fiscal year and multiplying the result by 1,000. The same groups of aliens which have been omitted from the calculation of a carrier's PL have also been omitted for the calculation of the APL. The second Acceptable Performance Level (APL2) will be based on statistical analysis of the performance of all carriers at or better than the APL. Using carrier statistics only for those carriers which are at or better than the APL, the APL2 shall be determined by taking the total number of these carrier violations of section 273 of the Act for a fiscal year and dividing by the total number of documented nonimmigrants transported by these carriers for the same fiscal year and multiplying the result by 1,000. Likewise, the same groups of aliens which have been omitted from the calculation of a carr ier's PL and APL have also been omitted for the calculation of the APL2. Carrier size is therefore inconsequential to the determination of a carrier's PL. The three measurements show the number of violations under section 273 of the Act per 1,000 passengers transported. This enables the Service to even the playing field and determine the carrier performance of small and large carriers per 1,000 passengers. Other variables, including market characteristics, risk factors at ports of embarkation, passenger nat ionalities, and local government laws, have not been factored into these numbers. Nevertheless, even if a carrier's PL is not at or better than the APL, due to these variables, the carrier may receive an automatic 25 percent reduction in fines, if it meets certain conditions, including being signatory to the MOU predicated on the submission of evidence demonstrating that the carrier has taken extensive measures to prevent the transport of improperly documented passengers to the United States and remaining i n compliance with the MOU. This evidence must be submitted to the Assistant Commissioner for Inspections for consideration. Evidence may include, but is not limited to, the following: (1) Information regarding the carrier's document screening training program, including attendance of the carrier's personnel in any Service, Department of State, or other training programs, the number of employees trained, and a description of the training program; (2) information regarding the date and number of improperly do cumented aliens intercepted by the carrier at the port(s) of embarkation including, but not limited to, the alien's name, date of birth, passport nationality, passport number, other travel document information, reason boarding was refused, and port of embarkation; and, (3) any other evidence to demonstrate the carrier's efforts to properly screen passengers destined to the United States. The Service will consider these variables and Service data in determining fines mitigation for carriers failing to meet t he APL level. The Service has previously stated in the proposed rule summary that it may consider other factors in evaluating carrier performance, including participation in data sharing initiatives or evaluation of a carrier's performance by particular port(s) of embarkation and/or route(s) to determine carrier fines mitigation levels at a later date as technology improves and more information is available.

Commenters calculated that only 20 percent of the carriers would be entitled to any fines mitigation under the Service's methodology. Some respondents further stated that the rule was deliberately designed to defeat Congress' intent by making a substantial degree of mitigation too difficult for a carrier to achieve.

To the contrary, the Service's calculations, upon which the PL, APL, and APL2 will be determined, show that 41 percent of the carriers (45 out of 109) will qualify for fines mitigation for fiscal year 1995 based on FY 94 violations. Nineteen (19) percent of the carriers (21 out of 109) achieved a PL at or better than the APL2 and are eligible for 50 percent fines mitigation and 24 carriers achieved a PL at or better than the APL and are eligible for 25 percent fines mitigation. This does not include those c arriers which apply for fines mitigation based on the submission of evidence as described in section 4.13 of the MOU (See attanchment). For violations in FY 96, the Service plans to retain the APL2 and APL yardsticks from FY 94 to determine fines mitigation. Further, 53 percent of the carriers (55 our of 104) are eligible for fines mitigation in FY 96 based on violations which occurred in FY 95 using the FY 94 APL yardstick. Thirty-two percent of the carriers (33 out of 104) are eligible for 50 percent fine s mitigation in FY 96 for having a PL at or better than the FY 94 APL2 yardstick. The Service envisions that cooperation in the sharing of information regarding fraudulent documents, the training of carrier agents by the Service's Ports-of Entry officers, carrier consultants, and overseas officers, and carrier dissemination of this information to their agents at the ports of embarkation, will continue to lower the number of improperly documented aliens arriving at United States Ports-of-Entry. The Service e xpects that the number of carriers eligible for fines mitigation to increase for FY 97 and beyond. Carrier interest in the training of its agents in the immigration laws and regulations of the United States together with invaluable Service document training has made the carrier-Service partnership a success.

Several commenters suggested that the Service should increase the levels of fines mitigation for those carriers who meet the APL and APL2, including up to 100 percent fines mitigation. Some respondents suggested having higher levels (for example, APL3 or APL4 levels). The amount of the fines mitigation, including possible increases to a higher percentage for violations of section 273 of the Act for carriers with an exceptional PL, and higher levels of fines mitigation shall be re-examined by the Service at a later date. The Service is not adverse to increasing the amount of fines mitigation or having higher levels providing it is in the interest of the American people to do so.

Several commenters suggested that the Service's methodology in determining performance levels should be entirely abandoned. They stated that, if the Service must employ such a method, the calculation should be made using the carriers' PL median ratio as the APL and giving fines mitigation to all those carriers whose PL is at or better than this average. These respondents contend that such a calculation would be a fairer representation of carrier performance and enable a significantly higher percentage of ca rriers to qualify for fines mitigation. This calculation simply rewards the top 50 percent of the carriers regardless of the actual performance of the carrier. The Service's methodology of using the overall PL ratio measures a carrier's performance against the average performance of all carriers in FY 94. As stated previously, the Service calculates that 41 percent of the carriers will be eligible for fines mitigation for FY 95 violations of section 273 of the Act. Fifty-three percent of the carriers are el igible for fines mitigation in FY 96 based on violation which occurred in FY 95 using the FY 94 APL. This favorably compares to the respondents suggestion that 50 percent of the carriers should be eligible for fines mitigation. The Service believes its methodology is sound but will re-examine it periodically to ensure that it sets both an appropriate benchmark by which to measure carrier performance and provides an appropriate level of relief for those carriers whose performance exceeds the norm.

Some respondents argue that the results of the calculations would be dramatically different if all passengers were considered in the methodology. Section 273 of the Act clearly specifies that the carrier can only be fined for the transportation of "* * * (other than from foreign contiguous territory) any alien [emphasis added] who does not have a valid passport and an unexpired visa, if a visa is required under this Act or regulations issued thereunder." Therefore the Service cannot fine carriers for the tr ansportation of United States (U.S.) citizens or for improperly documented passengers arriving from contiguous territory and maintains no records on improperly documented U.S. citizens or improperly documented passengers arriving from contiguous territory. Since these passengers cannot be fined under section 273 of the Act, they are omitted from the carrier's passenger calculations. The reason that some other groups of aliens are not counted in the passenger number statistics is due to the fact that the Ser vice cannot collect this information because they are exempt from presentation of the Form I-94, Arrival/Departure Record. Intending and returning immigrants and nonimmigrants are not required to complete Form I-94 and are counted together with U.S. citizens of Form I-92, Aircraft/Vessel Report. Only the number of documented nonimmigrants applying for admission to the United States with a Form I-94 is recorded on Form I-92 by the Service. This information on Form I-92 is used by the Service to determine the PL, APL, and APL2.

One respondent argued that if the Service will not consider immigrants in its methodology, then any violations involving those persons who destroy their documents prior to arriving in the United States, also known as document-destroyers, should be removed from the calculations since such aliens are actually intending immigrants. As previously stated, section 273 of the Act requires valid documentation for aliens. A document-destroyer is an alien. Therefore, he or she requires valid documentation. Failure to have valid documentation requires the Service to impose a fine of $ 3,000 on the carrier for the violation. Every improperly documented alien may be an intending immigrant. The fact remains that the document-destroyers do not possess the necessary documentation required of immigrants or non- immigrants. Therefore, the carrier is liable for fines under section 273 of the Act for bringing an improperly documented alien to the United States. Other commenters simply requested the Service not to count carrier v iolations involving those aliens who destroy their documents on the aircraft. The Service cannot ignore the fact that the carrier transported a passenger to the United States without proper documents. Carriers are responsible for bringing to the United States aliens with proper documentation. It is unreasonable for the carriers to expect the Service to fail to impose fines on carriers where no documents are presented or any evidence that an apparent valid travel document had existed. Thus, the carrier is re sponsible for thepresentation to the alien to the Service with proper documentation. Nevertheless, the Service has, under the umbrella of prosecutorial discretion, consistently relieved the carriers of fines for document- destroyers and aliens possessing fraudulent documentation. The former group requires the carrier to present evidence that the alien had documentation whose validity was reasonably apparent at the time of boarding. The Service allows the carrier to present photocopies of the documents pres ented by aliens who have destroyed their documents. Fines for both groups of improperly documented aliens are only imposed when those documents are "blatantly fraudulent." Through the various carrier-Service training programs, the number of document-destroyers has been significantly reduced during the last 4 years. This is evidenced by the dramatic decrease in document-destroyers at John F. Kennedy International Airport from 3,193 document-destroyers in FY 93 to only 582 document-destroyers in FY 96. Accor ding to the National Fines Office (NFO) statistics, the percentage of document-destroyer violations as compared to the total number of violations under section 273(a) of the Act dropped from 37.4 percent in FY 93 to 26.9 percent in FY 94, the last year fine statistics were available due to the pending publication of this final rule.

Some commenters requested that the Service postpone the final rule because of cases on appeal to the Board on the strict liability of section 273 of the Act. The commenters pointed out that the Service has acknowledged in a wire to field offices that the "* * * carrier[s] cannot be held liable for the level of forensic or law enforcement expertise which is the proper province of an official immigration agency" (See Service Wire # 1501217/01CE/1213.000 dated December, 1989, entitled "Stowaways on Commercial Airline Flights"). Nevertheless, the wire also states that in instances "[w]here a document is obviously altered, counterfeit, or expired, or where a passenger is an obvious impostor, to the extent that any reasonable person should be able to identify the deficiency, a carrier is required to refuse boarding as a matter of reasonable diligence. The photocopying of such a document does not provide protection from liability to fine." In cases involving fraud, the Service has not held the carrier liable for fin es under section 273 of the Act unless the fraud is sufficiently obvious that a reasonable person exercising reasonable diligence could have detected the fraud. In FY 94 only six fraudulent document cases qualified for fines using this standard. The Service does not consider it proper to await the Board's decision in any particular case that might now be pending before promulgating this final rule. The Service must decide a fine case according to the law as it exists at the time of decision. To the extent t hat future precedent decisions of the Board or of the Federal courts continue to refine the jurisprudence of fine cases, the Service will apply these future precedents into its own decision-making.

One respondent argues that the calculations should not include violations where a nonimmigrant was admitted to the United States under a waiver in accordance with 8 CFR 212.1(g), since the granting of such a waiver negates the concept of a violation. Waiving an applicant's documentary requirements subsequent to an arrival is no defense to liability of the carrier under section 273(a) for bringing to the United States an alien without a visa, if a visa is required by law or regulation. See The Peninsular & Occidental Steamship Company v. The United States , 242 F. 2d 639 (5 Cir. 1957); Matter of SS Florida , 5 I&N Dec. 85 (BIA 1954); Matter of Plane "F-BHSQ" , 9 I&N Dec. 595 (BIA 1962). The regulation, 8 CFR 212.1(g) also parallels the granting of a visa waiver to a lawful permanent resident found in 8 CFR 211.1(b)(3).

The regulation at 8 CFR 212.1(g) was recently amended (See 61 FR 11717, dated March 22, 1996) to read, in part:

Upon a nonimmigrant's application on Form I-193, a district director at a port of entry may, in an exercise of his or her discretion, on a case-by-case basis, waive the documentary requirements, if satisfied that the nonimmigrant cannot present the required documents because of an unforeseen emergency.

The clarification at 8 CFR 212.1(g) gave the Service the ability to exercise discretion to admit improperly documented nonimmigrants while penalizing carriers by the imposition of fines for the bringing of these aliens to the United States in violation of section 273 of the Act. Amending the regulation clarified any ambiguity regarding carriers' liability to ensure the transportation of properly documented aliens to the United States and to impose penalties for failure to do so, whether or not a waiver of d ocuments in granted. This is similar to the granting of individual waivers to lawful permanent residents under 8 CFR 211.1(b)(3), which also does not relieve the carrier of fine liability under section 273 of the Act. The authority to fine carriers, even when a waiver of documents is granted, has been the intent of Congress since the enactment of the Immigration Act of 1924 which established section 16, the precursor to section 273 of the Immigration Act of 1952.

Thirteen respondents commented that, although section 273(e) of the Act states that fines may be "reduced, refunded or waived," the proposed rule addresses only the reduction of these fines and fails to address the manner by which fines may be refunded or waived. Respondents argue that the proposed rule offers no guarantee of an avenue of full relief form fine liability. Nine respondents commented that the proposed rule refers to mitigating circumstances and extenuating circumstances which would warrant mit igation of fines but that these circumstances are not defined. The respondents state that the National Fines Office (NFO) should specify the circumstances by which it will mitigate fines and define the degree of mitigation applicable to each circumstance.

The term refund as defined by Black's Law Dictatory means "[t]o repay or restore; to return money in restitution or repayment." For the purposes of fines, this suggests that a fine has been paid by the carrier and money is refunded (repaid, restored, or returned) to the carrier. Under present fines procedures enumerated in 8 CFR 280.12 and 8 CFR 280.51 the Service is required to issue a Form I-79, Notice of Intent to Fine, and to allow the carrier to present evidence in defense of the fine and/or seek mitigation or remittance of the fine. In contested section 273 violat ions, no refund of money is due because the Service does not require the payment of a violation prior to the case's final disposition. If the carrier is signatory to the Service's proposed fines mitigation Memorandum of Understanding (MOU), the carrier will receive an automatic reduction of its fine prior to the Form I-79 being sent to the carrier. Signatory carriers to the MOU may, in addition, defend the fine in accordance with the procedures outlined in 8 CFR 280.12 and 8 CFR 280.51 to receive fines miti gation or remission.

The term waived is defined by Black's to mean "[t]o abandon, throw away, renounce, repudiate, or surrender a claim, a privilege, a right, or the opportunity to take advantage of some defect, irregularity, or wrong. To give up right or claim voluntarily." The respondents fail to consider the entire section of 273(e) added by Congress. Section 273(e) of the Act reads, in its entirety:

(e) A fine under this section may be reduced, refunded, or waived under such regulations as the Attorney General shall prescribe in cases in which-

(1) the carrier demonstrates that it had screened all passengers on the vessel or aircraft in accordance with procedures prescribed by the Attorney General, or

(2) circumstances exist that the Attorney General determines would justify such reduction, refund, or waiver.

The respondents omitted the line "* * * under such regulations as the Attorney General shall prescribe * * *."

In addition to the fines mitigation available to carriers under theService's policy of performance levels, some mitigating circumstances will warrant a further reduction of 25 percent. Some extenuating circumstances will result in a 100 percent waiver of the fine. These circumstances will not be part of the regulation; however, some of the mitigating and extenuating circumstances under which the Service will either mitigate or waive these penalties are listed in the following paragraphs. It is recommended t hat carriers defend fines cases in which the carrier believes circumstances exist that would warrant further mitigation or waiver of the fine. These cases will be handled on a case-by-case basis. Due to changes in technology and unforeseen circumstances, this list is not a complete one and additions or deletions to it may become necessary. Though the Service contends that section 273(e) of the Act does not require the Service to provide full relief from fines, the Service has on occasion exercised its prose cutorial discretion to de facto "waive" a fine. The Service now has the statutory authority to waive fines if extenuating circumstances exist and will consider these circumstances on a case- by-case basis. Such circumstances may include, but are not limited to, the following situations:

(a) Canadian national (no visa required) not in possession of their Alien Registration Receipt Card (ARC), Form I-551;

(b) Alien who has been rescued at sea;

(c) Documented evidence of a United States Consulate or Service officer providing incorrect information to the carrier resulting in the transportation of an improperly documented alien;

(d) Lawful permanent resident (LPR) who presents self to the carrier as a Visa Waiver Pilot Program (VWPP) applicant and who is in possession of a return ticket indicating a stay of less than 90 days in the United States;

(e) Lawful permanent resident whose Alien Documentation, identification, and Telecommunication (ADIT) stamp has no expiration date or the expiration date is placed underneath the ADIT stamp;

(f) Nonimmigrant in possession of a one-or-two entry nonimmigrant visa where the previous Service admission stamp is not on the visa or facing passport page;

(g) Alien arriving on a vessel or aircraft landing for emergent reasons and requiring an unscheduled landing in the United States;

(h) Alien arriving on a United States Government chartered aircraft or vessel;

(i) Nonimmigrant in possession of a machine-readable Canadian Border Crossing Card (BCC) without notation indicating it is valid for crossing the United States-Canadian border;

(j) Lawful permanent resident without Form I-551 and who is only in transit through the United States; and,

(k) Alien not in possession of proper documentation but where the carrier presents photocopies of reasonably apparent valid documents seen at boarding and which were subsequently destroyed or discarded en route to the United States. Waiver of the fine would not occur in this instance if the documents were blatantly fraudulent or if the carrier makes a statement to the Service that they suspected the documents to be fraudulent.

Examples of circumstances that would warrant mitigation by 25 percent may include, but are not limited to the following situations:

(a) Nonimmigrant child who is added to a passport subsequent to the issuance of the nonimmigrant visa where the "s" in the word "BEARER(S)" is crossed out;

(b) Lawful permanent resident who is not in possession of Form I- 551, but possesses a Form I-797, Notice of Action, removing conditional status and indicating it is valid for travel and employment;

(c) British subject, including British overseas citizen, British dependent territories citizen, or citizen of a British commonwealth country, seeking entry under WVPP but not eligible for the WVPP because they were not a British citizen with unrestricted right of permanent abode in the United Kingdom; and

(d) A nonimmigrant who would otherwise qualify for admission under the Transit without Visa (TWOV) Program except that he or she is arriving at a non-designated TWOV Port-of-Entry.

Eleven respondents cite § 273.4(b) of the proposed regulation as an area of concern. It states: The Service may, at any time, conduct an inspection of a carrier's document screening procedures at ports of embarkation to determine compliance with the procedures listed in § 273.3. If the carrier's port of embarkation operation is found not to be in compliance, the carrier will be notified by the Service that its fines will not be eligible for refund, reduction, or waiver of fines under section 273(e) of the Act unless the carrier can establish that lack of compliance was beyond the carrier's control.

The respondents express no objection to the Service's intention to conduct an inspection of a carrier's screening procedures at a port of embarkation but question whether the Service has the authority to conduct inspections in sovereign countries. The respondents express concern that the Service might consider the carrier to be non- compliant with the screening requirements if the carrier is otherwise compliant but local authorities prevent the Service from performing an inspection. The Service does concur with the comments regarding § 273.4(b). No Service inspection of a carrier's boarding procedure shall take place if not permitted by the local competent authority. The Service never contemplated penalizing a carrier for non-compliance of its screening procedure due to the inability of the Service to inspect its operation at a port of embarkation due to the refusal of a competent authority to grant the Service inspection privileges. However, the Service does expect the carrier to use its good offices with t he local competent authority to secure access for a Service inspection. This section of the regulation shall be amended to read as follows:

The Service may, at any time, conduct an inspection of a carrier's document screening procedures at ports of embarkation to determine compliance with the procedures listed in § 273.3, to the extent permitted by the local competent authority responsible for port access or security. If necessary, the carrier shall use its good offices to obtain this permission from the local authority [emphasis added]. If the carrier's port of embarkation * * *.

Similarly, three sections of the MOU, 1.3, 3.4, and 3.7, will also be amended with the same language. Nevertheless, if a carrier cannot comply with a section of the MOU because of local law, the carrier must notify the Assistant Commissioner of Inspections, in writing, listing the specific section of the MOU with which it is unable to be in compliance because of said local law or local competent authority. The carrier must notify the Service within ten (10) days after becoming aware of this inability to co mply in order to be deemed in compliance with the MOU. Section 3.14 has been added to the MOU. It reads as follows:

The Carrier agrees to notify the Assistant Commissioner of Inspections, in writing, if it is unable to comply with any section of the MOU because of local law or local competent authority. The Carrier shall list the specific section of the MOU with which it is unable to comply and, to be in compliance with the MOU, shall notify the Service within ten (10) days after becoming cognizant of this prohibition. Further, in such instances the Carrier shall propose alternative means for meeting the objective sought by the paragraph in question. For instance, where review of foreign boarding procedures cannot be performed by INS personnel, the Carrier could provide that an audit of their operation be performed by local authorities or by private auditors.

Additionally, if a carrier's port of embarkation operation was found not to be in compliance, the carrier's eligibility for refund, reduction, or waiver of fines would be jeopardized only for those violations from that port of embarkation. Fines originating from that specific port of embarkation would not be subject to fines mitigation unless the carrier could establish that lack of compliance was beyond the carrier's control. The carrier's entire fines mitigation could be placed in jeopardy the following y ear if their PL were adversely affected causing the carrier to have an PL worse than the APL or APL2 itself. The Service would be reluctant to allow a carrier with a declining PL that was lower than the APL to receive fines mitigation unless evidence was presented to suggest that the carrier planned to increase or had increased screening and vigilance procedures or that there were extenuating circumstances beyond the control of the carrier.

Six respondents state that the proposed rule, though supposedly based on the Canadian system of fines mitigation, bears little resemblance to the actual Canadian method, which allows for up-front reductions of 100 percent for eligible carriers. The proposed Service fines mitigation policy, though similar to the Canadian fines mitigation system, is significantly different because of the following: (1) Vast differences in traffic volume in the United States as compared with Canada; (2) the large number of por ts of embarkation to the United States; (3) the large number of United States Ports-of- Entry; and, (4) the different statutes themselves. The United States Ports-of-Entry handle almost ten times the volume of traffic transported to Canada. The relative small scale of the air traffic to Canada enables the Canadians to screen each air route to Canada so that a standard is created for carrier screening performance from each port of embarkation. By contrast, the huge number of routes to the United States preve nts the Service from performing a similar exercise. The Canadian fines system also allows for carrier fines in the transportation of aliens who destroy or discard their documents prior to arrival in Canada. On the other hand, the United States may accept carrier photocopies of these document-destroyers' apparently valid documents and may terminate the fines case upon their submission whereas the Canadians do not accept photocopies.

The respondents further claim that the Service's proposed rule offers a maximum of 50 percent up-front reduction thereby "forcing carriers to defend themselves in every instance." The Service disagrees that the carriers will be forced to defend themselves in every instance if signatory to the MOU. During 8 years of fines interaction with the Service's NFO, the carriers have obtained a thorough knowledge of the fines process and what fines will be terminated by the Service and what fines will not. The exampl es of mitigating and extenuating circumstances listed above where the Service will waive or mitigate a fine will provide the carriers with further information to determine whether to defend or seek reduction or waiver of a fine.

Some respondents claim the Canadian method resulted in a 50 percent decrease in improperly documented arrivals in the first year of implementation and that the program resulted in enhanced cooperation between the carriers and the Canadian Government. The respondents state that, because the proposed rule does not provide incentives comparable to the Canadian method, relations between the carriers and the Service will not improve and the number of violations of section 273 of the Act will not necessarily decr ease.

The Service has seen a downward trend in the transportation of improperly documented aliens nationwide since 1992. The number of violations of section 273 of the Act reached its high point in FY 91 (7,052 violations) and FY 92 (7,072). For FY 94, the last year in which statistics are available due to this final rule, there were only 4,512 violations of section 273 of the Act, a 36 percent decrease. The Service has also noticed the number of document-destroyers at John F. Kennedy International Airport (JFKIA ) has decreased from 3,153 in FY 93 to only 582 in FY 96; an 80 percent decrease. The number of asylum claims in JFKIA, which include the document-destroyers and aliens arriving with fraudulent documents, decreased from 9,180 in FY 92 to only 1,213 in FY 96; an 86 percent decrease. The Service views the fines increase to the present sum of $ 3,000 as the catalyst which made it cost-effective for carriers to seek Service training for its agents stationed at the overseas ports of embarkation. This cooperation between the carriers and the Service has brought both closer to reaching the mutually beneficial goal of reducing the number of improperly documented aliens arriving in the United States. The fines mitigation regulation and corresponding MOU represent an extension of this partnership, where the carrier is financially rewarded for properly screening its passengers prior to embarkation to the United States.

The Service concedes that if this plan is implemented there is no guarantee that the number of violations will decrease. The Service is unsure whether, by decreasing the amount of fines imposed on carriers through this final rule, the carriers will continue to invest the time and monetary resources on the training programs now in place. With carrier turnover of overseas agents at 25 percent per year, the carriers must continue to invest in their training programs on the interception of fraudulent documents and on documentary requirements of the United States so that the number of violations does not increase. Until the effects of fines mitigation on the increase or decrease of violations is known, fines mitigation percentages are to be initiated at only 25 and 50 percent. The Service will retain the flexibility to increase, decrease, or maintain the mitigation reductions and/or the APL and APL2 yardsticks so that any overall decrease in carrier screening can be rectified through appropriate Service action.

Several respondents charged that the Service's proposed rule was deliberately designed to defeat Congressional intent by determining reductions based on payment history. Delinquent carrier fines, liquidated damages, and user fee payments have made this a necessity. Service records reflect that over $ 5 million of carrier fines, liquidated damages, and user fees are outstanding for more than 30 days. Existing administrative means to enforce collection of these monies are insufficient and have led to litigati on. This provision in the final rule will enable the Service to collect the outstanding obligations of commercial transportation lines in a more timely and cost-effective manner. This policy was first published in the Federal Register as a notice of policy regarding contracts between the Service and the carriers (See 61 FR 5410, February 12, 1996). In the notice, the Service informed the public of its intention to deny transportation line requests for the following contracts, if the line had an unacceptable fines, liquidated damages, or user fee payment record:

(1) Form I-420, Agreement (Land Borders) Between Transportation Line and the United States;

(2) Form I-425, Agreement (Preinspection) Between Transportation Line and the United States (At Places Outside of the United States);

.