[Federal Register Volume 71, Number 126 (Friday, June 30, 2006)]
[Notices]
[Pages 37596-37598]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 06-5875]


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DEPARTMENT OF HOMELAND SECURITY

Bureau of Customs and Border Protection


Modification of the CBP NCAP Test Regarding Reconciliation for 
Entries Under the Dominican Republic-Central America-United States Free 
Trade Agreement

AGENCY: Customs and Border Protection, Homeland Security.

ACTION: General notice.

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SUMMARY: This document announces a modification to the Customs and 
Border Protection Automated Commercial

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System (ACS) Reconciliation prototype test that adds to the issues 
subject to the Reconciliation process those arising under the Dominican 
Republic-Central America-United States Free Trade Agreement. Other than 
this modification, the test remains the same as set forth in previously 
published Federal Register notices.

DATES: The test modification set forth in this document is effective on 
September 28, 2006. The two-year testing period of this Reconciliation 
prototype commenced on October 1, 1998, and was extended indefinitely 
starting October 1, 2000. Applications to participate in the test will 
be accepted throughout the duration of the test.

ADDRESSES: Written inquiries regarding participation in the 
Reconciliation prototype test and/or applications to participate should 
be addressed to Ms. Monica Crockett, Reconciliation Team, Bureau of 
Customs and Border Protection, 1300 Pennsylvania Ave., NW., Room 5.2A, 
Washington, DC 20229-0001. Answers to inquiries regarding the test are 
also available at [email protected].

FOR FURTHER INFORMATION CONTACT: Ms. Monica Crockett at (202) 344-2511.

SUPPLEMENTARY INFORMATION:

Background

    Reconciliation, a planned component of the National Customs 
Automation Program (NCAP), as provided for in Title VI (Subtitle B) of 
the North American Free Trade Agreement Implementation Act (the NAFTA 
Implementation Act; Public Law 103-182, 107 Stat. 2057 (December 8, 
1993)), is currently being tested by the Bureau of Customs and Border 
Protection (CBP) under the CBP Automated Commercial System (ACS) 
Prototype Test. CBP announced and explained the test in a general 
notice document published in the Federal Register (63 FR 6257) on 
February 6, 1998. Clarifications and operational changes were announced 
in subsequent Federal Register notices: 63 FR 44303, published on 
August 18, 1998; 64 FR 39187, published on July 21, 1999; 64 FR 73121, 
published on December 29, 1999; 66 FR 14619, published on March 13, 
2001; 67 FR 61200, published on September 27, 2002 (with a correction 
document published at 67 FR 68238 on November 8, 2002); 69 FR 53730, 
published on September 2, 2004; 70 FR 1730, published on January 10, 
2005; and 70 FR 46882, published on August 11, 2005. A Federal Register 
(65 FR 55326) notice published on September 13, 2000, extended the 
prototype indefinitely. This document announces a modification to the 
Reconciliation test to expand the issues subject to Reconciliation to 
include those arising under the Dominican Republic-Central America-
United States Free Trade Agreement. Aside from this modification, the 
test remains as set forth in the previously published Federal Register 
notices.
    For application requirements, see the Federal Register notices 
published on February 6, 1998, and August 18, 1998. Additional 
information regarding the test can be found at http://www.customs.gov/xp/cgov/import/cargo_summary/reconciliation/.

Reconciliation Generally

    Reconciliation is the process that allows an importer, at the time 
an entry summary is filed, to identify undeterminable information 
(other than that affecting admissibility) to CBP and to provide that 
outstanding information at a later date. The importer identifies the 
outstanding information by means of an electronic ``flag'' which is 
placed on the entry summary at the time the entry summary is filed and 
payment (applicable duty, taxes, and fees) is made. Previously 
published Federal Register documents have set forth that the issues for 
which an entry summary may be ``flagged'' (for the purpose of later 
reconciliation) are limited and relate to: (1) Value issues other than 
claims based on latent manufacturing defects; (2) classification 
issues, on a limited basis; (3) issues concerning value aspects of 
entries filed under heading 9802, Harmonized Tariff Schedule of the 
United States (HTSUS) (9802 issues); and (4) issues concerning 
merchandise entered under the North American Free Trade Agreement 
(NAFTA issues/claims) and under the United States-Chile Free Trade 
Agreement (CFTA or Chile issues/claims) that are eligible for treatment 
under 19 U.S.C. 1520(d).
    The flagged entry summary (the underlying entry summary) is 
liquidated for all aspects of the entry except those issues that were 
flagged. The means of providing the outstanding information at a later 
date relative to the flagged issues is through the filing of a 
Reconciliation entry. The flagged issues will be liquidated at the time 
the Reconciliation entry is liquidated. Any adjustments in duties, 
taxes, and/or fees owed will be made at that time. (See the February 6, 
1998, Federal Register notice for a more detailed presentation of the 
basic Reconciliation process.)
    CBP reminds test participants that the filing of a Reconciliation 
entry, like the filing of a regular consumption entry, is governed by 
19 U.S.C. 1484 and can be done only by the importer of record as 
defined in that statute.

Test Modification

The Agreement and the Implementation Act

    The Dominican Republic-Central America-United States Free Trade 
Agreement (CAFTA-DR or the Agreement) was entered into by the 
governments of Costa Rica, the Dominican Republic, El Salvador, 
Guatemala, Honduras, Nicaragua, and the United States on August 5, 
2004. The United States Congress approved the CAFTA-DR in the Dominican 
Republic-Central America-United States Free Trade Agreement 
Implementation Act (the Implementation Act), Public Law 109-53, 119 
Stat. 462 (19 U.S.C. 4001 et seq.). Under the Implementation Act, the 
provisions of the CAFTA-DR become effective for individual CAFTA-DR 
countries (defined under the Implementation Act to include all 
countries that are signatory to the Agreement except the United States) 
only when the Agreement enters into force for a CAFTA-DR country upon 
issuance of a presidential proclamation to that effect, an action that 
is conditioned upon the fulfillment of certain requirements (i.e., the 
CAFTA-DR country has taken measures to comply with the provisions of 
the Agreement). Importations of originating goods of such a CAFTA-DR 
country are entitled to the benefits of the Agreement as of the 
effective date set forth in the presidential proclamation and in 
accordance with the Implementation Act and new General Note 29 of the 
Harmonized Tariff Schedule of the United States (HTS).
    As of the date of this notice, the Agreement has entered into force 
for three CAFTA-DR countries: El Salvador, in accordance with 
Presidential Proclamation 7987, issued on February 28, 2006 (71 FR 
10827; March 2, 2006) (see also U.S. International Trade Commission 
(USITC) Publication 3829, February 2006), and Honduras and Nicaragua, 
in accordance with Presidential Proclamation 7996, issued on March 31, 
2006 (71 FR 16971; April 4, 2006) (see also USITC Publication 3845, 
April 2006).

Ordinary CAFTA-DR Claim and Post-Importation CAFTA-DR Claim Under 19 
U.S.C. 1520(d)

    A claim for preferential tariff treatment for an originating CAFTA-
DR good, in accordance with CAFTA-DR and applicable procedures 
(regulations are forthcoming), is made at the time of

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entry summary. (See General Note 29, HTSUS, for rules of origin.) 
However, in some instances, an importer may not be able to make the 
claim at that time, usually because the importer does not possess all 
the information or documentation required. In those instances, an 
importer may make a post-importation CAFTA-DR claim under 19 U.S.C. 
1520(d) (section 1520(d)), pursuant to an amendment to that section 
made by the Implementation Act (section 207). Under this amendment to 
section 1520(d), entries of goods qualifying under CAFTA-DR rules of 
origin are eligible for reliquidation when preferential tariff 
treatment under CAFTA-DR is not claimed at the time of importation, 
notwithstanding that a protest under 19 U.S.C. 1514 (section 1514) is 
not timely filed. (A section 1514 protest is a means of objecting to, 
among other things, the liquidation of an entry by filing the protest 
within 180 days of the liquidation (or other protestable decision or 
action by CBP).) A claimant must file a claim under section 1520(d) 
within one year of the applicable importation and meet other 
requirements, such as applicable documentary requirements, including 
(when requested by CBP) the filing of a certification or information 
demonstrating that the entered goods are originating CAFTA-DR goods.

Post-Importation CAFTA-DR Claim Under Reconciliation

    This notice announces that a post-importation claim for 
preferential tariff treatment under section 1520(d) for an entry filed 
pursuant to the CAFTA-DR also may be made under the Reconciliation 
test, in the same way as a post-importation NAFTA or Chile claim may be 
made (see, respectively, notices published in the Federal Register on 
September 27, 2002, and September 2, 2004, cited previously). This 
alternative requires that an importer follow the Reconciliation test 
procedure which, in contrast to the ordinary section 1520(d) procedure 
described above, requires action at the time of entry. That action is 
to flag the entry summary for the CAFTA-DR issue(s), which will be 
followed later by the filing of a Reconciliation entry within one year 
of the applicable importation. It is noted that CAFTA-DR Reconciliation 
entries cannot include other Reconciliation-eligible issues; i.e., a 
CAFTA-DR Reconciliation entry is limited to covering only CAFTA-DR 
issues (claims). NAFTA and Chile Reconciliation entries/claims are 
similarly limited.
    This CAFTA-DR Reconciliation alternative is available for eligible 
importations involving any eligible CAFTA-DR country (a CAFTA-DR 
country as to which the Agreement has entered into force) 90 days after 
the date this notice is published in the Federal Register.

Reconciliation CAFTA-DR Claim Precludes Claims by Other Means

    CBP emphasizes that once an importer flags an entry summary for 
CAFTA-DR issues for Reconciliation, indicating that it is pursuing the 
post-importation, section 1520(d) claim through the Reconciliation 
process, the only means of perfecting the CAFTA-DR claim is by 
completing the Reconciliation process by filing a timely Reconciliation 
entry. (See the September 27, 2002, Federal Register notice for an 
explanation of this same limitation relative to NAFTA and Chile 
issues.) By flagging the entry summary, the importer makes a commitment 
to perfect the claim only through the Reconciliation process--to, in 
effect, waive filing the claim any other way. Thus, once entries have 
been flagged for Reconciliation of CAFTA-DR issues, CBP will not accept 
a claim filed for those entries under the ordinary section 1520(d) 
procedure. This will prevent dual filings for the same underlying entry 
summaries.

Benefits of Reconciliation

    Finally, CBP recommends the use of the Reconciliation test 
procedure for making post-importation CAFTA-DR claims because the test 
procedure provides the importer with several benefits. First, using the 
test procedure is a simpler means of filing claims: i.e., the importer 
is able to make potentially thousands of CAFTA-DR claims on one 
Reconciliation entry. Second, the importer can receive one check from 
CBP rather than many (even up to thousands) upon CBP's liquidation of a 
Reconciliation entry and issuance of a refund. Third, because 
processing CAFTA-DR claims under Reconciliation is simpler for CBP, the 
refund delivery system is more efficient.

    Dated: June 23, 2006.
William S. Heffelfinger III,
Acting Assistant Commissioner, Office of Field Operations.
[FR Doc. 06-5875 Filed 6-29-06; 8:45 am]
BILLING CODE 9111-14-P