Announcement of a General Test Regarding the International Trade Prototype

DEPARTMENT OF THE TREASURY

Customs Service

Announcement of a General Test Regarding the International Trade

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 what is

expected to be a series of prototypes collectively called the

International Trade Prototype (ITP). This notice invites public

comments concerning any aspect of the planned prototype, informs

interested members of the public of the eligibility requirements for

voluntary participation in the first phase of the first prototype

called International Trade Prototype 1 (ITP1) and outlines the

development and evaluation methodology to be used in the test. To

participate in the first phase of ITP1, 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.

This notice supersedes the information on the International Trade

Prototype published by the International Trade Data System Project

Office of the Treasury Department in the Federal Register on December

31, 1997.

DATES: The first phase of ITP1 will commence no earlier than June 8,

1998 and will run for approximately six months with evaluations of the

prototype occurring periodically. Comments concerning any aspect of

this phase must be received on or before July 6, 1998. Future phases,

prototypes, or participant expansion of this prototype will be

announced in a Federal Register notice.

ADDRESSES: Written comments regarding this notice, and information

submitted to be considered for voluntary participation in this first

phase of ITP1 should be addressed to the U.S. Customs Service,

International Trade Prototype Team, Attn: Linda LeBaron Grasley, 4455

Genesee Street, Bldg. 10, Room #342, Buffalo, New York 14225. Note that

all comments received by U.S. Customs will be part of the public

record.

FOR FURTHER INFORMATION CONTACT: For any prototype or participation

questions please contact Daniel Buchanan, U.S. Customs Service at (617)

565-6236, or Linda LeBaron Grasley, U.S. Customs Service at (716) 626-

0400 x 204, or Kevin Franklin, United Kingdom, Her Majesty's Custom and

Excise at 011 44 171 865 4728 in London, England.

SUPPLEMENTARY INFORMATION:

Background

The ITP has evolved from an international drive to streamline

global trade. In both business and government, around the world,

processes are being automated and reengineered. Trade and information

are moving faster and more effectively all the time. Many international

companies share critical data with business and trading partners around

the world, and they expect government to maintain the leadership

position it has taken in developing domestic electronic trade systems

by moving into the global arena.

The ITP concept has been under consideration by both the U.S.

Customs Service (USCS) and Her Majesty's Custom and Excise (HMCE) since

1996. The nucleus of this program is an extension of ideas developed in

partnership with the trade community by various members of the Trans-

Atlantic Team, which is primarily comprised of USCS and HMCE officers.

The ITP concept also addresses issues raised by international traders,

the World Customs Organization (WCO), the United Nations Conference on

Trade and Development (UNCTAD), G-7 and other international

organizations. The concept is intended to simplify and standardize

customs processes and procedures in order to facilitate trade while

maintaining effective and efficient control. Information on an ITP

prototype contained in an information collection notice published in

the Federal Register (63 FR 68353 on December 31, 1997) is superseded

by this notice.

In the United States Customs Service Annual Plan for Fiscal Year

1998, USCS states a number of objectives associated with increased

cooperation and support of international trade automation. The plan's

objectives include increased cooperation with other customs

administrations at the multilateral, regional and bilateral levels. The

plan further states that USCS will work to promote standardized customs

processing through implementation of ``Customs Guidelines'' and

establishment of best practices. This is to be accomplished by working

with the WCO and the international trade community to promote the

development of international instruments to reduce customs procedural

barriers to trade and to secure greater standardization, transparency,

simplification and automation worldwide.

The developing relationship between the USCS and HMCE leads us to

prototype this concept. The USCS and HMCE have agreed that the ITP will

be delivered in a series of prototypes. Each prototype will be

evaluated against predetermined success criteria. Subsequent ITP

prototypes will build on lessons learned in ITP1 and the need for

enabling legislation will be evaluated.

It is expected that ITP1 will be rolled out in three phases. USCS

and HMCE agree that the first phase of ITP1 will commence no earlier

than June 8, 1998. Additional phases are being planned and future

prototypes are also under consideration.

The USCS will be testing the ITP in accordance with Section 101.9

of the Customs Regulations (19 CFR 101.9), which provides for the

testing to

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evaluate the planned components of the National Customs Automation

Program (NCAP). By virtue of 19 CFR 101.9, USCS 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, public health, safety, or law enforcement.

Description of Proposed International Trade Prototype

The Mission/Vision of the International Trade Prototype is a

standard customs regime that will facilitate the movement of goods

internationally. This regime will operate within an electronic

environment in which there will be automated systems using data which

conform to internationally agreed standards. The amount of information

supplied by business to customs will be minimized to the extent

possible, consistent with the customs administrations' performance of

their missions.

The goal of the project is to allow trade participants to supply

their information only once (seamless transaction, i.e., exports equals

imports) and will be restricted to the information that is essential to

allow customs to effect shipment and clearance of the goods.

More specifically, our Mission/Vision is to deliver an automated

system that utilizes internationally-accepted standard message formats

and codes, streamlines data transmission, simplifies and facilitates

global trade, and assists governments world-wide in enforcing their

laws.

I. Goals, Principles and Scope of ITP1

The following goals, principles and scope support USCS and HMCE

mission and strategic plans and will guide development of the first ITP

prototype.

Customs Administration Cooperation. The ITP will improve

international trade practices that are best addressed through

cooperative efforts between customs administrations, international

traders, and international trade organizations.

International Trade Transactions. This prototype will work toward

the development of harmonized and simplified messages and procedures,

based upon business practices, for transactions that support import,

export, and transportation without the need for redundant entry or

transmission of data.

Commercial and Enforcement Compliance Focus. Each country will

continue to use its own targeting and compliance measurement approaches

and procedures to ensure that the legal requirements of all

participating countries are met.

Account-Based Approach. Both countries will work with prototype

accounts, primarily importers and exporters, to better understand their

systems, procedures, and levels of compliance, with mutual assistance

between designated Customs Account Managers.

Automation and Information Sharing. Automation will allow the

sharing of information to enable the collection and exchange of

standardized information mutually agreed to by both governments in a

secured electronic environment.

Reduce the Burden on the Trade. This prototype will work toward

streamlining government reporting requirements placed upon the trade

community.

The scope of ITP1 will include:

--Air and sea cargo shipments.

--Cargo release, statistical and fiscal reporting, and supporting

information.

--Merchandise restrictions and limitations agreed between customs

administrations.

--Sharing of agreed standard data using various technological means

accepted by both administrations.

--UN/EDIFACT message syntax between governments.

--Unique Consignment Reference Numbers (UCRN) to be used by the USCS

and HMCE in separate formats.

--The HMCE conducting ITP1 in an operational environment.

--The USCS phasing ITP1 into an operational environment.

--Both one-step and two-step export reporting being implemented.

--A two-step import process in which data provided to the export

customs administration is forwarded to the import customs

administration and used to effect import cargo release.

--Acceptance of all participating traders being subject to compliance

review.

--Risk assessment, anti-smuggling, and commercial compliance checks

continuing to be applied to goods being moved under these simplified

procedures.

--Development of agreed joint operational procedures to manage traders'

accounts.

II. Development Methodology

ITP will be monitored by a Joint Prototype Team consisting of trade

participants, the USCS Offices of Field Operations, Strategic Trade,

Information and Technology, International Affairs and other interested

government agencies. This team will meet regularly throughout the

prototype period in appropriate locations to set development

milestones, monitor progress, resolve issues and evaluate program

effectiveness. The development effort will be coordinated with other

on-going National Customs Automation Program (NCAP) prototype programs

such as the NCAP Prototype, Remote Location Filing and Reconciliation,

and will be as consistent as possible with the overall direction of

USCS development of the Automated Commercial Environment (ACE).

Potential participants should recognize that this is a prototype

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

electronic transmission of data will differ from those currently used

in the Automated Export System (AES) and the Automated Commercial

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

undertaken for ITP may not meet the eventual requirements for programs

as they are finally implemented.

The public is invited to comment on any aspect of the ITP test as

described by this notice. Public comments received concerning the

methodology of the test program or procedures will be reviewed by USCS

and HMCE.

III. Account-Based Export/Import Declaration Process

In the United States, ITP1 will become operational under a three-

phase implementation.

The general scope of each phase is as follows:

(1) ITP1.1 will be a parallel (non-operational) test of pre-

departure export notification;

(2) ITP1.2 will be operational for pre-departure export

notification and import cargo release; and

(3) ITP1.3 will be the full implementation of ITP1 and will be

operational for full export declaration and import entry summary

acceptance and processing.

The full implementation of ITP1 will test an account-based

declaration process that integrates preliminary export and preliminary

import reporting. For shipments processed under ITP1 procedures, export

notification and import cargo examination decisions will be based

primarily on pre-established account/entry information, minimizing the

transaction data that needs to be transmitted to customs authorities

prior to release of cargo. Cargo examinations will also be performed on

the basis of selectivity criteria and for random compliance measurement

sampling. Complete export declaration data may be transmitted following

exportation. Detailed import entry summary data will be reported on a

monthly cycle, and

[[Page 30290]]

payment of duties, taxes and fees will be based on a monthly statement

cycle employing semi-monthly estimated payments. The full developed

account-based declaration process will be a fully electronic process;

no paper documents will be required or accepted at that time.

When ITP1 is fully implemented, export reporting, import cargo

release and assessment of duties, taxes and fees will be based on data

transmitted to the ITP1 system. For shipments processed in the fully

implemented ITP1 system, participants will not be required to provide

parallel filing of ACS or AES data or of paper documents.

In order for a shipment to be eligible for processing under ITP1

procedures, both the exporter and the importer of the shipment must be

ITP1 participants in their respective countries. While various

automatic notifications and back-up procedures will also be supported,

the basic declaration flow for U.S. exports in the full implementation

of ITP1 will be as follows:

1. The exporter's application, including any amendments, will be

used to assess the suitability of proposed export shipments for ITP

processing.

2. The exporter or an authorized agent will transmit a pre-

departure export notification message to USCS for each ITP shipment

exported from the U.S. The data elements of the pre-departure export

notification message are listed under ``DESCRIPTION OF PROPOSED FIRST

PHASE OF ITP1,'' below.

3. ITP1 shipments exported from the U.S. will be subject to

physical inspections and compliance reviews by various federal

agencies.

4. Upon departure of the exporting conveyance, USCS will forward

the data from the pre-departure export notification message to HMCE.

5. HMCE will use the forwarded data from the pre-departure export

notification message to effect import cargo release in the United

Kingdom (U.K.)

6. The U.S. exporter or an authorized agent will transmit a

complete export declaration to USCS prior to a specified periodic

filing deadline. These data may be transmitted at any time following

the pre-departure export notification and may be transmitted following

departure of the exporting conveyance. Data from the complete export

declaration will not be forwarded to HMCE.

The basic declaration flow for U.S. imports in the full

implementation of ITP1 will be as follows. Note that no data

transmitted by participants to USCS with regard to importations into

the U.S. will be forwarded to HMCE.

1. The U.K. exporter or an authorized agent will transmit a pre-

departure export notification message to HMCE for each ITP shipment

exported from the U.K. These data will consist of the same data

elements as a U.S. pre-departure export notification message. These

data elements are listed under ``DESCRIPTION OF PROPOSED FIRST PHASE OF

ITP1,'' below.

2. Upon departure of the exporting conveyance, HMCE will forward

the data from the pre-departure export notification message to USCS.

3. The importer's application, including any amendments, will serve

as a pre-filed entry for each ITP1 shipment. USCS will assign an ITP

Authorization Code to each participant who imports into the U.S.A.

participating importer or an authorized broker will electronically

transmit data to USCS to provide timely and accurate identification of

any changes to the original application, e.g., changes in a

participant's ITP business partners and merchandise imported under the

prototype.

4. USCS will assign a filer and entry number to each shipment. The

entry filer, i.e., importer or authorized agents (brokers) designated

by the importer, for ITP shipments at the port of unloading will be

assigned to the entry. The entry number will be assigned from the range

of entry numbers provided in advance by each designated entry filer for

that purpose. When an importing conveyance arrives, ITP shipments for

which no physical examination of cargo is required will be released

without additional data or documentation. For any shipment selected by

USCS for physical examination of cargo, USCS will issue an electronic

request for additional information to the entry filer. This request may

be satisfied by transmission of partial entry summary and commercial

data, as defined by USCS, plus packing data. The commercial data

required for cargo examination will be at the detailed item level.

Cargo will not be examined until these data are received by USCS.

5. The date of entry will be the date, after the merchandise

arrives, the merchandise is released into the commerce of the United

States. The release will obligate a continuous bond identified for that

purpose by the participant importer whose ITP Authorization Code is

present in the pre-departure export notification data forwarded to USCS

by HMCE.

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

filer must electronically transmit complete entry summary data to USCS

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.

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

will issue an electronic request for complete commercial data to the

entry filer. This request must be satisfied by electronic transmission

of a complete set of commercial data, as defined by USCS, plus packing

data if specifically requested.

8. In order to permit a different procedure to test the periodic

deposit of estimated duties without adversely affecting the collection

of revenue, participants who import into the U.S. must abide by the

following procedures. Each participating importer 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, and (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 USCS 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. USCS will issue two statements

each month, one before and one after the monthly filing deadline. Each

statement will list each importer's ITP activity at all locations for

the reporting month, and will indicate whether entry summary data has

been filed and, if it has, estimated duties and fees.

[[Page 30291]]

IV. Remote Location Filing

Remote location filing allows participants to electronically file

data for the entry of merchandise with USCS from any location in the

United States other than the port designated in the entry for

examination.

One aspect of remote location filing will be supported in ITP1 and

use of this aspect is voluntary, but the same electronic data

transmission requirements will apply for all prototype participants. A

U.S. ITP1 participant who will be filing remotely must meet the

criteria for remote filing established in 19 U.S.C. 1414.

An ITP1 participant will be voluntarily utilizing remote filing if

the electronic transmission of an entry, entry summary, invoice data

(when required by USCS) and payment of duties, fees, and taxes is

received from a participant not located in the port of arrival, which

for purposes of this prototype will also be the port of examination as

designated in the entry information.

The designation of alternative locations for cargo examination will

not be supported in ITP1. All cargo examinations will be conducted at

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

V. Description of Proposed First Phase of ITP1

USCS and HMCE agreed that the first phase of ITP1 (ITP1.1) will

commence on June 8, 1998. The number of U.S. participants will be

limited. In order for a shipment to be eligible for processing under

ITP1.1 procedures, both the exporter and the importer of the shipment

must be ITP1 participants in their respective countries. No more than

six U.S. ports will be included in ITP1.1. Port selections will be

based on applicants' requests. While ITP1.1 will be a parallel test in

the U.S., it will have operational status in the U.K. As a result, pre-

departure export notifications transmitted by participating U.S.

exporters or their authorized agents will be used to effect operational

release of the cargo upon importation into the U.K. Applicants should

note that participants must agree to the transmission of these data

between governments.

For U.S. exports in ITP1.1:

1. The exporter or an authorized agent will transmit a pre-

departure export notification message to USCS for each ITP shipment

exported from the U.S. The proposed data elements for pre-departure

export notifications in ITP1.1 are:

--Universal Consignment Reference Number (to identify transactions)

--Country of Export

--Mode of Transportation

--Port of Loading

--Shipping Reference (identification of Bill of Lading or Air Waybill)

--Shipping Quantity

--Exporter

--Importer

In the U.S. the ITP1.1 pre-departure export notification will be

tested in parallel. All U.S. export reporting requirements for ITP1.1

shipments must be satisfied through existing export reporting

procedures and systems.

2. USCS will forward the data from the pre-departure export

notification message to HMCE.

3. HMCE will use the forwarded data from the pre-departure export

notification message to effect operational import cargo release in the

U.K.

For U.S. imports in ITP1.1:

1. The U.K. exporter or an authorized agent will transmit a pre-

departure export notification message to HMCE for each ITP shipment

exported from the U.K. These data will consist of the same data

elements as a U.S. pre-departure export notification message. U.K.

filers of pre-departure export notifications will transmit the U.S.

importer's ITP Authorization Code to identify the importer. The pre-

departure export notification will have operational status for U.K.

export reporting.

2. Upon departure of the exporting conveyance, HMCE will forward

the data from the pre-departure export notification message to USCS.

3. In the U.S., the ITP1.1 pre-departure export notification will

be tested in parallel. All U.S. import reporting requirements for

ITP1.1 shipments must be satisfied through existing import reporting

procedures and systems.

Note that no ITP1.1 data is transmitted by participants to USCS

with regard to importations into the U.S.

VI. Eligibility Requirements

Customs will select a limited number of participants for ITP1.1. In

order to be eligible for participation in ITP1.1, a company operating

in the United States must:

1. Have the ability to provide electronically, on an entry-by-entry

basis, the following: entry, entry summary, invoice information; and

payment of duties, fees, and taxes through the Automated Clearing House

(ACH);

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

agree to undergo and cooperate fully with a Customs Compliance

Assessment. At the time the application is filed, if any Customs audit

is in progress, the importer must be fully cooperating in all aspects

of the Customs Compliance Assessment and any related audit, providing

timely and accurate information and adequate resources necessary for

USCS to conduct a Customs Compliance Assessment or audit; and be in

full compliance with the terms of any associated Compliance Improvement

Plan.

3. Export merchandise from the U.S. for importation into the U.K.

and/or import into the U.S. merchandise exported from the U.K. Note

that in order for a shipment to be eligible for processing under ITP1

procedures, both the exporter and the importer of the shipment must be

ITP1 participants in their respective countries. It is therefore

important that potential U.S. participants coordinate their

participation with that of their U.K. trading partners; and

4. For participants who wish to include U.S. export shipments in

the ITP1.1 test, provide or arrange for provision of timely and

accurate electronic transmission to USCS of pre-departure export

notification data for all included U.S. export shipments. If a

participant does not transmit electronic data for a particular export

shipment, USCS may exclude that shipment from ITP processing.

Applications will be accepted from all volunteers; however,

priority consideration will be given to:

1. Companies within the top 379 U.S. importers ranked by entered

value (the top 379 represent approximately 50 percent of all imports by

value);

2. Companies within the top 250 U.S. importers within any of the

USCS Primary Focus Industry (PFI) categories, which are:

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; and

m. Wearing Apparel;

3. Companies at least 50 percent of whose imports are in PFI

categories; and

4. Companies that indicate they plan to maintain an average of at

least 10 entries per month throughout the prototype period.

ITP1.1 participants who wish to continue to participate in

subsequent

[[Page 30292]]

operational phases of ITP1 will further be required to file or maintain

a continuous bond with sufficient liability coverage. They will also be

required to provide or arrange for provision of timely and accurate

electronic transmission to USCS of data required to pre-identify

parties and commodities involved in ITP transactions, and of all data

required in prototype declaration processes as they are phased into

ITP1.

VII. General Requirements

For ITP1, the following restrictions will be placed upon

participants.

Participants who will include shipments exported from the U.S.:

A. Must export merchandise identified in the application as being

from their typical commodities in their established lines of business

to pre-identified U.K. importers;

B. Must export only the merchandise identified in the application

as being within a range of pre-identified commodities (classified at

the 6-digit HTS level);

C. Must export merchandise using carriers pre-identified in the

application;

D. Must export merchandise from a port selected by USCS for

inclusion in the current phase of ITP1;

E. May not include export shipments of used vehicles or of DEA

essential and precursor chemicals for the manufacture of narcotics,

shipments subject to State Department licensing or shipments destined

to an embargoed nation;

F. Must not export any merchandise subject to export prohibitions

or restrictions;

G. May not export ITP1 merchandise under a transportation and

exportation (T&E) entry;

H. Are responsible for ensuring that ineligible merchandise is not

included in ITP1 shipments. Customs will exclude ineligible shipments

from ITP1 processing.

Participants who will include shipments imported into the U.S.:

A. Must provide electronically, on an entry-by-entry basis, the

following: entry, entry summary, invoice information; and payment of

duties, fees, and taxes through the Automated Clearing House (ACH);

B. Must enter merchandise identified in the application as being

from their typical commodities in their established lines of business

from pre-identified U.K. exporters;

C. 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);

D. Must enter merchandise transported by carriers pre-identified in

the application;

E. Must enter merchandise for release into the commerce under a

consumption entry at the port of unloading, i.e., may not enter ITP1

merchandise into a warehouse or Foreign Trade Zone, or as an in-bond

entry;

F. Must enter merchandise at a port selected by USCS for inclusion

in the current phase of ITP1;

G. May not enter merchandise in ITP1 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;

H. Must not import prohibited merchandise in prototype shipments;

and,

I. Are responsible for ensuring that ineligible merchandise is not

included in ITP1 shipments, and that all shipments aboard a conveyance

are eligible for ITP1 processing. Customs will exclude ineligible

shipments from ITP1 processing.

VIII. Application

Importers and exporters who wish to participate in ITP1.1 must

submit a written application within 30 days of this notice including

the following information:

1. Participant name, address and designated contact person.

2. For all exported cargo proposed for inclusion in the ITP1.1

test:

--Names and addresses of all U.K. importers;

--For each U.K. importer, a listing of all the 6-digit HTS numbers in

which the commodities to be exported are classified;

--Detailed explanation of any licenses or permits required for export

of the listed commodities;

--Lists of all air and ocean freight carriers to be used;

--For each carrier, a listing of the U.S. ports of loading at which the

carrier will be used; and

--An estimate of the total number of export shipments per month the

participant expects to include in the ITP1.1 test for each mode of

transportation at each U.S. port of loading.

3. For all imported cargo proposed for inclusion in the ITP1.1

test:

--Names and addresses of all U.K. exporters;

--For each U.K. exporter, a listing of all the 6-digit HTS numbers in

which the commodities to be imported are classified

--Lists of all air and ocean freight carriers to be used;

--For each carrier, a listing of the U.S. ports of unloading they

prefer to us; and,

--An estimate of the total number of import shipments per month the

participant expects to include in the ITP1.1 test for each mode of

transportation at each U.S. port of unloading.

4. 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.

5. A statement indicating that the participant will comply with the

procedures and restrictions of the prototype.

6. A statement indicating that the applicant agrees to the sharing

of pre-departure export notification data and other information between

the HMCE and USCS. This includes information in regard to imported/

exported commodities, value determination, and company structure and

finance. This information will be shared between UK and US Account

Managers to better understand importer and exporter systems,

procedures, and levels of compliance.

USCS will make import admissibility determinations on ITP shipments

imported into the U.S. based on any cargo examinations and the

information supplied with the application, which shall serve as a pre-

filed entry for ITP purposes. Applications may be referred to other

government agencies for review. All ITP1.1 applicants will be notified

in writing of their acceptance or rejection. USCS will assign an ITP

Authorization Code to each accepted participant whose application

indicates intent to include imports into the U.S. in the ITP1.1 test.

The USCS, with the HMCE, will schedule meetings with each accepted

participant to review the current prototype proposal, data elements,

technologies, and evaluation criteria.

If an applicant is denied participation, the notification letter

will include the reasons for that denial. The applicant may appeal such

decision in writing within 10 days to the Trade Compliance Process

Owner. Applicants who are denied participation in ITP1.1 may re-apply

if USCS subsequently opens participation to additional participants.

USCS will publish a notice in the Federal Register if an expansion of

participation is planned.

Applicants should note that participation is not confidential, and

that lists of participants will be made

[[Page 30293]]

available to the public. Additionally, all comments provided to U.S.

Customs will be part of the public record.

IX. Maintenance of Account Information

Throughout the prototype period, participants must provide USCS

with advance notification of any changes in the information provided in

the application. This notification must be provided to USCS at least

seven days before the effective date of a change and will be considered

an amendment to the application. By notification of the participant,

USCS may reject such an amendment or prohibit the participant's use of

a particular carrier, U.K. importer or exporter, or the export or

import of particular merchandise under this prototype.

ITP1.1 participants who wish to include imported cargo in

subsequent operational phases of ITP1 will be required to provide

additional information, including but not limited to the issuer and

number of the continuous surety bond which will cover all cargo

imported under ITP1 procedures and designation of a single entry filer

for each port at which imported cargo will be unloaded. Each entry

filer designated by one or more participant importers must provide USCS

with a range of entry numbers to be reserved for assignment by USCS to

ITP1 shipments. Entry filers may not assign these numbers to

transactions other than ITP transactions.

X. Misconduct Under Prototype

All participants in ITP1 are required to abide by the terms and

conditions of this notice.

A participant may be suspended from the prototype, subject to

liquidated damages, penalties, and/or other administrative sanctions,

and/or prevented from participation in future prototypes if a

participant fails to cooperate fully in a Compliance Assessment or

audit, provide timely and accurate data and adequate resources in

support of a Customs Compliance Assessment or audit, or comply fully

with the terms of a Compliance Improvement plan; participant exports or

attempts to export goods to U.K. importers or conveyed by carriers not

approved by USCS; exports or attempts to export goods classified in

commodity ranges not approved by USCS; exports or attempts to export or

submits data relating to prohibited merchandise or other non-eligible

merchandise; enters or attempts to enter goods from U.K. exporters or

conveyed by carriers not approved by USCS; enters or attempts to enter

goods classified in commodity ranges not approved by USCS; participant

files non-consumption import entries; enters or attempts to enter or

submits data relating to prohibited merchandise, merchandise subject to

quota or antidumping or countervailing duties, or other non-eligible

merchandise; fails to maintain sufficient continuous bond coverage;

files erroneous or untimely data; makes late or inadequate payments;

fails to supply USCS with requested invoice data; fails to maintain a

sufficient level of compliance; 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.

USCS has the discretion to suspend a prototype participant based on the

determination that an unacceptable compliance risk exists. This

suspension may be invoked at any time after acceptance in the

prototype.

Any decision proposing suspension of a participant may be appealed

in writing to the Director, Trade Compliance, within 15 days of the

decision date. Such proposed suspension will apprise the participant of

the facts or conduct warranting suspension. Should the participant

appeal the notice of proposed suspension, the participant should

address the facts or conduct charges contained in the notice and state

how he does or will achieve compliance. However, in the case of

willfulness or where public health interests or safety are concerned,

the suspension may be effective immediately.

Regulatory Provisions Suspended

Certain provisions of Parts 24, 111, 113, 141, 142, 143, and 159 of

the Customs Regulations (19 CFR Parts 24, 111, 113, 141, 142, 143, and

159) will be suspended during operational phases of the ITP1 test to

allow for monthly filing of entry summary data, periodic payment of

duties, taxes and fees, 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.

Prototype Evaluation

Once the participants are selected for ITP1.1, the Joint Prototype

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

the effectiveness of the automation involved. Subsequent reviews will

additionally consist of evaluating the data received from the

participants, along with the internal and external process operations

of the ITP. The intention of the evaluations is to enhance operational

procedures and to develop the detailed data requirements that are

needed for ITP.

Note that the fact of participation in the ITP is not confidential

information. Lists of participants, comments provided to U.S. Customs,

and evaluation results may be made available to the public by means of

the Customs Electronic Bulletin Board and the Customs Administrative

Message System, and upon written request. The G-7 countries will

participate in evaluation development and review. We stress that all

interested parties are invited to comment on the design, conduct, and

evaluation of ITP 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: May 29, 1998.

Samuel H. Banks,

Acting Commissioner of Customs.

[FR Doc. 98-14648 Filed 6-2-98; 8:45 am]

BILLING CODE 4820-02-P