[Federal Register Volume 59, Number 60 (Tuesday, March 29, 1994)]
[Unknown Section]
[Page 0]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 94-7261]
[[Page Unknown]]
[Federal Register: March 29, 1994]
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DEPARTMENT OF THE TREASURY
19 CFR Part 152
Notification to Importer of Increased Duties
AGENCY: U.S. Customs Service, Department of the Treasury.
ACTION: Withdrawal of proposed rule.
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SUMMARY: This document withdraws a proposal to amend the Customs
Regulations to provide that the district director of Customs shall
notify the importer on Customs Form (CF) 29, Notice of Action, when the
estimated aggregate of the increase of duties on an entry exceeds $100.
The regulations now provide that the importer shall be notified if the
increase exceeds $15. Most of the commenters were opposed to the
proposal and cited reasons why the proposed rule would not be in the
best interests of importers, brokers or the Customs Service. Customs
has concluded that the proposed rule would result in more time, effort
and cost for the government, importers and brokers.
DATES: Withdrawal effective on March 29, 1994.
FOR FURTHER INFORMATION CONTACT: Joanne Roman Stump, Office of
Regulations and Rulings, 202-482-7040.
SUPPLEMENTARY INFORMATION:
Background
On October 23, 1992, Customs published a notice in the Federal
Register (57 FR 48347), proposing to amend Sec. 152.2 of the Customs
Regulations (19 CFR 152.2) to provide that the district director would
notify the importer on Customs Form (CF) 29, Notice of Action, when the
estimated aggregate of the increase of duties on an entry exceeded
$100.
The notice proposed that in lieu of the current requirement of
preparing a CF 29 when the increase in duties is $15 or more, the
estimated increase which would trigger the sending of a CF 29 would be
raised to $100.
The reasons given for the proposed change were that it would lessen
the administrative burden and costs associated with notifying the
importer of minimal increases while it would not result in a
significant reduction of services provided to importers.
Discussion of Comments
Twelve comments were received in response to the notice of proposed
rulemaking. Ten of the twelve commenters objected to the proposed
amendment to Sec. 152.2 of the Customs Regulations. All ten of these
commenters believe that the proposed change would result in an increase
rather than a decrease in the administrative burden and costs to
Customs associated with notifying the importer of minimal increases in
duties.
Specifically, they point out that it would increase the demand to
review entry summaries after liquidation to determine the basis of the
duty increase (i.e., entered value, trade preference eligibility or
tariff classification), rather than during the initial entry stage when
the entry summary is processed by the import specialist. This change
would place an added burden upon Customs to locate and produce the
liquidated entry package and to research the reason for the increase,
since the liquidation generally follows the change by a certain time
period.
Most commenters thought it far more efficient to resolve a duty
difference on the basis of one entry, at the initial stages of
liquidation, rather than to wait several months until liquidation, by
which time numerous entries of the same merchandise may have been made
and by which time significant purchase orders may have been placed by
the importer based on the initial false impression that lower duties
would be due.
Moreover, they state that the absence of early notification of
increased duties will deprive the broker or importer of the opportunity
to receive valuable information from Customs necessary to modify future
importations to avoid repeating the same error and causing additional
increases. Two commenters stated that the size of the duty increase is
not a measure of the severity or complexity of the issue which is
causing the duty increase, and that a CF 29 involving one entry and a
minor duty increase could be the means for resolving a potentially
contentious matter involving many similarly entered entries and a much
greater increase in aggregate duties due.
Another factor militating against the proposed regulation change
which was mentioned by most commenters is that instead of seeking
resolution of a dispute in the assessment of increased duties prior to
liquidation through such methods as discussions with an import
specialist, use of the internal advice procedure or obtaining a binding
ruling, the number of protests filed under 19 U.S.C. 1514 would
increase on many entries involving the same issue. If the proposed
amendment to the regulations became effective, several areas of the
Customs Service (e.g., the import specialist teams, the protest
section, the liquidation section and the National Finance Center) would
have to expend considerable time and effort in processing more
protests.
Several commenters are brokers along the northern border handling
truck and rail shipments. These commenters said that the CF 29 is
essential to their business, citing the fact that they are usually the
importer of record on the entries for their clients, who import in high
volume and low value, and that approximately 25 percent of increased
duty bills are less than $100 per entry. The northern border brokers
assert that the preponderance of their customers will not pay the
increased duties without knowing why and how the duties are calculated.
These brokers reject the argument that by raising the $15 limit,
the inquiries between Customs and brokers or importers would decrease.
They observe that while many importers would not question an increase
in duty for $12 without notification and explanation, most importers
would challenge an increase of $50, $75 or $100 upon receipt of a
Customs bill.
Some commenters suggested further automating the liquidation
procedures so that comments or explanations pertinent to the duty
increase could be incorporated in the liquidation information
distributed via the Automated Commercial System to reduce the clerical
burden on the Customs Service.
The two commenters who supported the adoption of the proposal
stated--without elaboration--that it would reduce the overall cost of
importing into the United States and that it would relieve Customs of
repetitive minor administrative tasks. However, one did note that the
importer would not have knowledge of a value or classification change
causing a duty increase simply by viewing the liquidation notice.
The majority of the commenters point out that by using the CF 29 to
provide a clear explanation of its action regarding an entry before it
is liquidated, the Customs Service will avoid extra administrative
costs and burdens after the entry is liquidated.
Conclusion
Taking all of the factors and comments mentioned above into
consideration, Customs has determined that it should not proceed with
the proposal at this time. After further consideration and review of
the comments, Customs now believes that the proposed change would not
reduce cost, effort or time for Customs or for importers or brokers.
Given the validity of the comments and the fact that the majority of
the commenters were opposed to the changes, Customs believes that the
current regulation is preferable to the proposed regulation.
Accordingly, Customs has concluded that the proposal be withdrawn
at this time.
Approved: March 15, 1994.
George J. Weise,
Commissioner of Customs.
John P. Simpson,
Deputy Assistant Secretary (Regulatory, Tariff and Trade Enforcement).
[FR Doc. 94-7261 Filed 3-28-94; 8:45 am]
BILLING CODE 4820-02-P