(3) progressive clearance agreement requests;

(4) Form I-426, Immediate and Continuous Transit Agreement, also known as Transit Without Visa (TWOV) agreement;

(5) International-to-International (ITI) agreements, also known as In- Transit Lounge (ITL) agreements; and,

(6) Form I-775, Visa Waiver Pilot Program (VWPP) Carrier Agreement. An unacceptable fines payment record is one that includes fines or liquidated damages that are delinquent 30 days and have been affirmed by either a final decision or formal order. An unacceptable user fee payment record is one that includes user fees that are delinquent 30 days.

The Service also notified the public of its intention to evaluate existing carrier agreements for possible cancellation on account of a carrier's unacceptable payment record. The Service stated it will notify the affected carrier in writing of the proposed Service decision and will allow the carrier 30 days to make full payment of the debt or to show cause why the debt is not valid. The Service will issue a final determination after the close of the 30-day period. Promptness and good faith in the payment of fines are critically relevant factors in carrier performance which motivates mitigation of fines. It is clearly logical to link the mitigation of fines to the prompt and faithful payment of fines and this reasoning has been upheld in the courts ( See Amwest Surety Insurance Company v. Reno, CA No. 93-56625, DC No. CV-93-03256-JSL[S]). There is no legislative history to support the respondents' claims regarding Congressional 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 agrees with the commenter regarding prior notification to the carrier of an unsatisfactory fines, liquidated damages, or user fee payment record before termination of its fines mitigation levels (whether 25 or 50 percent). Therefore, the Service will notify the affected carrier in writing of the proposed Service decision to terminate a carrier's fines mitigation privilege. The Service will allow the carrier 30 days to make full payment of the debt or to show cause why the debt is not valid. Fine s incurred during the 30-day period will be mitigated in accordance with the carrier's fines mitigation PL. The Service will issue a final determination after the close of the 30-day period. Carrier fines violations incurred from the date of an adverse determination by the Service to terminate a carrier's fines mitigation privilege will not be subject to automatic fines mitigation based on screening procedures; however, individual requests for reduction, refund, or waiver citing mitigating or extenuating ci rcumstances will be considered.

One respondent requested that the proposed rule include a specific waiver for sanctions against a carrier for the transportation of an alien who is granted asylum or permitted to stay in the United States on humanitarian grounds. The respondent argues that sanctions against the carrier are unfounded as long as the United States has an asylum program and that inhibiting the carrier from transporting refugees to the United States would constitute a human rights violation on the part of the Service. The Servic e has in place procedures (See 8 CFR 280.12 and 280.51) whereby carriers may request mitigation or termination of a fine for extenuating circumstances.

Aliens who desire to request asylum in the United States should follow the normal overseas refugee processing procedures. The Service requires refugees to follow these procedures to obtain the proper documentation to enter the United States. To allow carriers the authority to determine admissibility of aliens not in possession of proper documentation at the port of embarkation, because they indicate a desire to apply for asylum in the United States, would seriously undermine the enforcement of the Act and t he security of the United States, and would circumvent existing immigration laws and regulations.

Several commenters have noted that § 273.4(a) requires the carrier to "provide evidence that it screened all passengers on the conveyance for the instant flight or voyage in accordance with the procedures listed in § 263.3" [emphasis added]. The commenters requested that the term "evidence" be explained as to the Service requirement. To fulfill this requirement the carrier must certify, on carrier or its agent's letterhead, that in the particular voyage where an improperly documented alien was transported, the carrier screened all passengers on the conveyance in accordance with the procedures listed in 8 CFR 273.3. Carriers who are not signatory to the MOU who request fines mitigation based on screening procedures must include this certification along with its application for reduction, refund, or waiver of fines in accordance with the procedures outlined in 8 CFR 280.12 and 8 CFR 280.51. Several commenters pointed out the typographical error in § 273.6(b) whereby the word "not" was mistakenly omitted form the proposed rule. The sentence is corrected to read as follows:

(b) Carriers signatory to an MOU will not [emphasis added] be required to apply for reduction, refund, or waiver of fines in accordance with the procedures outlined in 8 CFR 280.12 and 8 CFR 280.51, but will follow procedures as set forth in the MOU.

Many commenters stated that the regulation and the corresponding MOU have terms which are vague and ambiguous. The Service, during the writing of the Carrier Cooperative Agreement (CCA), the precursor to the present regulation and MOU, was requested to use general language so that the carrier, not the Service, would determine the screening procedures to utilize at the ports of embarkation, since the carrier is in the best position to decide on the amount of screening necessary at particular ports of embarka tion. Some ports of embarkation require minimal amount of screening due to the low-risk nature of the passengers while at high-risk ports of embarkation a greater amount is appropriate. The carrier organizations requested that the carriers themselves determine the level of document screening necessary rather than have the Service mandate a level of screening that may not be cost-effective for the carrier.

Several commenters requested the Service to provide fines mitigation based on "carrier compliance with INS-prescribed screening procedures." While the Service has set out the screening requirements carriers must undertake at the ports of embarkation in order to be eligible for fines mitigation, the Service cannot physically verify a carrier's actual screening procedures at every port of embarkation due to the limited Service personnel and the large number of carriers and ports of embarkation. As stated prev iously, in comparing the Canadian and United States systems for fines mitigation, the size of the passenger transportation industry in the United States makes the individual verification of a carrier's overseas screening procedures not feasible. The Service contemplates the inspection of only a sampling of carrier screening procedures at foreign ports of embarkation each year. Therefore, the Service is forced to determine carrier screening performance based on the proposed methodology explained previously.

Several respondents claimed that the proposed rule does not "provide carriers with sufficient certainty that fines will be reduced if specified criteria are met." The Service has made it emphatically clear that fines will be reduced if the carrier has effective screening procedures. Effective screening is determined by the carrier's PL and if that PL is at or better than the APL. If the carrier's PL does not meet or exceed the APL, the carrier may still submit evidence in accordance with section 4.13 of the MOU, maintain a satisfactory fines, liquidated damages, and user fee payment record to be eligible for fines mitigation. If there are additional "extenuating circumstances," the carrier may be eligible for additional fines mitigation above and beyond the up-front reductions established by the PL of the carrier. Thus, carriers meeting the first two requirements enumerated in § 273.5(c) of the regulation (i.e. effective screening procedures and satisfactory fines and user fee payment record) can be certain that their fines will be reduced according to the carrier's PL. In addition, carriers not signatory to the MOU may seek mitigation or remission of fines in accordance with the procedures outlined in 8 CFR 280.12 and 8 CFR 280.51.

One respondent incorrectly cites the case of Linea Area Nacional deChile S.A. v. Sale to support his argument that it is unfair "to fine a carrier where it has properly screened the passengers for the [Transit Without Visa] TWOV requirements." This case involved a dispute between the carriers and the Service regarding responsibility for the detention of TWOV aliens, and has nothing to do with the boarding of improperly documented TWOV or nonimmigrant aliens.

One commenter queried the significance of the MOU to a carrier whose PL did not meet or exceed the APL and if that carrier would qualify for the 25 percent automatic fines mitigation. If the carrier is signatory to the MOU and is eligible for automatic fines mitigation, the Service will not require the submission of evidence demonstrating the extent to which a carrier prevents the transport of improperly documented passengers for each case. Being signatory to the MOU will satisfy the requirement that the carrier has screened all passengers on the vessel or aircraft in accordance with procedures prescribed by the Attorney General as section 273(e)(1) of the Act requires. Of course, if the carrier can provide evidence that mitigating or extenuating factors should be considered as well, filing a defense for additional fines mitiga tion would be recommended.

If a carrier is not signatory to the MOU, regardless of their PL, the Service will require certification that the carrier properly screened its passengers if the carrier is applying for fines mitigation based on screening requirements. The Service intends to consider the evidence presented by a non-signatory carrier, including the carrier's current and past PLs, as well as other Service data and information, prior to the granting of the fines mitigation for screening procedures. In addition, the Service will consider any additional evidence that would demonstrate any miti gating or extenuating factors relevant to additional fines mitigation.

Several commenters wanted the Service to give extra "benefit" to carriers employing professional security agencies. While the Service commends such actions, it would be inappropriate to further reward a carrier for the use of a professional security agency merely because it was deemed "professional." The carrier's reward for the employment of such an agency is the reduction of the number of improperly documented aliens transported to the United States. The fewer number of fines violations a carrier incurs, the lower the carrier's PL. The lower the carrier's PL, the greater the amount of fines reduction. This will result in the reduction in the amount and number of fines imposed on the carriers.

Several commenters requested the source of the figures used in determining a carrier's PL, the APL, and APL2. The number of each carrier's violations is taken from the number of fines violations recorded by the National Fines Office (NFO) for each carrier for each fiscal year. This number omits all fines for lawful permanent residents and fines cases recommended from the Ports-of-Entry which are rejected by the NFO. This number does not omit those fines which are appealed to the Board of Immigration Appeals (BIA) by the carrier. To delete the fines appealed by the carrier from this number would decrease a carrier's PL even though the Service contends a fines violation did occur. A carrier which appealed all its fines, no matter how frivolous the appeals, would then have a PL of zero. This result would create a perverse incentive to appeal all cases, regardless of the merits of a particular case. The more prudent course, which the Service will follow, is to consi der in the calculation of the PL all fines imposed, including those on appeal, but then to recalculate a carrier's PL, as necessary, to reflect those cases in which the carrier prevails on appeal to the BIA or in the courts.

The source of the number of documented nonimmigrant arrivals per carrier per fiscal year is obtained from the Forms I-92, Aircraft/Vessel reports completed at the individual Ports-of-Entry. Based on the suggestion of some commenters, the Service intends to use the same yardstick (APL and APL2) computed by using data from fiscal year 1994 (FY) for the mitigation of fines for FY 95, FY 96, and for FY 97. The Service may exercise its discretion to use the APL and APL2 FY 94 yardstick for fines mitigation for F Y 98 and FY 99. The Service concurs with several commenters' observation that by re-computing the APL and APL2 annually, the Service would continually raise the fines mitigation standard, preventing carriers from ever qualifying for fines mitigation by having a "moving bell curve."

Some commenters have stated that carriers are eligible for fines mitigation under section 273(c) of the Act. The Service does not concur. Section 273(c) of the Act provides for fines remission or refund but not for fines mitigation. The Service has remitted or refunded fines when a carrier demonstrates that it has exercised reasonable diligence. Section 273(c), however, does not provide for fines reduction or mitigation.

Some commenters wanted the Service to "make clear that training is not tied to attendance of such [Carrier] personnel at INS training sessions." The Service has no intention of dictating to the carrier the type of training it should provide its employees. However, the Service does require the carrier to have trained employees at the ports of embarkation to examine all travel documents. Further, carriers signatory to the MOU agree to participate in Service training programs and use Service Information Guides ( See section 3.9 of the MOU).

Some respondents have stated that, due to time constraints and carrier facilitation needs, the carrier is unable to perform a thorough examination of a passenger's travel documents. In addition, several commenters claim they fear legal action if they refuse to board a passenger. Nevertheless, Congress requires the carrier to make certain its passengers are properly documented and gives the Service the authority to impose financial penalties on carriers which bring improperly documented aliens to the United States. See Matter of Swiss Air "Flight 164" 15 I&N Dec 111 (BIA 1974) .

One commenter requested that the Service determine the PL, APL, and APL2 quarterly. At the present time the Service projects a minimum 3- month lag time in the computation of a carrier's PL each fiscal year. If technological advances permit the rapid collection of this information, the Service will consider the commenter's suggestion for quarterly or semi-annual computation of a carrier's PL and/or the APL/APL2. Additionally, the Service is not opposed to future consideration of the proposal made by the com menter requesting that the Service determine carrier PLs, APLs, and APL2s for individual ports of embarkation (i.e., individual routes). As technology improves, the Service will examine the feasibility of making these calculations and presenting this approach to the carriers. Consultations with the carriers on these and other modifications, including risk assessments, route variations, past and present carrier performance history, and a general commitment to the process of proper screening of passengers, sh ould be ongoing so that needed regulatory changes, if any, or changes to the MOU, can be incorporated in the next revision of the fines mitigation program.

The Service concurs with several commenters who suggested that the MOUs should all expire on a certain day rather than 2 years from the date of each carrier's approval by the Service. Accordingly, the MOU will expire on September 30, 2000, for all carriers.

The Service concurs with one commenter's suggestion that the Service should immediately share information with the carrier at the Port-of-Entry where the fines violation occurs and is recommended to the Service. The Service currently provides the carrier with a copy of the Form I-849, Report to National Fines Office [NFO] of Possible Violation of the INA, which gives the carrier the Service's reason(s) for recommendation of the fine to the NFO for issuance of the Form I- 79, Notice of Intent to Fine. It is the issuance of Form I-79 that is the official Service notification to a carrier that a violation has occurred for which a fine may be assessed. The Form I-79 is issued by the NFO after review of the evidence submitted. If the carrier would like additional information, the NFO can answer most inquires. If carriers want a revision of the Form I-849, the Office of Inspections should be requested to consider such suggestions when the Service next modifies the Form I-849.

The Service concurs with a commenter that the Service should designate a coordinator to be the contact point for all issues arising from implementation of the MOU. Therefore, section 4.1 has been added to the MOU and subsequent sections re-numbered. Section 4.1 reads as follows:

The Director of the National Fines Office will serve as a coordinator for all issues arising from the implementation of this MOU. The INS shall provide the carrier with the coordinator's name, address, telephone, and facsimile number.

The Service has also taken into consideration suggested changes to several sections of the MOU and concurs on the following amendments to the MOU:

In section 3.2 the word "verify" is replaced by the phrase"confirm, to the best of their ability" and the word "apparent" is added to the last sentence. Section 3.2 is amended to read as follows:

The Carrier agrees to verify that trained personnel examine and screen passengers' travel documents to confirm, to the best of their ability, that the passport, visa (if one of required), or other travel documents presented are valid and unexpired, and that the passenger, and any accompanying passenger named in the passport, is the apparent rightful holder of the document.

In section 3.6 one commenter requested the addition of the sentence"[f[ollowing notification by the INS, or its representative, the" to precede the present section 3.6. The Service concurs with this suggestion. Section 3.6 is amended to read as follows:

Following notification by the INS, or its representative, the Carrier shall refuse to knowingly transport any individual who has been determined by an INS official not to be in possession of proper documentation to enter or pass through the United States. Transporting any improperly documented passenger so identified may result in a civil penalty. At locations where there is no INS presence, carriers may request State Department Consular officials to examine and advise on authenticity of passenger documenta tion. State Department Consular officials will act in an advisory capacity only.

The Service also concurs with the commenter regarding section 3.8 dealing with carrier security at the port of embarkation. The word "adequate" shall be replaced by the word "reasonable." Section 3.8 is amended to read as follows:

The Carrier shall maintain a reasonable level of security designed to prevent passengers from circumventing any Carrier document checks. The Carrier shall also maintain a reasonable level of security designed to prevent stowaways from boarding the Carrier's aircraft or vessel.

The Service is committed to continuing consultations with the carrier organizations in the area of fines mitigation. The Service views the fines mitigation regulation and the corresponding carrier- Service MOU as prime examples of carrier-Service cooperation in facilitating travel for the general public and protecting the American people through the enforcement of the immigration laws and regulations. The Service views the fines mitigation final rule as a continuance of this carrier-Service interaction and welcomes all future carrier questions and issues to improve passenger facilitation and enforcement of the Act and its regulations.