Extension of National Customs Automation Program Test Regarding Remote Location Filing

DEPARTMENT OF THE TREASURY

Customs Service

Extension 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 that Customs is permitting an extension

to continue the second prototype of Remote Location Filing (RLF). This

notice also invites public comments concerning any aspect of the

current 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. The Federal Register (61 FR 60749)

notice, dated November 29, 1996, continues to apply except as

specifically noted herein.

Based on our experience in second prototype of RLF, we have made

modifications to the sections detailing the Eligibility Criteria and

the Prototype Two Applications. The changes will effect parties who

wish to apply for participation in the extension of the second

prototype of RLF. Current participants may continue their participation

without reapplying.

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

earlier than January 1, 1998, will continue, and be concluded, no

earlier than December 31, 1998, by a notice in the Federal Register.

Comments concerning any aspect of the remote filing prototype test must

be received on or before January 2, 1998.

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,

1300 Pennsylvania Avenue, N.W., Room 5.2 A, Washington, D.C. 20229-

0001.

FOR FURTHER INFORMATION CONTACT: For systems or automation issues:

Joseph Palmer (202) 927-0173, Jackie Jegels (202) 927-0201, or Patricia

Welter (305) 869-2780.

For operational or policy issues: Jennifer Engelbach (202) 927-

2293, or Don Luther (202) 927-0915.

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).

The Remote Location Filing (RLF) prototype will allow an approved

participant to electronically file a formal or informal consumption

entry with Customs from a location within the United States other than

the port of arrival (POA), or from within the port of arrival with a

requested designated exam site (DES) outside of the POA. 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, as well as

posted information on the Customs Electronic Bulletin Board (CEBB), the

Customs Administrative Message System, and the Customs web page at

``http://www.customs.treas.gov/imp-exp/comm-imp/remote/toc.htm.''

Pursuant to Sec. 101.9, Customs Regulations, Customs has been testing

the RLF concept. On

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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. On November 29, 1996,

Customs announced in the Federal Register (61 FR 60749) 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. In today's document, Customs is announcing that it will permit an

extension of the RLF Prototype Two.

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 the second

test under ACS with a larger participant pool.

The first RLF prototype (Prototype One) concluded 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.

The second RLF prototype (Prototype Two) commenced January 1, 1997,

and will be extended to conclude no earlier than December 31, 1998.

Prototype Two is an expanded version of Prototype One with more ports

and trade participants. In order to expand the prototype Customs has

trained additional ports and allowed Customhouse Brokers to apply as

participants. Prototype Two will continue to operate with minimal

system changes. The intent of this prototype is to test such

operational issues as communication, cargo movement and release, and

service to and from remote locations. This prototype will further test

features such as filing from a remote location and alternate exam

location.

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, ACE, Trade Compliance Redesign, and Year 2000

programming. 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

Prototype Two commenced January 1, 1997, and will run until

concluded, no earlier than December 31, 1998, by a notice in the

Federal Register. Prototype Two will evaluate the operational impact

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

remote location, and alternate location examinations.

Regulatory Provisions Suspended

Certain provisions in Part 111, and Part 141, of the Customs

Regulations will be suspended during this prototype test. This will

allow brokers to file remotely to service ports, designated as ``broker

districts'' in accordance with a general notice published in the

Federal Register (60 FR 49971, dated September 27, 1995), 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 in another

port.

Eligibility Criteria

To qualify, a participant must have proven capability to provide

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

summary; invoice information (when required by the Customs Service)

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

Clearinghouse (ACH).

The following additional requirements and conditions apply:

1. Participants must be operational on ACH 30 days before applying

for Prototype Two.

2. Participants must be operational on EIP before applying for

Prototype Two.

3. The requested Customs locations must have operational experience

with EIP, and have received RLF training.

RLF Trained Locations

The following are locations currently operational under the RLF

Prototype Two test: (POA indicates a port trained as a port of arrival,

and DES indicates a port trained as a designated examination site).

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Port POA DES

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Atlanta.............................................

Baltimore...........................................

Buffalo.............................................

Champlain-Rouses Point..............................

Charleston..........................................

Chicago.............................................

Dallas/Ft. Worth....................................

Detroit.............................................

Houlton, ME.........................................

Houston.............................................

Jacksonville........................................

JFK.................................................

Laredo/Eagle Pass...................................

Los Angeles.........................................

NY/Newark Area......................................

New York Seaport....................................

Norfolk/Richmond....................................

Portland, ME........................................

Port Huron..........................................

Rochester........................................... (\1\)

San Diego/Otay Mesa.................................

San Francisco/Oakland...............................

Savannah............................................

Seattle.............................................

Utica/Syracuse......................................

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\1\ Not available.

Future RLF Trained Locations

As the prototype continues and trade interest warrants, ports which

are not currently trained in EIP and RLF processing will be trained.

Announcements on newly trained ports will be placed on the CEBB and

Administrative Message System. One criteria for selecting a port for

training will be interest from the trade. Participants who would like

to expand their participation to a non-trained port, should send the

following information to the Remote Filing Team, at U.S. Customs

Service, 1300 Pennsylvania Avenue, N.W. Room 5.2 A, Washington, D.C.

20229-0001:

a. Company name;

b. Contact name and phone number;

c. Importer name;

d. Port(s) of interest; and

e. The estimated number of entries a month.

[[Page 64045]]

4. Participants must maintain a continuous bond which meets or

exceeds the national guidelines for bond sufficiency.

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

accepted.

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

transaction with the exception of immediate delivery explained in #7.

7. RLF 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 (an EI transaction in ABI) with electronic invoice must be

transmitted.

8. Participants will not be allowed to file a RLF entry involving

cargo that has already been moved using in-bond procedures.

9. Participants will be required to use other government agency

interfaces where available.

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

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

decides to examine the merchandise at a DES that is not at the port of

arrival.

11. 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. The first is

a one-step application process for importers applying on their own

behalf as well as for brokers acting on behalf of specific clients. The

second is a two-step process for brokers applying on their own behalf.

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

Service, 1300 Pennsylvania Avenue, N.W. Room 5.2 A, Washington, D.C.

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

close of the Prototype Two extension.

Since this is an extension of Remote Prototype Two, current

participants may continue their participation without reapplying. Note

that participation in RLF Prototype Two is not confidential, and that

lists of participants will be made available to the public.

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. Site(s) from which the applicant will be transmitting the

electronic information;

6. Port name and port code for port(s) of arrival;

7. Port name and port code for designated examination site(s)

located nearest the final destination(s);

8. Monthly volume anticipated;

9. Electronic Invoicing Program status and starting date;

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

11. 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 U.S.

Customs Headquarters (address cited above):

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

2. Electronic Invoicing Program status and starting date;

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

4. Site(s) from which the broker will be transmitting the

electronic information;

5. Type of protocol: AII, EDIFACT or both; and

6. 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 must submit the following information to the Port

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

client (importer):

1. Participating client name, telephone number and Importer Number;

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

3. Types of commodities to be imported;

4. Other agency requirements;

5. Site(s) from which the applicant will be transmitting the

electronic information;

6. Port name and port code for port(s) of arrival;

7. Port name and port code for designated examination site(s)

located nearest the final destination(s);

8. Monthly entry volume anticipated;

9. Carriers used and their Automated Manifest System (AMS) status;

10. Main contact person and telephone number of filer; and

11. Certification that a copy of this application letter has been

provided to the Client named in item 1.

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. For application scenarios requesting a DES outside of the

POA, the compliance rate of the parties involved will be taken into

consideration.

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.

The Port Director has 10 working days after the receipt of the

information required in the second step of the application process to

provide written approval or denial to the applicant. If the Port

Director denies the application,

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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.

Also, it is emphasized that if a company is interested in filing

remotely, it must first be operational with EIP. For information on

EIP, please contact your ABI Client Representative.

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 liquidated damages and/or penalties under Section 592,

Tariff Act of 1930, as amended (19 U.S.C. 1592).

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; and

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; and

Other items identified by the participant group.

Dated: November 26, 1997.

Audrey Adams,

Acting Assistant Commissioner, Office of Field Operations.

[FR Doc. 97-31683 Filed 12-2-97; 8:45 am]

BILLING CODE 4820-02-P