[Federal Register Volume 70, Number 183 (Thursday, September 22, 2005)]
[Notices]
[Pages 55623-55625]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 05-18912]


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DEPARTMENT OF HOMELAND SECURITY

Bureau of Customs and Border Protection


Automated Commercial Environment (ACE): Elimination of Bond Rider 
Requirement for Participation in Periodic Monthly Statement Payment 
Process

AGENCY: Customs and Border Protection; Department of Homeland Security.

ACTION: General notice.

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SUMMARY: This notice announces changes in the Bureau of Customs and 
Border Protection's (CBP) National Customs Automation Program (NCAP) 
test concerning periodic monthly deposit of estimated duties and fees. 
Participants in the Periodic Monthly Statement test are no longer 
required to provide a bond rider covering the periodic payment of 
estimated duties and fees. Nonpayment or untimely payment of estimated 
duties and fees, however, may result in action by CBP to impose 
sanctions on the delinquent importer of record or to allow the surety 
to terminate its basic importation bond. If the bond principal is a 
participant in the Periodic Monthly Statement test, sureties will now 
be allowed, under certain conditions, to terminate bonds with 3 
business days notice to the bond principal and CBP.

EFFECTIVE DATES: The elimination of the requirement to provide a bond 
rider covering the periodic payment of estimated duties is effective 
immediately.

ADDRESSES: Comments concerning this notice should be submitted to 
Robert B. Hamilton via e-mail at [email protected].

SUPPLEMENTARY INFORMATION:

Background

    On February 4, 2004, the Bureau of Customs and Border Protection 
(CBP) published a General Notice in the Federal Register (69 FR 5362) 
announcing the National Customs Automation Program (NCAP) test for 
Periodic Monthly Payment Statement Process. The test, which is part of 
CBP's Automated Commercial Environment (ACE), benefits participants by 
giving them access to operational data through the ACE Secured Data 
Portal (``ACE Portal''), which provides them the capability to interact 
electronically with CBP, and by allowing them to deposit estimated 
duties and fees on a monthly basis based on a Periodic Monthly 
Statement generated by CBP.
    When the test started, only importers were eligible to apply for 
the test. Eligibility was later expanded to allow brokers to apply if 
they were specifically designated by an ACE importer.
    On September 8, 2004, CBP published a General Notice in the Federal 
Register (69 FR 54302) which invited customs brokers, regardless of 
whether they were designated by participating importers to make 
Periodic Monthly Statement payments on their behalf, to apply to 
participate in the test. That notice set

[[Page 55624]]

forth eligibility requirements for both importers and brokers.
    On February 1, 2005, CBP published a General Notice in the Federal 
Register (70 FR 5199) announcing that applicants seeking to establish 
importer or broker accounts so as to access the ACE Portal, or to 
participate in any ACE test (including the test for Periodic Monthly 
Payment Statement Process), are no longer required to provide a 
statement certifying participation in the Customs Trade Partnership 
Against Terrorism (C-TPAT).
    On August 8, 2005, CBP published a General Notice in the Federal 
Register (70 FR 45736) changing the time period allowed for the deposit 
of the duties and fees from the 15th calendar day to the 15th working 
day of the month following the month in which the goods are either 
entered or released. That change was made in order to comply with the 
provisions of section 2004 of the Miscellaneous Trade and Technical 
Corrections Act of 2004, Public Law 108-429, which extended the time of 
deposit of those estimated duties and fees. The document also advised 
that entries containing Census errors are eligible to be placed on a 
Periodic Daily Statement and designated for monthly payment. Finally, 
the document described those situations where liquidated damages would 
be imposed for failing to pay estimated duties in a timely manner.
    As provided in the February 4, 2004 General Notice announcing 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 was the case with existing 
daily statements in the Automated Commercial System (ACS) (ACE is the 
successor to ACS). The Periodic Monthly Statement can be created on a 
national basis by an Automated Broker Interface (ABI) filer. If an 
importer chooses to file the Periodic Monthly Statement on a national 
basis he must use his filer code and schedule and pay the monthly 
statements timely. The Periodic Monthly Statement will be 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 if that statement 
lists information filed by another broker.
    The February 4, 2004, Notice also stated that, in addition to other 
responsibilities, test participants are required to provide a bond 
rider covering the periodic payment of estimated duties.

Elimination of the Periodic Monthly Statement Payment Bond Rider

    In order to open participation in the Periodic Monthly Statement 
test to the widest number of importers, CBP will no longer require that 
an applicant, in order to participate in the test, submit a bond rider 
as required by the Federal Register Notice of February 4, 2004. CBP has 
determined that the rider is not necessary, inasmuch as the terms and 
conditions of the basic importation bond under section 113.62 of the 
CBP Regulations (title 19 Code of Federal Regulations (CFR), section 
113.62) require the bond obligors to deposit, in the time period 
prescribed by law or regulation, any duties, taxes, and charges 
imposed, or estimated to be due, at the time of merchandise release or 
withdrawal.
    Submission of the bond rider does have the effect of alerting the 
surety guaranteeing performance that the bond principal is 
participating in the Periodic Monthly Statement test. CBP agrees that, 
as a result of elimination of the rider submission requirement, it will 
notify sureties, electronically, of a bond principal's participation in 
the test.

Failure To Pay, or To Timely Pay, Estimated Duties and Fees

    A bond principal who fails to meet its obligation to pay estimated 
duties and fees under the test should not continue to enjoy the 
benefits of the deferred payment of estimated duties and fees. Such an 
allowance would further stress the bond amount and place the revenue in 
jeopardy. As such, CBP, through this notice, suspends those regulations 
in Part 142 relating to the delinquent payment of CBP bills as they 
relate to non-payment or late payment of estimated duties and fees made 
under the Periodic Monthly Statement test. Any bond principal who is 
late with an estimated monthly statement estimated duty payment by more 
than 2 business days will be notified by CBP, either electronically or 
by paper notification, that immediately it shall be required to file 
entry summary documentation with estimated duties and fees attached 
before its merchandise may be released from any CBP port. The surety on 
the affected bond will also be notified. The bond principal will only 
be released from such a requirement upon full payment of any unpaid 
estimated duties and fees that have come due under the Periodic Monthly 
Statement test.
    During the test, CBP will retain the right to deny Periodic Monthly 
Statement payment privileges to any importer that is repeatedly 
delinquent in the payment of estimated duties and fees due.

Termination of Bonds

    For purposes of the test, the provisions of 19 CFR part 113 
relating to termination of bonds will be suspended, in certain 
situations, insofar as sureties will be permitted to terminate bonds 
with 3 business days notice to the bond principal and CBP. Section 
113.27(b) of the CBP Regulations (19 CFR 113.27(b)) generally requires 
a 30-day notice (with exceptions) for surety termination of a bond. 
Sureties may now terminate bonds with 3 business days notice when 
termination by the surety occurs because the surety does not accept the 
risk relating to participation by the bond principal in the Periodic 
Monthly Statement test. Sureties may also terminate bonds with 3 
business days notice when termination is a result of the failure of the 
bond principal to perform obligations arising as a result of 
participation in the test; however, a termination under these 
circumstances can only take place after the surety has satisfied its 
obligations which have arisen as a result of the principal's failure to 
perform. The importer whose bond is terminated by a surety will be 
suspended from participation in the test unless a new surety is 
obtained. Notification of termination to CBP shall be provided to the 
Revenue Division, Office of Finance, 6650 Telecom Dr., Suite 100, Attn: 
Bond Team, Indianapolis, Indiana 46278. Notice of termination to CBP 
must be in writing and must be delivered by overnight mail, other 
express delivery service, or fax. Notice of termination to the bond 
principal must be in writing and must be delivered by overnight mail or 
other express delivery service. Any notice of termination provided to 
CBP must include a declaration that the bond principal has been 
notified of termination.

Suspension of the Regulations

    During the testing of the Periodic Monthly Statement process, CBP 
will suspend provisions in Parts 24, 141, 142, and 143 of the Customs 
and Border Protection Regulations (Title 19 Code of Federal 
Regulations) pertaining to financial, accounting, entry procedures, 
deposit of estimated duties and fees, and the delinquent payment of CBP 
bills. CBP will also suspend the provisions of Part 113 of the Customs 
and Border Protection Regulations with regard to surety termination of 
bonds only in the manner and for the reasons

[[Page 55625]]

discussed in this Notice. All other provisions of Part 113 of the 
Customs and Border Protection Regulations remain in effect during this 
test. All of the terms of the test and criteria for participation 
therein, as announced in the previous notices identified above, 
continue to be applicable unless changed by this notice.

    Dated: September 19, 2005.
Thomas S. Winkowski,
Acting Deputy Assistant Commissioner, Office of Field Operations.
[FR Doc. 05-18912 Filed 9-21-05; 8:45 am]
BILLING CODE 9110-06-P