[Federal Register Volume 63, Number 106 (Wednesday, June 3, 1998)]
[Notices]
[Pages 30288-30293]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 98-14648]


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DEPARTMENT OF THE TREASURY

Customs Service


Announcement of a General Test Regarding the International Trade 
Prototype

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

ACTION: General Notice.

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SUMMARY: This notice announces Customs' plan to conduct what is 
expected to be a series of prototypes collectively called the 
International Trade Prototype (ITP). This notice invites public 
comments concerning any aspect of the planned prototype, informs 
interested members of the public of the eligibility requirements for 
voluntary participation in the first phase of the first prototype 
called International Trade Prototype 1 (ITP1) and outlines the 
development and evaluation methodology to be used in the test. To 
participate in the first phase of ITP1, 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.
    This notice supersedes the information on the International Trade 
Prototype published by the International Trade Data System Project 
Office of the Treasury Department in the Federal Register on December 
31, 1997.

DATES: The first phase of ITP1 will commence no earlier than June 8, 
1998 and will run for approximately six months with evaluations of the 
prototype occurring periodically. Comments concerning any aspect of 
this phase must be received on or before July 6, 1998. Future phases, 
prototypes, or participant expansion of this prototype will be 
announced in a Federal Register notice.

ADDRESSES: Written comments regarding this notice, and information 
submitted to be considered for voluntary participation in this first 
phase of ITP1 should be addressed to the U.S. Customs Service, 
International Trade Prototype Team, Attn: Linda LeBaron Grasley, 4455 
Genesee Street, Bldg. 10, Room #342, Buffalo, New York 14225. Note that 
all comments received by U.S. Customs will be part of the public 
record.

FOR FURTHER INFORMATION CONTACT: For any prototype or participation 
questions please contact Daniel Buchanan, U.S. Customs Service at (617) 
565-6236, or Linda LeBaron Grasley, U.S. Customs Service at (716) 626-
0400 x 204, or Kevin Franklin, United Kingdom, Her Majesty's Custom and 
Excise at 011 44 171 865 4728 in London, England.

SUPPLEMENTARY INFORMATION:

Background

    The ITP has evolved from an international drive to streamline 
global trade. In both business and government, around the world, 
processes are being automated and reengineered. Trade and information 
are moving faster and more effectively all the time. Many international 
companies share critical data with business and trading partners around 
the world, and they expect government to maintain the leadership 
position it has taken in developing domestic electronic trade systems 
by moving into the global arena.
    The ITP concept has been under consideration by both the U.S. 
Customs Service (USCS) and Her Majesty's Custom and Excise (HMCE) since 
1996. The nucleus of this program is an extension of ideas developed in 
partnership with the trade community by various members of the Trans-
Atlantic Team, which is primarily comprised of USCS and HMCE officers. 
The ITP concept also addresses issues raised by international traders, 
the World Customs Organization (WCO), the United Nations Conference on 
Trade and Development (UNCTAD), G-7 and other international 
organizations. The concept is intended to simplify and standardize 
customs processes and procedures in order to facilitate trade while 
maintaining effective and efficient control. Information on an ITP 
prototype contained in an information collection notice published in 
the Federal Register (63 FR 68353 on December 31, 1997) is superseded 
by this notice.
    In the United States Customs Service Annual Plan for Fiscal Year 
1998, USCS states a number of objectives associated with increased 
cooperation and support of international trade automation. The plan's 
objectives include increased cooperation with other customs 
administrations at the multilateral, regional and bilateral levels. The 
plan further states that USCS will work to promote standardized customs 
processing through implementation of ``Customs Guidelines'' and 
establishment of best practices. This is to be accomplished by working 
with the WCO and the international trade community to promote the 
development of international instruments to reduce customs procedural 
barriers to trade and to secure greater standardization, transparency, 
simplification and automation worldwide.
    The developing relationship between the USCS and HMCE leads us to 
prototype this concept. The USCS and HMCE have agreed that the ITP will 
be delivered in a series of prototypes. Each prototype will be 
evaluated against predetermined success criteria. Subsequent ITP 
prototypes will build on lessons learned in ITP1 and the need for 
enabling legislation will be evaluated.
    It is expected that ITP1 will be rolled out in three phases. USCS 
and HMCE agree that the first phase of ITP1 will commence no earlier 
than June 8, 1998. Additional phases are being planned and future 
prototypes are also under consideration.
    The USCS will be testing the ITP in accordance with Section 101.9 
of the Customs Regulations (19 CFR 101.9), which provides for the 
testing to

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evaluate the planned components of the National Customs Automation 
Program (NCAP). By virtue of 19 CFR 101.9, USCS may impose requirements 
different than those specified in the Customs Regulations; but only to 
the extent that such different requirements do not affect the 
collection of revenue, public health, safety, or law enforcement.

Description of Proposed International Trade Prototype

    The Mission/Vision of the International Trade Prototype is a 
standard customs regime that will facilitate the movement of goods 
internationally. This regime will operate within an electronic 
environment in which there will be automated systems using data which 
conform to internationally agreed standards. The amount of information 
supplied by business to customs will be minimized to the extent 
possible, consistent with the customs administrations' performance of 
their missions.
    The goal of the project is to allow trade participants to supply 
their information only once (seamless transaction, i.e., exports equals 
imports) and will be restricted to the information that is essential to 
allow customs to effect shipment and clearance of the goods.
    More specifically, our Mission/Vision is to deliver an automated 
system that utilizes internationally-accepted standard message formats 
and codes, streamlines data transmission, simplifies and facilitates 
global trade, and assists governments world-wide in enforcing their 
laws.

I. Goals, Principles and Scope of ITP1

    The following goals, principles and scope support USCS and HMCE 
mission and strategic plans and will guide development of the first ITP 
prototype.
    Customs Administration Cooperation. The ITP will improve 
international trade practices that are best addressed through 
cooperative efforts between customs administrations, international 
traders, and international trade organizations.
    International Trade Transactions. This prototype will work toward 
the development of harmonized and simplified messages and procedures, 
based upon business practices, for transactions that support import, 
export, and transportation without the need for redundant entry or 
transmission of data.
    Commercial and Enforcement Compliance Focus. Each country will 
continue to use its own targeting and compliance measurement approaches 
and procedures to ensure that the legal requirements of all 
participating countries are met.
    Account-Based Approach. Both countries will work with prototype 
accounts, primarily importers and exporters, to better understand their 
systems, procedures, and levels of compliance, with mutual assistance 
between designated Customs Account Managers.
    Automation and Information Sharing. Automation will allow the 
sharing of information to enable the collection and exchange of 
standardized information mutually agreed to by both governments in a 
secured electronic environment.
    Reduce the Burden on the Trade. This prototype will work toward 
streamlining government reporting requirements placed upon the trade 
community.
    The scope of ITP1 will include:

--Air and sea cargo shipments.
--Cargo release, statistical and fiscal reporting, and supporting 
information.
--Merchandise restrictions and limitations agreed between customs 
administrations.
--Sharing of agreed standard data using various technological means 
accepted by both administrations.
--UN/EDIFACT message syntax between governments.
--Unique Consignment Reference Numbers (UCRN) to be used by the USCS 
and HMCE in separate formats.
--The HMCE conducting ITP1 in an operational environment.
--The USCS phasing ITP1 into an operational environment.
--Both one-step and two-step export reporting being implemented.
--A two-step import process in which data provided to the export 
customs administration is forwarded to the import customs 
administration and used to effect import cargo release.
--Acceptance of all participating traders being subject to compliance 
review.
--Risk assessment, anti-smuggling, and commercial compliance checks 
continuing to be applied to goods being moved under these simplified 
procedures.
--Development of agreed joint operational procedures to manage traders' 
accounts.

II. Development Methodology

    ITP will be monitored by a Joint Prototype Team consisting of trade 
participants, the USCS Offices of Field Operations, Strategic Trade, 
Information and Technology, International Affairs and other interested 
government agencies. This team will meet regularly throughout the 
prototype period in appropriate locations to set development 
milestones, monitor progress, resolve issues and evaluate program 
effectiveness. The development effort will be coordinated with other 
on-going National Customs Automation Program (NCAP) prototype programs 
such as the NCAP Prototype, Remote Location Filing and Reconciliation, 
and will be as consistent as possible with the overall direction of 
USCS development of the Automated Commercial Environment (ACE).
    Potential participants should recognize that this is a prototype 
test of new processes. Data definitions, values and formats for 
electronic transmission of data will differ from those currently used 
in the Automated Export System (AES) and the Automated Commercial 
System (ACS). It is also important to note that development efforts 
undertaken for ITP may not meet the eventual requirements for programs 
as they are finally implemented.
    The public is invited to comment on any aspect of the ITP test as 
described by this notice. Public comments received concerning the 
methodology of the test program or procedures will be reviewed by USCS 
and HMCE.

III. Account-Based Export/Import Declaration Process

    In the United States, ITP1 will become operational under a three-
phase implementation.
    The general scope of each phase is as follows:
    (1) ITP1.1 will be a parallel (non-operational) test of pre-
departure export notification;
    (2) ITP1.2 will be operational for pre-departure export 
notification and import cargo release; and
    (3) ITP1.3 will be the full implementation of ITP1 and will be 
operational for full export declaration and import entry summary 
acceptance and processing.
    The full implementation of ITP1 will test an account-based 
declaration process that integrates preliminary export and preliminary 
import reporting. For shipments processed under ITP1 procedures, export 
notification and import cargo examination decisions will be based 
primarily on pre-established account/entry information, minimizing the 
transaction data that needs to be transmitted to customs authorities 
prior to release of cargo. Cargo examinations will also be performed on 
the basis of selectivity criteria and for random compliance measurement 
sampling. Complete export declaration data may be transmitted following 
exportation. Detailed import entry summary data will be reported on a 
monthly cycle, and

[[Page 30290]]

payment of duties, taxes and fees will be based on a monthly statement 
cycle employing semi-monthly estimated payments. The full developed 
account-based declaration process will be a fully electronic process; 
no paper documents will be required or accepted at that time.
    When ITP1 is fully implemented, export reporting, import cargo 
release and assessment of duties, taxes and fees will be based on data 
transmitted to the ITP1 system. For shipments processed in the fully 
implemented ITP1 system, participants will not be required to provide 
parallel filing of ACS or AES data or of paper documents.
    In order for a shipment to be eligible for processing under ITP1 
procedures, both the exporter and the importer of the shipment must be 
ITP1 participants in their respective countries. While various 
automatic notifications and back-up procedures will also be supported, 
the basic declaration flow for U.S. exports in the full implementation 
of ITP1 will be as follows:
    1. The exporter's application, including any amendments, will be 
used to assess the suitability of proposed export shipments for ITP 
processing.
    2. The exporter or an authorized agent will transmit a pre-
departure export notification message to USCS for each ITP shipment 
exported from the U.S. The data elements of the pre-departure export 
notification message are listed under ``DESCRIPTION OF PROPOSED FIRST 
PHASE OF ITP1,'' below.
    3. ITP1 shipments exported from the U.S. will be subject to 
physical inspections and compliance reviews by various federal 
agencies.
    4. Upon departure of the exporting conveyance, USCS will forward 
the data from the pre-departure export notification message to HMCE.
    5. HMCE will use the forwarded data from the pre-departure export 
notification message to effect import cargo release in the United 
Kingdom (U.K.)
    6. The U.S. exporter or an authorized agent will transmit a 
complete export declaration to USCS prior to a specified periodic 
filing deadline. These data may be transmitted at any time following 
the pre-departure export notification and may be transmitted following 
departure of the exporting conveyance. Data from the complete export 
declaration will not be forwarded to HMCE.
    The basic declaration flow for U.S. imports in the full 
implementation of ITP1 will be as follows. Note that no data 
transmitted by participants to USCS with regard to importations into 
the U.S. will be forwarded to HMCE.
    1. The U.K. exporter or an authorized agent will transmit a pre-
departure export notification message to HMCE for each ITP shipment 
exported from the U.K. These data will consist of the same data 
elements as a U.S. pre-departure export notification message. These 
data elements are listed under ``DESCRIPTION OF PROPOSED FIRST PHASE OF 
ITP1,'' below.
    2. Upon departure of the exporting conveyance, HMCE will forward 
the data from the pre-departure export notification message to USCS.
    3. The importer's application, including any amendments, will serve 
as a pre-filed entry for each ITP1 shipment. USCS will assign an ITP 
Authorization Code to each participant who imports into the U.S.A. 
participating importer or an authorized broker will electronically 
transmit data to USCS to provide timely and accurate identification of 
any changes to the original application, e.g., changes in a 
participant's ITP business partners and merchandise imported under the 
prototype.
    4. USCS will assign a filer and entry number to each shipment. The 
entry filer, i.e., importer or authorized agents (brokers) designated 
by the importer, for ITP shipments at the port of unloading will be 
assigned to the entry. The entry number will be assigned from the range 
of entry numbers provided in advance by each designated entry filer for 
that purpose. When an importing conveyance arrives, ITP shipments for 
which no physical examination of cargo is required will be released 
without additional data or documentation. For any shipment selected by 
USCS for physical examination of cargo, USCS will issue an electronic 
request for additional information to the entry filer. This request may 
be satisfied by transmission of partial entry summary and commercial 
data, as defined by USCS, plus packing data. The commercial data 
required for cargo examination will be at the detailed item level. 
Cargo will not be examined until these data are received by USCS.
    5. The date of entry will be the date, after the merchandise 
arrives, the merchandise is released into the commerce of the United 
States. The release will obligate a continuous bond identified for that 
purpose by the participant importer whose ITP Authorization Code is 
present in the pre-departure export notification data forwarded to USCS 
by HMCE.
    6. For each shipment released during a calendar month, the entry 
filer must electronically transmit complete entry summary data to USCS 
on or before the filing deadline for that month. The filing deadline 
for each month will be the 10th calendar day of the following month, 
or, if the 10th falls on a weekend or holiday, the next business day. 
Entry summary data transmitted prior to this deadline will be 
considered provisional and may be replaced by the entry filer anytime 
before the deadline. All summaries filed on or before the deadline will 
be considered as filed on the deadline date.
    7. For any entry summary selected by USCS for data review, USCS 
will issue an electronic request for complete commercial data to the 
entry filer. This request must be satisfied by electronic transmission 
of a complete set of commercial data, as defined by USCS, plus packing 
data if specifically requested.
    8. In order to permit a different procedure to test the periodic 
deposit of estimated duties without adversely affecting the collection 
of revenue, participants who import into the U.S. must abide by the 
following procedures. Each participating importer will make semi-
monthly preliminary estimated payments through an electronic medium. 
Preliminary estimated payments will be initiated electronically using 
ACH credit on the 15th and the last day of the month. If the 15th or 
the last day of the month falls on a weekend or holiday, the payment 
must be initiated the next business day. Under the prototype, special 
electronic payment procedures will be utilized. The preliminary 
estimated payments will be based upon the following percentages: (a) 
the payment initiated on the 15th will be 75% of the estimated amount 
due on all releases for the 1-15th of the month, and (b) the payment 
initiated on the last day of the month will be 57% of the estimated 
amount due on all releases from the 16th to the last day of the month.
    These percentages will be reviewed and may have to be adjusted to 
maintain revenue neutrality. Payment for the remaining balance will be 
initiated electronically on the 15th of the following month, and it is 
this date which USCS and the participants agree will serve as the date 
of actual deposit of estimated duties and fees for purposes of 
assessing interest under 19 U.S.C. 1505. USCS will issue two statements 
each month, one before and one after the monthly filing deadline. Each 
statement will list each importer's ITP activity at all locations for 
the reporting month, and will indicate whether entry summary data has 
been filed and, if it has, estimated duties and fees.

[[Page 30291]]

IV. Remote Location Filing

    Remote location filing allows participants to electronically file 
data for the entry of merchandise with USCS from any location in the 
United States other than the port designated in the entry for 
examination.
    One aspect of remote location filing will be supported in ITP1 and 
use of this aspect is voluntary, but the same electronic data 
transmission requirements will apply for all prototype participants. A 
U.S. ITP1 participant who will be filing remotely must meet the 
criteria for remote filing established in 19 U.S.C. 1414.
    An ITP1 participant will be voluntarily utilizing remote filing if 
the electronic transmission of an entry, entry summary, invoice data 
(when required by USCS) and payment of duties, fees, and taxes is 
received from a participant not located in the port of arrival, which 
for purposes of this prototype will also be the port of examination as 
designated in the entry information.
    The designation of alternative locations for cargo examination will 
not be supported in ITP1. All cargo examinations will be conducted at 
the port where the cargo first arrives in the United States.

V. Description of Proposed First Phase of ITP1

    USCS and HMCE agreed that the first phase of ITP1 (ITP1.1) will 
commence on June 8, 1998. The number of U.S. participants will be 
limited. In order for a shipment to be eligible for processing under 
ITP1.1 procedures, both the exporter and the importer of the shipment 
must be ITP1 participants in their respective countries. No more than 
six U.S. ports will be included in ITP1.1. Port selections will be 
based on applicants' requests. While ITP1.1 will be a parallel test in 
the U.S., it will have operational status in the U.K. As a result, pre-
departure export notifications transmitted by participating U.S. 
exporters or their authorized agents will be used to effect operational 
release of the cargo upon importation into the U.K. Applicants should 
note that participants must agree to the transmission of these data 
between governments.
    For U.S. exports in ITP1.1:
    1. The exporter or an authorized agent will transmit a pre-
departure export notification message to USCS for each ITP shipment 
exported from the U.S. The proposed data elements for pre-departure 
export notifications in ITP1.1 are:

--Universal Consignment Reference Number (to identify transactions)
--Country of Export
--Mode of Transportation
--Port of Loading
--Shipping Reference (identification of Bill of Lading or Air Waybill)
--Shipping Quantity
--Exporter
--Importer
    In the U.S. the ITP1.1 pre-departure export notification will be 
tested in parallel. All U.S. export reporting requirements for ITP1.1 
shipments must be satisfied through existing export reporting 
procedures and systems.
    2. USCS will forward the data from the pre-departure export 
notification message to HMCE.
    3. HMCE will use the forwarded data from the pre-departure export 
notification message to effect operational import cargo release in the 
U.K.
    For U.S. imports in ITP1.1:
    1. The U.K. exporter or an authorized agent will transmit a pre-
departure export notification message to HMCE for each ITP shipment 
exported from the U.K. These data will consist of the same data 
elements as a U.S. pre-departure export notification message. U.K. 
filers of pre-departure export notifications will transmit the U.S. 
importer's ITP Authorization Code to identify the importer. The pre-
departure export notification will have operational status for U.K. 
export reporting.
    2. Upon departure of the exporting conveyance, HMCE will forward 
the data from the pre-departure export notification message to USCS.
    3. In the U.S., the ITP1.1 pre-departure export notification will 
be tested in parallel. All U.S. import reporting requirements for 
ITP1.1 shipments must be satisfied through existing import reporting 
procedures and systems.
    Note that no ITP1.1 data is transmitted by participants to USCS 
with regard to importations into the U.S.

VI. Eligibility Requirements

    Customs will select a limited number of participants for ITP1.1. In 
order to be eligible for participation in ITP1.1, a company operating 
in the United States must:
    1. Have the ability to provide electronically, on an entry-by-entry 
basis, the following: entry, entry summary, invoice information; and 
payment of duties, fees, and taxes through the Automated Clearing House 
(ACH);
    2. Be scheduled for, participating in, or, in the application, 
agree to undergo and cooperate fully with a Customs Compliance 
Assessment. At the time the application is filed, if any Customs audit 
is in progress, the importer must be fully cooperating in all aspects 
of the Customs Compliance Assessment and any related audit, providing 
timely and accurate information and adequate resources necessary for 
USCS to conduct a Customs Compliance Assessment or audit; and be in 
full compliance with the terms of any associated Compliance Improvement 
Plan.
    3. Export merchandise from the U.S. for importation into the U.K. 
and/or import into the U.S. merchandise exported from the U.K. Note 
that in order for a shipment to be eligible for processing under ITP1 
procedures, both the exporter and the importer of the shipment must be 
ITP1 participants in their respective countries. It is therefore 
important that potential U.S. participants coordinate their 
participation with that of their U.K. trading partners; and
    4. For participants who wish to include U.S. export shipments in 
the ITP1.1 test, provide or arrange for provision of timely and 
accurate electronic transmission to USCS of pre-departure export 
notification data for all included U.S. export shipments. If a 
participant does not transmit electronic data for a particular export 
shipment, USCS may exclude that shipment from ITP processing.
    Applications will be accepted from all volunteers; however, 
priority consideration will be given to:
    1. Companies within the top 379 U.S. importers ranked by entered 
value (the top 379 represent approximately 50 percent of all imports by 
value);
    2. Companies within the top 250 U.S. importers within any of the 
USCS Primary Focus Industry (PFI) categories, which are:
a. Advanced Displays;
b. Agriculture;
c. Auto/Truck Parts;
d. Automobiles;
e. Bearings;
f. Circuit Boards;
g. Fasteners;
h. Footwear;
i. Manufacturing Equipment;
j. Steel Products;
k. Telecommunications;
l. Textiles and Flatgoods; and
m. Wearing Apparel;
    3. Companies at least 50 percent of whose imports are in PFI 
categories; and
    4. Companies that indicate they plan to maintain an average of at 
least 10 entries per month throughout the prototype period.
    ITP1.1 participants who wish to continue to participate in 
subsequent

[[Page 30292]]

operational phases of ITP1 will further be required to file or maintain 
a continuous bond with sufficient liability coverage. They will also be 
required to provide or arrange for provision of timely and accurate 
electronic transmission to USCS of data required to pre-identify 
parties and commodities involved in ITP transactions, and of all data 
required in prototype declaration processes as they are phased into 
ITP1.

VII. General Requirements

    For ITP1, the following restrictions will be placed upon 
participants.
    Participants who will include shipments exported from the U.S.:
    A. Must export merchandise identified in the application as being 
from their typical commodities in their established lines of business 
to pre-identified U.K. importers;
    B. Must export only the merchandise identified in the application 
as being within a range of pre-identified commodities (classified at 
the 6-digit HTS level);
    C. Must export merchandise using carriers pre-identified in the 
application;
    D. Must export merchandise from a port selected by USCS for 
inclusion in the current phase of ITP1;
    E. May not include export shipments of used vehicles or of DEA 
essential and precursor chemicals for the manufacture of narcotics, 
shipments subject to State Department licensing or shipments destined 
to an embargoed nation;
    F. Must not export any merchandise subject to export prohibitions 
or restrictions;
    G. May not export ITP1 merchandise under a transportation and 
exportation (T&E) entry;
    H. Are responsible for ensuring that ineligible merchandise is not 
included in ITP1 shipments. Customs will exclude ineligible shipments 
from ITP1 processing.
    Participants who will include shipments imported into the U.S.:
    A. Must provide electronically, on an entry-by-entry basis, the 
following: entry, entry summary, invoice information; and payment of 
duties, fees, and taxes through the Automated Clearing House (ACH);
    B. Must enter merchandise identified in the application as being 
from their typical commodities in their established lines of business 
from pre-identified U.K. exporters;
    C. Must enter only the merchandise identified in the application as 
being within a range of pre-identified commodities (classified at the 
6-digit HTS level);
    D. Must enter merchandise transported by carriers pre-identified in 
the application;
    E. Must enter merchandise for release into the commerce under a 
consumption entry at the port of unloading, i.e., may not enter ITP1 
merchandise into a warehouse or Foreign Trade Zone, or as an in-bond 
entry;
    F. Must enter merchandise at a port selected by USCS for inclusion 
in the current phase of ITP1;
    G. May not enter merchandise in ITP1 if it is subject to 
antidumping or countervailing duty, quota, trade preference level or 
visa requirements, or pre-release reporting requirements imposed by 
other federal agencies;
    H. Must not import prohibited merchandise in prototype shipments; 
and,
    I. Are responsible for ensuring that ineligible merchandise is not 
included in ITP1 shipments, and that all shipments aboard a conveyance 
are eligible for ITP1 processing. Customs will exclude ineligible 
shipments from ITP1 processing.

VIII. Application

    Importers and exporters who wish to participate in ITP1.1 must 
submit a written application within 30 days of this notice including 
the following information:
    1. Participant name, address and designated contact person.
    2. For all exported cargo proposed for inclusion in the ITP1.1 
test:

--Names and addresses of all U.K. importers;
--For each U.K. importer, a listing of all the 6-digit HTS numbers in 
which the commodities to be exported are classified;
--Detailed explanation of any licenses or permits required for export 
of the listed commodities;
--Lists of all air and ocean freight carriers to be used;
--For each carrier, a listing of the U.S. ports of loading at which the 
carrier will be used; and
--An estimate of the total number of export shipments per month the 
participant expects to include in the ITP1.1 test for each mode of 
transportation at each U.S. port of loading.

    3. For all imported cargo proposed for inclusion in the ITP1.1 
test:

--Names and addresses of all U.K. exporters;
--For each U.K. exporter, a listing of all the 6-digit HTS numbers in 
which the commodities to be imported are classified
--Lists of all air and ocean freight carriers to be used;
--For each carrier, a listing of the U.S. ports of unloading they 
prefer to us; and,
--An estimate of the total number of import shipments per month the 
participant expects to include in the ITP1.1 test for each mode of 
transportation at each U.S. port of unloading.

    4. For applicants not already scheduled for or participating in a 
Customs Compliance Assessment, a statement in which the applicant 
indicates agreement to undergo and cooperate fully with a Customs 
Compliance Assessment.
    5. A statement indicating that the participant will comply with the 
procedures and restrictions of the prototype.
    6. A statement indicating that the applicant agrees to the sharing 
of pre-departure export notification data and other information between 
the HMCE and USCS. This includes information in regard to imported/
exported commodities, value determination, and company structure and 
finance. This information will be shared between UK and US Account 
Managers to better understand importer and exporter systems, 
procedures, and levels of compliance.
    USCS will make import admissibility determinations on ITP shipments 
imported into the U.S. based on any cargo examinations and the 
information supplied with the application, which shall serve as a pre-
filed entry for ITP purposes. Applications may be referred to other 
government agencies for review. All ITP1.1 applicants will be notified 
in writing of their acceptance or rejection. USCS will assign an ITP 
Authorization Code to each accepted participant whose application 
indicates intent to include imports into the U.S. in the ITP1.1 test. 
The USCS, with the HMCE, will schedule meetings with each accepted 
participant to review the current prototype proposal, data elements, 
technologies, and evaluation criteria.
    If an applicant is denied participation, the notification letter 
will include the reasons for that denial. The applicant may appeal such 
decision in writing within 10 days to the Trade Compliance Process 
Owner. Applicants who are denied participation in ITP1.1 may re-apply 
if USCS subsequently opens participation to additional participants. 
USCS will publish a notice in the Federal Register if an expansion of 
participation is planned.
    Applicants should note that participation is not confidential, and 
that lists of participants will be made

[[Page 30293]]

available to the public. Additionally, all comments provided to U.S. 
Customs will be part of the public record.

IX. Maintenance of Account Information 

    Throughout the prototype period, participants must provide USCS 
with advance notification of any changes in the information provided in 
the application. This notification must be provided to USCS at least 
seven days before the effective date of a change and will be considered 
an amendment to the application. By notification of the participant, 
USCS may reject such an amendment or prohibit the participant's use of 
a particular carrier, U.K. importer or exporter, or the export or 
import of particular merchandise under this prototype.
    ITP1.1 participants who wish to include imported cargo in 
subsequent operational phases of ITP1 will be required to provide 
additional information, including but not limited to the issuer and 
number of the continuous surety bond which will cover all cargo 
imported under ITP1 procedures and designation of a single entry filer 
for each port at which imported cargo will be unloaded. Each entry 
filer designated by one or more participant importers must provide USCS 
with a range of entry numbers to be reserved for assignment by USCS to 
ITP1 shipments. Entry filers may not assign these numbers to 
transactions other than ITP transactions.

X. Misconduct Under Prototype

    All participants in ITP1 are required to abide by the terms and 
conditions of this notice.
    A participant may be suspended from the prototype, subject to 
liquidated damages, penalties, and/or other administrative sanctions, 
and/or prevented from participation in future prototypes if a 
participant fails to cooperate fully in a Compliance Assessment or 
audit, provide timely and accurate data and adequate resources in 
support of a Customs Compliance Assessment or audit, or comply fully 
with the terms of a Compliance Improvement plan; participant exports or 
attempts to export goods to U.K. importers or conveyed by carriers not 
approved by USCS; exports or attempts to export goods classified in 
commodity ranges not approved by USCS; exports or attempts to export or 
submits data relating to prohibited merchandise or other non-eligible 
merchandise; enters or attempts to enter goods from U.K. exporters or 
conveyed by carriers not approved by USCS; enters or attempts to enter 
goods classified in commodity ranges not approved by USCS; participant 
files non-consumption import entries; enters or attempts to enter or 
submits data relating to prohibited merchandise, merchandise subject to 
quota or antidumping or countervailing duties, or other non-eligible 
merchandise; fails to maintain sufficient continuous bond coverage; 
files erroneous or untimely data; makes late or inadequate payments; 
fails to supply USCS with requested invoice data; fails to maintain a 
sufficient level of compliance; fails to exercise reasonable care in 
the execution of participant obligations; or otherwise fails to follow 
the procedures outlined herein, and applicable laws and regulations. 
USCS has the discretion to suspend a prototype participant 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 Director, Trade Compliance, within 15 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.

Regulatory Provisions Suspended

    Certain provisions of Parts 24, 111, 113, 141, 142, 143, and 159 of 
the Customs Regulations (19 CFR Parts 24, 111, 113, 141, 142, 143, and 
159) will be suspended during operational phases of the ITP1 test to 
allow for monthly filing of entry summary data, periodic payment of 
duties, taxes and fees, liquidation, billing and remote filing by 
Customs brokers in ports where they currently do not hold permits.
    Absent any specified alternate procedure, the current regulations 
apply.

Prototype Evaluation

    Once the participants are selected for ITP1.1, the Joint Prototype 
Team will, during the initial six months of the test period, evaluate 
the effectiveness of the automation involved. Subsequent reviews will 
additionally consist of evaluating the data received from the 
participants, along with the internal and external process operations 
of the ITP. The intention of the evaluations is to enhance operational 
procedures and to develop the detailed data requirements that are 
needed for ITP.
    Note that the fact of participation in the ITP is not confidential 
information. Lists of participants, comments provided to U.S. Customs, 
and evaluation results may be made available to the public by means of 
the Customs Electronic Bulletin Board and the Customs Administrative 
Message System, and upon written request. The G-7 countries will 
participate in evaluation development and review. We stress that all 
interested parties are invited to comment on the design, conduct, and 
evaluation of ITP at any time during prototype.
    Upon conclusion of the prototype the final results will be 
published in the Federal Register and the Customs Bulletin as required 
by Sec. 101.9(b), Customs Regulations and reported to Congress.

    Dated: May 29, 1998.
Samuel H. Banks,
Acting Commissioner of Customs.
[FR Doc. 98-14648 Filed 6-2-98; 8:45 am]
BILLING CODE 4820-02-P