[Federal Register Volume 63, Number 159 (Tuesday, August 18, 1998)]
[Notices]
[Pages 44303-44305]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 98-22148]
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DEPARTMENT OF THE TREASURY
Customs Service
Modification of National Customs Automation Program Test
Regarding Reconciliation
AGENCY: Customs Service, Treasury.
ACTION: General notice.
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SUMMARY: A notice was published in the Federal Register on February 6,
1998, announcing the U.S. Customs ACS Reconciliation Prototype. This
document serves to announce certain operational changes to the
prototype, as well as to provide clarification on some
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items. Most aspects of the prototype are unchanged, including the
Customs Service policy that the prototype will serve, until
implementation of the Reconciliation component of NCAP/P, as the
exclusive means to reconcile entry summaries.
EFFECTIVE DATE: The starting date announced in the February 6, 1998
notice is unchanged. This prototype will commence no earlier than
October 1, 1998, will run for approximately two years, and may be
extended. Applications to participate in the prototype will be accepted
throughout the duration of the prototype.
ADDRESSES: Written comments regarding this notice should be addressed
to Mr. Don Luther, Reconciliation Team, U.S. Customs Service, 1300
Pennsylvania Ave. N.W., Mailstop 5.2A, Washington, DC, 20229-0001.
FOR FURTHER INFORMATION CONTACT: Mr. Don Luther at (202) 927-0915.
SUPPLEMENTARY INFORMATION:
Changes and Clarifications
The following items are changes and clarifications to the February
6, 1998 Federal Register notice on the Reconciliation Prototype. Unless
specifically addressed in this notice, all elements of the earlier
notice still apply.
A. Additional Information on the Prototype
Additional information on the prototype is available on the U.S.
Customs Internet Web Site. The address for this site is:
www.customs.ustreas.gov/imp-exp2/comm-imp/recon/index.htm
B. Bond Issues
1. Bond Rider
The specific language in the bond rider has been changed to more
adequately address coverage for Aggregate Reconciliations. The rider
must be filed with the bond prior to any entry summaries being flagged
for reconciliation. Because the new bond rider is different, applicants
who already have provided the earlier bond rider must provide the new
bond rider prior to flagging entries for reconciliation.
The rider shall read as follows:
By this rider to the Customs Form 301 No. __________, executed on
__________, by __________ as principal(s), importer no(s). __________,
and __________, as surety, code no. __________, which is effective on
__________, the principal(s) and surety agree that this bond covers all
Reconciliations pursuant to 19 U.S.C. 1484(b) that are elected on any
entries secured by this bond, and that all conditions set out in
Section 113.62, Customs Regulations, are applicable thereto. The
principal(s) and surety also agree that, when an Aggregate
Reconciliation under this rider lists entries occurring in more than
one bond period, any liabilities to Customs reflected in that Aggregate
Reconciliation shall be attributable (up to the full available bond
amount) to any or all of those bond periods.
2. Termination of Bond Rider
Termination of the Reconciliation Bond Rider by either the
principal or the surety may be affected in accordance with procedures
set forth in Sec. 113.27, Customs Regulations. Termination of the
Reconciliation Bond Rider will not serve to terminate the underlying
bond. Moreover, it should be noted that Customs will not terminate
bonds or riders filed pursuant to this prototype.
3. Bond Coverage to be Evaluated
In addition to the test evaluation criteria listed in the February
6, 1998 notice, adequacy of bond coverage for participating importers
will also be evaluated for this prototype.
C. Changes in Terminology
The previous notice described two methods for flagging entry
summaries for reconciliation, and two methods for reconciling flagged
entry summaries. The method of flagging does not dictate the method of
reconciling. Due to some confusion caused by similar terms, Customs is
changing the terminology of the flagging methods. The methods
themselves are unchanged, but are shown here for clarification.
Individual entry flag (Previously called entry-by-entry flagging):
The importer electronically via ABI inputs an indicator on all entries
which are subject to reconciliation. This indicator identifies the
issue(s) subject to reconciliation.
Blanket flag (Previously called blanket application): Prior to
filing entries subject to reconciliation, the importer provides Customs
a letter which contains the importer of record number, the time period
in which entries are subject to reconciliation, and the issue(s)
subject to reconciliation. Customs will input an electronic indicator
on ALL entries for that importer for that time period, which will
identify them as being subject to reconciliation for the issue(s)
indicated. The flag that results is the same as the individual entry
flag, except that it is applied by Customs to all entries filed for a
given importer of record.
D. Designated Processing Ports
The previous notice stated that Reconciliations may be filed at any
Customs port, but would be processed at a processing port assigned to
the importer by Customs. Due to intricacies relating to financial
collections and routing of documents, Customs has changed this aspect
of the prototype. While the underlying entries may still be filed at
any port, the Reconciliation must be filed at the processing port
assigned to the importer by Customs. For purposes of filing the
Reconciliation at the processing port, the broker permit requirement is
waived (See below).
The Reconciliation Processing Ports are:
Boston, MA
Champlain, NY
Detroit, MI
El Paso, TX
Laredo, TX
Miami, FL
Minneapolis, MN
New York, NY/Newark, NJ
Nogales, AZ
Pharr, TX
Portland, OR
San Diego/Otay Mesa, CA
Other ports may be added at a later date, at which time affected
participants would be notified.
E. Entry Types Eligible for Reconciliation
The notice of February 6, 1998 stated that the following entry
types would be eligible for the ACS Reconciliation Prototype: 01, 02,
03, 06 and 07. During the course of program development, it became
apparent that Customs would not be able to include entry types 03 and
07 in this initial phase of the prototype. These entry types are those
subject to Antidumping/Countervailing duty cases, which due to their
inherent complexity, cannot be incorporated into reconciliation at this
time. The entry types covered by the prototype will be types 01, 02,
and 06. (Type 06 Foreign Trade Zone entries are allowed only when no
Antidumping/Countervailing duty merchandise is included on them.)
Entry summaries subject to Antidumping/Countervailing duty cases
may be adjusted via existing procedures for individually adjusting
entry summaries prior to liquidation.
F. Taxes and Fees
For Entry-by-entry Reconciliations, all taxes and fees on each
entry summary must be adjusted to show the correct amount appropriate
to that entry summary had the complete information for the transaction
been known at the time of entry summary filing.
[[Page 44305]]
On Aggregate Reconciliations, since monetary changes to individual
entry summaries are not reported, adjustments to taxes and fees will be
reported on the Summarized Line Item Data Spreadsheet, as follows:
Taxes and Fees applied to individual commodities, such as Cotton
Fee, Beef Fee and the like, will be adjusted by multiplying any
increase in dutiable value by the rate associated with the tariff
number for the product in question.
For Harbor Maintenance Tax (HMT), the importer is responsible for
determining and declaring the amount owed, based on any increase in
dutiable value, for those products which had been subject to HMT at the
time of original entry summary.
Merchandise Processing Fee (MPF) will be determined and declared in
a similar fashion. The importer is responsible for determining and
declaring the proper amount of MPF due based on any increase in
dutiable value, at the MPF rate applied to the product at time of
filing the underlying entry summary. Because there is a maximum
assessment of MPF for entry summaries, Customs will use the following
formula to set the maximum MPF to be paid on an Aggregate
Reconciliation: [($485 x number of entries covered by the
Reconciliation which were subject to MPF), less the amount of MPF
already paid on those same entries.]
G. Regulatory Provisions
The February 6, 1998 Federal Register notice included a section on
regulatory provisions suspended. That section is hereby modified by
removing all references to Part 113.62, Customs Regulations, and adding
the following statement: 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 Reconciliations on behalf of
importers at the designated Reconciliation Processing Port, without
holding a permit in that port. The suspension provided in this notice
pertains only to filing type ``09'' Reconciliation entries, and not to
any other Customs business transacted by brokers.
H. Handbook
A Reconciliation procedures handbook is currently under development
by Customs. Participants in the prototype will receive a copy of this
handbook, which will contain specific operational information,
including instructions on how to file and flag underlying entries, and
how to file Reconciliations. The publication will be made available to
the general public via the web site listed above, and a version of it
will be distributed to Customs officers.
I. Interest
Interest accrues on all Reconciliations where monetary adjustments
take place, whether they are increases or decreases in duties, taxes,
and fees. If interest is due Customs, the filer will make payment of
the interest upon filing the Reconciliation, along with duties, taxes,
and fees. Interest due the importer will be paid upon liquidation of
the Reconciliation. Customs is currently seeking a statutory amendment
to 19 U.S.C. 1505 which would allow an alternate interest accounting
methodology, such as the following, which will be used if the required
statutory change is obtained:
Interest will be calculated on the entire amount of adjusted
duties, taxes, and fees, as if they had been due on the midpoint date
of the period covered by the Reconciliation. For example, if a
Reconciliation covers January 1, 1999 through December 31, 1999, and
results in $20,000 in increased revenue, the interest would be
calculated for the $20,000 from the midpoint date of July 1, 1999.
If no such statutory amendment occurs: Importers will be required
to determine the appropriate amount of interest due for each entry
summary, and report such adjustment for each entry summary, either via
the Association File for Entry-by-Entry Reconciliations, or as a total
amount of interest due for Aggregate Reconciliations.
J. Components of the Reconciliation
Reconciliations will consist of three parts. This is true of both
Entry-by-entry and Aggregate Reconciliations: The Header, Association
File, and Summarized Line Data Spreadsheet. The characteristics of
these three components are unchanged from those described in the
Federal Register notice of February 6, 1998. In cases where a
Reconciliation is filed with no adjustments to value or other elements
of the underlying transactions, that is, merely to satisfy the
obligation to file a Reconciliation initiated by flagging entry
summaries, the spreadsheet need not be provided, as it would be a
spreadsheet containing no data. Importers should be aware of the
distinction between this situation and one where there are adjustments
to value but no revenue implications, in which a spreadsheet would be
required.
K. Summarized Line Item Data Spreadsheet
The spreadsheet shown in the February notice is correct except that
the title reads ``Aggregate Reconciliation'' when it should read
``Reconciliation Summarized Line Data Spreadsheet,'' since the
spreadsheet is used both for Entry-by-entry and Aggregate
Reconciliations. Also, it was brought to Customs attention that totals
on certain columns were incorrect. These were typographical errors not
intended to represent calculations other than those described in the
notice or on the face of the spreadsheet.
L. Application to Participate in the Prototype
Importers interested in participating in the prototype must apply
to Customs in writing. Policies from the earlier notice regarding
applications remain in effect. Applications will be accepted throughout
the duration of the prototype. The application requirements from the
earlier notice are unchanged, except that applicants are no longer
required to specify the port where the Reconciliations will be filed,
as Customs will instruct the importer on where they must be filed.
Applications should be submitted to Mr. Don Luther, Reconciliation
Team, U.S. Customs Service, 1300 Pennsylvania Ave, NW, Mailstop 5.2A,
Washington, DC, 20229-0001. Applications may be submitted until the
start of the prototype and throughout the duration of the prototype.
Parties interested in the ACS Reconciliation Prototype should consult
the Federal Register notice (63 FR 6257) of February 6, 1998. All terms
and conditions set forth in that notice remain in effect except to the
extent they are specifically modified by this notice.
Dated: August 12, 1998.
Robert S. Trotter,
Assistant Commissioner, Office of Field Operations.
[FR Doc. 98-22148 Filed 8-17-98; 8:45 am]
BILLING CODE 4820-02-P