[Federal Register Volume 67, Number 92 (Monday, May 13, 2002)]
[Rules and Regulations]
[Pages 31948-31955]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 02-11835]


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DEPARTMENT OF THE TREASURY

Customs Service

19 CFR Part 24

[T.D. 02-24]
RIN 1515-AC82


Amended Procedure for Refunds of Harbor Maintenance Fees Paid on 
Exports of Merchandise

AGENCY: Customs Service, Department of the Treasury.

ACTION: Final rule.

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SUMMARY: This document adopts as a final rule, with certain 
modifications, the content of interim amendments to the Customs 
Regulations which provide a new procedure for requesting refunds of 
export harbor maintenance fees. The new procedure simplifies the refund 
process by relieving exporters from documentary requirements in most 
cases and providing a 120-day period to allow exporters to seek 
additional refunds.

EFFECTIVE DATE: May 13, 2002.

FOR FURTHER INFORMATION CONTACT: Deborah Thompson, Revenue Branch, 
National Finance Center, (317) 298-1200 (ext. 4003).

SUPPLEMENTARY INFORMATION:

Background

    The harbor maintenance fee was created by the Water Resources 
Development Act of 1986 (Pub. L. 99-622; codified at 26 U.S.C. 4461 et 
seq.) (the Act) and is implemented by Sec. 24.24 of the Customs 
Regulations (19 CFR 24.24). Imposition of the fee is intended to 
require those who benefit from the maintenance of U.S. ports and 
harbors to share in the cost of that maintenance. Pursuant to the Act 
and as implemented by the regulations, the harbor maintenance fee 
became effective on April 1, 1987, and is assessed based on 0.125 
percent of the value of commercial cargo loaded or unloaded at certain 
identified ports or, in the case of passengers, on the value of the 
actual charge paid for the transportation. In 1998, the U.S. Supreme 
Court held the fee unconstitutional as applied to exports (United 
States Shoe Corporation v. United States, 118 S. Ct. 1290, No. 97-372 
(March 31, 1998)). Until then, the fee had been assessed on port use 
associated with imports, exports, foreign trade zone admissions, 
passengers, and movements of cargo between domestic ports.
    After the Supreme Court decision, by a notice published in the 
Federal Register (63 FR 24209) on May 1, 1998, Customs announced that, 
as of April 25, 1998, the harbor maintenance fee for cargo loaded on 
board a vessel for export would no longer be collected. On July 31, 
1998, Customs published in the Federal Register (63 FR 40822) an 
amendment to Sec. 24.24 of the Customs Regulations, removing the 
requirement that exporters loading cargo at ports subject to the harbor 
maintenance fee pay the fee. Thus, currently, application of the fee 
continues, as noted above, but only for imports, domestic shipments, 
foreign trade zone admissions, and passengers.
    On August 28, 1998, the U.S. Court of International Trade (CIT) 
ordered an immediate refund of undisputed export fee payments to 
exporters who had filed complaints with the court (United States Shoe 
Corporation v. United States, No. 94-11-00668, slip op. 98-126 (C.I.T. 
Aug. 28, 1998)). The court's refund procedure applied to export fee 
payments received by Customs within two years of the date of the 
exporter's complaint, and refunds under this procedure were duly paid 
by Customs. On February 28, 2000, the U.S. Court of Appeals for the 
Federal Circuit (CAFC) acknowledged that the Customs Regulations did 
not then impose a limitation on the period within which a refund 
request may be filed (Swisher International, Inc. v. U.S., 205 F. 3d 
1358 (No. 99-1277 C.A.F.C. February 28, 2000) (cert. denied).) With 
this decision, all parties who had paid export fees became eligible to 
file a refund request for those fees regardless of when the fees were 
paid. This opened the entire period the export fee was in effect (April 
1, 1987--April 25, 1998) to recovery of refunds under the 
administrative procedure set forth in the regulations.

Recent Regulatory Activity Affecting Export Harbor Maintenance Fee 
Payments

    After publishing a notice of proposed rulemaking and considering 
the comments received, Customs, on July 2, 2001, published a final rule 
in the Federal Register (66 FR 34813) establishing a one year from time 
of payment time limit within which a refund request must be filed for 
overpayments of harbor maintenance fees that were paid on a quarterly 
basis. As Customs has not collected the fee on exports since April 25, 
1998, this time limitation, when in effect, would have eliminated the 
opportunity for exporters to file any additional harbor maintenance fee 
refund requests. Thus, to ensure that all exporters had sufficient time 
and notice to file refund requests, the July 2, 2001, final rule 
provided that those who made quarterly payments on exports more than 
one year ago (in effect, all payers of these export fees) would have 
until December 31, 2001, to file refund requests. Customs notes that 
the December 31, 2001, filing deadline for refunds applied also to any 
other harbor maintenance fees paid on a quarterly basis that are more 
than a year old as of that date.
    Before publication of the July 2, 2001, final rule, Customs 
published an interim regulation providing a simplified procedure for 
requesting refunds of export harbor maintenance fees. The interim 
regulation was published in the Federal Register (66 FR 16854) on March 
28, 2001, and became effective on that date. A correction document to 
the interim regulation was published in the Federal Register (66 FR 
21806) on April 27, 2001.
    It is noted that the July 2, 2001, final rule setting the one year 
time limitation

[[Page 31949]]

for refunds of quarterly harbor maintenance fee payments incorporated 
the simplified refund procedure for export fee payments set forth in 
the interim regulation. However, it modified the structure of the 
interim regulation and deleted language in the interim regulation 
regarding the application of interest to refunds because the issue of 
interest was and remains subject to litigation.
    Today's document is a final rule that adopts, with modifications, 
the content of the interim regulation as corrected by the April 27, 
2001, correction document. It retains the structure of the July 2, 
2001, final rule and continues to not mention whether interest is 
applicable to the refunds. The primary additional modifications to the 
interim regulation (additional to those that were included in the July 
2, 2001, final rule) are that: (1) Customs, after receiving a refund 
request, will provide exporters a list of all payments Customs was able 
to identify from a search of its records; (2) all exporters filing 
refund requests will have an additional 120 days from Customs issuance 
of payment and certification reports to file a request for a Revised 
Report/Certification to make a refund claim for additional payments; 
(3) refund requests covering export fee payments made prior to July 1, 
1990, will become subject to a power of attorney/authorization letter 
requirement (exporters or their agents can submit the authorization 
after the refund request is filed); (4) an exception to the power of 
attorney/authorization letter requirement will be introduced for 
freight forwarders; and (5) any agent (including a freight forwarder) 
that signs a Report/Certification or Revised Report/Certification on an 
exporter's behalf will certify that it will use due diligence to 
forward the refund to the exporter and will return to Customs any 
refund not forwarded to the exporter within one year of its receipt. 
These and other changes are discussed in the ``Discussion of 
Comments'', ``Other Changes'', and ``Conclusion'' sections of this 
document.

Refund Filing Procedure Under the Interim Regulation and the July 2, 
2001, Final Rule

    For Export Fee Payments Made on and After July 1, 1990
    The interim regulation's refund procedure, which became effective 
on March 28, 2001 (the substance of which was incorporated into the 
July 2, 2001, final rule), provides that Customs, upon receipt of a 
request, will search its records for payments made on and after July 1, 
1990, and include all payments that can be confirmed in a ``Harbor 
Maintenance Tax Payment Report and Certification'' (Report/
Certification) that is issued to the exporter. If the exporter agrees 
that the Report/Certification is accurate, the exporter will sign and 
return it to Customs, thereby agreeing that the amount determined to be 
owed in the Report/Certification is in full accord and satisfaction of 
its export harbor maintenance fee claims. Customs then will issue the 
refund.
    If an exporter disputes any payment listed in the Report/
Certification (that is, the Report/Certification does not include a 
payment the exporter believes was made or includes one but not in the 
correct amount), the exporter must submit documentary proof to Customs 
to support its claim. After reviewing the submission, if any additional 
or corrected payments can be confirmed, Customs will issue a Revised 
Report/Certification listing all undisputed payments from the initially 
issued Report/Certification and adding the additional confirmed 
payments (including corrections). If Customs cannot confirm the 
additional payments/corrections, they will be denied a refund. The 
denial will be final, and the original Report/Certification will 
constitute the total refund.
    To receive a refund, the exporter must sign and return to Customs 
the Report/Certification or the Revised Report/Certification, as the 
case may be.
For Export Fee Payments Made Prior to July 1, 1990
    Regarding refund requests for payments made prior to July 1, 1990, 
the interim regulation (and the July 2, 2001, final rule) provides that 
proof of payment documentation for each payment must be submitted with 
the request. If the documentation relative to a payment is sufficient 
to confirm the payment, Customs will issue a refund. If the 
documentation relative to a payment is lacking or insufficient to 
confirm payment, the refund request for that payment will be denied. 
Upon denial, an exporter will have an additional 120 days to submit 
documentation or additional documentation proving payment. Customs will 
review the documentation and issue refunds for confirmed payments and 
deny refunds for payments that cannot be confirmed. Any denials will be 
final.
    In the interim regulation, Customs explained that it is treating 
payments made prior to July 1, 1990, differently from payments made on 
or after that date because it possesses paper documentary proof of 
payment for payments made on or after July 1, 1990, but not before. 
Under the interim regulation's procedure, where Customs has paper 
documentation, it will not require exporters to submit proof of payment 
with their refund requests. However, Customs will require documentation 
for such payments where an exporter disputes the completeness or 
accuracy of a Report/Certification.

Discussion of Comments

    Customs received comments from nine commenters on the interim 
regulation. The comments raised various issues, some of which have 
already been addressed by Customs in its July 2, 2001, final rule.
    Comment: One commenter indicated that exporters may be disinclined 
to accept Customs invitation to withdraw Freedom of Information Act 
(FOIA) requests. (Customs made the suggestion in the ``Background'' 
text of the interim regulation in order to unclog the refund process 
that had been inundated with FOIA requests. Customs did so after 
pointing out that FOIA requests would be of no benefit to exporters for 
two reasons: (1) In most cases, proof of payment documents would not be 
required under the refund procedure for export fee payments made on and 
after July 1, 1990, and (2) Customs does not possess, and therefore 
cannot provide, proof of payment documents (paper documents) for 
payments made prior to July 1, 1990.) This commenter explained that 
filers of FOIA requests will not withdraw them because the records 
received from a FOIA request can be used to assist exporters in 
identifying the quarters in which a payment was made, as required under 
the interim regulation. Thus, this commenter recommended that the 
regulation be modified to remove the requirement that the quarters of 
payment be identified in a refund request for payments made on and 
after July 1, 1990; Customs could then search the entire post-June 30, 
1990, period for payments.
    Customs response: Customs appreciates the commenter's concern 
regarding FOIA requests and has reconsidered the refund procedure. To 
accommodate exporters who have requested documentation and to further 
simplify the process, Customs is modifying the refund procedure in this 
document.
    As set forth in the regulatory text in this document, Customs, when 
processing a refund request, will perform a search of its records 
(paper documents and electronic database) and produce for issuance to 
the exporter two reports: the Report/Certification (also provided for 
under the interim

[[Page 31950]]

regulation) and the Harbor Maintenance Tax Payment Report (HMT Payment 
Report; not provided for under the interim regulation).
    The Report/Certification lists all post-June 30, 1990, payments 
identified by Customs record search and any pre-July 1, 1990, payments 
supported by documentation submitted by the exporter with its refund 
request or afterward; it also sets forth the total amount of the refund 
owed the exporter. The HMT Payment Report lists all payments made by 
the exporter during the entire recovery period (April 1, 1987 through 
April 25, 1998), as identified by Customs record search. Customs 
believes that the HMT Payment Report should satisfy all exporters who 
filed FOIA requests, as it contains all payments that Customs can 
identify from all record sources.
    Consequently, specifying quarters of payment in a refund request 
(or not doing so) will not determine which payments will be included in 
a Report/ Certification (although the information may be helpful to 
Customs in its search). Exporters who could not identify quarters will 
benefit from Customs issuance of the HMT Payment Report, as it will 
provide them information they may need to locate evidence of payments 
should that evidence be needed to obtain a refund.
    Also, Customs notes that under the modified procedure, upon receipt 
of the HMT Payment Report and the Report/Certification, the exporter 
will have 120 days to submit a request for a Revised Report/
Certification, with supporting documentation, to establish any payments 
not listed in the Report/Certification. This provides an exporter with 
a second opportunity to submit required documentation to establish pre-
July 1, 1990, payments and, as under the interim regulation procedure, 
gives exporters the opportunity to support with documentation 
additional post-June 30, 1990, payments not listed in a Report/
Certification (as well as corrections of payments listed).
    Comment: Several commenters contended that Customs could use its 
database to provide information to exporters relative to export fee 
payments made prior to July 1, 1990. The exporters could then use the 
provided data to search for records to support payments.
    Customs response: Customs favors this recommendation, which is 
reflected in the modified procedure set forth in this document. Under 
the modified procedure, Customs will use the database (along with other 
paper document sources Customs possesses for payments made on or after 
July 1, 1990) to provide each requesting exporter a HMT Payment Report 
that lists all payments made during the entire recovery period. This 
report will provide exporters data they can use to search for that 
supporting documentation, just as the commenter recommended.
    Comment: One commenter recommended that Customs search its database 
for pre-July 1, 1990, payments and treat them the same as post-July 1, 
1990, payments, meaning that Customs would include them in the Report/ 
Certification's refund calculation.
    Customs response: Customs cannot agree to this recommendation. The 
modified procedure will provide the exporter the reports that list 
payments Customs identified in its record search, but exporters will be 
required to submit supporting documentation to obtain refunds for pre-
July 1, 1990, payments. Customs records do not include paper 
documentation to support these payments, and Customs experience with 
older payments recorded in the database has shown that the database is 
unreliable. Customs therefore cannot rely exclusively on that record 
source to confirm export fee payments, and exporters will have to 
provide that documentation (if not with the refund request, as soon as 
possible thereafter) to receive refunds for pre-July 1, 1990, payments.
    Comment: Two commenters objected to the interim regulation's 
requirement that only certain documents are acceptable as proof of 
payment for pre-July 1, 1990, payments. (The interim regulation 
provides that acceptable documentation may be either a copy of the 
Export Vessel Movement Summary Sheet or, where an Automated Summary 
Monthly Shipper's Export Declaration was filed, a letter containing 
certain information there specified.) These commenters contended that 
any documentation tending to support the payment should be acceptable, 
such as a cancelled check, a company payment ledger, or a Shipper's 
Export Declaration (SED).
    Customs response: The interim regulation requires as proof of 
payment the documentation that, under the regulations, was required to 
be submitted with payment. In requiring that documentation to support a 
payment, Customs is demanding no more from exporters than the 
regulation always required for refunds and no more than the regulation 
still requires for refunds of other than export harbor maintenance fee 
payments. However, Customs appreciates the difficulty some exporters 
may have in locating these documents, particularly for older payments 
(the recovery period extends back to April of 1987). Therefore, Customs 
is modifying the regulation to provide that, in addition to the 
required documents, Customs will consider any documentation the 
exporter submits that tends to prove a payment, including, with respect 
to exporters whose only quarterly HMT payments were for exports, 
affidavits attesting to that fact.
    Customs notes however that in reviewing documentation other than 
the required documentation, it will balance its obligation to issue 
refunds with its obligation to protect the revenue. Thus, while Customs 
will accommodate exporters by considering additional evidence of 
payment, it will only accept those documents as evidence of payment if 
the documentation clearly shows that the payments were made for export 
fees (as opposed to other harbor maintenance fees), in the amounts 
sought to be refunded, and by the party requesting the refund (or on 
whose behalf the refund is requested). The regulation is amended in 
this document accordingly.
    Customs notes that the regulations did not require the CF 349 and 
the CF 350 until 1991. Thus, for a period of time after this 1991 
regulation change, Customs also accepted with payment, and for proving 
payments for refund, the documentation that was required under the 
regulations prior to the 1991 change. Consequently, for issuing refunds 
now for payments made on and after July 1, 1990, Customs will accept as 
proof of payment, when required to be submitted, whichever type of 
document Customs accepted with the payment at the time it was made. 
That documentation was either the documentation required after the 1991 
change or, at least for a time, the documentation required under the 
regulations prior to the 1991 change.
    Comment: Two commenters objected to the interim regulation's 
statement, in the ``Background'' text of the document, regarding when a 
protest under 19 U.S.C. 1514 should be filed to challenge a denial of a 
refund request for a pre-July 1, 1990, payment. These commenters 
contended that the 90-day protest filing period should commence upon 
expiration of the 120-day refund request refiling period. (The interim 
regulation procedure provided that, for pre-July 1, 1990, payments, an 
exporter would have 120 days after a refund denial to submit additional 
documentation. The document pointed out, however, that if an exporter 
wanted to file a protest, it must do so within 90 days of the refund 
denial. This would mean that an exporter would have to file

[[Page 31951]]

a protest prior to the end of the 120-day period.)
    Customs response: Under 19 U.S.C. 1514(c)(3), a protest must be 
filed within 90 days of the date of a Customs decision described in 19 
U.S.C. 1514(a)(3) concerning charges or exactions under the customs 
laws, which includes a decision to deny a refund of export harbor 
maintenance fees. (See Swisher International, Inc. v. United States, 
205 F. 3d 1358 (No. 99-1277 C.A.F.C. February 28, 2000)(cert. denied), 
which held that denial of a harbor maintenance fee refund request is 
protestable.) Based on this statutory requirement, the interim 
regulation document indicated that a protest must be filed within 90 
days of the Customs decision to deny a refund.
    However, the modified refund procedure, as set forth in this 
document, renders the concern of these commenters moot. Under the 
modified procedure, and in contrast to the procedure set forth in the 
interim regulation, under no circumstance does the 120-day period for 
filing documentation run concurrently with the statutory 90-day protest 
period. Under the modified procedure, the 90-day protest period begins 
to run either upon expiration of the 120-day period or issuance of a 
Revised Report/Certification if issued after the period's expiration.
    Comment: Several commenters objected to Customs expression of 
intent, in the ``Background'' text of the interim regulation, to 
require that refund requests for export fee payments made more than a 
year ago be filed by the anticipated 30-day delayed effective date of 
the then not yet published July 2, 2001, final rule. These commenters 
recommended that Customs allow one year or 18 months from the date of 
publication of that anticipated final rule.
    Customs response: Regarding the effective date of the July 2, 2001, 
final rule by which refund requests for export fee payments must be 
filed, Customs reconsidered the matter after publication of the interim 
regulation (partly in response to comments discussed in the final 
rule). Thus, in the July 2, 2001, final rule, Customs set forth a 180-
day delayed effective date that would allow exporters plenty of time to 
file these refund requests, through December 31, 2001. Customs believes 
that this was a satisfactory resolution of the matter as it provided 
ample time to file refund requests (considering the period of time 
exporters had to do so prior to issuance of the July 2, 2001, final 
rule).
    Comment: Several commenters objected to the interim regulation 
explicitly precluding application of interest to refunds of export 
harbor maintenance fees. Some of these commenters stated that interest 
should apply to these refunds and others stated that the regulation 
should not explicitly preclude application of interest while the issue 
is still being litigated.
    Customs response: Customs does not agree that interest should apply 
to refunds of export harbor maintenance fees. As Customs pointed out in 
its comment responses published in the July 2, 2001, final rule, the 
U.S. Court of Appeals for the Federal Circuit ruled in International 
Business Machines Corp. v. United States, 201 F.3d 1367 (Fed. Cir. 
2000), that exporters are not entitled to interest on the refund of 
these fees. Customs, however, does agree that the regulation should not 
mention interest while the matter is still subject to litigation. 
Consequently, Customs removed the language regarding interest from the 
regulation published in the July 2, 2001, final rule, and today's final 
rule document continues the omission.
    Customs also notes that under Sec. 24.24(e)(4)(ii)(B) of the 
interim regulation (and under the July 2, 2001, final rule), claims for 
recovery of interest are not included among the claims waived by the 
exporter. This is made explicit in the amendment published in this 
document (see Sec. 24.24(e)(4)(iv)(B)(5)).
    Comment: Several commenters objected to the interim regulation's 
requirement that a power of attorney or letter of authorization be 
submitted when an exporter is represented by an agent. The power of 
attorney or letter constitutes the exporter's authorization of an agent 
or representative to file a refund request, sign a Report/Certification 
or Revised Report/Certification, and/or receive a refund on its behalf.
    Customs response: Customs notes that it was the exporter who was 
liable for the export fee and, as such, is the proper party entitled to 
receive a refund. Generally, where an agent claims to represent an 
exporter, Customs believes it is appropriate to require as evidence of 
the representation a properly executed and current power of attorney or 
letter of authorization executed by the exporter. This ensures that the 
agent requestor is properly authorized to request and receive the 
refund, and it protects both the Government and the exporter against 
the possibility of issuing a refund to the wrong party, issuing 
duplicate refunds to both the exporter and its agent, or issuing 
refunds to more than one agent claiming to represent the same exporter.
    Thus, the general rule is that Customs will not process a refund 
request submitted by an agent on behalf of an exporter (by witholding 
issuance of the HMT Payment Report and the Report/Certification until 
an authorizing document is filed) unless a power of attorney or 
authorization letter signed by the exporter is submitted.
    However, in reviewing this matter, Customs has recognized the 
special circumstance of freight forwarders who made export fee payments 
on behalf of many exporters at a time, in some cases, hundreds. Customs 
believes that this special circumstance warrants an exception to the 
general rule that is practical for Customs as well as the exporters 
represented by these agents.
    To accommodate these agents and yet to ensure, as much as possible, 
that Customs does not inadvertently issue double refunds to an exporter 
who also files a refund request on its own behalf, Customs will process 
refund requests filed by freight forwarders without power of attorneys 
or authorization letters unless any exporter covered in the refund 
request has also filed a separate refund request on its own behalf. In 
that instance, the freight forwarder's entire refund request will be 
removed from the chronological processing order and processed later.
    The exception to the power of attorney/authorization letter 
requirement for freight forwarders is added to 
Sec. 24.24(e)(4)(iv)(B)(1) of this final rule. Minor conforming 
modifications are made in the amended regulation, as necessary.
    Customs notes that while it always intended to process refund 
requests in the chronological order of receipt, the interim regulation 
did not make that explicit. This final rule amends the regulation to 
make it explicit (see Sec. 24.24(e)(4)(iv)(B)(1)).
    Where a power of attorney or authorization letter is submitted, 
whether or not required, it must be executed by an official of the 
exporting company who is authorized to legally bind the company.
    Finally, Customs notes that under the interim regulation procedure, 
this requirement for a power of attorney or authorization letter only 
applied to refund requests for post-June 30, 1990, payments for which a 
Report/Certification would be issued. Refund requests covering payments 
made prior to July 1, 1990, did not require a power of attorney or 
authorization letter, as they were to be treated like a request for a 
refund of any other quarterly paid harbor maintenance fee (except that 
an

[[Page 31952]]

additional 120-day period to establish payments would apply) and a 
Report/Certification would not be issued. However, as the modified 
procedure treats payments made prior to and on or after July 1, 1990, 
the same with respect to issuance of a HMT Payment Report and a Report/
Certification that must be signed by the exporter or its representative 
to receive a refund, the power of attorney/authorization letter 
requirement is no longer limited to refund requests covering post-June 
30, 1990, payments. The regulation is modified accordingly in this 
document (Sec. 24.24(e)(4)(iv)(B)(1)).
    Comment: One commenter recommended that Customs clarify that 
already-filed refund requests (filed before publication of the interim 
regulation) that were accompanied by documentation to prove payments 
made on or after July 1, 1990, will result in a Customs records search 
that is not limited to only the quarters covered by the documentation 
submitted. This commenter stated that an exporter should receive 
refunds for all post-June 30, 1990, payments made but will not if 
Customs does not search the entire period or the exporter does not 
refile its refund request identifying all possible quarters during 
which payments were (or could have been) made.
    Customs response: Given the modified procedure set forth in this 
document, this commenter's concern is moot. Exporters, all of whom have 
already filed refund requests, will receive the HMT Payment Report that 
identifies all payments made by the exporter, as revealed by Customs 
record search. All post-June 30, 1990, payments that Customs can 
identify will be included in the HMT Payment Report and the Report/
Certification whether or not the exporter's request specified quarters 
of payment. All payments, no matter when made, will be included in the 
HMT Payment Report.
    Comment: Some commenters contended that Customs should convene a 
public meeting to discuss the amended refund process.
    Customs response: Customs does not agree with this recommendation. 
As stated in its comment responses published in the July 2, 2001, final 
rule document, Customs believes that a public meeting regarding this 
subject is unnecessary and that the particular administrative (notice 
and comment) procedures being followed are sufficient to resolve the 
matter at issue.
    Comment: One commenter recommended that Customs adopt a procedure 
to sever disputed claims from undisputed claims in a refund request to 
allow immediate payment of claims that can be verified while the 
exporter pursues a dispute involving claims that cannot be verified.
    Customs response: A form of severability (of undisputed claims from 
disputed claims) is available under the modified procedure. Under the 
modified procedure, an exporter may sign and return to Customs a 
Report/Certification to receive the refund set forth in that report and 
also file a request for a Revised Report/Certification to seek refunds 
for additional payments not identified in the Report/Certification. The 
request for a Revised Report/Certification may be filed either 
contemporaneously with the filing of the signed Report/Certification or 
sometime later but within the 120-day period. Customs notes, however, 
that corrections of payments included in a signed Report/Certification 
cannot be pursued later because the exporter's signature on the report 
constitutes a full accord and satisfaction agreement with respect to 
all payments covered in that report.
    In addition, an exporter may file another request for a Revised 
Report/Certification at any time during the 120-day period. This 
feature of the procedure allows an exporter to seek a refund for any 
later discovered payments and gives an exporter another chance to prove 
(with additional documentation) a payment that was not included in a 
refund previously issued by Customs.
    Finally, after expiration of the 120-day period, an exporter may 
file a protest covering any payments not refunded by Customs. This 
provides another opportunity to sever disputed from undisputed refund 
claims, though later in the process.
    Comment: One commenter recommended that a time limit be imposed on 
Customs processing of refund requests to require that Customs process 
at least 500 claims per month.
    Customs response: Customs disagrees that a monthly processing 
requirement is necessary. However, Customs agrees that the expeditious 
processing of claims should be given a high priority. Toward that end, 
the modified procedure provides that Customs will endeavor to issue a 
Revised Report/Certification within 60 days of receiving a request for 
a revised report with supporting documentation. Also, for exporters 
whose payments are confined to the post-June 30, 1990, period and who 
do not dispute the payments listed and the refund set forth in a 
Report/Certification, refunds will be issued soon after Customs receipt 
of a signed Report/Certification. The sooner the exporter signs and 
returns it to Customs, the sooner Customs will issue the refund. 
Customs believes that the timetable set up in the modified procedure 
adequately addresses this commenter's concern.

Other Changes

    After further consideration of the interim regulation's refund 
procedure, Customs determined that other changes were warranted 
(additional to those discussed in the comment responses above). One 
change involves the exporter's waiver (release, waiver, and 
abandonment) of claims against the Government (its officers, agents, 
and assigns for costs, attorney fees, expenses, compensatory damages, 
and exemplary damages, excluding interest), and another change involves 
the exporter's full accord and satisfaction agreement. The interim 
regulation (as well as the July 2, 2001, final rule) provides that the 
waiver and the full accord and satisfaction agreement apply to all 
export fee payments made by the exporter, whether or not addressed in a 
report. In contrast, under the modified procedure set forth in this 
document, an exporter's signature on a Report/Certification or a 
Revised Report/Certification represents a waiver and a full accord and 
satisfaction agreement relative only to the payments approved for 
refund in the report.
    Another change is the Government's waiver of claims (excluding 
fraud claims) against the exporter (its employees, etc.) which in this 
document, like the exporter's waiver, is limited to claims arising out 
of payments covered in a signed report. Under the interim regulation, 
the Government's waiver was broad, covering all export fee payments 
whether or not covered in a report.
    Another change has to do with the certification made by an agent, 
including a freight forwarder, that signs a Report/Certification or 
Revised Report/Certification on an exporter's behalf. Customs, in 
determining that the freight forwarder exception to the power of 
attorney/authorization letter requirement is warranted (discussed in 
the ``Comments'' section), recognized that any agent should be 
accountable for the proper distribution of refunds issued by Customs 
that are intended for exporters covered in the agent's refund request. 
Thus, Customs is adding to the regulation (Sec. 24.24(e)(4)(iv)(B)(5)) 
a provision that requires any agent, when signing a Report/
Certification or Revised Report/Certification and accepting refunds on 
behalf of exporters, to certify that it will use due diligence to 
forward the refund to the exporters it represents, and will return a 
refund to Customs,

[[Page 31953]]

within one year of receipt, if it does not forward it to the exporter.
    Another change in the regulation is to add language indicating that 
refund requests will be processed in the chronological order of receipt 
(see Sec. 24.24(e)(4)(iv)(B)(1)) . Customs always intended to process 
refund requests in this way, but the regulation was silent in this 
regard.
    Finally, a change concerning the address for submitting requests 
for refunds of harbor maintenance fees paid on a quarterly basis (found 
in Sec. 24.24(e)(4)(i) of the interim regulation) is made in this 
document (in Secs. 24.24(e)(4)(i) and (iv)(A)). The change reflects the 
correct zip code; however, as noted previously, this change was 
reflected in the July 2, 2001, final rule and was made in a notice of 
correction document published in the Federal Register on April 27, 
2001.

Conclusion

    After analysis of the comments and further review and consideration 
of the matter, Customs has determined to adopt as final the content of 
the interim amendments published in the Federal Register (66 FR 16854) 
on March 28, 2001, with the changes discussed above in this document 
and set forth in the amended regulatory text below.
    In summary, these changes relate to: (1) That part of the procedure 
relative to Customs issuance of refunds after receiving a refund 
request, including the issuance of a HMT Payment Report; (2) the 
processing of refund requests in chronological order; (3) the 
requirement that a power of attorney or authorization letter be 
submitted to Customs prior to issuance of a HMT Payment Report and 
Report/Certification for any refund request (as opposed to only 
requests covering post-June 30, 1990, payments) submitted on the 
exporter's behalf by an agent other than a freight forwarder; (4) an 
exception to the power of attorney/ authorization letter requirement 
applicable to freight forwarders and it's effect on the chronological 
processing of refunds filed by freight forwarders; (5) a requirement 
that any agent (including a freight forwarder) that signs a Report/
Certification or Revised Report/Certification on an exporter's behalf 
must certify that it will use due diligence to forward the refund to 
the exporter and will return to Customs any refund not forwarded to the 
exporter within one year of its receipt; (6) the exporter's waiver 
(release and abandonment) of claims and its agreement of full accord 
and satisfaction; (7) the Government's waiver of claims against the 
exporter; (8) the address for mailing refund requests for export harbor 
maintenance fees; and (9) the matter of interest on refunds of export 
harbor maintenance fees. Customs notes that the latter two changes were 
reflected in the July 2, 2001, final rule.
    Customs emphasizes that the instant final rule's modification of 
the interim regulation's refund-filing procedure will not prejudice 
exporters who filed refund requests in accordance with that procedure. 
The modified procedure is simpler and more accommodating to exporters 
than the interim regulation's procedure, and all filers will benefit 
equally from its implementation. Customs notes that as all refund 
requests have been filed prior to publication of this document, any 
modification to the procedure will not affect any exporter's actual 
filing of the request. The modifications made in this document affect 
the part of the procedure that commences after Customs receives a 
refund request.
    Finally, Customs notes that this document amends only 
Sec. 24.24(e)(4)(iv). The remaining paragraphs of Sec. 24.24(e)(4) 
remain as published in the July 2, 2001, final rule (which became 
effective after the interim regulation and thereby replaced the interim 
regulation).

Inapplicability of Delayed Effective Date

    Pursuant to 5 U.S.C. 553(d)(3), Customs has determined that a 
delayed effective date for this final rule is unnecessary. This 
document adopts, with some modifications, the content of an interim 
regulation previously published in the Federal Register (66 FR 34813) 
and made effective on March 28, 2001. The several changes made with 
publication of this document are to the benefit of the exporters who 
are required to follow the procedure set forth in the already effective 
interim regulation. For that reason, the effective date of this final 
rule document should not be delayed.

Executive Order 12866

    This document does not meet the criteria for a Asignificant 
regulatory action'' as specified in E.O. 12866.

Paperwork Reduction Act

    The collection of information contained in this final rule has 
previously been reviewed and approved by the Office of Management and 
Budget (OMB) under OMB control number 1515-0158. Additional information 
requested in the final rule relates to usual and customary business 
information/records. This rule does not include any substantive changes 
to the existing approved information collection. An agency may not 
conduct or sponsor, and a person is not required to respond to, a 
collection of information unless the collection of information displays 
a valid control number.

Regulatory Flexibility Act

    Because no notice of proposed rulemaking was required for this 
rule, the provisions of the Regulatory Flexibility Act (5 U.S.C. 601 et 
seq.) do not apply. However, because this amendment to the regulations 
merely simplifies, to the benefit of exporters, a procedure for 
applying for and receiving refunds of export harbor maintenance fees 
that is already provided for under an existing regulation, it will not 
have a significant economic impact on a substantial number of small 
entities.

Drafting Information

    The principal author of this document was Bill Conrad, Office of 
Regulations and Rulings, U.S. Customs Service. However, personnel from 
other offices contributed in its development.

List of Subjects in 19 CFR Part 24

    Accounting, Claims, Customs duties and inspection, Fees, Financial 
and accounting procedures, Imports, Taxes, User fees.

Amendments to the Regulations

    For the reasons stated in the preamble, under the authority of 19 
U.S.C. 66 and 1624, the content of the interim rule amending 19 CFR 
part 24 that was published at 66 FR 16854 on March 28, 2001, is adopted 
as a final rule, with changes, to read as follows:

PART 24--CUSTOMS FINANCIAL AND ACCOUNTING PROCEDURE

    1. The general authority citation for part 24 is amended to read as 
follows:

    Authority: 5 U.S.C. 301; 19 U.S.C. 58a-58c, 66, 1202 (General 
Note 23, Harmonized Tariff Schedule of the United States), 1505, 
1520, 1624; 26 U.S.C. 4461, 4462; 31 U.S.C. 9701.
* * * * *

    2. Section 24.24 is amended by revising paragraph (e)(4)(iv) to 
read as follows:


Sec. 24.24  Harbor maintenance fee.

* * * * *
    (e) Collections, supplemental payments, and refunds--* * *
    (4) * * *
    (iv) For fees paid on export movements. Customs will process refund 
requests relative to fee payments previously made regarding the loading 
of cargo for export as follows:
    (A) Refund request. For export fee payments made prior to July 1, 
1990, the

[[Page 31954]]

exporter (the name that appears on the SED or equivalent documentation 
authorized under 15 CFR 30.39(b)) or its agent must submit a letter of 
request for a refund specifying the grounds for the refund and 
identifying the specific payments made. The letter must be accompanied 
by the proof of payment set forth in paragraph (e)(4)(iv)(C) of this 
section. For export fee payments made on or after July 1, 1990, 
supporting documentation is not required with the refund request. For 
these payments, the request must specify the grounds for the refund, 
identify the quarters for which a refund is sought, and contain the 
following additional information: the exporter's name, address, and 
employer identification number (EIN); the name and EIN of any freight 
forwarder or other agent that made export fee payments on the 
exporter's behalf; and a name, telephone number, and facsimile number 
of a contact person.
    (B) Refund procedure--(1) Processing order; power of attorney. 
Generally, a properly filed refund request will be processed in the 
chronological order of its receipt. A refund request filed on behalf of 
an exporter by an agent other than a freight forwarder must be 
supported by a power of attorney or letter signed by the exporter 
authorizing the representation. A refund request filed by an agent 
other than a freight forwarder that lacks a power of attorney or 
authorization letter will not be processed unless one or the other is 
submitted. A refund request filed by a freight forwarder does not 
require a power of attorney or authorization letter to be processed; 
however, if Customs has not received a power of attorney or 
authorization letter for an exporter covered in a freight forwarder's 
refund request and that exporter has filed a separate refund request on 
its own behalf, that freight forwarder's entire refund request will be 
removed from the chronological processing order and processed after the 
processing of all exporter refund requests is completed.
    (2) HMT Payment Report and Report/Certification. In processing a 
request for a refund, Customs will conduct a search of its records 
(Customs electronic database and paper document sources) and produce 
for issuance to the exporter (or its agent, as appropriate) a ``Harbor 
Mantenance Tax Payment Report'' (HMT Payment Report) that lists all 
payments reflected in those records for the entire period the fee was 
in effect. Customs will also produce for issuance to the exporter a 
``Harbor Maintenance Tax Refund Report and Certification'' (Report/
Certification) that lists all payments supported by paper 
documentation, either retained by Customs (relative to payments made on 
and after July 1, 1990) or submitted by the exporter with its refund 
request (relative to payments made at any time the fee was in effect). 
Where a refund request was filed on the exporter's behalf by an agent 
other than a freight forwarder, a power of attorney or authorization 
letter must be filed with Customs before Customs will issue these 
reports. The Report/Certification sets forth the total amount of the 
refund that Customs believes it owes the exporter for the payments 
listed in that report (minus any previous refunds). Pre-July 1, 1990, 
payments listed in the HMT Payment Report for which paper documentation 
has not been provided by the exporter will not be listed in the Report/
Certification. The exporter has 120 days from the date the HMT Payment 
Report and the Report/Certification are issued (the 120-day period) to 
sign and return to Customs the Report/Certification in order to receive 
the refund set forth in that report and/or to submit to Customs a 
request for a Revised Report/Certification. Where the exporter chooses 
to receive the refund set forth in the Report/Certification, the 
exporter must sign and return the report to Customs. Customs will issue 
the refund upon receipt of the signed report.
    (3) Revised Report/Certification. A request for a Revised Report/
Certification must be accompanied by documentation to support any 
payments not listed in the Report/Certification or corrections to 
listed payments. See paragraph (e)(4)(iv)(C) of this section regarding 
acceptable documentation. If an exporter (or its agent, as appropriate) 
both signs and returns to Customs a Report/Certification and requests a 
Revised Report/Certification, Customs will not, when reviewing the 
request for a Revised Report/Certification, approve for refund any 
corrections to the payments that were listed in the signed Report/
Certification; Customs will, however, in that circumstance, consider 
approving any additional payments that were not listed in the signed 
Report/Certification. If an exporter does not sign and return to 
Customs a Report/Certification, but requests a Revised Report/
Certification, Customs will consider approving for refund corrections 
to the payments listed in the Report/Certification and additional 
payments. Where the exporter requests a Revised Report/Certification, 
Customs will review the documentation submitted with the request, make 
a determination, and, within 60 days of the request's receipt, issue a 
Revised Report/Certification that lists all payments approved for 
refund and the total amount of the refund owed. In order to receive the 
refund set forth in a Revised Report/Certification, the exporter must 
sign and return it to Customs. Customs will issue the refund upon its 
receipt of the signed report. An exporter, within the 120-day period, 
may submit additional requests for a Revised Report/Certification, with 
appropriate documentation, to cover any payments not approved for 
refund in a Revised Report/Certification previously issued by Customs.
    (4) Protest. For purposes of filing a protest under 19 U.S.C. 1514 
(and 19 CFR part 174), unless issuance of a Revised Report/
Certification is pending, any payments not approved for refund in a 
Report/Certification or a Revised Report/Certification issued by 
Customs within the 120-day period will be considered denied as of the 
date the period expires; a protest covering such payments must be filed 
within 90 days of that date. For any payments not approved for refund 
in a Revised Report/Certification issued after expiration of the 120-
day period, a protest may be filed within 90 days of that report's 
issuance.
    (5) Significance of signed Report/Certification and Revised Report/
Certification. A Report/Certification or Revised Report/Certification 
must be signed by an officer of the company duly authorized to bind the 
company or by an agent (such as a broker or freight forwarder) 
representing the exporter in seeking a refund under this section. A 
Report/Certification or Revised Report/Certification signed by the 
exporter or its agent and received by Customs constitutes the 
exporter's agreement that the amount of the refund set forth in the 
report is accurate and Customs payment of that refund amount is in full 
accord and satisfaction of all payments approved for refund in the 
report. The signed Report/Certification or Revised Report/Certification 
also represents the exporter's release, waiver, and abandonment of all 
claims, excluding claims for interest, against the Government, its 
officers, agents, and assigns for costs, attorney fees, expenses, 
compensatory damages, and exemplary damages arising out of the payments 
approved for refund in the report. When an agent, including a freight 
forwarder, signs a Report/Certification or Revised Report/ 
Certification on behalf of an exporter(s), the agent certifies that it 
is acting on the exporter's behalf and will use due diligence to 
forward the refund to the exporter, and, in the event the agent does 
not forward the refund to the exporter, will notify Customs and return

[[Page 31955]]

the refund to Customs within one year of its receipt of the refund. 
Upon receipt of the signed Report/Certification or Revised Report/
Certification, Customs releases, waives, and abandons all claims other 
than fraud against the exporter, its officers, agents, or employees 
arising out of all payments approved for refund in the report.
    (C) Documentation. For payments made prior to July 1, 1990, 
supporting documentation is required to obtain a refund and must be 
submitted in accordance with paragraphs (e)(4)(iv)(A) and/or (B)(3) of 
this section. For payments made on and after July 1, 1990, supporting 
documentation is not required to obtain a refund, unless the exporter 
seeks to prove corrections of payments listed in the Report/
Certification (if the exporter did not sign and return it to Customs) 
and/or additional payments not listed in a Report/Certification, in 
accordance with paragraph (e)(4)(iv)(B)(3) of this section. The 
supporting documentation that Customs will accept as establishing 
entitlement to a refund, whether submitted with a refund request or a 
request for a Revised Report/Certification, is whichever of the 
following documents Customs accepted with the payment at the time it 
was made: a copy of the Export Vessel Movement Summary Sheet; where an 
Automated Summary Monthly Shipper's Export Declaration was filed, a 
copy of a letter containing the exporter's identification, its employer 
identification number (EIN), the Census Bureau reporting symbol, and, 
the quarter for which the payment was made; or a copy of a Harbor 
Maintenance Fee Quarterly Summary Report, Customs Form 349, for the 
quarter covering the refund requested. Customs also will consider other 
documentation offered as proof of payment of the fee, such as cancelled 
checks and/or affidavits from exporters attesting to the fact that all 
quarterly harbor maintenance tax payments made by the exporter were 
made exclusively for exports, and will accept that other documentation 
as establishing entitlement for a refund only if it clearly proves the 
payments were made for export harbor maintenance fees in the amounts 
sought to be refunded and were made by the party requesting the refund 
or the party on whose behalf the refund was requested.
* * * * *

Robert C. Bonner,
Commissioner of Customs.
    Approved: May 8, 2002.
Timothy E. Skud,
Deputy Assistant Secretary of the Treasury.
[FR Doc. 02-11835 Filed 5-10-02; 8:45 am]
BILLING CODE 4820-02-P