Preliminary Vessel Entry and Permits to Lade and Unlade

DEPARTMENT OF THE TREASURY

Customs Service

19 CFR PART 4

[T.D. 96-11]

RIN 1515-AB37

Preliminary Vessel Entry and Permits to Lade and Unlade

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

ACTION: Final rule.

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SUMMARY: This document amends the Customs Regulations regarding the

preliminary entry of vessels arriving in ports of the United States and

the granting of permits for the lading and unlading of merchandise from

those vessels. The Customs Regulations regarding this subject are being

amended to accurately reflect recent changes to the underlying

statutory authority, enacted as part of the Customs Modernization Act.

EFFECTIVE DATE: February 26, 1996.

FOR FURTHER INFORMATION CONTACT: William Scopa, Office of Field

Operations, 202-927-3112 (operational matters), or Larry L. Burton,

202-482-6940 (legal matters).

SUPPLEMENTARY INFORMATION:

Background

On December 8, 1993, amendments to certain Customs and navigation

laws became effective as the result of the President signing Pub. L.

103-182, Title VI of which is popularly known as 2 the Customs

Modernization Act (the Act). Sections 653 and 656 of the Act

significantly amended the statutes governing the entry and the lading

and unlading of vessels in the United States. These operations are

governed, respectively, by sections 434 and 448 of the Tariff Act of

1930, as amended (19 U.S.C. 1434 and 1448).

Prior to these amendments, the entry of vessels of the United

States and vessels of foreign countries had been

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governed by separate statutes (19 U.S.C. 1434 and 1435), neither of

which included elements concerning preliminary vessel entry or the

boarding of vessels. The Act repealed section 1435 and amended section

1434 to provide for the entry of American and foreign-documented

vessels under the same statute. Additionally, the amended section 1434

now provides authority for the promulgation of regulations regarding

preliminary vessel entry, and while neither mandating boarding for all

vessels nor specifying that optional boarding must be accomplished at

any particular stage of the vessel entry process, the amended law does

require that a sufficient number of vessels be boarded to ensure

compliance with the laws enforced by the Customs Service.

Section 1448 had previously linked the granting of preliminary

vessel entry to a mandatory boarding requirement and the physical

presentation of manifest documents to the Customs boarding officer. The

amended section 1448 no longer contains provisions regarding

preliminary vessel entry, vessel boarding, or manifest presentation,

matters which are now provided for in other statutes. Section 1448 now

states that Customs may electronically issue permits to lade or unlade

merchandise, pursuant to an authorized data interchange system.

The regulations which implement the statutory authority for the

granting of preliminary vessel entry and the issuance of permits to

lade and unlade merchandise are contained in sections 4.8 and 4.30 of

the Customs Regulations (19 CFR 4.8 and 4.30). These provisions still

contain mandatory boarding and physical document presentation

requirements, and of course do not include any reference to an

electronic permit issuance option.

On March 18, 1994, a document was published in the Federal Register

(59 FR 12878) soliciting comments regarding a proposal to amend

sections 4.8 and 4.30 of the Customs Regulations (19 CFR 4.8 and 4.30),

in order to properly implement the amended statutory authority. This

document considers the comments received and amends the cited sections

of the Customs Regulations.

Discussion of Comments

Thirty comments were received in response to the proposal. There

were thirteen comments received from vessel operators, nine from vessel

agents, six from vessel and import trade groups, one from a customs

broker, and one from a labor union. Of the thirty comments received,

twenty-eight of them expressed enthusiastic and unqualified support for

the published proposal. A discussion of the remaining comments follows.

Comment: One commenter stated that while the inclusion of elements

concerning the electronic transmission of information was both welcome

and necessary, our proposal was ``vague'' in this regard. It is stated

that if the authorized electronic system contemplated by Customs is one

which will be used with the Automated Commercial System (ACS), that

fact should have been made clear and guidelines should have been

published. The question of compliance by Customs with 19 U.S.C. 1412,

as enacted by section 631 of the Customs Modernization Act, was also

raised. The newly enacted section provides, in its entirety, that with

regard to the National Customs Automation Program (the Program):

The goals of the Program are to ensure that all regulations and

rulings that are administered or enforced by the Customs Service are

administered and enforced in a manner that--

(1) is uniform and consistent;

(2) is as minimally intrusive upon the normal flow of business

activity as practicable; and

(3) improves compliance.

The commenter goes on to urge that if Customs is contemplating

revised requirements for the submission of information electronically,

that existing legal considerations concerning electronic commercial

document transactions be taken into account.

Response: The quoted statutory language merely recites the goals of

the automation program when that program is eventually devised and

published. The amendments presented in this document do not implement

an automation program; they are simply intended to authorize the

voluntary utilization of such a system, once implemented, in

transacting operations under sections 4.8 and 4.30 of the regulations.

Further, Customs will implement regulations concerning how

electronic transmission of documents and information may be

accomplished only after a thorough investigation and with a full

appreciation of all legal and practical considerations. The process

will, as always, invite public participation.

Comment: One commenter correctly states that section 434, Tariff

Act of 1930 (as amended by section 653 of the Customs Modernization

Act) 19 U.S.C. 1434, places an affirmative obligation upon Customs to

board a sufficient number of vessels during the preliminary entry

process to ensure compliance with various provisions of law. The

commenter then goes on to rely upon language in the legislative history

relating to section 653 in an effort to fix the number of vessels to be

boarded. It is urged that the number of vessels boarded be published in

the Federal Register, and that the regulations themselves state that

the number of vessel boardings may not be decreased.

Response: The commenter does not suggest that the amended statute

is in any way ambiguous, and neither does Customs believe it to be.

With statutory authority clear on its face, there is no need to seek

clarification in the history of the law. The statute, in setting forth

that Customs shall board a sufficient number of vessels to ensure

compliance with the laws it administers, merely reinforces the

underlying current prevalent throughout the Customs Modernization Act.

That common theme is the vesting in Customs of broad discretion to

promulgate regulations and install procedures. There is no question

that Customs will continue to board vessels for the purpose of

enforcing the laws of the United States. Effectively ensuring

enforcement of U.S. laws can best be realized by boarding vessels when

circumstances suggest that a Customs presence is warranted, to include

random boardings. Boarding quotas will not further the ends of the

statute as reflected in its plain words.

Conclusion

After careful consideration of all comments received as well as

further review of the matter, it has been determined that the

amendments should be adopted as proposed.

Regulatory Flexibility Act

Pursuant to the provisions of the Regulatory Flexibility Act (5

U.S.C. 601 et seq.), it is certified that the amendments will not have

a significant economic impact on a substantial number of small

entities. Accordingly, they are not subject to the regulatory analysis

or other requirements of 5 U.S.C. 603 and 604.

Executive Order 12866

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 Larry L. Burton, Carrier

Rulings Branch, U.S. Customs Service. However, personnel from other

Customs offices participated in its development.

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List of Subjects in 19 CFR Part 4

Customs duties and inspection, Reporting and recordkeeping

requirements, Vessels.

Amendments to the Regulations

Part 4, Customs Regulations (19 CFR Part 4), is amended as set

forth below.

PART 4--VESSELS IN FOREIGN AND DOMESTIC TRADES

1. The general authority citation for Part 4, Customs Regulations

(19 CFR Part 4) and specific authority citation for section 4.8

continue, and the specific authority citation for section 4.30 is

revised, to read as follows:

Authority: 5 U.S.C. 301; 19 U.S.C. 66, 1431, 1433, 1434, 1624;

46 U.S.C. App. 3, 91;

* * * * *

Section 4.8 also issued under 19 U.S.C. 1448, 1486;

* * * * *

Section 4.30 also issued under 19 U.S.C. 288, 1446, 1448, 1450-

1454, 1490;

* * * * *

2. Section 4.8 is revised to read as follows:

Sec. 4.8 Preliminary entry.

Preliminary entry allows a U.S. or foreign vessel arriving under

circumstances which require it to formally enter, to discharge cargo,

passengers, or baggage prior to making formal entry. The granting of

preliminary entry may be accomplished electronically pursuant to an

authorized electronic data interchange system, or by other means of

communication approved by the Customs Service. Preliminary entry must

be made in compliance with Sec. 4.30 of this part. The granting of

preliminary vessel entry by the Customs Service may be conditioned upon

the presentation of a completed Customs Form 1300 (Master's Certificate

on Preliminary Entry) to Customs during discretionary vessel boarding,

or upon the filing with Customs of a Customs Form 1300 or its

equivalent by electronic or other means in instances where vessels are

not boarded.

3. Section 4.30 (a) is amended by removing the period at the end

and adding the words ``or electronically pursuant to an authorized

electronic data interchange system or other means of communication

approved by the Customs Service.''

4. Section 4.30(b) is amended by adding after the phrase ``Customs

Form 3171,'' the words `` or electronically pursuant to an authorized

electronic data interchange system or other means of communication

approved by the Customs Service,''.

George J. Weise,

Commissioner of Customs.

Approved: November 24, 1995.

John P. Simpson,

Deputy Assistant Secretary of the Treasury.

[FR Doc. 96-1327 Filed 1-25-96; 8:45 am]

BILLING CODE 4820-02-P