Announcement of National Customs Automation Program Test Regarding Remote Location Filing

DEPARTMENT OF THE TREASURY

Customs Service

Announcement of National Customs Automation Program Test

Regarding Remote Location Filing

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

ACTION: General notice.

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SUMMARY: This notice announces Customs plan to conduct a second

prototype test of remote location filing. This notice invites public

comments concerning any aspect of the planned test, informs interested

members of the public of the eligibility requirements for voluntary

participation, describes the basis for selecting participants, and

establishes the process for developing evaluation criteria. To

participate in the prototype test, the necessary information, as

outlined in this notice, must be filed with Customs and approval

granted. It is important to note that resources expended by the trade

and Customs on these prototypes may not carry forward to the final

program.

EFFECTIVE DATE: The test of the second prototype will commence no

earlier than January 1, 1997, and will run for approximately one year,

and may be extended. Comments concerning any

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aspect of the remote filing prototype test must be received on or

before December 30, 1996.

ADDRESSES: Written comments regarding this notice, and information

submitted to be considered for voluntary participation in the prototype

should be addressed to the Remote Filing Team, U.S. Customs Service,

1301 Constitution Avenue, NW., Room 1322, Washington, D.C. 20229-0001.

FOR FURTHER INFORMATION CONTACT:

For systems or automation issues: Joseph Palmer (202) 927-0173, or

Patricia Welter (202) 927-0775

For operational or policy issues: Troy Riley (202) 927-0256, or Bonnie

Brigman (202) 927-0294

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). These 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).

Remote Location Filing (RLF) will allow a participant to file

electronically a formal or informal consumption entry with Customs from

a location within the United States other than the port of arrival

(POA) or the designated exam site (DES). Section 101.9(b) of the

Customs Regulations (19 CFR 101.9(b)), implements the testing of NCAP

components. See, T.D. 95-21 (60 FR 14211, March 16, 1995).

Since June 1994, the Customs Remote Team has shared the Customs RLF

concept through many public meetings and concept papers, and posted

information on the Customs Electronic Bulletin Board and the Customs

Administrative Message System. Pursuant to Sec. 101.9, Customs

Regulations, Customs has been testing the RLF concept. On April 6,

1995, Customs announced in the Federal Register (60 FR 17605) its plan

to conduct the first of at least two prototype tests regarding RLF. The

first test (Prototype One) began on June 19, 1995. On February 27,

1996, Customs announced in the Federal Register (61 FR 7300) that it

was permitting an extension and expansion of the RLF Prototype One

until the implementation of Remote Prototype Two. In today's document,

Customs is announcing its plan to conclude the first prototype test on

December 31, 1996, and conduct a second prototype test of RLF

commencing no earlier than January 1, 1997. The first remote location

prototype test was offered in the Automated Commercial System (ACS).

Although the second remote prototype test was originally scheduled to

be tested in the Automated Commercial Environment (ACE), the success of

Prototype One precipitated this second test under the Automated

Commercial System (ACS) with a larger participant pool.

The first RLF prototype (Prototype One) will conclude December 31,

1996. Prototype One was conducted with a very limited number of

participants at limited locations. It was conducted with minimal system

changes thereby requiring Customs to intervene manually in tracking and

processing. All procedures and processes were closely coordinated with

all selected and affected parties. The intent of Prototype One was to

test such operational issues as communication, cargo movement and

release, and service to and from remote locations. Prototype One tested

features such as filing from a remote location, alternate exam

location, and entry summary workload distribution.

Additional prototypes of RLF are being developed by Customs to

determine the systemic and operational design of the final RLF program

which will allow all filers to participate in this type of entry

process at a national level. Prototype participants must recognize that

these prototypes test the benefits and potential problems of RLF for

Customs, the trade community, and other parties impacted by this

program.

Description of RLF Program

The RLF program will be determined by the experiences of the

planned remote prototypes and with other Customs initiatives such as

the Reorganization, Automated Commercial Environment (ACE), and Trade

Compliance Redesign. The Customs RLF team's objectives are:

(1) To work with the trade community, other agencies, and other

parties impacted by this program in the design, conduct and evaluation

of a second prototype test of RLF;

(2) To obtain experience through prototype tests of RLF for use in

the design of operational procedures, automated systems, and

regulations and

(3) To implement RLF on a national level in conjunction with the

Trade Compliance Redesign, and the Automated Commercial Environment.

Description of Proposed Test

The second remote prototype test (Prototype Two) is scheduled to

commence no sooner than January 1, 1997, and will run until December

31, 1997, unless Customs exercises its option to extend the test an

additional year. Prototype Two will evaluate the operational impact and

procedures for a larger participant base, testing filing from a remote

location, and alternate location examinations. Prototype Two will not

offer the entry summary workload distribution part of RLF as tested in

Prototype One.

Regulatory Provisions Suspended

Certain provisions in Part 111 and Part 141 of the Customs

Regulations will be suspended during this prototype test to allow

remote filing by brokers in ports (broker districts per 60 FR 187,

pages 49971-49974), where they currently do not hold permits, and to

allow for the movement of cargo from its port of arrival to a

designated examination site.

Eligibility Criteria

Note that participation in RLF Prototype Two is not confidential,

and that lists of participants will be made available to the public.

To qualify, a participant must have proven capability to provide

electronically, on an entry-by-entry basis, the following: entry; entry

summary; invoice information using the Electronic Invoice Program

(EIP); and payment of duties, fees, and taxes through the Automated

Clearing House (ACH).

The following additional requirements and conditions apply:

1. The requested Customs locations must have operational experience

with the Customs Electronic Invoice Program (EIP), and have received

RLF training.

RLF Trained Locations

The following are locations currently operational under the RLF

Prototype One test: (POA indicates port of arrival, and DES indicates

designated examination site).

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DDPP location RLF status

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0712 Champlain-Rouses Point............... POA, DES

0901 Buffalo.............................. POA, DES

0903 Rochester DES

090# Utica/Syracuse....................... POA, DES

1001 NY Seaport........................... POA, DES

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1303 Baltimore............................ POA, DES

230# Laredo/Eagle Pass.................... POA, DES

2704 Los Angeles.......................... POA, DES

3801 Detroit.............................. POA, DES

3802 Port Huron........................... POA, DES

4601 Newark............................... POA, DES

4701 JFK.................................. POA, DES

5501 Dallas............................... DES

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After the prototype begins, additional ports that are operational

with EIP release and summary processing will be trained in RLF

processing if there is significant interest.

EIP Locations

The following locations are currently operational with EIP, and

would require appropriate RLF training to become eligible for

participation as a POA, DES, or both.

S/P indicates an entry summary processing location which could be

eligible as a POA. R/P indicates a release processing location, which

could be eligible as a DES.

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DDPP location EIP status

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0101 Portland ME.......................... S/P

0106 Houlton ME........................... R/P

0115 Calais ME............................ R/P

0401 Boston............................... R/P, S/P

0901 Buffalo.............................. R/P, S/P

0903 Rochester............................ R/P

1001 New York Seaport..................... R/P, S/P

1101 Philadelphia......................... R/P, S/P

1102 Chester PA........................... R/P

1103 Wilmington DE........................ R/P

1108 Philadelphia Arprt................... R/P

1303 Baltimore Seaport.................... R/P, S/P

1401 Norfolk.............................. R/P, S/P

1601 Charleston........................... R/P

1703 Savannah............................. R/P

1803 Jacksonville......................... R/P

2002 New Orleans.......................... R/P

2304 Laredo............................... R/P, S/P

2704 Los Angeles.......................... R/P, S/P

2720 Los Angeles Arprt.................... R/P, S/P

2809 San Francisco........................ R/P

3001 Seattle.............................. R/P

3701 Milwaukee............................ R/P

3801 Detroit.............................. R/P S/P

3901 Chicago.............................. R/P

4101 Cleveland............................ S/P

4102 Cincinnati........................... R/P

4115 Louisville........................... R/P

4601 Newark............................... R/P, S/P

4701 JFK.................................. R/P, S/P

5201 Miami................................ R/P, S/P

5203 Port Everglades...................... R/P

5206 Miami Airport........................ R/P

5301 Houston.............................. R/P

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2. Participants must be operational on the Automated Clearing House

(ACH) 30 days before applying for Prototype Two.

3. Only entry types 01 (consumption) and 11 (informal) will be

accepted.

4. Cargo release must be certified from the entry summary (EI)

transaction with the exception of immediate delivery explained in #5.

5. Participants will be allowed to file Immediate Delivery releases

for direct arrival road and rail freight at the land border using paper

invoices under Line Release, Border Cargo Selectivity (BCS), or Cargo

Selectivity (CS). This must be done in accordance with 19 CFR

142.21(a). Submission of all line items at the time of release will be

required of Northern Border filers if the release is effected using BCS

or CS. If an examination is required for a line release transaction,

the filer must submit all relevant line item information through BCS or

CS. Under BCS and CS, the examination will be performed at the port of

arrival using paper invoices. If the filer wishes the examination to be

performed at an alternate site, full entry summary information (EI

transaction) with electronic invoice must be transmitted.

6. Participants will not be allowed to file an RLF involving cargo

that has already been moved using in-bond procedures.

7. Participants will be required to use other government agency

(OGA) interfaces where available.

8. When necessary, cargo will be examined at the Customs port of

arrival, or, at Customs discretion, a filer's requested designated

examination site (DES), which must be the Customs port nearest the

final destination. The scheduling (approval) of merchandise for

examination at a DES that is not at the port of arrival will be

considered a conditional release under permit that automatically

obligates the importer's bond pursuant to 19 CFR 113.62 for an

immediate redelivery to the DES. This Federal Register Notice advises

the importer of record for such merchandise that this movement is a

redelivery and he/she will not receive an individual notice of

redelivery, Customs Form 4647, and that the redelivery clause of the

importers bond is automatically triggered whenever Customs examines the

merchandise at a DES that is not at the port of arrival.

9. If a notice of redelivery is not complied with, or delivery to

unauthorized locations, or delivery to the consignee without Customs

permission occurs, the obligors agree to pay liquidated damages in the

amount specified pursuant to the bond in 19 CFR 113.62 (f).

Customs will work with all participants to ensure that:

(1) Customs contacts and problem solving teams are established, and

(2) Procedures for remote entry and entry summary processing are

prepared.

Prototype Two Applications

This notice solicits applications for participation in Remote

Location Filing Prototype Two. There are two distinct application

procedures, which depend upon the status of the applicant. One process

applies to importers and to brokers acting on behalf of their clients.

The other process is for brokers applying on their own behalf.

All applications must initially be submitted to the U.S. Customs

Service, 1301 Constitution Avenue, N.W. Room 1322, Washington, D.C.

20229-0001. Applications will be accepted up to 30 days before the

close of Prototype Two.

Importers/Brokers on Behalf of Clients

These applications must be submitted to the U.S. Customs

Headquarters (address cited above) with the following information:

1. Importer name and, if applicable, broker name, address, and

filer code;

2. Supplier name, address, and manufacturer's number;

3. Types of commodities to be imported;

4. Other agency requirements;

5. Port(s) of arrival;

6. Designated examination site(s) (location nearest the final

destination);

7. Monthly volume anticipated;

8. Electronic Invoicing Program status and starting date;

9. Electronic Payment (ACH) status and starting date;

10. Main contact person and telephone number.

Brokers as Applicants

This application process will be done in two steps. During the

first step the broker must submit the following information to the U.S.

Customs Headquarters (address cited above):

1. Broker name, address, filer code and IRS#;

2. Experience with EIP;

3. Sites from which the broker will be transmitting the electronic

information;

4. Type of protocol: AII, EDIFACT or both;

5. Point of contact.

Once a broker has received written approval from U.S. Customs

Headquarters to proceed with the second step of the application

process, the broker will submit the following information to the Port

Director(s) overseeing each requested POA and DES location for each

client (importer):

1. Participating client name and Importer Number;

2. Supplier name, address, and manufacturer's number;

3. Types of commodities to be imported;

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4. Other agency requirements;

5. Port(s) of arrival;

6. Designated examination site(s) located nearest the final

destination(s);

7. Monthly entry volume anticipated;

8. Electronic Invoicing Program status and starting date;

9. Electronic Payment (ACH) status and starting date;

10. Main contact person and telephone number of filer.

Basis for Participant Selection

The basis for applications approved by Customs Headquarters will be

EIP operational experience, electronic abilities, available electronic

interfaces with other agency's import requirements, and operational

limitations. The basis for applications being approved or denied by the

Port Director(s) will involve issues such as impact on available

resources, commodity requirements and if the port has been trained in

EIP/RLF.

For brokers applying on their own behalf, the Port Director has 10

working days after the receipt of the second step in the application

process to approve or deny the application. Written approval or denial

of the second step of the broker application process will be sent to

the applicant from the Port Director. If the Port Director denies the

second step of the broker application, that denial is effective for 10

working days. After that, a new request may be submitted to the Port

Director at the Port of Arrival and the Designated Examination Site. If

the applicant does not receive a reply from the Port Director within 10

working days from the date of submission, the application should be

considered denied. Those applicants not selected for participation by

U.S. Customs Headquarters will be sent a letter of denial. They will,

however, be invited to comment on the design, conduct, and evaluation

of this prototype.

Current Remote Prototype One participants who wish to apply are

required to submit a letter requesting the continuation of their

participation under Prototype Two. Participants selected will be

notified by means of the Customs Electronic Bulletin Board, the Customs

Administrative Message System and in writing.

Dismissal from Prototype Two

If a filer attempts to submit data relating to restricted

merchandise or merchandise subject to quota, anti-dumping duties,

countervailing duties, or other non-eligible data through the

Electronic Invoice Program, the filer may be expelled from the program,

prevented from participation in future RLF prototypes, and may be

subject to penalties under section 592, Tariff Act of 1930, as amended

(19 U.S.C. 1592).

III. Test evaluation criteria

Once participants are selected, Customs and the participants will

meet publicly or in an electronic forum to review comments received

concerning the methodology of the test program or procedures, complete

procedures in light of those comments, and establish baseline measures

and evaluation methods and criteria. Evaluations of the prototype will

be conducted and the final results will be published in the Federal

Register as required by Sec. 101.9(b), Customs Regulations.

The following evaluation methods and criteria have been identified.

1. Baseline measurements will be established through data queries

and questionnaires.

2. Reports will be run through use of data query throughout the

prototype.

3. Questionnaires will be distributed during and after the

prototype period. Participants are required to complete the

questionnaires in full and return them within 30 days of receipt.

Customs may evaluate any or all of the following items:

Workload impact (workload shifts, volume, etc.);

Policy and procedural accommodation;

Trade compliance impact;

Alternate exam site issues (workload shift, coordination/

communication, etc.);

Problem solving;

System efficiency;

The collection of statistics.

The trade will be responsible for evaluating the following items:

Service in cargo clearance;

Problem resolution;

Cost benefits;

System efficiency;

Operational efficiency;

Other items identified by the participant group.

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

filing remotely, it must first be operational with the Electronic

Invoicing Program (EIP). For information on the Electronic Invoicing

Program (EIP), please contact your ABI Client Representative.

Dated: November 25, 1996.

Robert S. Trotter,

Acting Assistant Commissioner Office of Field Operations.

[FR Doc. 96-30501 Filed 11-27-96; 8:45 am]

BILLING CODE 4820-02-P