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 Customs second extension of 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.

Based on our experience in the extension of the second prototype of

RLF, we have made modifications to the sections detailing Eligibility

Criteria, Prototype Two Applications, and Misconduct. The changes to

the Prototype Two Applications will affect 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, 1999, will continue, and be concluded, no

earlier than December 31, 1999, by a notice in the Federal Register.

Comments concerning any aspect of the remote filing prototype test must

be received on or before [insert date 30 days after date of publication

of this document in the Federal Register].

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, NW, Room 5.2 A, Washington, DC 20229-0001.

FOR FURTHER INFORMATION CONTACT: For systems or automation issues:

Joseph Palmer (202) 927-0173, Jackie Jegels (301) 893-6717, or Patricia

Welter (305) 869-2782.

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

2293, or Bonnie Brigman (202) 927-0294.

SUPPLEMENTARY INFORMATION:

Background

Title VI of the North American Free Trade Agreement Implementation

Act (the Act), Pub. L. 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 file electronically a formal or informal consumption

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

the port of arrival (POA), or 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 Site on the

Internet at ``http://www.customs.treas.gov/rlf.'' Pursuant to

Sec. 101.9, Customs Regulations, Customs has been testing the RLF

concept.

On April 6, 1995, Customs announced in the Federal Register (60 FR

17605) its plan to conduct the first of at least two prototype tests

regarding RLF. The first test, Prototype One, began on June 19,

[[Page 67512]]

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. On December 3, 1997, Customs announced in the

Federal Register (62 FR 64043) its plan to extend the second prototype

through December 31, 1998. In today's document, Customs is announcing

that it will permit a second 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. Remote location filing

will be a capability of ACE.

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 the 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 Trade Compliance Redesign, and ACE. 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 the 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 at the national level in conjunction with the

Trade Compliance Redesign and ACE.

Description of Proposed Test

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

concluded, no earlier than December 31, 1999, by a notice in the

Federal Register. Prototype Two will evaluate the operational impact

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

remote location and alternate location examinations.

Regulatory Provisions Suspended

Certain provisions in Parts 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 allow for the movement of cargo from

its POA to a DES outside of the POA.

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 using the Electronic Invoice Program (EIP)

when required by Customs; and the payment of duties, fees, and taxes

through the Automated Clearinghouse (ACH).

The following eleven 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 as both ports of arrival (POA) and designated

examination sites (DES).

Anchorage, AK

Atlanta, GA

Baltimore, MD

Baton Rouge, LA

Boston, MA

Brunswick, GA

Buffalo, NY

Calais, ME

Champlain-Rouses Point, NY

Charleston, SC

Charlotte, NC

Chattanooga, TN

Chicago, IL

Cincinnati, OH

Cleveland, OH

Columbus, OH

Dayton, OH

Dallas/Fort Worth, TX

Del Rio, TX

Detroit, MI

Durham, Raleigh, NC

Erie, PA

Gloucester, MA

Gramercy, LA

Greenville-Spartanburg, SC

Gulfport, MS

Houlton, ME

Houston, TX

Huntsville, AL

Indianapolis, IN

Jacksonville, FL

JFK International Airport

Knoxville, TN

Lake Charles, LA

Laredo/Eagle Pass, TX

LAX International Airport

Little Rock, AR

Logan Airport, MA

Longview, WA

Los Angeles/Long Beach, CA

Louisville, KY

Memphis, TN

Miami, FL

Morgan City, LA

Mobile, AL

Nashville, TN

New Bedford, MA

New Orleans, LA

Newport News, VA

Norfolk, VA

NY/Newark Area

NY Seaport, NY

Orlando, FL

Pascagoula, MS

Philadeophia/Chester, PA

Port Everglades, FL

Port Huron, MI

Portland, ME

Portland, OR

Portland Int'l Airport, OR

Providence, RI

Richmond, VA

Rochester, NY

San Diego/Otay Mesa, CA

San Francisco/Oakland, CA

Savannah, GA

Seattle, WA

Shreveport, LA

Springfield, MA

Tampa, FL

Toledo, OH

Utica/Syracuse, NY

Vicksburg/Jackson, MS

West Palm Beach, FL

Wilmington, NC

Winston-Salem, NC

Worcester, MA

Washington, DC

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,

Administrative Message System, and Customs Web Site on the Internet.

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 the

[[Page 67513]]

address listed at the front of this document):

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.

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 an 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 importer's 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. All applications must initially be

submitted to Customs (at the address listed at the front of this

document). 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. New

applicants will follow a two-step application process.

First Stage Application

During the first step, the filer must submit the following

information to U.S. Customs Headquarters (address cited above):

1. Filer or 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.

Second Stage Application

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

Headquarters to proceed with the second step of the application

process, the filer must submit the following information to the Port

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

client (importer):

1. Participating importer name, telephone number, contact name, and

Importer Number;

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

3. Types of commodities to be imported;

4. Other government 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 commodity documentation

requirements and whether the port has been trained in EIP/RLF.

Upon receipt of an application, the Port Director or designate,

will send the applicant a letter of acknowledgment. If there are no

issues to be resolved, the application will be considered approved

twenty (20) days from the date of the acknowledgment letter. If there

are issues to be resolved prior to a decision on the application, the

Port Director or designate will send the applicant, within twenty (20)

days, a letter indicating that the application is pending further

review until joint resolution of the issues can be achieved. If the

application is denied, the Port Director or designate will issue a

denial letter with reasons to the applicant. If denied, the applicant

may appeal to the Remote Filing Team at Headquarters in writing within

twenty (20) days from the date of denial or reapply to the Port

Director(s).

Misconduct

If a program participant attempts to submit data for merchandise

subject to quota, anti-dumping duties, countervailing duties, or other

non-eligible merchandise, or fails to exercise reasonable care in the

execution of participant obligations and the filing of information

regarding the admissibility

[[Page 67514]]

of merchandise, and declaring the classification, value, and rate of

duty applicable to the merchandise, or otherwise fails to follow the

procedures (outlined herein) or applicable laws and regulations, then

the participant may be subject to liquidated damages, penalties, and/or

other administrative sanctions, expelled or suspended from the

prototype, and/or prevented from participation in future prototypes.

Customs has the discretion to suspend prototype participation 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 Headquarters Remote Team within twenty (20) 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.

Any other action commenced by Customs for misconduct may be

appealed in writing through existing procedures or, if none exists, to

the Headquarters Remote Team within twenty (20) days of the action.

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: December 1, 1998.

Robert S. Trotter,

Assistant Commissioner, Office of Field Operations.

[FR Doc. 98-32459 Filed 12-4-98; 8:45 am]

BILLING CODE 4820-02-P