[Federal Register Volume 62, Number 76 (Monday, April 21, 1997)]
[Rules and Regulations]
[Pages 19223-19224]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 97-10250]


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POSTAL SERVICE

39 CFR Part 20


Global Package Link

AGENCY: Postal Service.

ACTION: Final rule.

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SUMMARY: The Postal Service, after considering comments submitted in 
response to its request in 61 FR 55 572 (October 28, 1996) for comments 
on an interim rule establishing a charge for harmonization of catalog 
items for mailers using Global Package Link, hereby gives notice that 
it is adopting the interim regulations on a permanent basis, with 
modification.

EFFECTIVE DATE: 12:01 a.m., April 21, 1997.

FOR FURTHER INFORMATION CONTACT: Robert Michelson, (202) 268-5731.

SUPPLEMENTARY INFORMATION: On October 28, 1996, the Postal Service 
published in the Federal Register interim regulations establishing a 
charge of $1.25 per item for catalog harmonization work performed by 
the Postal Service for the mailer. Harmonized items are needed for most 
GPL destination countries to ensure an expeditious customs clearance 
and to allow the USPS to settle the customs charges on behalf of the 
mailer. The service includes expedited customs clearance through use of 
a software-based information system containing all the applicable duty 
and tax rates for specific products being mailed to destination 
countries. Of the current GPL destination countries, Brazil, Canada, 
Chile, Germany, Japan, and the U.K., only Japan does not require 
harmonized items for a GPL clearance.
    Comments were due on or before December 15, 1996. Comments were 
received from one commenter, a company engaged in international package 
mail order, J.C. Penney

[[Page 19224]]

International Catalog, Inc. After considering the comments, the Postal 
Service has decided to adopt the rule with modification.
    J.C. Penney asserts that harmonization is a basic component of the 
GPL service and therefore is included in the GPL rate chart. The Postal 
Service does not agree that harmonization is included in the GPL rate 
chart. When GPL, then called IPCS, was first implemented in December 
1994, Japan was the only destination country and did not require a 
harmonized datafile to be transmitted for customs clearance. All 
subsequent rates for GPL to other destinations were developed without 
inclusion of customs harmonization costs, with the knowledge that at a 
later date a specific harmonization fee would be implemented when the 
costs to perform this service were fully revealed. By late summer of 
1996, the Postal Service had determined its customs harmonization costs 
and took action to publish a specific fee in the Federal Register 
(October 28, 1996). The Postal Service does not feel it is appropriate 
to include these costs in the rate charts for GPL because GPL mailers 
have very different levels of need for harmonization. For example, if 
the harmonization costs were in the rate charts, a high volume GPL 
mailer with a small number of catalog items would be paying for 
harmonization services not fully utilized, while a lower volume GPL 
mailer with a large catalog and many more harmonized items would be 
receiving more services and paying the same rate. Also, some customers 
may already have a fully harmonized database of their catalog items at 
the time of initiating GPL service, and as such should not be paying 
higher rates for a harmonization service that they will not use.
    J.C. Penney also asserts that billing for this portion of the 
service causes an unnecessary accounting step (separate billing, 
invoicing, etc.), creating numerous invoices for small specialty 
catalogs (hundreds of dollars) and a disincentive for larger catalogers 
with thousands of items. The Postal Service disagrees that invoicing 
for small amounts will be an unnecessary accounting step. To our 
knowledge, most companies do not excuse payment from customers owing 
small amounts just because it is extra effort. The USPS has developed 
an accounts receivable infrastructure and as such is able to generate 
invoices in an automated manner.
    In its last assertion, J.C. Penney claims that a number of private 
customs brokers in Canada are already set up to handle pre-customs 
advisory and package processing for catalog shipments and do not charge 
separate small fees for harmonization but rather incorporate this 
feature in the overall rate per package. J.C. Penney asserts that if 
the USPS were to add this new fee, GPL service would no longer be 
competitive. The Postal Service will not dispute that some Canada 
customs brokers include this charge in the overall package delivery 
fee, but the USPS is also aware that other Canada customs brokers do 
charge separately for harmonization and do not include these charges as 
part of the per package fee. Harmonization fees alone are a relatively 
small investment for an international mailer to make and therefore is 
unlikely to make the GPL service noncompetitive in the marketplace.
    After carefully reviewing J.C. Penney's comments and input received 
from other sources, the Postal Service has decided to modify the policy 
regarding harmonization fees to allow each GPL mailer to have 2,500 
catalog items harmonized by the Postal Service at no cost during the 
first 12 months after signing a GPL agreement to a destination country 
that requires harmonization. This free service will be offered only 
once to each customer and only during the first 12 months after signing 
a GPL agreement. Any harmonization service performed in excess of 2,500 
items and/or after 12 months will be assessed a per-item fee of $1.25.
    Accordingly, the Postal Service adopts the following amendments to 
the International Mail Manual, which is incorporated by reference in 
the Code of Federal Regulations. See 39 CFR 20.1. All other interim 
changes in the rule for Global Package Link service which were 
published in the Federal Register as amendments of the interim rule 
remain in effect as interim rules.

List of Subjects in 39 CFR Part 20

    International postal service, Foreign relations.

PART 20--[AMENDED]

    1. The authority citation for 39 CFR part 20 continues to read as 
follows:

    Authority: 5 U.S.C. 552(a); 39 U.S.C. 401, 404, 407, 408.

    2. Chapter 6 of the International Mail Manual is amended to read as 
follows:
626.4  Customs Clearance
* * * * *
626.421  Catalog Harmonization Services
    The Postal Service will provide free catalog harmonization services 
for the first 2,500 catalog items presented for harmonization during 
the first 12 months following the GPL customer signing an agreement for 
a GPL destination country that requires harmonization. Any 
harmonization work performed in excess of 2,500 for each customer and/
or after the first 12 months of signing a GPL agreement will be charged 
a fee of $1.25 per item. The mailer has the option of performing their 
own harmonization, provided it is done in a format compatible with the 
Postal Service's Customs Pre-Advisory System (CPAS) software.
* * * * *
Stanley F. Mires,
Chief Counsel, Legislative.
[FR Doc. 97-10250 Filed 4-18-97; 8:45 am]
BILLING CODE 7710-12-P