[Federal Register Volume 61, Number 176 (Tuesday, September 10, 1996)]
[Notices]
[Pages 47782-47785]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-23084]


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DEPARTMENT OF THE TREASURY

Customs Service


Announcement of National Customs Automation Program Test 
Regarding Presentation of Electronic Cargo Declarations

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

ACTION: General notice.

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SUMMARY: This notice announces a Customs plan to conduct a test program 
to allow the electronic submission of certain inward vessel manifest 
information. This notice invites public comments concerning any aspect 
of the test, informs interested members of the public of the 
eligibility requirements for voluntary participation in the test, and 
describes the requirements required to be met in order to participate 
in the test.

EFFECTIVE DATE: The test will commence no sooner than December 9, 1996, 
and will run for approximately one year. Comments concerning the 
eligibility standards, selection criteria, or information submission 
requirements must be received on or before October 10, 1996. To 
participate in the test, the necessary information as outlined in this 
notice must be filed with Customs on or before October 10, 1996.

ADDRESSES: Written comments regarding this notice and letters 
requesting participation in the test program should be addressed to 
Cargo Control and Entry, U.S. Customs Service, 1301 Constitution 
Avenue, NW., Room 1328, Washington, DC 20229.

FOR FURTHER INFORMATION CONTACT:

    For operational or policy matters: William Scopa (202) 927-3112.
    For systems or automation matters: Kim Santos (202) 927- 0651.
    For legal matters: Larry L. Burton (202) 482-7040.
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 which pertain 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 of the Act created 
sections 411 through 414 of the Tariff Act of 1930 (19 U.S.C. 1411 
through 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 the remote location filing of entries 
(section 414). Actual testing procedures for both existing and planned 
components were established by the publication of Treasury Decision 95-
21 in the Federal Register of March 16, 1995 (60 FR 14211), which 
appear as section 101.9, Customs Regulations (19 CFR 101.9).

I. Description of Proposed Test

The Concept of Electronically Filing the Cargo Declaration

    The filing of the Customs Form 1302 Cargo Declaration 
electronically allows an importing carrier to transmit one cargo 
declaration to all Customs ports for review and for enforcement 
purposes. It also allows for the electronic release of cargo to 
carriers and other participating parties, as well as facilitating the 
process of many other Customs regulatory requirements related to the 
control and processing of cargo. For many years now, Customs has been 
accepting electronic cargo data from importing carriers, while 
simultaneously requiring the same information to be submitted on the 
Customs Form 1302 (Cargo Declaration). This test program will eliminate 
the requirement for participating Automated Manifest System (AMS) 
vessel carriers who qualify for the test to submit a Customs Form 1302 
Cargo Declaration to Customs, so long as they

[[Page 47783]]

remain proficient in meeting the electronic standards established by 
Customs.
    Since August of 1995, Customs has been working in partnership with 
the trade through the Customs Electronic Systems Advisory Committee 
(CESAC) and other parties in developing the standards for this test 
program as well as identifying necessary enhancements to the AMS. 
Although electronic cargo data has been received by Customs from 
importing carriers for many years, there were many technical omissions 
in the AMS system which made the paper collection of cargo information 
more useful for enforcement and control purposes. Customs is now 
confident that the standards developed and enhancements being made to 
the AMS will make it possible to eliminate the need to submit the 
Customs Form 1302 simultaneously with the transmission of the cargo 
data electronically, and hopes to verify this through the test program. 
Since many importing carriers have been transmitting the cargo data to 
Customs nationally for many years now, the test will run nationally.

Description of the Test

    Customs objectives are: (1) To work with the trade community, other 
agencies, and other parties impacted by this program in the design, 
implementation and evaluation of the test; and,
    (2) To use the experience gained by the test in designing 
operational procedures, automated systems, and regulations that are 
supportive of and compatible with the Customs Reorganization, the 
ongoing effort to improve the Trade Compliance Process, and the 
Automated Commercial System Redesign (ACE).
    All procedures and processes will be closely coordinated with all 
participating and affected parties. The intent of this program is to 
test such operational issues as communication, cargo movement and 
release, as well as whether participants can meet the requirements of 
transmitting timely, complete and accurate cargo data.

Regulatory Provisions Suspended

    Provisions in sections 4.7 and 4.7a of the Customs Regulations (19 
CFR 4.7 and 4.7a), relating to the presentation of a cargo declaration 
with a vessel manifest, will be suspended during this test. 
Participants will not be required to submit a Customs Form 1302 to 
Customs or have a copy on board a vessel, including the ``dock copy'' 
or the ``traveler'', but must be able to download or otherwise produce 
required information for Customs, or Coast Guard officers who may 
board. Participants will not be required by Customs to provide a paper 
Customs Form 1302 as an additional copy. There is no suspension of the 
requirements contained in the cited regulatory provisions to submit the 
other forms to be presented with a vessel manifest, such as the Customs 
Forms 1300 and 1301.

II. Eligibility Criteria

    Participation in this testing will not be considered confidential 
information, and the identity of participants will be made available to 
the public upon written request. In order to qualify for participation 
in the test program it will be necessary that a party either be a 
qualified Automated Manifest System (AMS) carrier, or that a qualified 
AMS Service Center(s) be designated to submit required information to 
Customs. In order to be considered AMS-qualified, vessel operators and 
other entities must have been tested by Customs and determined to 
possess full technical capability to transmit and receive all types of 
AMS data. Customs authorizes Automated Manifest System (AMS) service 
centers to assist carriers in the submission of required electronic 
information. Such AMS centers may include Port Authorities and other 
interested parties who act on behalf of carriers who either cannot or 
choose not to develop the required electronic capabilities for direct 
participation. Service centers are selected by Customs only if they 
demonstrate that they possess the full technical capacity and necessary 
facilities to receive and transmit data for requesting carriers. If 
these conditions are met, such entities are officially recognized as 
``Designated Service Centers.'' Any participating carrier that is using 
a Designated Service Center is reminded that the carrier is responsible 
for all electronic submission requirements incorporated in the test. 
User requirements for qualifying carriers will be governed by those 
published in the handbook entitled ``Customs Automated Manifest 
Interface Requirements-Intermodal'' (CAMIR). A list of Designated 
Service Centers can be obtained from the U.S. Customs Service, Office 
of Information Technology, 1301 Constitution Avenue, NW., Washington DC 
20229. All test participants, whether participating directly or through 
the services of a Designated Service Center or Centers, must submit 
required information electronically in all ports in which business is 
conducted. Electronic submissions will be required for all cargo and/or 
vessel types, including containerized, bulk, and break-bulk.
    In order to qualify for participation in the program, an applicant 
is subject to and must have the electronic capabilities to meet 
additional requirements and conditions as follows:
    1. Except as further specified in this paragraph, any carrier 
participating in this test program must electronically transmit 
complete cargo declaration information to Customs no less than 48 hours 
prior to actual arrival of a vessel in a port of the United States. 
Such transmissions will be considered certified for manifesting 
purposes at 48 hours prior to actual vessel arrival. For voyages from 
the last foreign port of departure of less than 48 hours duration, the 
complete cargo declaration must be transmitted no later than the actual 
time of vessel arrival in a United States port. Such transmissions will 
be considered certified for manifesting purposes at time of vessel 
arrival. The presentation of complete and accurate cargo information is 
essential to Customs enforcement mission. Therefore, each time a 
participating carrier fails to transmit complete and accurate cargo 
declaration information in a timely manner, the port director may 
require the presentation of the paper Customs Form 1302 for the 
relevant voyage. All test participants are required to transmit into 
AMS the actual time and date of vessel arrival in a United States port.
    In any instance where a participant whose vessel is on a voyage of 
longer than 48 hours duration fails to transmit the necessary 
electronic cargo data at or before 48 hours before a vessel arrival, 
the port director retains the discretion to delay the unlading of the 
vessel. Unlading may also be delayed with respect to those voyages of 
less than 48 hours in duration if the port director requires additional 
time to review the data transmitted. Alternatively, with respect to all 
participants, the port director may allow the unlading to proceed but 
require the cargoes to be maintained and controlled by the test 
participant at the place of unlading in a manner as directed. In no 
instance, unless otherwise notified by the port director, shall cargo 
be removed from the place of unlading until the cargo declaration 
transmission has been received by Customs, an entry has been filed, and 
the carrier receives electronic releases for the cargo or electronic 
authorizations from Customs to transfer the cargo.
    2. The electronic cargo declaration information submitted under 
this program at the first port of arrival in the United States must 
list all foreign cargo on board the vessel, regardless of the intended 
port of discharge. In addition

[[Page 47784]]

to the current inventory of AMS data elements, participants using CAMIR 
and ANSI ASCX12 standards will be required to transmit the five 
following new data elements:
     Place of Receipt of Cargo;
     Container Dimensional Data: Height, Width, Length, 
equipment type;
     Container Seal Number;
     Type of Container Movement (e.g., House-to-House, 
Container Station-to-Container Station, etc.);
     Remaining on Board Indicator.
    For AMS participants using the CAMIR format, the above data 
elements must be provided as follows:
    Place of Receipt: B02 record, columns 16-32;
    Remaining on Board: B01 record, column 48;
    Container Information: C01 record, Length (columns 50-54), Height 
(columns 55-62), Width (columns 63-70), Type (columns 71-74 ISO Code);
    Container Seal Number: C01 record, columns 18-32 (Seal 1), columns 
33-47 (Seal 2);
    Type of Container Move: C01 record, columns 76-77.

System participants should refer to the CAMIR handbook issued in August 
of 1995 for detailed record layouts and additional instructions.
    For participants using the American National Standards Institute, 
Accredited Standards Committee X12 (ANSI, ASC X12) formats, the data 
should be sent as follows:
    Place of Receipt: M11 segment, data element M1110;
    Remain on Board: M11 segment, data element M1109;
    Container Information: VID segment, Length = DE VID06, Height = DE 
VID07, Width = DE VID08, Type = DE VID09 ISO Code;
    Container Seal Numbers: VID segment, Seal 1 = DE VID04, Seal 2 = DE 
VID05;
    Type of Cont. Service Code: VID segment, DE = VID11.
    Also, it is required that the following data elements be included 
in electronic transmissions under this test:
     Foreign port of lading;
     Place of receipt by the carrier of all cargoes. This means 
the first place the participating carrier took possession of the cargo, 
whether it be a port city or other location;
     Container number (s), length, height, width, and equipment 
type;
     Container seal number;
     Type of container movement (e.g., House-to-House, 
Container Station-to-Container Station, etc.);
     Bill of Lading number(s);
     Total quantity and unit type of merchandise in a shipment 
(quantity of pallets or cargo containers is not sufficient; smallest 
external packaging unit must be used);
     Complete shipper, consignee, and notify party names and 
addresses. If both notify party and consignee information is available 
to the participant, both shall be transmitted, including such 
information as ``to order'' or similar language if that is all that is 
supplied to the participant by the shipper;
     Indications of presence of hazardous materials;
     Marks and numbers, including in that data field when 
available:
     Country and/or other place of origin information;
     Consignee or other name listed;
     Other conveyance information, such as identification of 
feeder vessels;
     Purchase order, style and other identifying numbers;
     Description of merchandise. In the case of consolidated 
shipments, merchandise descriptions must be distinguished by quantity, 
weight and identifying characteristics for each shipment within a 
consolidated batch.
    3. When a vessel is being operated under the terms of a vessel 
sharing or slot charter arrangement, each test participant carrier with 
cargo aboard the vessel is responsible for filing required information 
with Customs regarding their particular electronic cargo declaration . 
Test participant parties who provide required data to Customs 
electronically must do so for their portion of the cargo within the 
time limits established in this document.
    Test participant carriers operating under a vessel sharing or slot 
charter arrangement shall transmit an identical vessel name and the 
true, accurate, and identical date and time of vessel arrival. The 
vessel name shall be identified with the Lloyd's Register of Ships 
vessel code, as submitted by the vessel owner/operator. The owner/
operator of a vessel operating under a vessel sharing or slot charter 
arrangement shall be responsible for noting on the Customs Form 3171 
(Application-Permit-Special License-Unlading-Lading-Overtime Services), 
each of the carriers sharing or chartering space aboard the vessel. The 
Customs Form 3171 shall be submitted at least 48 hours prior to a 
vessel's arrival. If the participant has been granted a term permit (CF 
3171), the participant shall always notify the port director at least 
48 hours prior to arrival of a vessel, of any changes in parties or 
slot charterers as well as any other changes made after the granting of 
the term permit. This should be accomplished by submitting an amended 
copy of the original term permit.
    4. Beginning with records created as of the date of first 
participation by a carrier and continuing for a period of 6 months 
after the actual date of arrival of a particular shipment, participants 
must maintain for immediate examination by Customs upon demand, all 
electronic or paper records kept in the normal course of business which 
relate to any particular bill of lading. After 6 months from the date 
of arrival, unless in an unreconciled status, any such records must be 
produced for examination by Customs within 5 business days following 
any demand for their production. Records of any bill of lading which 
remains in an unreconciled status must always be available for 
immediate examination by Customs.
    Electronically maintained records may be furnished to Customs 
either in the form of a computer-generated report, or in screen prints 
of relevant electronic data. Regardless of presentation form, 
submissions must clearly identify, for each shipment, the vessel name 
and voyage number, date of arrival, port of discharge, bill of lading 
and container number(s), total quantity of goods, full identity of 
shipper and consignee, and all bill of lading transactions posted 
against a bill during the period when the party was responsible for the 
proper safekeeping and delivery of the merchandise.
    5. Test participants shall not remove merchandise from Customs 
custody until the cargo declaration transmission has been received by 
Customs, an entry has been filed, and an electronic release notice has 
been received from Customs. Removing merchandise without proper 
electronic notice from Customs will subject a participant to full 
penalty liability and no such penalty will be mitigated to less than 
$500. This mitigation limitation does not apply in the case of any bill 
of lading which is in an unreconciled status at the time of the 
effective date of this test program.
    6. Electronically reported cargo may not be transferred on a 
Permit-to-Transfer (PTT) unless the participating carrier has received 
an electronic authorization from Customs.
    7. If for any reason the electronic system becomes inoperative or 
Customs is unable to receive electronic Customs Form 1302 information 
transmitted by test participants, it will be required that parties 
submit the paper Customs Form 1302 to Customs. The port director may 
require up to three copies.
    If for any reason the Automated Manifest System, cargo selectivity, 
or other entry-related automated system is inoperative and electronic 
cargo release and selectivity is not possible, a Customs port director 
will, after a 2-

[[Page 47785]]

hour waiting period, implement procedures to allow for the non-
electronic release of all cargo until such time as electronic systems 
are again operative. The port director will ensure that any of the 
appropriate information on entries released under these manual 
procedures is properly entered into the electronic system as soon as 
possible.
    8. All empty containers aboard a vessel will be manifested for 
discharge at the first United States port of arrival, indicating the 
foreign port of loading of each container. If the vessel is proceeding 
coastwise, within 24 hours after time of arrival and at least two hours 
prior to time of arrival at the next United States port, the test 
participant will retransmit the empty container list indicating the 
empty containers remaining on board and any containers which were 
loaded at preceding ports which are to be discharged domestically.
    All empty containers discharged are to be held at the place of 
unlading until the carrier transmits, in AMS, the actual list of 
containers discharged at the place of unlading. Upon such transmission, 
all empty containers shall be considered automatically released from 
Customs custody unless it is otherwise indicated by Customs that any or 
all are to be held. Since the AMS Empty Container Module does not allow 
electronic holds to be placed, any necessary holds will be placed 
through physical means. These requirements apply equally to domestic 
and foreign carriers.
    9. In the case of Foreign Freight Remaining On Board (FROB) a 
vessel entering the United States and not intended for discharge in 
this country, test participants are required to transmit all bill of 
lading cargo data pertaining to such shipments at the first U.S. port 
of arrival. Such bills of lading shall be automatically released in AMS 
upon transmission of the data unless placed on hold with the test 
participant by Customs through electronic or other means. FROB bill of 
lading cargo data is subject to all of the same requirements and 
standards set forth in this document which apply to other bill of 
lading cargo data.
    10. The penalties provided in law and regulations with respect to 
any discrepancy between the cargo described and identified to Customs 
and the cargo actually found to be aboard a vessel continue to remain 
in full force and effect during the test program.
    11. The enormous reliance placed upon the vessel cargo declaration 
by Customs in its mission to interdict the flow of illegal narcotics 
into the United States cannot be overstated. Therefore, if the 
Director, Trade Compliance, Customs Headquarters, determines that a 
test participant's electronic transmissions of the cargo declaration 
are deficient to the extent that they compromise that mission in any 
manner, he may require that participant to submit a Customs Form 1302 
Cargo Declaration for all or a portion of that party's vessel arrivals 
during the pendency of the test period. Such participant must submit 
the paper Customs Form 1302 in accordance with the requirements of Part 
4 of the Customs Regulations (19 CFR Part 4).

Application Process

    Parties desiring to participate in this test program must submit a 
written statement to the United States Customs Service, Cargo Control & 
Entry, 1301 Constitution Avenue, NW., Room 1328, Washington, D.C. 
20229-0002, on or before 30 days from publication in the Federal 
Register. The document, signed by an authorized official of the 
carrier, must state that the carrier meets all qualifications as 
outlined in this document and wishes to voluntarily participate in the 
test. The statement must acknowledge that all submissions made to 
Customs as part of the test are required to be accomplished 
electronically. The document must also designate a national point of 
contact and telephone number, and shall also identify local contacts 
and telephone numbers for the use of Customs personnel at individual 
ports.

Bases for Participant Selection

    Eligible importing carriers will be considered for participation in 
this test. Customs is looking for a variety of circumstances and 
participants in this test. We stress that those not selected for 
participation will be invited to comment on the test and to participate 
in its evaluation. Selection will be based on the depth of an 
applicant's electronic interface capabilities and the ability to meet 
all the user requirements in the CAMIR and in this notice. Participants 
selected will be notified by means of the Customs Electronic Bulletin 
Board.

III. Test Evaluation Criteria

    Once participants are selected, Customs will meet to review all 
public comments received concerning any aspect of the test program or 
procedures, amend procedures as necessary in light of those comments, 
form problem-solving teams, and establish baseline measures and 
evaluation methods and criteria. Six months after implementation of the 
program, evaluations of the program will be commenced with the final 
results published in the Federal Register and Customs Bulletin as 
required by section 101.9(b), Customs Regulations (19 CFR 101.9(b)). 
The following evaluation methods and criteria have been suggested:
    1. Establish baseline measurements through questionnaires to the 
trade and Customs port officials.
    2. Use the results obtained through various Compliance Measurement 
programs related to vessel manifesting to determine the efficiency of 
electronic transmissions of the cargo data.
    Preliminary choices of evaluation criteria for Customs and other 
government agencies include workload impact (workload shifts, cycle 
time, etc. * * *), policy and procedural accommodation, and trade 
compliance impact. Possible criteria for the trade participants are 
cost benefits, system efficiency, operational efficiency, and other 
items identified by the group.
    In conclusion, it is emphasized that if a company is interested in 
participating in the test program, it must first be tested by Customs 
and become a qualified AMS carrier, or it may use a qualified AMS 
service center. It is also emphasized that a participant must transmit 
the electronic cargo declaration for all of its arrivals in all Customs 
ports, for all types of cargo. Upon arrival of a vessel at its first 
U.S. port, an electronic cargo declaration for all cargo aboard the 
vessel must be transmitted, regardless of the intended port of 
discharge.

    Dated: September 5, 1996.
Samuel H. Banks,
Assistant Commissioner, Office of Field Operations.
[FR Doc. 96-23084 Filed 9-9-96; 8:45 am]
BILLING CODE 4820-02-P