[Federal Register Volume 62, Number 232 (Wednesday, December 3, 1997)]
[Notices]
[Pages 64043-64046]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 97-31683]


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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 that Customs is permitting an extension 
to continue 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. The Federal Register (61 FR 60749) 
notice, dated November 29, 1996, continues to apply except as 
specifically noted herein.
    Based on our experience in second prototype of RLF, we have made 
modifications to the sections detailing the Eligibility Criteria and 
the Prototype Two Applications. The changes will effect 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, 1998, will continue, and be concluded, no 
earlier than December 31, 1998, by a notice in the Federal Register. 
Comments concerning any aspect of the remote filing prototype test must 
be received on or before January 2, 1998.

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, N.W., Room 5.2 A, Washington, D.C. 20229-
0001.

FOR FURTHER INFORMATION CONTACT: For systems or automation issues: 
Joseph Palmer (202) 927-0173, Jackie Jegels (202) 927-0201, or Patricia 
Welter (305) 869-2780.
    For operational or policy issues: Jennifer Engelbach (202) 927-
2293, or Don Luther (202) 927-0915.

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 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 electronically file 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 page at 
``http://www.customs.treas.gov/imp-exp/comm-imp/remote/toc.htm.'' 
Pursuant to Sec. 101.9, Customs Regulations, Customs has been testing 
the RLF concept. On

[[Page 64044]]

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, 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. In today's document, Customs is announcing that it will permit an 
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.
    The first RLF prototype (Prototype One) concluded December 31, 
1996. Prototype One was conducted with a very limited number of 
participants at limited locations. It was conducted with minimal system 
changes thereby requiring Customs to intervene manually in tracking and 
processing. All procedures and processes were closely coordinated with 
all selected and affected parties. The intent of Prototype One was to 
test such operational issues as communication, cargo movement and 
release, and service to and from remote locations. Prototype One tested 
features such as filing from a remote location, alternate exam 
location, and entry summary workload distribution.
    The second RLF prototype (Prototype Two) commenced January 1, 1997, 
and will be extended to conclude no earlier than December 31, 1998. 
Prototype Two is an expanded version of Prototype One with more ports 
and trade participants. In order to expand the prototype Customs has 
trained additional ports and allowed Customhouse Brokers to apply as 
participants. Prototype Two will continue to operate with minimal 
system changes. The intent of this prototype is to test such 
operational issues as communication, cargo movement and release, and 
service to and from remote locations. This prototype will further test 
features such as filing from a remote location and alternate exam 
location.
    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 a 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 Reorganization, ACE, Trade Compliance Redesign, and Year 2000 
programming. 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 a 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 on a national level in conjunction with the 
Trade Compliance Redesign, and the Automated Commercial Environment.

Description of Proposed Test

    Prototype Two commenced January 1, 1997, and will run until 
concluded, no earlier than December 31, 1998, by a notice in the 
Federal Register. Prototype Two will evaluate the operational impact 
and procedures for a larger participant base, testing filing from a 
remote location, and alternate location examinations.

Regulatory Provisions Suspended

    Certain provisions in Part 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 to allow for the movement of cargo 
from its port of arrival to a designated examination site in another 
port.

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 (when required by the Customs Service) 
using EIP; and payment of duties, fees, and taxes through the Automated 
Clearinghouse (ACH).
    The following additional 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: (POA indicates a port trained as a port of arrival, 
and DES indicates a port trained as a designated examination site).

------------------------------------------------------------------------
                        Port                             POA       DES  
------------------------------------------------------------------------
Atlanta.............................................      
Baltimore...........................................      
Buffalo.............................................      
Champlain-Rouses Point..............................      
Charleston..........................................      
Chicago.............................................      
Dallas/Ft. Worth....................................      
Detroit.............................................      
Houlton, ME.........................................      
Houston.............................................      
Jacksonville........................................      
JFK.................................................      
Laredo/Eagle Pass...................................      
Los Angeles.........................................      
NY/Newark Area......................................      
New York Seaport....................................      
Norfolk/Richmond....................................      
Portland, ME........................................      
Port Huron..........................................      
Rochester...........................................    (\1\)    
San Diego/Otay Mesa.................................      
San Francisco/Oakland...............................      
Savannah............................................      
Seattle.............................................      
Utica/Syracuse......................................      
------------------------------------------------------------------------
\1\ Not available.                                                      

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 and 
Administrative Message System. 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 U.S. Customs 
Service, 1300 Pennsylvania Avenue, N.W. Room 5.2 A, Washington, D.C. 
20229-0001:
    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.

[[Page 64045]]

    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 a 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 importers 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. There are two distinct application 
procedures, which depend upon the status of the applicant. The first is 
a one-step application process for importers applying on their own 
behalf as well as for brokers acting on behalf of specific clients. The 
second is a two-step process for brokers applying on their own behalf.
    All applications must initially be submitted to the U.S. Customs 
Service, 1300 Pennsylvania Avenue, N.W. Room 5.2 A, Washington, D.C. 
20229-0001. 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.

Importers / Brokers on Behalf of Clients

    These applications must be submitted to the U.S. Customs 
Headquarters (address cited above) with the following information:
    1. Importer name and, if applicable, broker name, address, and 
filer code;
    2. Supplier name, address, and manufacturer's number;
    3. Types of commodities to be imported;
    4. Other 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 volume anticipated;
    9. Electronic Invoicing Program status and starting date;
    10. Electronic Payment (ACH) status and starting date; and
    11. Main contact person and telephone number.

Brokers as Applicants

    This application process will be done in two steps. During the 
first step, the broker must submit the following information to U.S. 
Customs Headquarters (address cited above):
    1. 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.
    Once a broker has received written approval from U.S. Customs 
Headquarters to proceed with the second step of the application 
process, the broker must submit the following information to the Port 
Director(s) overseeing each requested POA and DES location for each 
client (importer):
    1. Participating client name, telephone number and Importer Number;
    2. Supplier name, address, and manufacturer's number;
    3. Types of commodities to be imported;
    4. Other 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 impact on available resources, 
commodity requirements and if the port has been trained in EIP/RLF.
    The Port Director has 10 working days after the receipt of the 
information required in the second step of the application process to 
provide written approval or denial to the applicant. If the Port 
Director denies the application,

[[Page 64046]]

that denial is effective for 10 working days. After that, a new request 
may be submitted to the Port Director at the Port of Arrival and the 
Designated Examination Site. If the applicant does not receive a reply 
from the Port Director within 10 working days from the date of 
submission, the application should be considered denied. Those 
applicants not selected for participation by U.S. Customs Headquarters 
will be sent a letter of denial. They will, however, be invited to 
comment on the design, conduct, and evaluation of this prototype.
    Also, it is emphasized that if a company is interested in filing 
remotely, it must first be operational with EIP. For information on 
EIP, please contact your ABI Client Representative.

Dismissal From Prototype Two

    If a filer attempts to submit data relating to restricted 
merchandise or merchandise subject to quota, anti-dumping duties, 
countervailing duties, or other non-eligible data through the 
Electronic Invoice Program, the filer may be expelled from the program, 
prevented from participation in future RLF prototypes, and may be 
subject to liquidated damages and/or penalties under Section 592, 
Tariff Act of 1930, as amended (19 U.S.C. 1592).

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: November 26, 1997.
Audrey Adams,
Acting Assistant Commissioner, Office of Field Operations.
[FR Doc. 97-31683 Filed 12-2-97; 8:45 am]
BILLING CODE 4820-02-P