[Federal Register Volume 67, Number 174 (Monday, September 9, 2002)]
[Notices]
[Pages 57271-57273]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 02-22782]


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DEPARTMENT OF THE TREASURY

Customs Service


General Program Test Expanded and Extended: Quota Preprocessing

AGENCY: Customs Service, Department of the Treasury.

ACTION: General notice.

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SUMMARY: This notice announces that the quota preprocessing program 
test, which provides for the electronic processing of certain quota-
class apparel merchandise prior to arrival of the importing carrier, 
will be expanded to all Customs ports and the duration of the program 
test will be extended until December 31, 2004.
    The quota preprocessing program test is currently being conducted 
at a selected number of Customs ports and was set to expire on December 
31, 2002. The program test is being expanded to all ports and the 
duration of the test extended so that Customs can continue to evaluate 
the program's effectiveness on a greatly increased scale pending the 
initiation and completion of a rulemaking process that will seek to 
establish the program permanently through appropriate amendments to the 
Customs Regulations. Public comments concerning any aspect of the 
program test as well as applications to participate in the test are 
requested.

DATES: The expansion of the test to all Customs ports is effective on 
October 9, 2002. The expanded program test is scheduled to run until 
December 31, 2004. Applications to participate in the test and comments 
concerning the test will continue to be accepted throughout the testing 
period.

ADDRESSES: Written comments regarding this notice or any aspect of the 
program test should be addressed to Stephen Silvestri, Quota Branch, 
U.S. Customs Service, 1300 Pennsylvania Avenue, NW., Room 5.3-D, 
Washington, DC 20229, or may be sent via e-mail to 
[email protected]. An application to participate in 
the program test must be sent to the Customs port(s) (Attention: 
program coordinator for quota preprocessing) where the applicant 
intends to submit quota entries for preprocessing. If necessary, 
information on Customs port addresses may be obtained by contacting the 
Customs Web site at http://www.customs.gov (Office Locations).

FOR FURTHER INFORMATION CONTACT: Stephen Silvestri, Quota Branch, (202-
927-5397).

SUPPLEMENTARY INFORMATION: On July 24, 1998, Customs published a 
general notice in the Federal Register (63 FR 39929) announcing the 
limited testing, pursuant to the provisions of Sec.  101.9(a), Customs 
Regulations (19 CFR 101.9(a)), of a new operational procedure regarding 
the electronic processing of quota-class apparel merchandise. The test 
was initially to be conducted at the ports located in New York/Newark 
and Los Angeles.
    Quota preprocessing permits certain quota entries (merchandise 
classifiable in chapter 61 or 62 of the Harmonized Tariff Schedule of 
the United States (HTSUS)) to be filed, reviewed for admissibility, and 
to have their quota priority and status determined by Customs prior to 
arrival of the carrier, similar to the method of preliminary review by 
which non-quota entries are currently processed. The purpose of quota 
preprocessing is to reduce Customs processing time for qualified quota 
entries and to expedite the release of the subject merchandise to the 
importer. To this end, participants in quota preprocessing have been 
allowed to submit quota entries to Customs up to 5 days prior to vessel 
arrival or after the wheels are up on air shipments.
    The July 24, 1998, Federal Register notice principally described 
the new procedure, specified the eligibility and application 
requirements for participation in the program test, and

[[Page 57272]]

noted the acts of misconduct for which a participant in the test could 
be suspended and disqualified from continued participation in the 
program.
    The initial test of the quota preprocessing procedure began on 
September 15, 1998, and was intended to continue for a six-month period 
that expired on March 14, 1999. However, on March 25, 1999, and on 
January 6, 2000, Customs published general notices in the Federal 
Register (64 FR 14499 and 65 FR 806, respectively) that extended the 
program test through 1999 and 2000. In addition, on November 30, 2000, 
Customs published another general notice in the Federal Register (65 FR 
71356), further extending the program test through December 31, 2002.
    These respective extensions of the test procedure were undertaken 
so that Customs could further evaluate the effectiveness of the program 
and determine whether the program test should be expanded to other 
ports. Consequently, by a notice published in the Federal Register (66 
FR 66018) on December 21, 2001, the test was in fact expanded to a 
selected number of additional ports in order to enable Customs to 
further study the program's effectiveness and determine whether the 
program should be established nationwide on a permanent basis through 
appropriate amendments to the Customs Regulations.
    Specifically, the additional ports selected to participate in the 
expanded program test pursuant to the December 21, 2001, Federal 
Register notice were: Atlanta; Boston seaport; Logan Airport, Boston; 
Buffalo-Niagara Falls; Champlain-Rouses Point; Chicago; Columbus; 
Memphis; Miami; Miami International Airport; Newport/Portland, Oregon 
(the area port of Portland); Puget Sound (the ports of Seattle; and 
Seattle/Tacoma International Airport); San Francisco seaport; and San 
Francisco International Airport.
    The expansion of the test to these ports was determined by the 
volume of quota lines of apparel merchandise entered at these ports. 
Because two of the additional ports selected to participate in the 
program test received shipments by land (Buffalo-Niagara Falls; and 
Champlain-Rouses Point), Customs allowed quota entries in these 
circumstances to be presented to Customs after the carrier departed 
from its location in Canada destined for the U.S. border.

Program Test To Be Further Expanded and Its Duration Extended

    In addition to the previously noted ports where the test is 
ongoing, Customs has now determined that the program test should be 
expanded to all Customs ports effective as of October 9, 2002, and that 
the duration of the program test should be extended until December 31, 
2004. The test is being further expanded and the duration of the test 
extended so that Customs can continue to evaluate the program's 
effectiveness on a greatly increased scale pending the initiation and 
completion of a rulemaking process that will seek to establish the 
program permanently through appropriate amendments to the Customs 
Regulations.

Eligibility Criteria and Application Requirements for the Program Test

    The eligibility criteria and application requirements for 
participation in this latest expansion of the quota preprocessing 
program test are set out below. They are largely repeated from the 
December 21, 2001, Federal Register notice, albeit revised as 
appropriate to reflect the further expansion of the test. Prospective 
applicants may also consult the December 21, 2001, Federal Register 
notice as well as the July 24, 1998, Federal Register notice for a more 
detailed discussion of the quota preprocessing program.

Importer/Entry Eligibility Criteria

    Customs will only accept consumption entries of apparel merchandise 
subject to quota (types 02 and 07) for preprocessing which meet the 
following criteria:
    (1) The entry must contain at least one line classifiable in 
chapter 61 or 62 of the Harmonized Tariff Schedule of the United States 
(HTSUS);
    (2) The quota category for the line must be less than 90% full;
    (3) The entry must be filed using the Automated Broker Interface 
(ABI);
    (4) Payment must be made electronically through the Automated 
Clearinghouse (ACH); and
    (5)(a) An importer must use a carrier that is operational on the 
Automated Manifest System (AMS) through which the carrier will transmit 
the estimated date of arrival for the quota shipment to Customs, as 
heretofore required under the program test; however,
    (5)(b) For an importer entering merchandise at a land border port 
of entry where an AMS carrier is not available, the importer may 
transmit the estimated date of arrival for the quota shipment to 
Customs through ABI when transmitting the entry/entry summary data for 
the shipment to Customs.
    In this latter regard, Customs port directors at land border ports 
will be responsible for monitoring the availability of AMS carriers at 
these ports to ensure that option (5)(b) is only exercised when 
appropriate. It is noted that, at present, most carriers on the land 
borders, especially those on the Southern border, are non-AMS. The 
requirement that an importer use an AMS carrier was imposed initially 
so that the estimated date of arrival of a preprocessed quota shipment 
could be provided to Customs electronically. Since the quota 
preprocessing prototype was begun, however, Customs has determined 
that, in those circumstances where an AMS carrier is not otherwise 
available, an importer may transmit the estimated date of arrival of a 
quota shipment through ABI when transmitting the entry/entry summary 
data for the shipment to Customs.
    If an importer submits a quota entry for preprocessing and the 
entry does not meet the criteria set forth above in items ``(1)'' 
through ``(5)(a)'' or ``(5)(b)'' as applicable, the entry summary will 
be rejected and the filer may not resubmit the entry summary to Customs 
until after the carrier has arrived. Upon arrival of the carrier, 
merchandise covered by a preprocessed entry will be released unless 
Customs decides to perform an examination. In this respect, the fact 
that merchandise has been processed under the quota preprocessing 
program will not interfere with or impede Customs ability to examine 
the merchandise upon its arrival, should such an examination be found 
to be warranted. If an examination of the merchandise is necessary, the 
examination will occur during the port's regular inspectional hours.

Application To Participate in Quota Preprocessing

    An importer wishing to participate in quota preprocessing must 
submit a written application to the attention of the program 
coordinator for quota preprocessing at each port where the applicant 
intends to submit quota entries for preprocessing. The application must 
include the following information:
    1. The specific port(s) included under the program where entries of 
the quota merchandise are intended to be made;
    2. The importer of record number(s), including suffix(es), and a 
statement of the importer's/filer's electronic filing capabilities; and
    3. Names and addresses of any entry filers, including Customs 
brokers, that will be electronically filing entries at

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each port under the program on behalf of the importer/participant.
    Applicants will be notified in writing of their selection or 
nonselection to participate in quota preprocessing. An applicant denied 
participation may appeal in writing to the port director at the port 
where the application was denied.
    Current participants in quota preprocessing that also wish to file 
entries under the program at any additional ports must notify, in 
writing, the additional port(s) at least 5 working days before 
submitting entries at such port(s). Also, for those that are selected 
to participate in the test, the July 24, 1998, Federal Register notice 
should be consulted regarding the acts of misconduct that may result in 
a participant being suspended from the program and the extent to which 
a participant may appeal a proposed suspension from the program.

    Dated: August 30, 2002.
Jayson P. Ahern,
Assistant Commissioner, Office of Field Operations.
[FR Doc. 02-22782 Filed 9-6-02; 8:45 am]
BILLING CODE 4820-02-P