[Federal Register Volume 70, Number 160 (Friday, August 19, 2005)]
[Notices]
[Pages 48774-48777]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 05-16427]


-----------------------------------------------------------------------

DEPARTMENT OF HOMELAND SECURITY

Bureau of Customs and Border Protection


Announcement of Test Program Regarding Electronic Foreign Trade 
Zone Admission Applications

AGENCY: Customs and Border Protection, Homeland Security.

ACTION: General notice.

-----------------------------------------------------------------------

SUMMARY: This notice announces the Bureau of Customs and Border 
Protection's (CBP) plan to conduct a voluntary test program to allow 
the submission of electronic Foreign Trade Zone (FTZ) admission 
applications. Pursuant to the terms of the test, an application for FTZ 
admission (CBP Form 214--``FTZ Admission and/or Status Designation'') 
may be filed electronically with CBP via the Automated Broker Interface 
(ABI). Parties not participating in the test may continue to file the 
CBP Form 214 in a paper format pursuant to existing FTZ procedures. The 
test program is limited to electronic FTZ admission applications for 
merchandise reported to CBP via air, sea, and rail manifest. CBP 
intends to implement a future phase of this test that will allow 
electronic FTZ admission applications for merchandise reported to CBP 
via truck manifest as soon as a CBP-approved electronic data 
interchange system exists for these transmissions. This notice informs 
interested members of the public of the eligibility and procedural 
requirements for participation in the test, outlines the evaluation 
methodology to be used, and invites public comment concerning any 
aspect of the planned prototype test.

DATES: The Electronic FTZ Admission Application test program will 
commence no earlier than September 30, 2005, and will run for 
approximately 6 months with a final evaluation to take place at the end 
of that period. CBP may extend the test period by way of announcement 
in the Federal Register.

[[Page 48775]]

Comments concerning this notice and any aspect of the prototype may be 
submitted at any time during the test period.

ADDRESSES: Written comments regarding this notice should be addressed 
to Customs and Border Protection, Cargo Control Branch, 1300 
Pennsylvania Avenue, NW., Room 5.2A, Washington, DC 20229.

FOR FURTHER INFORMATION CONTACT: Gary Rosenthal, Customs and Border 
Protection, Office of Field Operations, via e-mail at 
[email protected].

SUPPLEMENTARY INFORMATION:

Background

Electronic Foreign Trade Zone Admission Application Prototype: Planned 
Component of the National Customs Automation Program

    Title VI of the North American Free Trade Agreement Implementation 
Act (the Act), Pub. L. 103-182, 107 Stat. 2057 (December 8, 1993), 
contains provisions pertaining to Customs Modernization (107 Stat. 
2170). Subpart B of Title VI of the Act concerns the National Customs 
Automation Program (NCAP), an electronic system for the processing of 
commercial importations. Within subpart B, section 631 of the Act added 
section 411 to the Tariff Act of 1930 (19 U.S.C. 1411-1414), which 
defines the NCAP, provides for the establishment of and participation 
in the NCAP, and includes a list of existing and planned components. 
Section 411(a)(2)(G) identifies any program initiated by CBP to carry 
out the automation goals of this subpart as a planned NCAP component. 
The planned test program described in this document falls within this 
category of planned NCAP component.
    Section 101.9(b) of Title 19 of the Code of Federal Regulations (19 
CFR 101.9(b)) provides for the testing of NCAP planned components. The 
Electronic Foreign Trade Zone (FTZ) Admissions Application prototype is 
being tested in accordance with this provision.

Description of the Test Program

    The Electronic FTZ Admission Application test program permits a 
participant to submit an electronic version of the CBP Form 214 (``FTZ 
Admission and/or Status Designation'') to CBP via the Automated Broker 
Interface (ABI) of Customs Automated Commercial System (ACS). Any 
person not participating in the prototype will be required to submit a 
paper CBP Form 214 pursuant to existing FTZ admission procedures.
    The test program is limited to electronic FTZ admission 
applications for merchandise reported to CBP via air, sea, and rail 
manifest. It is noted that CBP intends to implement a future phase of 
this test that will allow electronic FTZ admission applications for 
merchandise reported to CBP via truck manifest as soon as a CBP-
approved electronic data interchange system exists for these 
transmissions.

Regulatory Provisions Suspended

    Subpart C to part 146 of the CFR prescribes the conditions 
applicable to admission of merchandise into a foreign trade zone. To 
the extent that certain provisions within subpart C to part 146 may be 
incompatible with the terms of this test program, the affected 
regulatory provisions will be suspended for the duration of the 
prototype test.

Test Commencement Date

    The test program will commence no earlier than September 30, 2005, 
and will run for a 6-month period with a final evaluation to take place 
at the end of the test period. CBP may extend the prototype and any 
such extension will be announced in the Federal Register.

Participant Eligibility

    Eligible participants in the Electronic FTZ Admissions Application 
test program include:
     FTZ operators
     FTZ Admission Applicants
     Agents of FTZ Admission Applicants
    Participation in the test is voluntary and there are no application 
procedures.

Prototype Procedures

Submission of Electronic CBP Form 214 and Related Data
    Test participants must request permission to admit merchandise into 
a FTZ by electronically transmitting the CBP Form 214 data elements to 
CBP via ABI. The data transmission may cover a single shipment of 
merchandise or be a consolidated transmission that covers multiple 
shipments to a single zone. CBP must receive the CBP Form 214 before 
the merchandise can be released for admission into the FTZ. An 
exception to this requirement exists for test participants who are 
authorized to use the FTZ direct delivery procedures, as discussed 
below.
    The test program will also incorporate transmissions of data on 
merchandise that is transported to a FTZ or from a FTZ if the data 
transmission is made via CBP Form 7512 in-bond transaction or its 
electronic equivalent.
Prior Notice Reporting Requirements
    Test participants, including those approved to participate under 
direct delivery procedures, must comply with the prior notice reporting 
requirements stipulated in the Public Health Security and Bioterrorism 
Preparedness and Responsive Act of 2002 (``the Bioterrorism Act''), 
Public Law 107-188. Title III of the Bioterrorism Act contains 
provisions relating to providing the Department of Health and Human 
Services with prior notice regarding certain information about foods 
that are imported or offered for import into the United States.
Direct Delivery Procedures
    As a general rule, a test participant who is also authorized to use 
the direct delivery procedures prescribed in Sec.  146.39 (19 CFR 
146.39) to admit merchandise into a FTZ may transmit the required data 
to CBP on an electronic CBP Form 214 no later than the close of 
business on the business day following receipt of the merchandise into 
the FTZ inventory control and recordkeeping system.
    With regard to the applicability of direct delivery procedures in 
the context of the test program, two exceptions to the above rule are 
noted. First, as stated above, direct delivery participants are subject 
to any applicable prior notice reporting requirements set forth in the 
Bioterrorism Act. Second, in the absence of a CBP Form 7512 in-bond 
transaction authorizing direct delivery to the FTZ, or its electronic 
equivalent, a permit to transfer request must be electronically 
transmitted to CBP before the merchandise can be released for 
admission.
FTZ Operators as Test Participants
    Under the test program, a FTZ operator will be able to accept or 
reject the merchandise, assume custodial responsibility for the 
accepted merchandise and report discrepancies between the documents 
covering the merchandise and the merchandise itself, admit zone status 
merchandise transferred from another zone, change zone status, admit 
domestic status merchandise, and transmit post admission inventory 
adjustment transactions via ABI.
Transmittal of Statistical Data to the Bureau of Census
    After permission to transfer merchandise into a FTZ is granted, CBP 
will transmit statistical data to the Bureau of the Census through an 
automated link.

[[Page 48776]]

CBP Form 214 Required Data Elements

    Participants in the test must provide CBP with the following data 
elements:
     A code representing the action to be taken (i.e., add, 
delete, replace).
     A line item number.
     The zone number designated in the foreign trade zone 
grant.
     The port code where the FTZ is located as shown in 
Schedule D, Harmonized Tariff Schedule of the United States (HTSUS).
     An indicator specifying whether the merchandise is being 
admitted into the FTZ under direct delivery procedures.
     The Automated Broker Interface (ABI) filer code.
     The ABI routing code and optional office extension for one 
additional ABI participant who will receive a copy of the electronic 
CBP Form 214 and subsequent electronic notifications.
     The IRS number, Importer of Record Number or EIN of the 
applicant.
     An indicator specifying the admission type.
     The mode of transportation code. Valid codes are listed in 
Appendix B of the CATAIR (CBP Publication 552, Customs and Trade 
Automated Interface Requirements).
     The name of the conveyance (if not a vessel, the name of 
the transportation company).
     The vessel voyage, truck or rail trip, or aircraft flight 
number.
     The country of export.
     The export date. For merchandise arriving in the U.S. by 
vessel: the month, day and year on which the vessel departed the last 
port of the country of exportation. For merchandise exported by air: 
the month, day and year on which the aircraft departed the last airport 
of the country of exportation. For merchandise exported by truck or 
rail: the month, day and year in which the carrier crossed the border 
of the country of exportation.
     The import date. For merchandise arriving in the U.S. by 
vessel: the month, day and year on which the vessel transporting the 
merchandise from the foreign country arrived within the limits of the 
U.S. port at which the merchandise was unladen. For merchandise 
arriving in the U.S. other than by vessel: the month, day and year in 
which the merchandise arrived within the territory of the U.S.
     The zone admission number (zone number, calendar year, and 
control number).
     The U.S. port of unlading (the port at which the 
merchandise was unladen whether or not the port is a CBP port of 
entry). Valid codes are listed in Schedule D issued by the Bureau of 
the Census.
     The foreign port of lading.
     The bill of lading or airway bill number.
     The house bill number.
     The Standard Carrier Alpha Code (SCAC) identifier of the 
importing carrier.
     The immediate transportation (IT) number assigned to in-
bond shipments and the date the CBP Form 7512 was prepared.
     The number of packages and the country of origin. An 
indication of the quantity and unit of measure (cartons, cases, 
bundles, etc.) in the shipment as stated in the Customs Automated 
Manifest Interface Requirements (CAMIR). For containerized merchandise, 
an indication of the number of packages within the container(s) and the 
container number(s). For bulk shipments, show ``1 Bulk.'' Enter the 
country of origin code, provided in Annex B, ISO code, Harmonized 
Tariff Schedule (HTS), which represents the country of origin in which 
the product was manufactured, mined, or grown. If the merchandise is 
from more than one country of origin, the country of origin will be 
indicated separately against each HTS subheading or group of 
subheadings.
     A detailed description of the merchandise at the line item 
level.
     The Manufacturer Identification (MID) number (as required 
for type 01 entries).
     The applicable HTS number(s).
     The quantity of the merchandise for each HTS number.
     The quota category (if applicable).
     The gross weight in kilograms of the merchandise. Supply 
separate gross weight information for each HTS subheading.
     The separate value and aggregate charges: For each HTS, 
enter the purchase price (in U.S. dollars) or, if the merchandise was 
not acquired by purchase, the equivalent of such price. Also, report 
the aggregate cost (in U.S. dollars) of freight, insurance, and all 
other costs, charges and expenses incurred in bringing the merchandise 
from alongside the carrier at the foreign port of exportation in the 
country of exportation in addition to unlading the merchandise at the 
first U.S. port of entry.
     The indicator designating a special program and country 
affecting duty payments (if applicable).
     If applicable, a qualifier code and reference identifier 
associated with the shipment. Valid qualifiers are listed in the 
CATAIR. Code ``IM'' will be added to indicate importer.
     The Harbor Maintenance Fee incurred for loading or 
unloading the commercial cargo from a commercial vessel.
     The FTZ status designation of the merchandise.
     The container number if a permit to transfer is requested.
     Concurrence/discrepancy data relating to the admission 
application/permit to transfer.
     The IRS number of the carrier responsible for the movement 
of merchandise into the FTZ following issuance of a permit to transfer.
     The Facilities Information and Resources Management 
Systems (FIRMS) code identifying the location that the merchandise 
(moving on a permit to transfer) is being delivered to.
     The three position airport code if the bill of lading is 
Air AMS.
     An indicator if the merchandise is subject to Bioterrorism 
Act of 2002 requirements.
    Test participants are responsible for the accuracy and completeness 
of all data transmitted under the prototype.

Processing of Electronic FTZ Admission Applications

    Upon approval of an electronic FTZ admission application, CBP will 
transmit electronic notice to the FTZ operator authorizing admission of 
the merchandise into the FTZ. As noted above, this approval process 
does not apply to merchandise admitted to a FTZ under direct delivery 
procedures.
    After CBP receives notice of the FTZ operator's decision to grant 
or deny admission, CBP will electronically transmit approval/denial to 
transfer the merchandise into the FTZ electronically to the test 
applicant or the applicant's agent, and to the carrier of the 
merchandise. CBP will also provide electronic notice to these parties 
as to whether the merchandise is subject to CBP examination. In 
addition, test program participants and carriers will be able to 
receive electronic notification concerning the status of an admission 
request.
    A test participant whose FTZ admission application is rejected by 
CBP will be provided with an opportunity to correct the reported error. 
A complete re-transmission of the entire admission application through 
ABI is required by CBP.

Misconduct Under the Test

    A test participant may be subject to civil and criminal penalties, 
administrative sanctions, liquidated damages, and/or suspension from 
this test for any of the following:

[[Page 48777]]

     Failure to abide by the terms and conditions of this test, 
and any applicable laws and regulations.
     Failure to exercise reasonable care in the execution of 
participant obligations.
     Misuse of the automated CBP Form 214 (i.e., engaging in 
unauthorized disclosure or any activity which interferes with the 
successful evaluation of the new technology).
    The Executive Director, Trade Compliance and Facilitation, will 
administer suspensions for misconduct. A written notice proposing 
suspension will be provided to the participant. Such notice will 
apprise the participant of the alleged 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, 1300 Pennsylvania Ave., NW., Washington, DC 
20229, within 15 calendar days of the notification date. An appeal must 
address the alleged facts or conduct charges contained in the notice 
and state how compliance has been or 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. The same appeal procedures apply in cases of immediate 
suspension.

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 section 101.9 (b) of Title 19 of the CFR.
    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
     Policy and procedure accommodation
     Trade compliance impact
     Problem resolution
     System efficiency
     Operational efficiency
     Other issues identified by the participant group

    Dated: August 12, 2005.
Jayson P. Ahern,
Assistant Commissioner, Office of Field Operations.
[FR Doc. 05-16427 Filed 8-18-05; 8:45 am]
BILLING CODE 9110-06-P