[Federal Register Volume 69, Number 23 (Wednesday, February 4, 2004)]
[Notices]
[Pages 5362-5364]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 04-2254]



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DEPARTMENT OF HOMELAND SECURITY

Bureau of Customs and Border Protection


Automated Commercial Environment (ACE): Announcement of a 
National Customs Automation Program Test of Periodic Monthly Payment 
Statement Process and Establishment of Broker Accounts in the ACE 
Secure Data Portal

AGENCY: Customs and Border Protection, DHS.

ACTION: General notice.

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SUMMARY: This document announces the Bureau of Customs and Border 
Protection's (CBP) plan to conduct a National Customs Automation 
Program test concerning periodic monthly deposit of estimated duties 
and fees. This notice provides a description of the test process, 
outlines the development and evaluation methodology to be used, sets 
forth eligibility requirements for participation, invites public 
comment on any aspect of the planned test, and opens the application 
period for participation.
    This notice invites participation of the initial forty-one ACE 
Importer Accounts, and establishes a process by which their designated 
brokers can participate in filing entries and making payments related 
to the Periodic Monthly Statement.

DATES: The test will commence no earlier than April 14, 2004. Comments 
concerning this notice and all aspects of the announced test may be 
submitted at any time during the test period. CBP must receive all 
statements affirming intent to participate from the initial forty-one 
ACE Importer Accounts, the list of designated brokers, and the 
designated broker applications, as set forth in this notice, by April 
5, 2004, unless under exceptional circumstances, and with CBP approval, 
an extension is granted. CBP will process additional Importer Account 
applications as CBP expands the universe of participation for this 
test.
    Expansion of this test to allow future applicants to participate 
may be delayed due to funding and technological constraints. Future 
phases of ACE may also be tested; however, the eligibility criteria may 
differ from the criteria listed in this notice. Acceptance into this 
test does not guarantee eligibility for, or acceptance into, future 
technical tests.

ADDRESSES: Comments concerning program and policy issues should be 
submitted to Mr. Robert B. Hamilton, Office of Finance, via e-mail at 
[email protected]. All statements affirming intent to 
participate in the test by the initial forty-one Importer Accounts, and 
new applications to establish ACE Importer and Broker Accounts should 
be submitted to Mr. Michael Maricich via email at 
[email protected].

FOR FURTHER INFORMATION CONTACT: For questions regarding these Importer 
or Broker Accounts: Mr. Michael Maricich via email at 
[email protected], or by telephone at (703) 668-2406;
    For questions regarding Periodic Monthly Statement payments: Mr. 
Robert Hamilton via email at [email protected], or by telephone 
at (317) 298-1107.

SUPPLEMENTARY INFORMATION:

Background

    This document announces the Bureau of Customs and Border 
Protection's (CBP) plan to conduct a National Customs Automation 
Program (NCAP) test, under which test participants will be allowed to 
deposit estimated duties and fees on a monthly basis, based on a 
Periodic Monthly Statement issued by CBP. Participating importers and 
their designated brokers will be allowed to deposit estimated duties 
and fees no later than the 15th calendar day of the month following the 
month in which the goods are either entered or released, whichever 
comes first. (See section 383 of the Trade Act of 2002, Pub. L. 107-
210, dated August 6, 2002, which amends section 505(a) of the Tariff 
Act of 1930 (19 U.S.C. 1505(a)).
    The authority for testing NCAP programs is set forth in 19 CFR 
101.9(b), which enables the Commissioner of CBP to conduct limited test 
programs or procedures designed to evaluate planned components of the 
NCAP.

Development of ACE

    The initial phase of the Customs and Border Protection 
Modernization Program (see North American Free Trade Agreement 
Implementation Act, Pub. L. 103-182, 107 Stat. 2057, 2170 (December 8, 
1993)) focuses on Trade Compliance and the development of ACE through 
NCAP. The purposes of ACE, successor to the Automated Commercial System 
(ACS), are to streamline business processes, to facilitate growth in 
trade, and to foster participation in global commerce, while ensuring 
compliance with U.S. laws and regulations. Development of ACE will 
consist of many releases. Each release, while individually achieving 
critical business needs, also will set forth the foundation for the 
subsequent releases.
    The previous release of ACE involved testing the ability of 
importers and authorized parties to access their CBP data via the ACE 
Secured Data Portal (hereinafter, ``ACE Portal''), with a focus on 
defining and establishing the Importer Account structure. (See, Federal 
Register notice published May 1, 2002 (67 FR 21800)). This test is the 
next step toward the full electronic processing of commercial 
importations in ACE, with a focus on identifying authorized importers 
and brokers to participate in the Periodic Monthly Statement process.
    The benefits to participants in this test include having access to 
operational data through the ACE Portal, the capability of being able 
to interact electronically with CBP, and the capability of making 
payments of duties and fees on a periodic monthly basis.

Eligibility Criteria

    The eligibility criteria for importer participation in the previous 
release of ACE, as set forth in the May 1, 2002, Federal Register 
notice (67 FR 21800), included the first two provisions listed below. 
For this test, importers and their designated brokers must satisfy two 
additional requirements. To be eligible for participation in this test, 
importers and their designated brokers must:
    1. Participate in the Customs Trade Partnership Against Terrorism 
(C-TPAT) program; C-TPAT is a joint government-business initiative to 
build cooperative relationships that strengthen overall supply chain 
and border security. For further information, please refer to the CBP 
Web site at http://www.cbp.gov.
    2. Have the ability to connect to the Internet;
    3. Have the ability to make periodic payment via ACH Credit or ACH 
Debit; and
    4. Have the ability to file entry/entry summary via ABI (Automated 
Broker Interface).

Description of the Test

    Participants in the Periodic Monthly Statement test are required to 
schedule entries for monthly payment. A Periodic Monthly Statement will 
list Periodic Daily Statements that have been designated for monthly 
payment. The Periodic Monthly Statement can be created on a port basis 
by the importer or broker, as is the case with existing daily 
statements in ACS. The Periodic Monthly Statement can be created on a 
national basis by an ABI filer. If an importer chooses to file the 
Periodic Monthly Statement on a national basis, it must use its filer 
code and schedule and pay the monthly statements. The Periodic Monthly 
Statement will be

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routed under existing CBP procedures. Brokers will only view / receive 
information that they have filed on an importer's behalf. ACE will not 
route a Periodic Monthly Statement to a broker through ABI that lists 
information filed by another broker.
    CBP will allow all entries currently eligible for placement on a 
daily statement to be placed on a Periodic Daily Statement, with the 
exception of reconciliation entries, NAFTA duty deferral entries, 
entries requiring the payment of excise taxes, and entries containing 
Census errors.
    Entries for monthly payment will be processed as follows:
    a. As entries are filed with CBP, the importer or its designated 
broker schedules them for monthly payment;
    b. Those entries scheduled for monthly payment appear on the 
Preliminary Periodic Daily Statement;
    c. The importer or its designated broker processes entry summary 
presentation transactions for Periodic Daily Statements within 10 
working-days of the date of entry;
    d. After summary information has been filed, the scheduled entries 
appear on the Final Periodic Daily Statement;
    e. Entries appearing on the Final Periodic Daily Statements and 
scheduled for monthly payment appear on the Preliminary Periodic 
Monthly Statement. CBP will generate the Preliminary Periodic Monthly 
Statement on the 11th calendar day of the month following the month in 
which the merchandise is either entered or released, whichever comes 
first, unless the importer or designated broker selects an earlier 
date;
    f. On the 15th of that month, for ACH Debit participants, CBP 
transmits the debit authorizations compiled in the Preliminary Periodic 
Monthly Statement from the Final Periodic Daily Statements to the 
financial institution, and the Preliminary Periodic Monthly Statement 
is marked as paid. The Final Periodic Monthly Statement indicating 
receipt of payment is generated by CBP, and is transmitted to the 
importer or its designated broker. ACH Debit participants must ensure 
that the money amount identified on the Preliminary Monthly Statement 
is, in fact, available in their bank account by the 15th of the month 
following the month in which the merchandise is either entered or 
released, whichever comes first.
    g. ACH Credit participants must ensure that CBP receives payment no 
later than the 15th of that month. CBP must receive the settlement for 
the credit, and then the Preliminary Periodic Monthly Statement is 
marked as paid. The Final Periodic Monthly Statement indicating receipt 
of payment is generated by CBP, and is transmitted to the importer or 
its designated broker. For ACH Credit participants, if the 15th falls 
on a weekend or holiday, CBP must receive the settlement for the credit 
by the business day directly preceding such weekend or holiday.
    h. For both ACH Credit and ACH Debit participants, CBP will 
generate the Final Periodic Monthly Statement on the night that payment 
is processed.
    Participants should note that if they voluntarily remove an entry 
from a Periodic Daily Statement before expiration of the 10-working-day 
period after release, that entry may be placed on another Periodic 
Daily Statement falling within the same 10-working-day period. If, 
however, participants remove an entry from a Periodic Daily Statement 
or a Preliminary Monthly Statement after expiration of the 10-working-
day period after release, then that entry must be paid individually, 
and the entry will automatically be the subject of a claim for 
liquidated damages for late payment of estimated duties.

Initial ACE Importer Accounts

    This test will be conducted in a phased approach, with primary 
deployment scheduled for no earlier than April 14, 2004. The initial 
release of the Web-based account revenue functionality will involve the 
forty-one initial ACE Importer Accounts and their designated brokers. 
The forty-one initial ACE Importer Accounts were created based on 
applications submitted in response to the Federal Register notices of 
May 1, 2002 (67 FR 21800) and/or June 18, 2002 (67 FR 41572). Any of 
those initial applicants interested in participating in this test must 
submit, via email, a statement affirming their ``intent to 
participate'' and a list of any designated brokers who will be 
authorized to act on their behalf, no later than 60 days from date of 
publication of this notice in the Federal Register, unless under 
exceptional circumstances, and with CBP approval, an extension is 
granted.

ACE Broker Account Application Process

    The term ``application'', as used throughout this notice, is 
defined as a statement of intent to participate in the Periodic Monthly 
Statement process. Designated brokers wishing to participate in this 
test and make Periodic Monthly Statement payment on behalf of 
participating importers must first establish an individual ACE Broker 
Account. Designated brokers must submit an application to establish an 
ACE Broker Account, via email, by no later than 60 days from date of 
publication of this notice in the Federal Register, unless under 
exceptional circumstances, and with CBP approval, an extension is 
granted. Each broker application for participation in this test must 
include the following information:
    1. Broker Name;
    2. Names of the initial forty-one importers participating in the 
test by whom they have been or will be designated as the authorized 
broker;
    3. Unique Identification Number (EIN, SSN);
    4. Filer Code;
    5. Statement certifying participation in C-TPAT;
    6. Statement certifying capability of connecting to the Internet;
    7. Statement certifying capability of making periodic payment via 
ACH Credit or ACH Debit; and
    8. Statement certifying capability of filing entry/entry summary 
via ABI.

Expansion of Participation

    Participation in the periodic monthly payment process will be 
expanded in the future as funding allows. CBP will accept, hold, or 
reject additional Importer Account and Broker Account applications 
throughout the duration of the test. CBP will provide notice of 
expansion to the applicants as appropriate. New applicants interested 
in participating in this test must submit an application, per the 
Federal Register notice of May 1, 2002 (67 FR 21800), Application 
Process section, to CBP, and will be notified of the status of their 
application (i.e., whether CBP has accepted their application for 
participation upon an initial expansion, or, is holding their 
application pending a further expansion of the test). CBP will notify 
any applicant not meeting the eligibility criteria or providing an 
incomplete application, and allow such applicant an opportunity to 
resubmit its application.

Other Responsibilities of Applicants

    Upon accepting an applicant for participation in the Periodic 
Monthly Statement test, CBP may request additional information. 
Participants accept a continuing obligation to provide CBP with any 
updates or changes to the information originally submitted. All data 
submitted and entered into the ACE Portal is subject to the Trade 
Secrets Act (18 U.S.C. 1905) and is considered confidential. CBP will 
provide participants with additional information about the content of 
the test.
    All participants are required to provide a bond rider covering the

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periodic payment of estimated duties. The language of the bond rider 
shall read as follows:

    ``By this rider to the Customs Form 301 No. ------, executed on 
by--------as principal(s), importer nos. --------, and --------, as 
surety, code no. --------, which is effective on--------, the 
principal(s) and surety agree that this bond covers all periodic 
payments of estimated duties and fees no later than the 15th day of 
the month following the month in which the merchandise is entered or 
released, whichever comes first, as provided in 19 U.S.C. 1505(a), 
and all conditions set out in section 113.62, Customs Regulations, 
are applicable thereto.''

    Each participant must designate one person as the ACE Portal 
Account Owner for the information entered into the participant's ACE 
Portal account. The Account Owner will be responsible for safeguarding 
the ACE Portal account information, controlling disclosures of that 
information to authorized persons, authorizing user access to the ACE 
Portal account, and ensuring that access by authorized persons to the 
ACE Portal account information is strictly controlled. The participant 
will need to identify a point of contact for the testing of 
communications and software.
    Participants are further reminded that participation in this test 
is not confidential. Lists of approved participants will be made 
available to the public.

Suspension of Regulations

    During the testing of the Periodic Monthly Statement process, CBP 
will suspend provisions in Parts 24, 141, 142, and 143 of the Customs 
Regulations (Title 19 Code of Federal Regulations) pertaining to 
financial, accounting, entry procedures, and deposit of estimated 
duties and fees. Absent any alternate procedure set forth in the above 
description of the test, the current regulations apply.

Misconduct Under the Test

    If a test participant fails to follow the terms and conditions of 
this test, fails to exercise reasonable care in the execution of 
participant obligations, fails to abide by applicable laws and 
regulations, fails to deposit duties or fees in a timely manner, 
misuses the ACE Portal, engages in any unauthorized disclosure or 
access to the ACE Portal, or engages in any activity which interferes 
with the successful evaluation of the new technology, the participant 
may be subject to civil and criminal penalties, administrative 
sanctions, liquidated damages, and/or suspension from this test.
    Suspensions for misconduct will be administered by the Executive 
Director, Trade Compliance and Facilitation. A notice proposing 
suspension will be provided in writing to the participant. Such notice 
will apprise the participant of the facts or conduct warranting 
suspension and will inform the participant of the date that the 
suspension will begin. Any decision proposing suspension of a 
participant may be appealed in writing to the Assistant Commissioner, 
Office of Field Operations within 15 calendar days of the notification 
date. Should the participant appeal the notice of proposed suspension, 
the participant must address the facts or conduct charges contained in 
the notice and state how compliance will be achieved. In cases of non-
payment, late payment, willful misconduct or where public health 
interests or safety is concerned, the suspension may be effective 
immediately.

Test Evaluation Criteria

    To ensure adequate feedback, participants are required to 
participate in an evaluation of this test. CBP also invites all 
interested parties to comment on the design, conduct and implementation 
of the test at any time during the test period. CBP will publish the 
final results in the Federal Register and the CBP Bulletin as required 
by Sec. 101.9(b) of the Customs Regulations.
    The following evaluation methods and criteria have been suggested:
    1. Baseline measurements to be established through data analysis;
    2. Questionnaires from both trade participants and CBP addressing 
such issues as:
     Workload impact (workload shifts/volume, cycle 
times, etc.);
     Cost savings (staff, interest, reduction in 
mailing costs, etc.);
     Policy and procedure accommodation;
     Trade compliance impact;
     Problem resolution;
     System efficiency;
     Operational efficiency;
     Other issues identified by the participant 
group.

    Dated: January 30, 2004.
Jayson P. Ahern,
Assistant Commissioner, Office of Field Operations.
[FR Doc. 04-2254 Filed 2-3-04; 8:45 am]
BILLING CODE 4820-02-P