Announcement of National Customs Automation Program Test of Account-Based Declaration Prototype

DEPARTMENT OF THE TREASURY

Customs Service

Announcement of National Customs Automation Program Test of

Account-Based Declaration Prototype

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

ACTION: General notice.

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SUMMARY: This notice announces Customs' plan to conduct an account-

based declaration prototype (NCAP/P) under the National Customs

Automation Program (NCAP), and invites eligible importers to

participate. The NCAP/P will be initially applicable to merchandise

imported by truck through the ports of Laredo, Texas (Colombia Bridge

only), and Detroit and Port Huron, Michigan. This notice provides a

description of the test, outlines the development and evaluation

methodology to be used in the test, sets forth the eligibility

requirements for participation in the test and invites public comment

on any aspect of the planned test.

DATES: The account-based declaration prototype (NCAP/P) will commence

no earlier than August, 1997 and will run for approximately eighteen

months, with evaluations of the prototype occurring periodically. All

applications to participate in the test must be received on or before

April 25, 1997. Public comments on any aspect of the planned test must

be received on or before April 25, 1997.

ADDRESSES: Applications should be addressed to Ms. Margaret Fearon at

U.S. Customs Service, 1301 Constitution Avenue, NW, Room 4139,

Washington, DC 20229.

FOR FURTHER INFORMATION CONTACT: For inquiries regarding eligibility of

specific importers: Margaret Fearon, Process Analysis and Requirements

Team, at (202)927-1413. For questions on reconciliation: Shari McCann,

Process Analysis and Requirements Team, at (202)927-1106. For questions

on other aspects of the Account-Based Declaration Prototype: Daniel

Buchanan, Process Analysis and Requirements Team, at (617)565-6236.

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 (the Mod Act).

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

101.9(b) of the Customs Regulations (19 CFR 101.9(b)), concerns the

testing of NCAP components. See, T.D. 95-21 (60 FR 14211, March 16,

1995).

A key element of Customs efforts to re-engineer its Trade

Compliance process is a shift in emphasis from the traditional

transaction-based approach of ensuring compliance with import laws and

regulations to an account-based approach, which addresses an importer's

overall compliance through account management, process reviews, and

audits. One feature of this approach is a new account-based declaration

process. Customs is also developing a new commercial processing system,

the Automated Commercial Environment (ACE), which will be designed to

support the new Trade Compliance processes. An account-based

declaration prototype (NCAP/P) is being developed to provide the first

operational demonstration of ACE capabilities for processing imports,

integrating the new account-based import declaration process with other

aspects of the Trade Compliance process and with selected features of

NCAP elements of the Mod Act.

I. Development Methodology

NCAP/P will be monitored by a Joint Prototype Team consisting of

trade participants, the Customs Offices of Field Operations and

Strategic Trade, the ACE Development Team, and other interested

government agencies. This team will meet regularly throughout the

prototype period in Detroit, Laredo and Washington, DC, to set

development milestones, monitor progress, resolve issues and evaluate

program effectiveness. The development effort will be coordinated with

other on-going NCAP prototype programs such as Remote Location Filing

and Reconciliation, and will be as consistent as possible with the

overall direction of ACE development.

Potential participants should recognize that this is a prototype

test of new processes. Data definitions and values and formats for

electronic transmission of manifest, entry and commercial data will

differ from those currently used in the Automated Commercial System

(ACS). It is also important to note that development efforts undertaken

for NCAP/P may not meet the eventual requirements for programs as they

are finally implemented in ACE.

The public is invited to comment on any aspect of the NCAP/P test

as described by this notice.

II. Eligibility Requirements

In order to be eligible for participation in the NCAP/P, an

importer must:

1. Be designated as one of the top 350 U.S. importers in terms of

entered value, while importing no less than 50% of their merchandise

specified as Customs' Primary Focus Industries, which are as follows:

(a) Advanced Displays

(b) Agriculture

(c) Auto/Truck Parts

(d) Automobiles

(e) Bearings

(f) Circuit Boards

(g) Fasteners

(h) Footwear

(i) Manufacturing Equipment

(j) Steel Products

(k) Telecommunications

(l) Textiles and Flatgoods

(m) Wearing Apparel

[[Page 14732]]

Importers who are originally selected to participate will be

eligible to continue to participate throughout the prototype period,

regardless of their subsequent eligibility in regard to this

requirement.

2. Be scheduled for, participating in, or, in the application,

agree to undergo and cooperate fully with a Customs Compliance

Assessment;

3. For Southern border NCAP/P shipments, use carriers who

participate in the Land Border Carrier Initiative Program (LBCIP). No

importer may enter Southern border cargo transported by non-participant

carriers;

4. Agree in the application to file or maintain a continuous bond

which will be obligated upon release of each NCAP/P shipment;

5. Be capable and/or agree to arrange for timely and accurate

electronic transmission to Customs of all data required in the NCAP/P

declaration process, including manifest and pre-release shipment data,

additional data required to support physical examinations of cargo,

entry summary data, detailed commercial data when requested, and

reconciliation data. If an importer does not transmit electronic data

for a particular shipment, Customs may exclude that shipment from NCAP/

P processing. Participants who are unable to reliably provide timely

transmission of required data may be suspended from further

participation in this prototype; and

6. Be capable and/or agree to arrange for electronic payment of

duties, taxes and fees. Participants who are unable to reliably provide

timely transmission of required payments may be suspended from further

participation in this prototype.

For NCAP/P, the following restrictions will be placed upon

importers:

1. Importers must enter merchandise identified in the application

as being from their typical commodities in their established lines of

business and coming from pre-identified sellers and shippers;

2. Importers must enter only the merchandise identified in the

application as being within a range of pre-identified commodities

(classified at the 6-digit HTS level);

3. Importers must enter merchandise conveyed on trucks operated by

carriers pre-identified by participants in the application; and

4. Importers must enter merchandise for release into the commerce

under a consumption entry at the port of arrival.

5. Importers must enter merchandise at the port of Laredo, Texas

(Colombia Bridge only), or at Detroit or Port Huron, Michigan;

Importers may not enter merchandise in the NCAP/P if it is subject

to antidumping or countervailing duty, quota, trade preference level or

visa requirements, or pre-release reporting requirements imposed by

other federal agencies. No prohibited or embargoed merchandise will be

permitted in prototype shipments. In addition, importers may not enter

NCAP/P merchandise into a warehouse or Foreign Trade Zone, or as an in-

bond entry.

Importers are responsible for ensuring that ineligible merchandise

is not included in NCAP/P shipments, and that all shipments aboard a

conveyance are eligible for NCAP/P processing. Customs will exclude

ineligible shipments from NCAP/P processing. Customs will monitor

participating importers' compliance with these restrictions;

participants who are unable to maintain a high level of compliance may

be suspended from further NCAP/P participation.

III. Application

Importers who wish to participate in NCAP/P must submit a written

application including the following information:

1. Importer name;

2. Names and addresses of all their shippers for NCAP/P;

3. Names and addresses of all their seller/vendors for NCAP/P, and,

for each seller/vendor identified, a listing of all the 6-digit HTS

numbers in which the commodities to be imported are classified;

4. The issuer and number of the continuous surety bond which will

cover all cargo processed under NCAP/P procedures;

5. Names and addresses of truck carriers who will be transporting

NCAP/P shipments across the international borders;

6. Names and addresses of any customs brokers who will be filing

declaration data;

7. The approximate total number of entries per month expected to be

processed at each of the following locations: Colombia Bridge, Laredo;

Ambassador Bridge, Detroit; Windsor Tunnel, Detroit; Blue Water Bridge,

Port Huron;

8. Description of anticipated issues (from the eligible issues

listed in Section VI of this Notice) and commodities for which the

participant anticipates electing reconciliation;

9. For applicants not already scheduled for or participating in a

Customs Compliance Assessment, a statement in which the applicant

indicates agreement to undergo and cooperate fully with a Customs

Compliance Assessment.

Customs will make admissibility determinations on NCAP/P shipments

based on any cargo examinations and the information supplied with the

application, which shall serve as a pre-filed entry for NCAP/P

purposes.

Any importers who have applied to become NCAP/P participants will

be notified in writing of their acceptance or rejection. If an

importer's application for NCAP/P participation is accepted, Customs

will assign the importer an NCAP/P Authorization Code. If an applicant

is denied participation based on deficiencies in the application, the

notification letter will include the reasons for that denial. Eligible

importers whose initial applications are rejected may re-apply after

correcting any deficiencies in the initial application.

Customs expects to initially limit NCAP/P participation to ten (10)

importers. Preference will be given to applicants who indicate that

they plan to maintain an average of at least 25 entries per month

throughout the prototype period. Eligible importers whose initial

applications are rejected may re-apply if Customs subsequently opens

participation to additional participants. Customs will publish a notice

in the Federal Register if an expansion of participation is planned.

IV. Maintenance of Account Information

Following approval by Customs of an importer's application, each

participating entry filer must provide Customs with a range of entry

numbers to be reserved for assignment by Customs to NCAP/P shipments.

Entry filers may not assign these numbers to other transactions, either

for NCAP/P or for non-prototype entries.

Throughout the prototype period, participating importers must

provide Customs with advance notification of any changes in the

information provided in the application. This notification will be

considered an amendment to the application. By notification of the

participating importer, Customs may require that the participant not

use a particular carrier, shipper, or seller, and not enter particular

merchandise under this prototype.

V. Remote Location Filing

Some aspects of remote location filing will be supported in NCAP/P.

Under the remote location filing component, importers will be able to

electronically

[[Page 14733]]

file data with Customs from any place in the United States regardless

of where the merchandise arrives. To qualify for remote location

filing, a filer must be able to electronically transmit information on

a shipment by shipment basis, including entry summary, invoice

information (when required by Customs), and payment of duties, fees,

and taxes. Use of the remote location filing component of the prototype

is voluntary, but the same electronic data transmission requirements

will apply for all prototype participants.

The designation of alternative locations for cargo examination will

not be supported in NCAP/P. All cargo examinations will be conducted at

the port where the cargo first arrives in the United States.

VI. Reconciliation

Currently there are two reconciliation prototypes in operation or

being implemented, in addition to the NCAP/P. The reconciliation test

of Antidumping and Countervailing duties was published on May 10, 1996

(61 FR 21534). The ``manual'' reconciliation test, which covers

reconciliation of certain value issues, was published on February 6,

1997 (62 FR 5673). (In 1995 a notice was published in the Federal

Register concerning a reconciliation prototype for related party

importers making upward adjustments to the price of imported

merchandise, pursuant to 26 U.S.C. 482. This prototype did not become

operational.)

Importers are reminded that reasonable care is required for all

phases of reconciliation, including, but not limited to, submitting

information on the underlying entries, flagging the underlying entries

for reconciliation, grouping the outstanding issue(s) from the range of

entries onto the Reconciliation and providing the final information on

the Reconciliation.

Reconciliation permits those elements of an entry, other than those

related to admissibility, which are undetermined at the time of entry

summary filing, to be provided at a subsequent time. For merchandise

processed in the NCAP/P, reconciliation will allow participating

importers to identify the following issues for which complete

information is unavailable at the time of entry summary filing:

1. NAFTA

2. Value

3. 9802

4. Classification

Classification issues will be eligible for reconciliation only when

such issues have been formally established as the subject of an

administrative ruling, protest, petition, or Court action.

Reconciliations of classification issues may result in a tariff shift

which falls within the pre-identified range of 6-digit HTS provisions.

Generally, the exercise of reasonable care should ensure that

reconciliations do not result in a tariff shift outside the pre-

identified range of 6-digit HTS provisions; however, if special

circumstances justify a tariff shift outside the pre-identified range

of 6-digit HTS numbers contained in the application, a participant must

submit an amended application requesting permission to continue to

enter such merchandise in this prototype.

Reconciliations of NAFTA issues must be electronically filed within

one year of the date of importation of the oldest entry which is

flagged for the Reconciliation. Reconciliation is a vehicle which an

importer can use to file post-importation refund claims under 19 U.S.C.

1520(d). Consequently, a failure to file a NAFTA reconciliation within

one year of the date of importation will preclude the granting of NAFTA

tariff treatment. As such, NAFTA reconciliations are subject to the

obligations under 19 CFR part 181, subpart D. NAFTA reconciliations

must be supported by importer possession of the documents required

under 19 U.S.C. 1520(d) and 19 CFR 181.32(b). Presentation of the NAFTA

Certificate of Origin to Customs is waived for the purposes of this

prototype test, and the filer must retain these documents, which shall

be provided to Customs upon request. Filers are reminded that interest

shall accrue from the date on which the claim for NAFTA eligibility is

made (the date of the Reconciliation) to the date of liquidation or

reliquidation of the Reconciliation.

Reconciliations of classification, 9802 and/or value issues must be

electronically filed within 15 months of the date of entry summary

filing for the oldest entry flagged for the Reconciliation. In order to

gain as much experience as possible from this prototype, Customs will

work with the participants to determine whether an earlier time frame

for filing of the Reconciliation is possible.

Entry summaries may be flagged for reconciliation until the close

of the test period. It is important to note that, although the test

period has concluded, Reconciliations may be filed and liquidated after

the closing date of the test.

Only consumption entries may be filed in the NCAP/P system. Entries

subject to reconciliation will be flagged at the header level with an

electronic indicator specifying the issue(s) to be reconciled.

The flagging of an entry for reconciliation will serve as the

Notice of Intent to File a Reconciliation (``Notice of Intent''), and

will permit the liquidation of an entry as to all issues other than

those which are flagged for reconciliation. By filing a Notice of

Intent, the importer voluntarily requests and accepts that each issue

flagged for reconciliation, and the liability for each issue, is

separated from the entry, remains open and is transferred to the

Reconciliation. The Notice of Intent opens an obligation for the

importer to file the Reconciliation. This obligation also applies to

NAFTA reconciliations even if the participant finally concludes it

cannot file a valid 520(d) claim, in which instance, the NAFTA

reconciliation would be filed as no change.

Importers who choose to participate in this prototype will

recognize that the liquidation of the underlying entries pertains only

to those issues not identified by the importer on the Notice of Intent.

Upon liquidation of the entry, any decision by Customs entering into

that liquidation, e.g., classification, may be protested pursuant to 19

U.S.C. 1514. When the outstanding information, e.g., value as

determined by the actual costs, is later furnished on the

Reconciliation, the Reconciliation will be liquidated upon review by

Customs. The liquidation of the Reconciliation may be protested but the

protest may only pertain to issues contained in the liquidated

Reconciliation, i.e., the protest may not re-visit issues previously

liquidated in the entry. Separate Bulletin Notices of Liquidation will

be posted for the liquidation of the underlying entries and for the

liquidation of the Reconciliation.

Under the statutory mandate of 19 U.S.C. 1484, the importer is

responsible for using reasonable care in declaring at entry the proper

value, classification and rate of duty applicable to imported

merchandise. Inherent in the concept of reconciliation is the fact

that, because certain issues are kept open pending filing of the

Reconciliation, the information regarding these issues and the

resulting liability for the duties, taxes and fees previously asserted

by the importer may change when the Reconciliation is filed. Therefore,

should any drawback claim or Certificate of Delivery for drawback be

filed on import entries which are flagged for reconciliation, Customs

will pay accelerated drawback only after the Reconciliation is filed.

Upon filing of the Reconciliation, the importer is responsible for

indicating whether any underlying entry could be subject to drawback.

In the case of a drawback

[[Page 14734]]

claim and a reconciliation refund against the same underlying entries,

the importer is responsible for ensuring that refunds in excess of the

duties paid are not filed with Customs and for substantiating how the

separate refund requests apply to different merchandise.

A Reconciliation may cover any combination of value, 9802 and

classification. Should the issues of value, 9802 and classification be

flagged for reconciliation on one entry, one Reconciliation covering

all three issues will be filed. NAFTA Reconciliations will not be

combined with other issues, because of NAFTA's unique nature, different

due dates, and so that Customs may expedite the processing of such

refunds. Issues will always be reconciled in their entirety, as opposed

to partial Reconciliations. Each Reconciliation should cover no fewer

than ten entries. Reconciliation is to be used to group entries

together for a common, outstanding issue.

A Reconciliation is treated as a legal entry for purposes of

liquidation, reliquidation and protest. For purposes of this prototype,

each Reconciliation must be covered by one surety, i.e., two sureties

cannot cover the same Reconciliation. The continuous bond obligated on

the underlying entries will be used to cover the Reconciliation.

Payments due from the participant as a result of the Reconciliation

will be reflected on the participant's monthly statement. Should the

Reconciliation result in a refund due the participant, the refund will

also appear on the monthly statement and will be used to offset

existing or future payment obligations of the participant. Customs will

calculate interest upon liquidation of the Reconciliation, and reflect

such interest on the monthly statement.

The Reconciliation header will contain the Reconciliation number,

the date of Reconciliation filing, the issue(s) being reconciled and

the comments. In the comment field, the filer may provide pertinent

information, to explain, for example, that the specific value issue

within this Reconciliation is an assist declaration.

Following this summary information, there will be two parts of the

Reconciliation. The first part will include a list of underlying entry

numbers, entry summary dates, and the total duty, taxes and fees

(reported by class code) which should have been paid for each of the

underlying entries had the complete information been available to the

importer at the time of filing of the entry summary. This part of the

Reconciliation will also have a field to indicate entries being closed

out on the Reconciliation which did not change.

Part two of the Reconciliation will list all of the lines on the

flagged entries which changed as a result of the reconciliation. Data

elements for each line include entry number, SPI if applicable, HTS,

country of origin, quantity if applicable, total value and the total

duties, taxes and fees (reported by class code). The ``total'' figures

will represent that which was reported on the underlying entry plus the

change pursuant to the Reconciliation. In coordination with the Census

Bureau, Customs is analyzing the assignment of a parameter, below which

the reporting of reconciled lines (Part 2) would not be required.

The reporting of line items is an interim step being taken for the

purposes of gaining experience in the short term. While the

Reconciliation will capture line item details for this prototype,

Customs is working toward capturing the reconciled information at an

aggregate level for future prototypes, which will incorporate

compensating controls as a means to ensure that financial safeguards

are in place.

The following will serve as an example of the probable structure

for the Reconciliation:

Reconciliation #557, Date: 2/1/97, Issue: NAFTA

Part 1:

----------------------------------------------------------------------------------------------------------------

Total

Entry Summary Total Total fees No change

date duties taxes [499]

----------------------------------------------------------------------------------------------------------------

123.................................................... 10/11/96 $25 ......... $2.89 .........

234.................................................... 11/11/96 ......... ......... ......... X

345.................................................... 12/11/96 $200 ......... $6.10 .........

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Part 2:

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Total

Entry SPI/HTS Country of Qty Total Total Total fees

origin value duty taxes [499]

----------------------------------------------------------------------------------------------------------------

123............................... 2222............ MX............. 0 $0 $0 ....... $0

123............................... MX2222.......... MX............. 700 $1000 $0 ....... $1.90

123............................... 3333............ MX............. 500 $250 $25 ....... $0.52

123............................... MX3333.......... MX............. 500 $250 $0 ....... $0.47

345............................... 2222............ MX............. 750 $1500 $150 ....... $3.15

345............................... MX2222.......... MX............. 250 $500 $0 ....... $0.95

345............................... 3333............ MX............. 200 $500 $50 ....... $1.05

345............................... MX3333.......... MX............. 200 $500 $0 ....... $0.95

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VII. Account-Based Import Declaration Process

The account-based declaration process is a fully electronic process

that will, for NCAP/P participant importers, who must file consumption

entries under NCAP/P:

1. Base cargo examination decisions primarily on pre-established

account/entry information, minimizing the transaction data that needs

to be transmitted to Customs prior to release of cargo. Cargo

examinations will also be performed on the basis of selectivity

criteria and for random compliance measurement sampling;

2. Permit reporting of detailed entry summary data on a monthly

cycle, and

3. Provide for payment of duties, taxes and fees on a monthly

statement cycle employing semi-monthly estimated payments.

While various automatic notifications and back-up procedures will

also be supported, the basic declaration flow for NCAP/P will be as

follows:

[[Page 14735]]

1. The application will serve as a pre-filed entry for NCAP/P

purposes.

2. Prior to arrival of cargo at the border, the carrier issuing the

manifest or an authorized agent will electronically transmit to Customs

basic manifest data: coded identification of the carrier; trip details;

identification of drivers, the conveyance and other equipment; and an

identifying number and the laden quantity for each shipment on the

conveyance.

3. Also prior to arrival of the cargo at the border, data

pertaining to each individual shipment must be electronically

transmitted to Customs. This shipment data will include information

generally found on freight bills, plus the NCAP/P Authorization Code

assigned to the participating importer by Customs, and identification

of the entry filer and the seller and buyer of the merchandise. This

shipment data may be transmitted by the carrier issuing the manifest,

an authorized agent acting on behalf of the carrier issuing the

manifest, or the entry filer (i.e., either the importer of record or

the importer of record's customs broker.)

4. Customs will assign an entry number to each shipment from the

range of entry numbers provided in advance by each participating entry

filer for that purpose. When a truck arrives at the border, shipments

for which no physical examination of cargo is required will be released

without additional data or documentation. For any shipment aboard that

truck selected by Customs for physical examination of cargo, Customs

will issue to the entry filer designated in the shipment data an

electronic request for additional information. This request may be

satisfied by transmission of either partial or complete entry summary

and commercial data, as defined by Customs, plus packing data. The

commercial data required for cargo examination, whether partial or

complete, will be at the detailed item level. Cargo will not be

examined until this data is received by Customs.

5. The date of entry will be the date on which merchandise is

released by Customs. The release will obligate the continuous bond

identified in the prototype application of the importer whose NCAP/P

Authorization Code is present in the shipment data.

6. For each shipment released during a calendar month, the entry

filer must electronically transmit complete entry summary data to

Customs on or before the filing deadline for that month. The filing

deadline for each month will be the 10th calendar day of the following

month, or, if the 10th falls on a weekend or holiday, the next business

day. Entry summary data transmitted prior to this deadline will be

considered provisional and may be replaced by the entry filer anytime

before the deadline. All summaries filed on or before the deadline will

be considered as filed on the deadline date. Any issues that may be the

subject of a future reconciliation must be identified in the entry

summary data.

7. For any entry summary selected by Customs for data review,

unless complete commercial data was previously transmitted to support a

cargo examination, Customs will issue to the entry filer an electronic

request for complete commercial data. This request must be satisfied by

electronic transmission of a complete set of commercial data, as

defined by Customs, plus packing data if specifically requested.

8. By virtue of 19 CFR 101.9, the Customs Service may impose

requirements different than those specified in the Customs Regulations;

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

the collection of revenue. Consequently, in order to permit a different

procedure to test the periodic deposit of estimated duties without

adversely affecting the collection of revenue, the participant must

agree to and abide by the following procedures. Each participating

importer account will make semi-monthly preliminary estimated payments

through an electronic medium. Preliminary estimated payments will be

initiated electronically using ACH credit on the 15th and the last day

of the month. If the 15th or the last day of the month falls on a

weekend or holiday, the payment must be initiated the next business

day. Under the prototype, special electronic payment procedures will be

utilized. The preliminary estimated payments will be based upon the

following percentages: (a) The payment initiated on the 15th will be

75% of the estimated amount due on all releases for the 1-15th of the

month, (b) the payment initiated on the last day of the month will be

57% of the estimated amount due on all releases from the 16th to the

last day of the month. These percentages will be reviewed and may have

to be adjusted to maintain revenue neutrality. Payment for the

remaining balance will be initiated electronically on the 15th of the

following month, and it is this date which Customs and the participants

agree will serve as the date of actual deposit of estimated duties and

fees for purposes of assessing interest under 19 U.S.C. 1505. Customs

will issue two statements each month, one before and one after the

monthly filing deadline. Each statement will list each importer

account's NCAP/P activity at all locations for the reporting month, and

will indicate whether entry summary data has been filed and, if it has,

amounts due.

9. Within the period of time prescribed for each issue, the entry

filer must transmit an electronic Reconciliation to resolve each issue

identified for reconciliation in entry summary data. In general, one

Reconciliation will resolve multiple issues for each of the underlying

entries.

Cargo will be released and duties, taxes and fees assessed on the

basis of data transmitted to the NCAP/P system. For shipments processed

in NCAP/P, participants will not be required to provide parallel filing

of ACS data or paper documents.

VIII. Suspension From Prototype

If a participant attempts to enter or submit data relating to

prohibited merchandise, merchandise subject to quota or antidumping or

countervailing duties, or other non-eligible merchandise; or if a

participant files non-consumption entries; files erroneous or untimely

data; fails to provide requested invoice data or sufficient supporting

documentation for Reconciliations; makes late or inadequate payments;

fails to exercise reasonable care in the execution of participant

obligations; or otherwise fails to follow the procedures outlined

herein, and applicable laws and regulations, then the participant may

be suspended from the prototype, and/or be subject to penalties.

Any decision suspending participation may be appealed to the Trade

Compliance Process Owner, within 15 days of the decision date.

IX. Regulatory Provisions Suspended

Certain provisions of parts 24, 111, 141, 142, 143 and 159 of the

Customs Regulations (19 CFR parts 24, 111, 141, 142, 143 and 159) will

be suspended during this prototype test to allow for monthly filing of

entry summary data, periodic payment of duties, taxes and fees,

reconciliation for NAFTA, classification, value and 9802 issues,

liquidation, billing and remote filing by Customs brokers in ports

where they currently do not hold permits.

Absent any specified alternate procedure, the current regulations

apply.

X. Prototype Evaluation

Once the importers are selected for NCAP/P, the Joint Prototype

Team will, during the initial six months of the test period, evaluate

the effectiveness of the

[[Page 14736]]

automation involved. Subsequent reviews will additionally consist of

evaluating the data received from the importers, along with the

internal and external process operations of the NCAP/P.

Additional importers may become eligible during the prototype

period, using the eligibility requirements cited above, thereby

increasing the number of companies involved in the NCAP/P. The

evaluation of the prototype as it pertains to these importers may occur

separately from that which is done on the original participants.

Regardless, the intention of the evaluations is to enhance operational

procedures and to develop the detailed data requirements that are

needed for NCAP.

Note that the fact of participation in the NCAP/P is not

confidential information. Lists of participants will be made available

to the public by means of the Customs Electronic Bulletin Board and the

Customs Administrative Message System, and upon written request. We

stress that all interested parties are invited to comment on the

design, conduct, and evaluation of NCAP/P at any time during prototype.

Upon conclusion of the prototype the final results will be

published in the Federal Register and the Customs Bulletin as required

by Sec. 101.9(b), Customs Regulations and reported to Congress.

Dated: March 21, 1997.

Audrey Adams,

Acting Assistant Commissioner, Office of Field Operations.

[FR Doc. 97-7733 Filed 3-26-97; 8:45 am]

BILLING CODE 4820-02-P