[Federal Register Volume 64, Number 102 (Thursday, May 27, 1999)]
[Notices]
[Pages 28870-28873]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 99-13498]


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DEPARTMENT OF THE TREASURY

Customs Service


Evaluation and Extension of National Customs Automation Program 
Test: Electronic Cargo Declarations

AGENCY: Customs Service, Treasury.

ACTION: General notice.

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SUMMARY: This notice announces an extension of the National Customs 
Automation Program test concerning the electronic submission of certain 
inward vessel manifest information and discusses the result of an 
interim evaluation by Customs of the test. Testing of this program has 
been occurring since February 11, 1997. The test allows participating 
Automated Manifest System vessel carriers to electronically file 
complete cargo information prior to a vessel's arrival in the U.S., 
which in turn enables Customs to electronically release cargo to 
carriers and other participating parties and facilitate the control and 
processing of cargo that would otherwise have to await the filing of 
applicable paper Customs Forms.

DATES: The test is extended at least until December 31, 2000. 
Applications to participate in the test and comments concerning the 
test will be accepted throughout the testing period.

FOR FURTHER INFORMATION CONTACT: For operational or policy matters: 
Robert Watt (202) 927-0360; for systems or automation matters: Kim 
Santos (202) 927-0651; and for legal matters: Larry L. Burton (202) 
927-1287.

SUPPLEMENTARY INFORMATION:

Background

    On February 11, 1997, Customs commenced a one-year National Customs 
Automation Program (NCAP) test concerning the electronic submission of 
cargo declaration information. One of the goals of the program test was 
to eliminate the requirement that participating Automated Manifest 
System (AMS) vessel carriers must also submit a paper Cargo Declaration 
(Customs Form 1302). Other objectives of this test included whether the 
trade community could realize certain time savings and whether Customs 
law enforcement responsibilities, e.g., such as targeting examinations, 
could be enhanced. See, the notice published in the Federal Register 
(61 FR 47782) on September 10, 1996, announcing this NCAP test and 
informing the public of the eligibility requirements for participation 
in the test. On December 19, 1997, it was announced that the test 
period for this NCAP was extended for an additional year and that the 
program test was to be modified concerning the manifesting of empty 
containers. See, the notice published in the Federal Register (62 FR 
66719) on December 19, 1997.
    The modification concerning the manifesting of empty containers 
could not be implemented at the time that the test was extended because 
the module in the AMS was not yet developed. Now that the AMS module 
has been developed, Customs needs to further test the program.
    This document announces an extension of the NCAP test concerning 
the electronic submission of certain inward vessel manifest information 
and discusses the result of an interim evaluation by Customs of the 
test. Customs intends to continue testing this NCAP until such time as 
all program elements are fully tested and final regulations are 
promulgated that permanently provide for the electronic submission of 
inward vessel manifest information in the Customs Regulations (19 CFR 
chapter I). Anyone interested in participating in the test should refer 
to the test notice published in the Federal Register on September 10, 
1996, for eligibility and application information.

Evaluation Methodology

    Customs evaluated this NCAP test by developing certain performance 
criteria and measuring over time the test population's overall 
compliance with these performance criteria from baseline measurements. 
The composition of the test population and the methodology of the 
evaluation follow.
Size of Test Population and Extent of Data Evaluated
    Overall, 17 carriers participated in the program test. These 17 
carriers transported approximately 40% of all the cargo imported by 
vessel during the time period of the test. Customs evaluation of the 
program test is based on the test population's overall compliance with 
the nine performance criteria developed and measured by Customs. The 
data was collected over the period February 11-December 31, 1997.
    Three questionnaires were also developed to take account of all 
participants' concerns: two for carrier participants and one for port 
directors that participated in the program test. The comments/responses 
generated by these questionnaires, while helpful to Customs, were not 
factored into the evaluation report that follows.
Evaluation Process
    To evaluate the achievement of the program test to date, Customs 
established National Standard Operating (NSO) procedures and developed 
performance criteria to measure such operational issues as whether 
participants could meet the requirements of transmitting timely, 
complete, and accurate cargo data, and the benefits to the trade 
community. The NSO procedures were established to ensure that Customs 
personnel uniformly collected the same data. Baseline performance 
measurements for each participant carrier were recorded and subsequent 
performance measurements were taken monthly and averaged quarterly. The 
nine performance criteria developed sought to measure each aspect of 
the electronic filing test--from the completeness of the information to 
the time it was transmitted--that participants had to comply with.
    To evaluate the various performance statistics, the raw data was 
compiled into a spreadsheet data-base program and the following factor 
ratings were used in measuring participant's compliance:
    If the criterion was met 100% of the time, an ``Excellent'' rating 
was ascribed;
    If the criterion was met 90-99% of the time, a ``Very Good'' rating 
was ascribed;
    If the criterion was met 80-89% of the time, a ``Good'' rating was 
ascribed;
    If the criterion was met 70-79% of the time, a ``Fair'' rating was 
ascribed; and
    If the criterion was met less than 70% of the time, a ``Poor'' 
rating was ascribed.

[[Page 28871]]

    Overall, a ``Good'' compliance rating was scored by the 
participants evaluated to date, which convinces Customs that this 
program test has been successful in achieving its goals and time-saving 
and law-enforcement objectives. Further, Customs found that the carrier 
industry can sustain both the electronic and policy standards 
established for this NCAP.
    Regarding the questionnaires, the two questionnaires sent to 
carrier participants inquired into the overall effectiveness of the 
program test for the carriers and posed specific questions regarding 
problems encountered with the manifesting of Foreign Freight Remaining 
On Board (FROB) cargo. The questionnaire sent to port director 
participants inquired if the program test resulted in enhanced internal 
operations. The comments and responses to these questionnaires by each 
group of respondents showed again that the program test was successful. 
The trade community, represented by the Customs Electronic System 
Action Committee (CESAC), stated that participant carriers showed 
increased efficiency, experienced excellent communications with the 
local Customs office, and had reduced paper costs and a labor savings 
that averaged $100,000 per carrier. Customs personnel involved with 
this test also cited increased efficiency and excellent communications 
with carriers, and also enhancements to internal operating procedures.
    The following composite evaluation report identifies the 
performance criteria measured and shows the average compliance rating 
for the test population evaluated to date.

Performance Criteria and Results of Evaluation

    Customs evaluation of the 17 test participants' performance is 
based on their proficiency as a group in meeting the following 
performance criteria:
    Criterion A measured whether participating vessel operators 
informed Customs if other carriers were shipping cargo on the subject 
vessel and, if they were, whether the other carriers were using the 
vessel pursuant to a vessel sharing or chartering agreement 
arrangement, and whether the participating vessel operators correctly 
listed those carriers. This criterion was designed to help Customs know 
if these other carriers were correctly reporting their cargo 
information, otherwise required by Customs Form 3171 (Application-
Permit-Special License-Unlading-Lading-Overtime Services). Customs 
evaluation of the data shows that 92% of the time participating vessel 
operators accurately indicated when other carriers' were shipping cargo 
on board the subject vessel, and correctly identified those carriers to 
Customs, which is a ``Very Good'' compliance rating.
    Criterion B measured whether participating vessel operators timely 
submitted--at least 48 hours prior to the vessel's arrival (a new time 
requirement)--the data required by Customs Form 3171. This criterion 
was designed to determine if participants could submit the data in 
advance of arrival, thus, giving Customs advanced notice of the 
vessel's arrival so that appropriate administrative and enforcement 
measures could be readied. Customs evaluation of the data shows that 
92% of the time the required data was submitted at least 48 hours prior 
to the vessel's arrival, which is a ``Very Good'' compliance rating.
    Criterion C measured whether, in those instances when multiple 
participating carriers were sharing or chartering space on board the 
same vessel, each test participant transmitted the identical vessel 
name as the vessel operator. This criterion was designed to measure if 
each AMS carrier, which separately transmits its own portion of the 
vessel's cargo declaration, could accurately identify the name of the 
vessel. (If the vessel name is not correctly identified by each 
carrier, then the AMS cannot associate the separately transmitted cargo 
declarations as part of the same arriving vessel and manifest, 
resulting in cargo information not being properly reviewed by Customs 
enforcement and regulatory teams.) Customs evaluation of the data shows 
that 98% of the time test participants correctly identified the same 
vessel name as the vessel operator, which is a ``Very Good'' compliance 
rating.
    Criterion D measured whether test participants transmitted the 
correct arrival date and time of the vessel. This criterion was 
designed to help Customs assess the impact of date/time data received 
by Customs on such time-sensitive procedures as general order, quota, 
and formal vessel entry. Customs evaluation of the data shows test 
participants transmitted the correct arrival date and time of the 
vessel only 74% of the time, which is a ``Fair'' compliance rating.
    Criterion E measured whether test participants timely submitted--at 
least 48 hours prior to the vessel's arrival or, for ``short haul'' 
voyages, by the time of arrival-- complete cargo declaration 
information. This criterion was designed to determine how far in 
advance of arrival participants could submit the cargo declaration data 
so that Customs could ready appropriate enforcement and cargo control 
measures based on the vessel's cargo information. Further, advance 
notice of the vessel's cargo expedites the cargo release process, which 
saves time for the trade community. Customs evaluation of the data 
shows that 85% of the time the cargo declaration data was timely 
submitted, which is a ``Good'' compliance rating.
    Criterion F measured whether test participants transmitted complete 
and accurate bill(s) of lading information with the cargo declaration 
data. This criterion was designed to determine whether all of the data 
element fields were being completed, so that appropriate manifest 
targeting and audit procedures could be readied. Customs evaluation of 
the data shows that 83% of the time complete and accurate bill(s) of 
lading information was transmitted with the cargo declaration data, 
which is a ``Good'' compliance rating.
    Criterion G measured whether test participants timely transmitted 
all FROB cargo data upon arrival at the first port of entry. Although 
this data could have been measured within criterion F, it was 
separately measured because this type of cargo data had never been 
required by AMS before. Customs evaluation of the data shows that 92% 
of the time all FROB cargo data was timely transmitted upon arrival at 
the first port of entry, which is a ``Very Good'' compliance rating.
    Criterion H measured whether test participants released any cargo 
prior to receiving an electronic release from Customs. This criterion 
was designed to measure the compliance of test participants in 
observing the cargo release procedures established by Customs. Customs 
evaluation of the data shows that 100% of the time no merchandise was 
released without proper electronic notice, which is an ``Excellent'' 
compliance rating.
    Criterion I measured whether any penalties were assessed against 
participants because of manifest discrepancies or improper cargo 
releases. Again, this criterion was designed to measure the compliance 
of test participants in observing the test procedures established by 
Customs. Customs evaluation of the data shows that 100% of the time no 
penalties were issued, which is an ``Excellent'' compliance rating.
    The factor ratings for individual test participants were:

7 had an overall rating of ``very good';
8 had a rating of ``good';
1 had a rating of ``fair'; and
1 had a rating of ``poor'.


[[Page 28872]]


    The test group's compliance ratings for criterion A, B, C, G, H, 
and I--all more than 90% compliant--are considered sufficiently high 
enough to be acceptable without further comment. However, Customs 
acceptance of the compliance ratings for criterion D, E, and F merits 
further explanation.
    Customs evaluation of the criterion D data, which measured whether 
the date and time transmitted by the test participant was the same as 
that recorded by the Customs officer processing the entrance of the 
vessel, revealed that the low compliance rating (only 74% of the time 
was the correct data transmitted by test participants, a ``Fair'' 
compliance rating) had more to do with the time element than the date 
element, and that the discrepancy noted was of marginal significance: 
the time transmitted by participants was usually off by no more than an 
hour or two. Accordingly, Customs does not consider the 74% compliance 
rate as detrimental to the test.
    Criterion E, which measured how timely complete cargo declaration 
information could be transmitted, and criterion F, which measured 
whether complete and accurate bill(s) of lading information was also 
transmitted when the cargo declaration information was transmitted, are 
considered together because the timeliness and accuracy of the data 
measured are essential for Customs to be able to perform its law-
enforcement mission. Customs believes that the marginally acceptable 
compliance ratings scored (85% for criterion E and 83% for criterion F, 
``Good'' compliance ratings) were based on performance criteria 
measures that were contingent on procedural, rather than substantive, 
reasons that are inherent in shipping programs and that the 
discrepancies noted, again, are of marginal significance.
    For criterion E, Customs analysis of the data shows that the 
compliance level for this criteria fell below 90% for one reason: 
short-haul voyages, i.e., vessels arriving in the U.S. at the nearest 
port of entry directly from Canada, the Caribbean, or Mexico with the 
voyage lasting less than 48 hours. In many instances, voyages lasted 
less than 24 hours. Affected participants stated that such short-haul 
voyages could not easily comply with the time of arrival transmission 
requirement being measured, since complete cargo data is often not 
electronically compiled timely enough to be transmitted to Customs. 
Since Customs retains the authority to prohibit the release of cargo 
until a manifest is presented and/or to require the master of the 
vessel to present the manifest on the paper CF 1302 upon arrival, 
Customs believes that there is no good substantive reason to allow this 
skewed performance measure to adversely affect the other successes of 
this test program.
    For criterion F, Customs analysis of the data again shows that the 
compliance level for this criteria fell below 90% for one reason: the 
allowance of amendments to manifest information for 60 days. Since 
amendments to manifest information are allowed, this procedural 
circumstance compromised the ``completeness of the information'' data 
being measured. However, because the test compliance rate (83%) is 
comparable to the completeness of cargo data compliance measure for 
carriers filing paper CF 1302s, Customs does not view this test 
compliance rating as significant. Further, Customs notes that while a 
couple of the participants were rated well below the 83% compliance 
level at the time of the evaluation, by subsequently working with these 
participants, Customs has seen remarkable improvement in the compliance 
results of these test participants.
The Future of the Program
    Customs planned to modify the initial program test 2 years ago 
regarding the submission of empty container information. However, the 
hoped for new module in AMS was not available at that time and is only 
now being readied for testing. (The proposed modified procedure will 
allow empty container information to be manifested by container number 
listing only the port of loading along with the equipment 
identification, instead of by the current AMS procedure which requires 
the use of a bill of lading indicating the container number in the 
description field and the U.S. port of discharge.) Until this new 
module becomes generally available for testing, empty container 
information must be manifested either by providing the information on a 
CF 1302 or by using the current AMS procedure; this aspect of the 
program test remains subject to the general manifesting requirements of 
Sec. 4.7 of the Customs Regulations (19 CFR 4.7).
    Although the overall performance rating for the manifesting of FROB 
cargo information was ``very good,'' this measure of the program test 
called Customs attention to a peculiar problem, which ultimately 
required that vessels on certain routes submit FROB cargo information 
on a CF 1302. In those situations where FROB cargo arrived in the U.S. 
on a vessel, then left on the same vessel for unlading in a foreign 
port, no significant problems were encountered. In other situations, 
however, where FROB cargo arrived in the U.S. on a vessel and that 
vessel later arrived at a foreign port where the FROB cargo was 
unladened and reladened onto another vessel for discharge in the U.S., 
Customs discovered that although there were two vessels involved, the 
bill of lading information for the FROB cargo remained the same for 
each vessel. There were also other peculiar scenarios such as a 
vessel's voyage number changes. Presently AMS cannot accommodate these 
circumstances. Therefore, participating carriers must constantly juggle 
bill(s) of lading information and manipulate bill numbers to submit 
correct FROB cargo data or present the changing FROB cargo information 
on a CF 1302.
    Customs will try to make programing changes that address these 
problems and has already informed the trade that enhancements to the 
AMS module will be made. Comments concerning these problems and any 
other aspect of this NCAP test are welcome.

Conclusion

    Customs evaluation to date of the performance criteria established 
for this NCAP test shows that, overall, a ``Good'' compliance rating 
was scored by the participants. Although certain compliance ratings are 
only marginally acceptable, Customs believes the performance criteria 
measured were contingent on procedural, rather than substantive, 
reasons that are inherent in shipping programs, and that the 
discrepancies discovered are of marginal significance. Accordingly, 
Customs believes that the program test has been successful so far in 
achieving its time-saving and law-enforcement objectives. Further, 
Customs has found that the carrier industry can sustain both the 
electronic and policy standards established for the test program, and 
that the trade community is benefitting from and is satisfied with the 
program.
    Until all elements of this program are tested and final regulations 
are developed that permanently provide for the program the testing of 
this NCAP will continue at least until December 31, 2000. Customs hopes 
that the success of this program test so far will convince other 
carriers to participate, and will continue to accept applications for 
participation throughout the further testing of this NCAP.


[[Page 28873]]


    Dated: May 21, 1999.
Charles W. Winwood,
Assistant Commissioner, Office of Field Operations.
[FR Doc. 99-13498 Filed 5-26-99; 8:45 am]
BILLING CODE 4820-02-P