[Federal Register Volume 63, Number 234 (Monday, December 7, 1998)]
[Notices]
[Pages 67511-67514]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 98-32459]


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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 Customs second extension of 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.
    Based on our experience in the extension of the second prototype of 
RLF, we have made modifications to the sections detailing Eligibility 
Criteria, Prototype Two Applications, and Misconduct. The changes to 
the Prototype Two Applications will affect 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, 1999, will continue, and be concluded, no 
earlier than December 31, 1999, by a notice in the Federal Register. 
Comments concerning any aspect of the remote filing prototype test must 
be received on or before [insert date 30 days after date of publication 
of this document in the Federal Register].

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, NW, Room 5.2 A, Washington, DC 20229-0001.

FOR FURTHER INFORMATION CONTACT: For systems or automation issues: 
Joseph Palmer (202) 927-0173, Jackie Jegels (301) 893-6717, or Patricia 
Welter (305) 869-2782.
    For operational or policy issues: Jennifer Engelbach (202) 927-
2293, or Bonnie Brigman (202) 927-0294.

SUPPLEMENTARY INFORMATION:

Background

    Title VI of the North American Free Trade Agreement Implementation 
Act (the Act), Pub. L. 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 file electronically 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 Site on the 
Internet at ``http://www.customs.treas.gov/rlf.'' Pursuant to 
Sec. 101.9, Customs Regulations, Customs has been testing the RLF 
concept.
    On 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,

[[Page 67512]]

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. On December 3, 1997, Customs announced in the 
Federal Register (62 FR 64043) its plan to extend the second prototype 
through December 31, 1998. In today's document, Customs is announcing 
that it will permit a second 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. Remote location filing 
will be a capability of ACE.
    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 the 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 Trade Compliance Redesign, and ACE. 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 the 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 at the national level in conjunction with the 
Trade Compliance Redesign and ACE.

Description of Proposed Test

    Prototype Two commenced January 1, 1997, and will run until 
concluded, no earlier than December 31, 1999, by a notice in the 
Federal Register. Prototype Two will evaluate the operational impact 
and procedures for a larger participant base, and test filing from a 
remote location and alternate location examinations.

Regulatory Provisions Suspended

    Certain provisions in Parts 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 allow for the movement of cargo from 
its POA to a DES outside of the POA.

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 using the Electronic Invoice Program (EIP) 
when required by Customs; and the payment of duties, fees, and taxes 
through the Automated Clearinghouse (ACH).
    The following eleven 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 as both ports of arrival (POA) and designated 
examination sites (DES).

Anchorage, AK
Atlanta, GA
Baltimore, MD
Baton Rouge, LA
Boston, MA
Brunswick, GA
Buffalo, NY
Calais, ME
Champlain-Rouses Point, NY
Charleston, SC
Charlotte, NC
Chattanooga, TN
Chicago, IL
Cincinnati, OH
Cleveland, OH
Columbus, OH
Dayton, OH
Dallas/Fort Worth, TX
Del Rio, TX
Detroit, MI
Durham, Raleigh, NC
Erie, PA
Gloucester, MA
Gramercy, LA
Greenville-Spartanburg, SC
Gulfport, MS
Houlton, ME
Houston, TX
Huntsville, AL
Indianapolis, IN
Jacksonville, FL
JFK International Airport
Knoxville, TN
Lake Charles, LA
Laredo/Eagle Pass, TX
LAX International Airport
Little Rock, AR
Logan Airport, MA
Longview, WA
Los Angeles/Long Beach, CA
Louisville, KY
Memphis, TN
Miami, FL
Morgan City, LA
Mobile, AL
Nashville, TN
New Bedford, MA
New Orleans, LA
Newport News, VA
Norfolk, VA
NY/Newark Area
NY Seaport, NY
Orlando, FL
Pascagoula, MS
Philadeophia/Chester, PA
Port Everglades, FL
Port Huron, MI
Portland, ME
Portland, OR
Portland Int'l Airport, OR
Providence, RI
Richmond, VA
Rochester, NY
San Diego/Otay Mesa, CA
San Francisco/Oakland, CA
Savannah, GA
Seattle, WA
Shreveport, LA
Springfield, MA
Tampa, FL
Toledo, OH
Utica/Syracuse, NY
Vicksburg/Jackson, MS
West Palm Beach, FL
Wilmington, NC
Winston-Salem, NC
Worcester, MA
Washington, DC

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, 
Administrative Message System, and Customs Web Site on the Internet. 
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 the

[[Page 67513]]

address listed at the front of this document):
    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.
    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 an 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 importer's 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. All applications must initially be 
submitted to Customs (at the address listed at the front of this 
document). 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. New 
applicants will follow a two-step application process.

First Stage Application

    During the first step, the filer must submit the following 
information to U.S. Customs Headquarters (address cited above):
    1. Filer or 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.

Second Stage Application

    Once a filer has received written approval from U.S. Customs 
Headquarters to proceed with the second step of the application 
process, the filer must submit the following information to the Port 
Director(s) overseeing each requested POA and DES location for each 
client (importer):
    1. Participating importer name, telephone number, contact name, and 
Importer Number;
    2. Supplier name, address, and manufacturer's number;
    3. Types of commodities to be imported;
    4. Other government 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 commodity documentation 
requirements and whether the port has been trained in EIP/RLF.
    Upon receipt of an application, the Port Director or designate, 
will send the applicant a letter of acknowledgment. If there are no 
issues to be resolved, the application will be considered approved 
twenty (20) days from the date of the acknowledgment letter. If there 
are issues to be resolved prior to a decision on the application, the 
Port Director or designate will send the applicant, within twenty (20) 
days, a letter indicating that the application is pending further 
review until joint resolution of the issues can be achieved. If the 
application is denied, the Port Director or designate will issue a 
denial letter with reasons to the applicant. If denied, the applicant 
may appeal to the Remote Filing Team at Headquarters in writing within 
twenty (20) days from the date of denial or reapply to the Port 
Director(s).

Misconduct

    If a program participant attempts to submit data for merchandise 
subject to quota, anti-dumping duties, countervailing duties, or other 
non-eligible merchandise, or fails to exercise reasonable care in the 
execution of participant obligations and the filing of information 
regarding the admissibility

[[Page 67514]]

of merchandise, and declaring the classification, value, and rate of 
duty applicable to the merchandise, or otherwise fails to follow the 
procedures (outlined herein) or applicable laws and regulations, then 
the participant may be subject to liquidated damages, penalties, and/or 
other administrative sanctions, expelled or suspended from the 
prototype, and/or prevented from participation in future prototypes. 
Customs has the discretion to suspend prototype participation 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 Headquarters Remote Team within twenty (20) 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.
    Any other action commenced by Customs for misconduct may be 
appealed in writing through existing procedures or, if none exists, to 
the Headquarters Remote Team within twenty (20) days of the action.

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: December 1, 1998.
Robert S. Trotter,
Assistant Commissioner, Office of Field Operations.
[FR Doc. 98-32459 Filed 12-4-98; 8:45 am]
BILLING CODE 4820-02-P