Test Programs

DEPARTMENT OF THE TREASURY

Customs Service

19 CFR Part 101

RIN 1515-AB47

Test Programs

AGENCY: U.S. Customs Service, Department of the Treasury.

ACTION: Notice of proposed rulemaking.

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SUMMARY: This document proposes to amend the Customs Regulations by

adding a new provision that would allow for test programs and

procedures in general and, specifically, for purposes of implementing

those Customs Modernization provisions of the North American Free Trade

Agreement Implementation Act that provide for the National Customs

Automation Program. The proposed regulation would allow the

Commissioner of Customs to conduct limited test programs/ procedures,

which have as their goal the more efficient and effective processing of

passengers, carriers, and merchandise, and impose upon participants

requirements different from those specified in the Customs Regulations,

but only to the extent that such different requirements do not affect

the collection of the revenue, public health, safety, or law

enforcement.

DATES: Comments must be received on or before October 17, 1994.

ADDRESSES: Written comments (preferably in triplicate) may be addressed

to the Regulations Branch, Office of Regulations and Rulings, U.S.

Customs Service, Franklin Court, 1301 Constitution Avenue, NW.,

Washington, D.C. 20229. Comments submitted may be inspected at the

Regulations Branch, Office of Regulations and Rulings, U.S. Customs

Service, Franklin Court, 1099 14th St., NW, Suite 4000, Washington,

D.C.

FOR FURTHER INFORMATION CONTACT: John Durant, Director, Commercial

Rulings Division, (202) 482-6990.

SUPPLEMENTARY INFORMATION:

Background

Title VI of the North American Free Trade Agreement Implementation

Act (the Act), Public Law 103-182, 107 Stat. 2057 (December 8, 1993),

contains provisions pertaining to Customs Modernization (107 Stat.

2170). Subtitle B of title VI establishes the National Customs

Automation Program (NCAP)--an automated and electronic system for the

processing of commercial importations. Section 631 in Subtitle B of the

Act creates sections 411 through 414 of the Tariff Act of 1930 (19

U.S.C. 1411-1414), which define and list the existing and planned

components of the NCAP (section 411), promulgate program goals (section

412), provide for the implementation and evaluation of the program

(section 413), and provide for remote location filing (section 414).

Section 631 of the Act provides Customs with direct statutory

authority for full electronic processing of all Customs-related

transactions. For each planned NCAP program component, Customs is

required to prepare a separate implementation plan in consultation with

the trade community, establish eligibility criteria for voluntary

participation in the program, test the component, and transmit to

Congress the implementation plan, testing results, and an evaluation

report. The testing of any planned NCAP components would be conducted

under carefully delineated circumstances--with objective measures of

success or failure, a predetermined time frame, and a defined class of

participants. Notice of any NCAP program component testing would be

published in both the Customs Bulletin and the Federal Register and

participants solicited.

In addition to testing planned NCAP components there are other

areas of Customs-related transactions wherein Customs and the trade

community could benefit from the valuable information that limited test

programs/procedures could provide. Thus, Customs is proposing this

regulation in order both to meet its obligations under the NCAP

legislation and to provide itself with the ability to obtain

information necessary to predict the effects of various policy options.

If adopted, the regulation would allow the Commissioner of Customs to

conduct limited test programs and procedures and allow certain eligible

members of the public to participate on a voluntary basis. Also,

because test programs could require exemptions from regulations in

various parts of the Customs Regulations, e.g., parts 113 (Customs

bonds), 141 (entry of merchandise), 142 (entry process), 171 (fines,

penalties, and forfeitures), 174 (protests), and 191 (drawback),

participants would be subject to requirements different from those

specified in the Customs Regulations, but only to the extent that such

different requirements do not affect the collection of the revenue,

public health, safety, or law enforcement. Accordingly, pursuant to the

Secretary's authority under section 624 of the Tariff Act of 1930 (19

U.S.C. 1624) to make such rules and regulations as may be necessary to

carry out the provisions of the Tariff Act of 1930 and pursuant to the

requirement set forth in section 413 of the Tariff Act of 1930 (19

U.S.C. 1413) that the Secretary test planned NCAP program components,

it is proposed to amend the Customs Regulations at part 101 (19 CFR

part 101) to allow the Commissioner of Customs to conduct limited test

programs and procedures in general, as well as for purposes of

implementing the NCAP provisions of the Act.

Discussion of Proposed Amendment

Customs proposes to amend part 101 of the Customs Regulations (19

CFR part 101) by adding a new Sec. 101.9, which would allow the

Commissioner of Customs to conduct limited test programs and procedures

in general and for purposes of implementing NCAP program components,

which may impose upon eligible participants requirements different from

those specified in the Customs Regulations, but only to the extent that

such different requirements do not affect the collection of the

revenue, public health, safety, or law enforcement. Those test

programs/procedures related to the NCAP would be subject to certain

time, scope, participation, and publication constraints, whereas, those

test programs that are not related to the NCAP would be subject, in

general, to constraints concerning time and scope only. However,

because general test programs may affect the processing not only of

passengers and carriers but also the importation of merchandise,

Customs recognizes that the provisions of 19 U.S.C. 1484(a)(2)(C), as

amended, require that, to the maximum extent practicable, the Secretary

provide for the equal treatment of all importers of record of imported

merchandise. Accordingly, the proposed regulation requires that notice

be published in both the Customs Bulletin and the Federal Register

before implementing those limited tests or procedures that involve

merchandise.

In order to implement test programs and procedures in general

(i.e., tests that are designed to evaluate the effectiveness of new

technology or operational procedures in the processing of passengers,

carriers, or merchandise) paragraph (a) authorizes the Commissioner of

Customs to provide for requirements different from those specified in

the Customs Regulations, but only to the extent that such different

requirements do not affect the collection of the revenue, public

health, safety, or law enforcement. Such different requirements will be

limited in scope, time, and application as necessary to facilitate the

conduct of the specified program or procedure. Where the test program

or procedure could affect the processing of merchandise, however, not

less than thirty days prior to implementing such test program or

procedure a notice of the test program would be published in both the

Customs Bulletin and the Federal Register, inviting public comments

concerning the methodology of the test program or procedure, and which

informs interested members of the public of the eligibility criteria

for voluntary participation in the test program and the basis for

selecting participants. Where the test program or procedure does not

affect the importation of merchandise and is not required under the

NCAP legislation, however, public notice would not be required.

In order to implement test programs and procedures for purposes of

implementing NCAP program components, as described in section 411(a)(2)

of the Tariff Act of 1930 (19 U.S.C. 1411(a)(2)), paragraph (b)

similarly authorizes the Commissioner of Customs to provide for

requirements that may be different from those specified in the Customs

Regulations, but only to the extent that such different requirements do

not affect the collection of the revenue, public health, safety, or law

enforcement. The publication requirement on tests of planned NCAP

components is similar. Not less than 30 days prior to implementing any

test program or procedure notice of the NCAP test would be published in

both the Customs Bulletin and the Federal Register that invites public

comments concerning the test program, and informs interested members of

the public of the eligibility criteria for voluntary participation in

the test program and the basis for selecting participants. Within a

reasonable time following the completion of the test program or

procedure a description of the results would be published in both the

Customs Bulletin and the Federal Register.

Comments

Before adopting this proposed regulation as a final rule

consideration will be given to any written comments timely submitted to

Customs. Comments submitted will be available for public inspection in

accordance with the Freedom of Information Act (5 U.S.C. 552), Sec. 1.4

of the Treasury Department Regulations (31 CFR 1.4), and Sec. 103.11(b)

of the Customs Regulations (19 CFR 103.11(b)), on regular business days

between the hours of 9 a.m. and 4:30 p.m. at the Regulations Branch,

Office of Regulations and Rulings, U.S. Customs Service, Franklin

Court, 1099 14th St., N.W., 4th floor, Washington, D.C.

Inapplicability of the Regulatory Flexibility Act, and Executive Order

12866

Since the regulation proposed seeks to alleviate regulatory burdens

rather than impose new ones, it does not constitute a ``major rule''

for purposes of the Regulatory Flexibility Act, 5 U.S.C. 601 et seq.,

and is, therefore, not subject to its provisions. Further, this

document does not meet the criteria for a ``significant regulatory

action'' as specified in E.O. 12866.

Drafting Information

The principal author of this document was Gregory R. Vilders,

Office of Regulations and Rulings, Regulations Branch. However,

personnel from other offices participated in its development.

List of Subjects in 19 CFR Part 101

Customs duties and inspection, Exports, Imports, Organization and

functions (Government agencies), Reporting and recordkeeping

requirements, Tests.

Amendments to the Regulations

For the reasons stated above, part 101 of the Customs Regulations

(19 CFR part 101) is amended as set forth below:

PART 101--GENERAL PROVISIONS

1. The authority citation for part 101 is revised to read as

follows:

Authority: 5 U.S.C. 301; 19 U.S.C. 2, 66, 1202 (General Note 17,

Harmonized Tariff Schedule of the United States (HTSUS)), 1623,

1624.

Section 101.3 and 101.4 also issued under 19 U.S.C. 1 and 58b;

Section 101.9 also issued under 19 U.S.C. 1411-1414.

2. It is proposed to amend part 101 by adding a new Sec. 101.9 to

read as follows:

Sec. 101.9 Test programs or procedures; alternate requirements.

(a) General testing. For purposes of conducting a test program or

procedure designed to evaluate the effectiveness of new technology or

operational procedures regarding the processing of passengers, vessels,

or merchandise, the Commissioner of Customs may impose requirements

different from those specified in the Customs Regulations, but only to

the extent that such different requirements do not affect the

collection of the revenue, public health, safety, or law enforcement.

The imposition of any such different requirements shall be subject to

the following conditions:

(1) Defined purpose. The test is limited in scope, time, and

application to such relief as may be necessary to facilitate the

conduct of a specified program or procedure;

(2) Prior publication requirement. For tests affecting the entry of

merchandise, whenever practicable, notice shall be published in the

Federal Register not less than thirty days prior to implementing such

test, followed by publication in the Customs Bulletin. The notice shall

invite public comments concerning the methodology of the test program

or procedure, and inform interested members of the public of the

eligibility criteria for voluntary participation in the test and the

basis for selecting participants. For tests affecting the entry of

passengers or carriers, no public notice is required.

(b) NCAP testing. For purposes of conducting an approved test

program or procedure designed to evaluate planned components of the

National Customs Automation Program (NCAP), as described in section

411(a)(2) of the Tariff Act of 1930 (19 U.S.C. 411), the Commissioner

of Customs may impose requirements different from those specified in

the Customs Regulations, but only to the extent that such different

requirements do not affect the collection of the revenue, public

health, safety, or law enforcement. In addition to the requirement of

paragraph (a)(1) of this section, the imposition of any such different

requirements shall be subject to the following conditions:

(1) Prior publication requirement. For tests affecting the NCAP,

notice shall be published in the Federal Register not less than thirty

days prior to implementing such test, followed by publication in the

Customs Bulletin. The notice shall invite public comments concerning

any aspect of the test program or procedure, and inform interested

members of the public of the eligibility criteria for voluntary

participation in the test and the basis for selecting participants;

and,

(2) Post publication requirement. Within a reasonable time period

following the completion of the test, a complete description of the

results shall be published in both the Federal Register and the Customs

Bulletin.

George J. Weise,

Commissioner of Customs.

Approved: August 5, 1994.

John P. Simpson,

Deputy Assistant Secretary of the Treasury.

[FR Doc. 94-20029 Filed 8-15-94; 8:45 am]

BILLING CODE 4820-02-P