Announcement of National Customs Automation Program Test Regarding Presentation of Electronic Cargo Declarations

DEPARTMENT OF THE TREASURY

Customs Service

Announcement of National Customs Automation Program Test

Regarding Presentation of Electronic Cargo Declarations

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

ACTION: General notice.

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SUMMARY: This notice announces a Customs plan to conduct a test program

to allow the electronic submission of certain inward vessel manifest

information. This notice invites public comments concerning any aspect

of the test, informs interested members of the public of the

eligibility requirements for voluntary participation in the test, and

describes the requirements required to be met in order to participate

in the test.

EFFECTIVE DATE: The test will commence no sooner than December 9, 1996,

and will run for approximately one year. Comments concerning the

eligibility standards, selection criteria, or information submission

requirements must be received on or before October 10, 1996. To

participate in the test, the necessary information as outlined in this

notice must be filed with Customs on or before October 10, 1996.

ADDRESSES: Written comments regarding this notice and letters

requesting participation in the test program should be addressed to

Cargo Control and Entry, U.S. Customs Service, 1301 Constitution

Avenue, NW., Room 1328, Washington, DC 20229.

FOR FURTHER INFORMATION CONTACT:

For operational or policy matters: William Scopa (202) 927-3112.

For systems or automation matters: Kim Santos (202) 927- 0651.

For legal matters: Larry L. Burton (202) 482-7040.

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 which pertain 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 of the Act created

sections 411 through 414 of the Tariff Act of 1930 (19 U.S.C. 1411

through 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 the remote location filing of entries

(section 414). Actual testing procedures for both existing and planned

components were established by the publication of Treasury Decision 95-

21 in the Federal Register of March 16, 1995 (60 FR 14211), which

appear as section 101.9, Customs Regulations (19 CFR 101.9).

I. Description of Proposed Test

The Concept of Electronically Filing the Cargo Declaration

The filing of the Customs Form 1302 Cargo Declaration

electronically allows an importing carrier to transmit one cargo

declaration to all Customs ports for review and for enforcement

purposes. It also allows for the electronic release of cargo to

carriers and other participating parties, as well as facilitating the

process of many other Customs regulatory requirements related to the

control and processing of cargo. For many years now, Customs has been

accepting electronic cargo data from importing carriers, while

simultaneously requiring the same information to be submitted on the

Customs Form 1302 (Cargo Declaration). This test program will eliminate

the requirement for participating Automated Manifest System (AMS)

vessel carriers who qualify for the test to submit a Customs Form 1302

Cargo Declaration to Customs, so long as they

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remain proficient in meeting the electronic standards established by

Customs.

Since August of 1995, Customs has been working in partnership with

the trade through the Customs Electronic Systems Advisory Committee

(CESAC) and other parties in developing the standards for this test

program as well as identifying necessary enhancements to the AMS.

Although electronic cargo data has been received by Customs from

importing carriers for many years, there were many technical omissions

in the AMS system which made the paper collection of cargo information

more useful for enforcement and control purposes. Customs is now

confident that the standards developed and enhancements being made to

the AMS will make it possible to eliminate the need to submit the

Customs Form 1302 simultaneously with the transmission of the cargo

data electronically, and hopes to verify this through the test program.

Since many importing carriers have been transmitting the cargo data to

Customs nationally for many years now, the test will run nationally.

Description of the Test

Customs objectives are: (1) To work with the trade community, other

agencies, and other parties impacted by this program in the design,

implementation and evaluation of the test; and,

(2) To use the experience gained by the test in designing

operational procedures, automated systems, and regulations that are

supportive of and compatible with the Customs Reorganization, the

ongoing effort to improve the Trade Compliance Process, and the

Automated Commercial System Redesign (ACE).

All procedures and processes will be closely coordinated with all

participating and affected parties. The intent of this program is to

test such operational issues as communication, cargo movement and

release, as well as whether participants can meet the requirements of

transmitting timely, complete and accurate cargo data.

Regulatory Provisions Suspended

Provisions in sections 4.7 and 4.7a of the Customs Regulations (19

CFR 4.7 and 4.7a), relating to the presentation of a cargo declaration

with a vessel manifest, will be suspended during this test.

Participants will not be required to submit a Customs Form 1302 to

Customs or have a copy on board a vessel, including the ``dock copy''

or the ``traveler'', but must be able to download or otherwise produce

required information for Customs, or Coast Guard officers who may

board. Participants will not be required by Customs to provide a paper

Customs Form 1302 as an additional copy. There is no suspension of the

requirements contained in the cited regulatory provisions to submit the

other forms to be presented with a vessel manifest, such as the Customs

Forms 1300 and 1301.

II. Eligibility Criteria

Participation in this testing will not be considered confidential

information, and the identity of participants will be made available to

the public upon written request. In order to qualify for participation

in the test program it will be necessary that a party either be a

qualified Automated Manifest System (AMS) carrier, or that a qualified

AMS Service Center(s) be designated to submit required information to

Customs. In order to be considered AMS-qualified, vessel operators and

other entities must have been tested by Customs and determined to

possess full technical capability to transmit and receive all types of

AMS data. Customs authorizes Automated Manifest System (AMS) service

centers to assist carriers in the submission of required electronic

information. Such AMS centers may include Port Authorities and other

interested parties who act on behalf of carriers who either cannot or

choose not to develop the required electronic capabilities for direct

participation. Service centers are selected by Customs only if they

demonstrate that they possess the full technical capacity and necessary

facilities to receive and transmit data for requesting carriers. If

these conditions are met, such entities are officially recognized as

``Designated Service Centers.'' Any participating carrier that is using

a Designated Service Center is reminded that the carrier is responsible

for all electronic submission requirements incorporated in the test.

User requirements for qualifying carriers will be governed by those

published in the handbook entitled ``Customs Automated Manifest

Interface Requirements-Intermodal'' (CAMIR). A list of Designated

Service Centers can be obtained from the U.S. Customs Service, Office

of Information Technology, 1301 Constitution Avenue, NW., Washington DC

20229. All test participants, whether participating directly or through

the services of a Designated Service Center or Centers, must submit

required information electronically in all ports in which business is

conducted. Electronic submissions will be required for all cargo and/or

vessel types, including containerized, bulk, and break-bulk.

In order to qualify for participation in the program, an applicant

is subject to and must have the electronic capabilities to meet

additional requirements and conditions as follows:

1. Except as further specified in this paragraph, any carrier

participating in this test program must electronically transmit

complete cargo declaration information to Customs no less than 48 hours

prior to actual arrival of a vessel in a port of the United States.

Such transmissions will be considered certified for manifesting

purposes at 48 hours prior to actual vessel arrival. For voyages from

the last foreign port of departure of less than 48 hours duration, the

complete cargo declaration must be transmitted no later than the actual

time of vessel arrival in a United States port. Such transmissions will

be considered certified for manifesting purposes at time of vessel

arrival. The presentation of complete and accurate cargo information is

essential to Customs enforcement mission. Therefore, each time a

participating carrier fails to transmit complete and accurate cargo

declaration information in a timely manner, the port director may

require the presentation of the paper Customs Form 1302 for the

relevant voyage. All test participants are required to transmit into

AMS the actual time and date of vessel arrival in a United States port.

In any instance where a participant whose vessel is on a voyage of

longer than 48 hours duration fails to transmit the necessary

electronic cargo data at or before 48 hours before a vessel arrival,

the port director retains the discretion to delay the unlading of the

vessel. Unlading may also be delayed with respect to those voyages of

less than 48 hours in duration if the port director requires additional

time to review the data transmitted. Alternatively, with respect to all

participants, the port director may allow the unlading to proceed but

require the cargoes to be maintained and controlled by the test

participant at the place of unlading in a manner as directed. In no

instance, unless otherwise notified by the port director, shall cargo

be removed from the place of unlading until the cargo declaration

transmission has been received by Customs, an entry has been filed, and

the carrier receives electronic releases for the cargo or electronic

authorizations from Customs to transfer the cargo.

2. The electronic cargo declaration information submitted under

this program at the first port of arrival in the United States must

list all foreign cargo on board the vessel, regardless of the intended

port of discharge. In addition

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to the current inventory of AMS data elements, participants using CAMIR

and ANSI ASCX12 standards will be required to transmit the five

following new data elements:

Place of Receipt of Cargo;

Container Dimensional Data: Height, Width, Length,

equipment type;

Container Seal Number;

Type of Container Movement (e.g., House-to-House,

Container Station-to-Container Station, etc.);

Remaining on Board Indicator.

For AMS participants using the CAMIR format, the above data

elements must be provided as follows:

Place of Receipt: B02 record, columns 16-32;

Remaining on Board: B01 record, column 48;

Container Information: C01 record, Length (columns 50-54), Height

(columns 55-62), Width (columns 63-70), Type (columns 71-74 ISO Code);

Container Seal Number: C01 record, columns 18-32 (Seal 1), columns

33-47 (Seal 2);

Type of Container Move: C01 record, columns 76-77.

System participants should refer to the CAMIR handbook issued in August

of 1995 for detailed record layouts and additional instructions.

For participants using the American National Standards Institute,

Accredited Standards Committee X12 (ANSI, ASC X12) formats, the data

should be sent as follows:

Place of Receipt: M11 segment, data element M1110;

Remain on Board: M11 segment, data element M1109;

Container Information: VID segment, Length = DE VID06, Height = DE

VID07, Width = DE VID08, Type = DE VID09 ISO Code;

Container Seal Numbers: VID segment, Seal 1 = DE VID04, Seal 2 = DE

VID05;

Type of Cont. Service Code: VID segment, DE = VID11.

Also, it is required that the following data elements be included

in electronic transmissions under this test:

Foreign port of lading;

Place of receipt by the carrier of all cargoes. This means

the first place the participating carrier took possession of the cargo,

whether it be a port city or other location;

Container number (s), length, height, width, and equipment

type;

Container seal number;

Type of container movement (e.g., House-to-House,

Container Station-to-Container Station, etc.);

Bill of Lading number(s);

Total quantity and unit type of merchandise in a shipment

(quantity of pallets or cargo containers is not sufficient; smallest

external packaging unit must be used);

Complete shipper, consignee, and notify party names and

addresses. If both notify party and consignee information is available

to the participant, both shall be transmitted, including such

information as ``to order'' or similar language if that is all that is

supplied to the participant by the shipper;

Indications of presence of hazardous materials;

Marks and numbers, including in that data field when

available:

Country and/or other place of origin information;

Consignee or other name listed;

Other conveyance information, such as identification of

feeder vessels;

Purchase order, style and other identifying numbers;

Description of merchandise. In the case of consolidated

shipments, merchandise descriptions must be distinguished by quantity,

weight and identifying characteristics for each shipment within a

consolidated batch.

3. When a vessel is being operated under the terms of a vessel

sharing or slot charter arrangement, each test participant carrier with

cargo aboard the vessel is responsible for filing required information

with Customs regarding their particular electronic cargo declaration .

Test participant parties who provide required data to Customs

electronically must do so for their portion of the cargo within the

time limits established in this document.

Test participant carriers operating under a vessel sharing or slot

charter arrangement shall transmit an identical vessel name and the

true, accurate, and identical date and time of vessel arrival. The

vessel name shall be identified with the Lloyd's Register of Ships

vessel code, as submitted by the vessel owner/operator. The owner/

operator of a vessel operating under a vessel sharing or slot charter

arrangement shall be responsible for noting on the Customs Form 3171

(Application-Permit-Special License-Unlading-Lading-Overtime Services),

each of the carriers sharing or chartering space aboard the vessel. The

Customs Form 3171 shall be submitted at least 48 hours prior to a

vessel's arrival. If the participant has been granted a term permit (CF

3171), the participant shall always notify the port director at least

48 hours prior to arrival of a vessel, of any changes in parties or

slot charterers as well as any other changes made after the granting of

the term permit. This should be accomplished by submitting an amended

copy of the original term permit.

4. Beginning with records created as of the date of first

participation by a carrier and continuing for a period of 6 months

after the actual date of arrival of a particular shipment, participants

must maintain for immediate examination by Customs upon demand, all

electronic or paper records kept in the normal course of business which

relate to any particular bill of lading. After 6 months from the date

of arrival, unless in an unreconciled status, any such records must be

produced for examination by Customs within 5 business days following

any demand for their production. Records of any bill of lading which

remains in an unreconciled status must always be available for

immediate examination by Customs.

Electronically maintained records may be furnished to Customs

either in the form of a computer-generated report, or in screen prints

of relevant electronic data. Regardless of presentation form,

submissions must clearly identify, for each shipment, the vessel name

and voyage number, date of arrival, port of discharge, bill of lading

and container number(s), total quantity of goods, full identity of

shipper and consignee, and all bill of lading transactions posted

against a bill during the period when the party was responsible for the

proper safekeeping and delivery of the merchandise.

5. Test participants shall not remove merchandise from Customs

custody until the cargo declaration transmission has been received by

Customs, an entry has been filed, and an electronic release notice has

been received from Customs. Removing merchandise without proper

electronic notice from Customs will subject a participant to full

penalty liability and no such penalty will be mitigated to less than

$500. This mitigation limitation does not apply in the case of any bill

of lading which is in an unreconciled status at the time of the

effective date of this test program.

6. Electronically reported cargo may not be transferred on a

Permit-to-Transfer (PTT) unless the participating carrier has received

an electronic authorization from Customs.

7. If for any reason the electronic system becomes inoperative or

Customs is unable to receive electronic Customs Form 1302 information

transmitted by test participants, it will be required that parties

submit the paper Customs Form 1302 to Customs. The port director may

require up to three copies.

If for any reason the Automated Manifest System, cargo selectivity,

or other entry-related automated system is inoperative and electronic

cargo release and selectivity is not possible, a Customs port director

will, after a 2-

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hour waiting period, implement procedures to allow for the non-

electronic release of all cargo until such time as electronic systems

are again operative. The port director will ensure that any of the

appropriate information on entries released under these manual

procedures is properly entered into the electronic system as soon as

possible.

8. All empty containers aboard a vessel will be manifested for

discharge at the first United States port of arrival, indicating the

foreign port of loading of each container. If the vessel is proceeding

coastwise, within 24 hours after time of arrival and at least two hours

prior to time of arrival at the next United States port, the test

participant will retransmit the empty container list indicating the

empty containers remaining on board and any containers which were

loaded at preceding ports which are to be discharged domestically.

All empty containers discharged are to be held at the place of

unlading until the carrier transmits, in AMS, the actual list of

containers discharged at the place of unlading. Upon such transmission,

all empty containers shall be considered automatically released from

Customs custody unless it is otherwise indicated by Customs that any or

all are to be held. Since the AMS Empty Container Module does not allow

electronic holds to be placed, any necessary holds will be placed

through physical means. These requirements apply equally to domestic

and foreign carriers.

9. In the case of Foreign Freight Remaining On Board (FROB) a

vessel entering the United States and not intended for discharge in

this country, test participants are required to transmit all bill of

lading cargo data pertaining to such shipments at the first U.S. port

of arrival. Such bills of lading shall be automatically released in AMS

upon transmission of the data unless placed on hold with the test

participant by Customs through electronic or other means. FROB bill of

lading cargo data is subject to all of the same requirements and

standards set forth in this document which apply to other bill of

lading cargo data.

10. The penalties provided in law and regulations with respect to

any discrepancy between the cargo described and identified to Customs

and the cargo actually found to be aboard a vessel continue to remain

in full force and effect during the test program.

11. The enormous reliance placed upon the vessel cargo declaration

by Customs in its mission to interdict the flow of illegal narcotics

into the United States cannot be overstated. Therefore, if the

Director, Trade Compliance, Customs Headquarters, determines that a

test participant's electronic transmissions of the cargo declaration

are deficient to the extent that they compromise that mission in any

manner, he may require that participant to submit a Customs Form 1302

Cargo Declaration for all or a portion of that party's vessel arrivals

during the pendency of the test period. Such participant must submit

the paper Customs Form 1302 in accordance with the requirements of Part

4 of the Customs Regulations (19 CFR Part 4).

Application Process

Parties desiring to participate in this test program must submit a

written statement to the United States Customs Service, Cargo Control &

Entry, 1301 Constitution Avenue, NW., Room 1328, Washington, D.C.

20229-0002, on or before 30 days from publication in the Federal

Register. The document, signed by an authorized official of the

carrier, must state that the carrier meets all qualifications as

outlined in this document and wishes to voluntarily participate in the

test. The statement must acknowledge that all submissions made to

Customs as part of the test are required to be accomplished

electronically. The document must also designate a national point of

contact and telephone number, and shall also identify local contacts

and telephone numbers for the use of Customs personnel at individual

ports.

Bases for Participant Selection

Eligible importing carriers will be considered for participation in

this test. Customs is looking for a variety of circumstances and

participants in this test. We stress that those not selected for

participation will be invited to comment on the test and to participate

in its evaluation. Selection will be based on the depth of an

applicant's electronic interface capabilities and the ability to meet

all the user requirements in the CAMIR and in this notice. Participants

selected will be notified by means of the Customs Electronic Bulletin

Board.

III. Test Evaluation Criteria

Once participants are selected, Customs will meet to review all

public comments received concerning any aspect of the test program or

procedures, amend procedures as necessary in light of those comments,

form problem-solving teams, and establish baseline measures and

evaluation methods and criteria. Six months after implementation of the

program, evaluations of the program will be commenced with the final

results published in the Federal Register and Customs Bulletin as

required by section 101.9(b), Customs Regulations (19 CFR 101.9(b)).

The following evaluation methods and criteria have been suggested:

1. Establish baseline measurements through questionnaires to the

trade and Customs port officials.

2. Use the results obtained through various Compliance Measurement

programs related to vessel manifesting to determine the efficiency of

electronic transmissions of the cargo data.

Preliminary choices of evaluation criteria for Customs and other

government agencies include workload impact (workload shifts, cycle

time, etc. * * *), policy and procedural accommodation, and trade

compliance impact. Possible criteria for the trade participants are

cost benefits, system efficiency, operational efficiency, and other

items identified by the group.

In conclusion, it is emphasized that if a company is interested in

participating in the test program, it must first be tested by Customs

and become a qualified AMS carrier, or it may use a qualified AMS

service center. It is also emphasized that a participant must transmit

the electronic cargo declaration for all of its arrivals in all Customs

ports, for all types of cargo. Upon arrival of a vessel at its first

U.S. port, an electronic cargo declaration for all cargo aboard the

vessel must be transmitted, regardless of the intended port of

discharge.

Dated: September 5, 1996.

Samuel H. Banks,

Assistant Commissioner, Office of Field Operations.

[FR Doc. 96-23084 Filed 9-9-96; 8:45 am]

BILLING CODE 4820-02-P