ENFORCEMENT.

SEC. 205. ENFORCEMENT. (a) Recordkeeping Requirements.— Section 508 of the Tariff Act of 1930 (19 U.S.C. 1508) is amended as follows: (1) Subsection (b) is amended to read as follows: “(b) Exportations to Free Trade Countries.— “(1) Definitions.— As used in this subsection— “(A) The term ‘associated records’ means, in regard to an exported good under paragraph (2), records associated with— “(i) the purchase of, cost of, value of, and payment for, the good; “(ii) the purchase of, cost of, value of, and payment for, all material, including indirect materials, used in the production of the good; and “(iii) the production of the good. For purposes of this subparagraph, the terms ‘indirect material’, ‘material’, ‘preferential tariff treatment’, ‘used’, and ‘value’ have the respective meanings given them in articles 415 and 514 of the North American Free Trade Agreement. “(B) The term ‘NAFTA Certificate of Origin’ means the certification, established under article 501 of the North American Free Trade Agreement, that a good qualifies as an originating good under such Agreement. “(2) Exports to nafta countries.— “(A) In general.— Any person who completes and signs a NAFTA Certificate of Origin for a good for which preferential treatment under the North American Free Trade Agreement is claimed shall make, keep, and render for examination and inspection all records relating to the origin of the good (including the Certificate or copies thereof) and the associated records. “(B) Claims for certain waivers, reductions, or refunds of duties or for credit against bonds.— “(i) In general.— Any person that claims with respect to an article— “(I) a waiver or reduction of duty under the last paragraph of section 311, section 312(b) (1) or (4), section 562(2), or the last proviso to section 3(a) of the Foreign Trade Zones Act; “(II) a credit against a bond under section 312(d); or “(III) a refund, waiver, or reduction of duty under section 313 (n)(2) or (o)(1); must disclose to the Customs Service the information described in clause (ii). “(ii) Information required.—Within 30 days after making a claim described in clause (i) with respect to an article, the person making the claim must disclose to the Customs Service whether that person has prepared, or has knowledge that another person has prepared, a NAFTA Certificate of Origin 107 STAT. 2094for the article. If after such 30-day period the person making the claim either— “(I) prepares a NAFTA Certificate of Origin for the article; or “(II) learns of the existence of such a Certificate for the article; that person, within 30 days after the occurrence described in subclause (I) or (II), must disclose the occurrence to the Customs Service. “(iii) Action on claim.— If the Customs Service determines that a NAFTA Certificate of Origin has been prepared with respect to an article for which a claim described in clause (i) is made, the Customs Service may make such adjustments regarding the previous customs treatment of the article as may be warranted. “(3) Exports under the Canadian agreement.— Any person who exports, or who knowingly causes to be exported, any merchandise 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 shall make, keep, and render for examination and inspection such records (including certifications of origin or copies thereof) which pertain to the exportations.”. (2) Subsection (c) is amended to read as follows: “(c) Period of Time.— The records required by subsections (a) and (b) shall be kept for such periods of time as the Secretary shall prescribe; except that— “(1) no period of time for the retention of the records required under subsection (a) or (b)(3) may exceed 5 years from the date of entry or exportation, as appropriate; “(2) the period of time for the retention of the records required under subsection (b)(2) shall be at least 5 years from the date of signature of the NAFTA Certificate of Origin; and “(3) records for any drawback claim shall be kept until the 3rd anniversary of the date of payment of the claim.”. (3) Subsection (e) is amended to read as follows: “(e) Subsection (b) Penalties.— “(1) Relating to nafta exports.— Any person who fails to retain records required by paragraph (2) of subsection (b) or the regulations issued to implement that paragraph shall be liable for— “(A) a civil penalty not to exceed $10,000; or “(B) the general recordkeeping penalty that applies under the customs laws; whichever penalty is higher. “(2) Relating to Canadian agreement exports.— Any person who fails to retain the records required by paragraph (3) of subsection (b) or the regulations issued to implement that paragraph shall be liable for a civil penalty not to exceed $10,000.”. (b) Conforming Amendment.— Section 509(a)(2)(A)(ii) of the Tariff Act of 1930 (19 U.S.C. 1509(a)(2)(A)(ii)) is amended to read as follows: “(ii) exported merchandise, or knowingly caused merchandise to be exported, to a NAFTA country (as defined in section 2(4) of the North American Free 107 STAT. 2095Trade Agreement Implementation Act) 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,”. (c) Disclosure of Incorrect Information.— Section 592 of the Tariff Act of 1930 (19 U.S.C. 1592) is amended— (1) in subsection (c)— (A) by redesignating paragraph (5) as paragraph (6); and (B) by inserting after paragraph (4) the following new paragraph: “(5) Prior disclosure regarding nafta claims.— An importer shall not be subject to penalties under subsection (a) for making an incorrect claim for preferential tariff treatment under section 202 of the North American Free Trade Agreement Implementation Act if the importer— “(A) has reason to believe that the NAFTA Certificate of Origin (as defined in section 508(b)(1)) on which the claim was based contains incorrect information; and “(B) in accordance with regulations issued by the Secretary, voluntarily and promptly makes a corrected declaration and pays any duties owing.”; and (2) by adding at the end the following new subsection: “(f) False Certifications Regarding Exports to NAFTA Countries.— “(1) In general.— Subject to paragraph (3), it is unlawful for any person to certify falsely, by fraud, gross negligence, or negligence, in a NAFTA Certificate of Origin (as defined in section 508(b)(1)) that a good to be exported to a NAFTA country (as defined in section 2(4) of the North American Free Trade Agreement Implementation Act) qualifies under the rules of origin set out in section 202 of that Act. “(2) Applicable provisions.— The procedures and penalties of this section that apply to a violation of subsection (a) also apply to a violation of paragraph (1), except that— “(A) subsection (d) does not apply, and “(B) subsection (c)(5) applies only if the person voluntarily and promptly provides, to all persons to whom the person provided the NAFTA Certificate of Origin, written notice of the falsity of the Certificate. “(3) Exception.— A person may not be considered to have violated paragraph (1) if— “(A) the information was correct at the time it was provided in a NAFTA Certificate of Origin but was later rendered incorrect due to a change in circumstances; and “(B) the person voluntarily and promptly provides written notice of the change to all persons to whom the person provided the Certificate of Origin.”.