[Federal Register Volume 64, Number 143 (Tuesday, July 27, 1999)]
[Notices]
[Pages 40643-40648]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 99-19071]


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DEPARTMENT OF THE TREASURY

Customs Service


Announcement of a General Test Regarding the International Trade 
Prototype

AGENCY: Customs Service, Department of the Treasury.

ACTION: General notice.

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SUMMARY: This notice announces Customs plan to conduct the next phase 
in a series of prototypes collectively called the International Trade 
Prototype (ITP). This notice invites public comments concerning any 
aspect of the planned prototypes; informs interested members of the 
public of the eligibility requirements for voluntary participation in 
the second phase of the first prototype, called International Trade 
Prototype 1.2 (ITP1.2); and outlines the development and evaluation 
methodology to be used in the test.
    This notice supersedes and replaces the Federal Register notice on 
the first phase of the first prototype, called International Trade 
Prototype 1.1 (ITP1.1), published by the U.S. Customs Service on June 
3, 1998.

DATES: ITP1.2 will commence after June 30, 1999, and will run for at 
least 6 months with evaluations of the prototype occurring 
periodically. Comments concerning any aspect of this phase must be 
received on or before August 26, 1999. Operations under the procedures 
for ITP1.1 will cease upon implementation of ITP1.2.

ADDRESSES: Written comments regarding this notice and application 
information submitted to be considered for voluntary participation in 
ITP1.2 should be addressed to the U.S. Customs Service, International 
Trade Prototype Team, Attn: Pamela McGuyer, 1300 Pennsylvania Avenue, 
NW., Room 5.4-129, Washington, DC 20229. 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 Pamela McGuyer, U.S. Customs Service at (202) 927-
0279, or Michael Coussins, United Kingdom, Her Majesty's Custom and 
Excise at 011 44 171 865 4728 in London, England.

SUPPLEMENTARY INFORMATION:

Background

    The International Trade Prototype project 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 the ITP 
contained in an announcement published in the Federal Register (63 FR 
30288) on June 3, 1998, 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.
    USCS and HMCE have agreed that ITP will be delivered in a series of 
prototypes. Each prototype will be evaluated against predetermined 
success criteria. USCS and HMCE have conducted ITP1.1 since June 1998. 
USCS and HMCE have agreed that ITP1.1 operations will cease upon 
implementation of ITP1.2. Plans beyond ITP1.2 are also under 
consideration. Subsequent ITP prototypes will build on lessons learned 
in ITP1.2 and the need for enabling legislation will be evaluated.
    If a subsequent ITP phase is planned following evaluation of 
ITP1.2, operations under ITP1.2 may be continued until implementation 
of the next phase. Future phases, prototypes, or participant expansion 
of this prototype will be announced in a Federal Register notice.
    USCS will be testing ITP1.2 in accordance with section 101.9 of the 
Customs Regulations (19 CFR 101.9). 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.

Descripton of Proposed International Trade Prototype

    The mission/vision of ITP 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 that conform to

[[Page 40644]]

internationally agreed upon 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 the processing and clearance of goods.
    More specifically, the mission/vision of the ITP 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 ITP1.2

    The following goals, principles, and scope support USCS and HMCE 
missions and strategic plans and have guided development of ITP1.2.

Goals and Principles

     Customs Administration Cooperation. 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.

Scope

    The scope of ITP1.2 will include:

--Air and sea cargo shipments;
--Cargo release 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 USCS and 
HMCE in separate formats;
--A two-step import process in which data provided to the export 
customs administration is forwarded to the import customs 
administration and used, in conjunction with information supplied by 
the importer, 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; and,
--Development of agreed joint operational procedures to manage traders' 
accounts.

II. Development Methodology

    ITP1.2 will be monitored by an Evaluation Task Force 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 
National Customs Automation Program (NCAP) prototype programs such as 
the NCAP, Remote Location Filing, and Reconciliation Prototypes, 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 ITP1.2 may not meet the 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 that concern the 
methodology of the test program or procedures will be reviewed by both 
USCS and HMCE.

III. Description of Proposed ITP1.2

    ITP1.2 will test an account-based declaration process that 
integrates preliminary export and preliminary import reporting. The 
number of U.S. participants will be limited. In order for a shipment to 
be eligible for processing under ITP1.2 procedures, both the exporter 
and the importer of the shipment must be ITP1.2 participants in their 
respective countries. ITP1.2 shipments must be exported from or entered 
at one of the following six U.S. ports: Baltimore, Chicago, Detroit, 
JFK, Newark, and San Francisco. Additional port selections may be 
considered upon request. For shipments processed under ITP1.2 
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 be 
performed mostly on the basis of selectivity criteria and for random 
compliance measurement sampling.
    Information supplied by the trade participants concerning their ITP 
transactions will be shared between the USCS and HMCE customs 
administrations. The customs administrations will not further release 
this information unless specifically required or authorized by law.

U.S. Exports

    While various automatic notifications and back-up procedures will 
also be supported, the basic declaration flow for U.S. exports in 
ITP1.2 will be as follows:
    1. The exporter's application, including any amendments, will be 
used to assess the suitability of proposed export shipments for ITP1.2 
processing.
    2. Using an Internet web form provided by USCS, the exporter or an 
authorized agent will transmit a pre-departure export notification 
message to USCS for each ITP1.2 shipment exported from the U.S. The 
data elements of the pre-departure export notification message are:

--Universal Consignment Reference Number (to identify transactions)
--Country of Export

[[Page 40645]]

--Country of Import
--Mode of Transportation
--Port of Loading
--Shipping Reference (identification of Bill of Loading or Air Waybill)
--Shipping Quantity
--Exporter
--Importer
    3. ITP1.2 shipments exported from the U.S. will be subject to 
physical inspections and compliance reviews by various federal 
agencies.
    4. USCS will forward the data from the pre-departure export 
notification message to HMCE. Applicants should note that participants 
must agree to the transmission of these data between governments.
    5. HMCE will use the forwarded data from the pre-departure export 
notification message to effect operational release of the cargo upon 
importation into the United Kingdom (U.K.)
    6. All U.S. export reporting requirements for ITP1.2 shipments must 
be satisfied through existing export reporting procedures and systems.

U.S. Imports

    While various automatic notifications, override, and back-up 
procedures will also be supported, the basic declaration flow for U.S. 
imports in ITP1.2 will be as follows. Note that data transmitted by 
participants to USCS with regard to imports into the U.S. will not 
routinely be forwarded to HMCE.
    1. The importer's application, including any amendments, will serve 
as a pre-filed entry for each ITP1.2 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 provide USCS with 
timely and accurate notification of any proposed changes to the 
original application, e.g., changes in a participant's ITP1.2 business 
partners and merchandise imported under the prototype.
    2. The U.K. exporter or an authorized agent will transmit a pre-
departure export notification message to HMCE for each ITP1.2 shipment 
exported from the U.K. This will consist of the same data elements as 
the U.S. pre-departure export notification message which are listed 
under item 2 of the ITP1.2 export process, above. U.K. filers of pre-
departure export notifications will transmit the U.S. importer's ITP 
Authorization Code to identify the importer.
    3. Upon departure of the exporting conveyance, HMCE will forward 
the data from the pre-departure export notification message to USCS.
    4. The USCS ITP1.2 system will assign, based upon the importer's 
request as provided in the application, an entry filer and entry number 
to each shipment. The entry filer, i.e., the importer or a licensed 
customs broker designated by the importer for ITP1.2 shipments, will be 
assigned to and responsible for 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.
    5. The USCS ITP1.2 system will determine whether a physical 
examination of cargo will be performed for the shipment. An initial 
system determination that no physical examination of cargo will occur 
is subject to subsequent override by USCS.
    6. If no physical examination of cargo is required, a record of the 
shipment is found in the USCS Automated Manifest System (AMS), and the 
ITP1.2 participant has indicated that it will enter ITP1.2 imports at 
the port of unloading reported for the shipment in AMS, the cargo will 
be released without additional data or documentation. Both the entry 
filer (through the USCS ITP1.2 system) and the carrier (through AMS) 
will receive automated cargo release notifications. The port of entry 
will be the port of unloading reported for the shipment in AMS.
    7. If no physical examination of cargo is required, but no record 
of the shipment is found in the USCS Automated Manifest System (AMS), 
or the ITP1.2 participant has not indicated that it will enter ITP1.2 
importations at the port of unloading reported for the shipment in AMS, 
the USCS ITP1.2 system will generate an e-mail message to the entry 
filer requesting supplemental shipment information. Using an Internet 
web form provided by USCS, the importer or broker must transmit the 
following data elements to USCS:

--Port of Unloading
--Port of Entry
--Estimated Date/Time of Arrival at Port of Entry
--Shipping Reference (if correct data is not provided in U.K. 
exporter's pre-departure export notification)
--Shipping Quantity (if correct data is not provided in U.K. exporter's 
pre-departure export notification)

    If the Port of Unloading is different from the Port of Entry, 
movement of the cargo between ports must be accomplished under existing 
in-bond procedures.
    8. If a physical examination of cargo is required, the USCS ITP1.2 
system will generate an e-mail message to the entry filer requesting 
cargo exam data. Using either an Internet web form provided by USCS or 
an EDIFACT CUSDEC message, the entry filer must transmit the required 
data to USCS. Cargo exam data will include partial entry and commercial 
data, provided to the detailed line item level. Cargo will not be 
examined until these data are received by Customs.
    9. The date of entry will be the latter of the date the merchandise 
arrives in the port where entry is made or the date the merchandise is 
released by U.S. Customs into the commerce of the United States. The 
release will obligate the continuous bond identified in the prototype 
application of the importer whose ITP Authorization Code is present in 
the pre-departure export notification data forwarded to USCS by HMCE.
    10. Within 10 working days after the date of entry, U.S. entry 
summary reporting and payment requirements for ITP1.2 shipments must be 
satisfied through existing import reporting and payment procedures and 
systems.

IV. Remote Location Filing

    Remote location filing allows U.S. Customs brokers to 
electronically file data for the entry of merchandise with USCS from 
any location in the United States. This feature of remote location 
filing will be supported in ITP1.2. A U.S. ITP participant or their 
customs broker who electronically transmits supplemental shipment 
information or cargo exam data for an ITP1.2 import shipment from a 
location other than the port where entry is made must meet the criteria 
for remote filing established in 19 U.S.C. 1414.
    The designation of alternative locations for cargo examination will 
not be supported in ITP1.2. All cargo examinations will be conducted at 
the port where the cargo is entered, or at another location chosen by 
USCS.

V. Eligibility Requirements

    Customs will select a limited number of participants for ITP1.2. In 
order to be eligible for participation in ITP1.2, a company operating 
in the United States must:
    1. Be participating or approved for participation in the Importer 
Compliance Monitoring Program (see 63 FR 20442; April 24, 1998) or be 
scheduled for, be 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 a Customs Compliance Assessment 
or other type of Customs audit is in progress, the importer must be 
fully cooperating and

[[Page 40646]]

providing timely and accurate information and the resources necessary 
for USCS to conduct the Compliance Assessment or audit. If the importer 
is subject to a compliance improvement plan, the importer must be 
abiding by the terms and conditions of the plan;
    2. 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 ITP1.2 
procedures, both the exporter and the importer of the shipment must be 
ITP1.2 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;
    3. For participants who wish to include U.S. export shipments in 
ITP1.2, 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 ITP1.2 processing; and
    4. For participants who wish to include U.S. import shipments in 
ITP1.2, commit in the application to file or maintain a continuous bond 
with sufficient liability coverage that will be obligated upon release 
of each ITP1.2 shipment.
    Applications will be accepted from all volunteers; however, 
priority consideration will be given to:
    1. ITP1.1 participants;
    2. Companies within the top 463 U.S. importers ranked by entered 
value (the top 463 represent approximately 50 percent of all imports by 
value);
    3. Companies within the top 250 U.S. importers within any of the 
USCS Primary Focus Industry (PFI) categories, which are:

a. Agriculture
b. Automotive
c. Communications--Telecommunications, Advanced Displays, Board Level 
Products
d. Critical Components--Bearings, Fasteners
e. Footwear
f. Production Equipment
g. Steel
h. Textiles--Textile Products, Wearing Apparel;

    4. Companies that do not represent an unacceptable compliance risk; 
and
    5. Companies that indicate they plan to maintain an average of at 
least 10 entries per month throughout the prototype period.

VI. Application

    Importers and exporters who wish to participate in ITP1.2 must 
submit a written application within 30 days of this notice including 
the following information:
    1. Participant name, address and designated contact person.
    2. An e-mail address to be used by the USCS ITP1.2 system for 
automatic routing of ITP1.2 status notification messages.
    3. For all exported cargo proposed for inclusion in the ITP1.2 
test:

--Names and addresses of all U.K. importers;
--For each U.K. importer, a listing of all the six-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 trade routes (U.S. ports of 
loading and U.K. ports of unloading) for which the carrier will be 
used; and
--An estimate for the total number of export shipments per month the 
participant expects to include in the ITP1.2 test for each trade route.

    4. For participants who wish to include U.S. export shipments in 
ITP1.2: the names and addresses of any agents who will provide ITP1.2 
export data.
    5. For all imported cargo proposed for inclusion in the ITP1.2 
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 trade routes (U.K. ports of 
loading and U.S. ports of unloading) for which the carrier will be 
used; and
--An estimate of the total number of import shipments per month the 
participant expects to include in the ITP1.2 test for each trade route.

    6. For participants who wish to include U.S. import shipments in 
ITP1.2: a designated single import entry filer, i.e., the importer 
itself or a licensed customs broker, to file required import data for 
all ITP1.2 imports at U.S. ports of entry. 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 ITP1.2 
shipments. Entry filers may not assign these numbers to non-ITP 
transactions.
    7. For participants who wish to include U.S. import shipments in 
ITP1.2: the surety company and surety code and the number of the 
continuous surety bond that will cover all cargo processed under ITP1.2 
procedures.
    8. For applicants not participating in or approved for 
participation in the Importer Compliance Monitoring Program or not 
already scheduled for or participating in a Customs Compliance 
Assessment, a statement in which the applicant commits to undergo and 
cooperate fully with a Customs Compliance Assessment.
    9. It is required that the following consent form be executed and 
filed with USCS:

Authorization to Provide ITP Data to UK Customs

    I, ________, holding the position of
----------------------------------------------------------------------
at---------------------------------------------------------------------
    (name of company)

being duly authorized to represent and bind said company, hereby 
authorize the United States Customs Service to provide Her Majesty's 
Custom and Excise of the United Kingdom all the information 
contained in our application for participation in the International 
Trade Prototype and the following export data related to shipments 
from the United States to the United Kingdom made pursuant to the 
International Trade Prototype:

a. Universal Consignment Reference Number
b. Country of Export
c. Mode of Transportation
d. Port of loading
e. Shipping reference (identification of bill of loading or air 
waybill)
f. Shipping quantity
g. Exporter
h. Importer

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(name of company)
unconditionally releases the United States Customs Service and its 
employees from any and all liability, and waives any and all legal 
action, claims and causes of action related to or concerning the 
release of the afore-listed data to Her Majesty's Custom and Excise 
for shipments made pursuant to the International Trade Prototype.
----------------------------------------------------------------------
Signature
----------------------------------------------------------------------
Date

    ITP1.1 participants who wish to continue their participation must 
re-apply. These applications must contain all of the elements listed 
above, except that for items 3 and 4 they need provide only changes to 
the information provided in their applications for ITP1.1.
    USCS will make import admissibility determinations on ITP1.2 
shipments imported into the U.S. based on any

[[Page 40647]]

cargo examinations and the information supplied with the application, 
which shall serve as a pre-filed entry for ITP1.2 purposes. 
Applications may be referred to HMCE and other government agencies for 
review. All ITP1.2 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 ITP1.2 test. USCS and HMCE will schedule 
meetings with each new participant to review the current prototype 
requirements, 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 15 days to the Director, Trade Programs. 
Applicants who are denied participation in ITP1.2 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 available to the public. 
Additionally, all comments provided to U.S. Customs will be part of the 
public record.

VII. General Requirements and Restrictions

    For ITP1.2, the following restrictions will be placed upon 
participants.
    Participants who export ITP1.2 shipments from the United States:
    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 six-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 ITP1.2 test;
    E. Must 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. Must not export ITP1.2 merchandise under a transportation and 
exportation (T&E) entry;
    H. Must ensure that ineligible merchandise is not included in 
ITP1.2 shipments. Customs will exclude ineligible shipments from ITP1.2 
processing.
    Participants who import ITP1.2 shipments into the United States:
    A. 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;
    B. Must enter only the merchandise identified in the application as 
being within a range of pre-identified commodities (classified at the 
six-digit HTS level);
    C. Must enter merchandise transported by carriers pre-identified in 
the application;
    D. Must enter merchandise for release into the commerce under a 
consumption entry, e.g., may not enter ITP1.2 merchandise into a 
warehouse or Foreign Trade Zone;
    E. Must enter merchandise at a port selected by USCS for inclusion 
in the ITP1.2 test;
    F. Must not enter merchandise in ITP1.2 if it is subject to 
antidumping or countervailing duty, absolute or tariff rate quota, visa 
requirements, or pre-release reporting requirements imposed by other 
federal agencies;
    G. Must not import restricted or prohibited merchandise in 
prototype shipments; and,
    H. Must ensure that ineligible merchandise is not included in 
ITP1.2 shipments. Customs will exclude ineligible shipments from ITP1.2 
processing.

VIII. Maintenance of Account Information

    Throughout the prototype period, participants must provide USCS 
with advance notification of any proposed changes to the information 
provided in the application. This notification must be provided to USCS 
at least 7 days before the effective date of a proposed change and will 
be considered a proposed 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. 
If USCS does not reject the proposed amendment within 7 days of the 
proposed amendment, it is accepted.

IX. Technical Requirements

    ITP1.2 participants are required, at a minimum, to have the 
following hardware and software:
    A. Pentium series PC with Windows 95, 98, or NT 4.0 operating 
system and an available serial port;
    B. 28.8 Kbps or better modem;
    C. Microsoft Internet Explorer 4.01 or higher (but not IE 5.0);
    D. Established account with an Internet service provider; and,
    E. Internet e-mail service and a valid e-mail address.
    ITP1.2 will not support Netscape or Internet Explorer 5.0 Web 
browsers. Treasury Department and USCS automated information security 
requirements mandate the use of Data Encryption Standard III (DES III) 
for Internet security. For ITP 1.2, this will be accomplished using 
smart cards and serial readers. USCS will provide ITP1.2 participants 
with this equipment and supporting software. Up to three readers will 
be distributed to each ITP1.2 participant company. Although each user 
must have his/her own smart card and personal identification number, 
multiple users may access one reader. Smart cards will be initialized 
by USCS and sent to users in a separate package from the readers and 
software.
    Users are encouraged to access ITP1.2 via the ITP Web site. Limited 
EDI support will be offered only for submission of cargo exam data and 
return of import release notification messages.

X. Misconduct under Prototype

    All participants in ITP1.2 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 the 
participant:
     Fails to cooperate fully in a Compliance Assessment or 
audit;
     Fails to provide timely and accurate data and adequate 
resources in support of a Customs Compliance Assessment or audit;
     Fails to comply fully with the terms of a Compliance 
Improvement plan;
     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 submit data relating to 
prohibited or restricted merchandise or other non-eligible merchandise;

[[Page 40648]]

     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;
     Files non-consumption import entries;
     Enters or attempts to enter or submit data relating to 
prohibited or restricted merchandise, merchandise subject to absolute 
or tariff rate 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,
     Fails to follow the procedures, terms, and conditions 
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 Programs, 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.

XI. 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 ITP1.2. Absent any specified alternate 
procedure, the current regulations apply.

XII. Prototype Evaluation

    Once the participants are selected for ITP1.2, both the domestic 
Evaluation Task Force and the international Joint Evaluation Team will, 
during the initial 6 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 ITP1.2. 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 ITP1.2 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) of the Customs Regulations and will be reported to 
Congress.

    Dated: July 21, 1999.
Raymond W. Kelly,
Commissioner of Customs.
[FR Doc. 99-19071 Filed 7-26-99; 8:45 am]
BILLING CODE 4820-02-P