[Federal Register Volume 72, Number 110 (Friday, June 8, 2007)]
[Rules and Regulations]
[Pages 31719-31725]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E7-11071]


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DEPARTMENT OF HOMELAND SECURITY

 Customs and Border Protection

DEPARTMENT OF THE TREASURY

19 CFR Parts 24, 113, and 128

[CBP Dec. 07-29; USCBP-2006-0015]
RIN 1505-AB39


Fees for Customs Processing at Express Consignment Carrier 
Facilities

AGENCIES: U.S. Customs and Border Protection, Department of Homeland 
Security; Department of the Treasury.

ACTION: Final rule.

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SUMMARY: This document amends title 19 of the Code of Federal 
Regulations (19 CFR) to reflect changes to the customs user fee statute 
made by section 337 of the Trade Act of 2002 and section 2004(f) of the 
Miscellaneous Trade and Technical Corrections Act of 2004. The 
statutory amendments made by section 337 concern the fees payable for 
customs services provided in connection with the informal entry or 
release of shipments at express consignment carrier facilities and 
centralized hub facilities, and primarily serve to replace the annual 
lump sum payment procedure with a quarterly payment procedure based on 
a specific fee for each individual air waybill or bill of lading. 
Section 2004(f) amended the user fee statute by authorizing the 
assessment of both the merchandise processing fee and a reimbursable 
fee assessed on each air waybill or bill of lading for merchandise that 
is formally entered at these sites and valued at $2,000 or less. In 
addition, pursuant to the authority established in 19 U.S.C. 
58c(b)(9)(B)(i), this document raises the existing $0.66 fee assessed 
on individual air waybills or bills of lading to $1.00 to more 
equitably align it with the actual costs incurred by CBP in processing 
these items.

EFFECTIVE DATE: July 9, 2007.

FOR FURTHER INFORMATION CONTACT: Michael L. Jackson, Office of Field 
Operations, Cargo Control, Tel.: (202) 344-1196.

SUPPLEMENTARY INFORMATION:

Background

    On July 28, 2006, CBP published in the Federal Register (71 FR 
42778) a proposal to reflect the changes to the customs user fee 
statute made by section 337 of the Trade Act of 2002 and section 
2004(f) of the Miscellaneous Trade and Technical Corrections Act of 
2004, as well as to raise the existing $0.66 fee assessed on individual 
air waybills or bills of lading to $1.00.

Statutory Changes Made by Section 337(a) of the Trade Act of 2002

    On August 6, 2002, the President signed into law the Trade Act of 
2002, Public Law 107-210, 116 Stat. 933. Section 337(a) of the Trade 
Act of 2002 amended section 13031(b)(9) of the Consolidated Omnibus 
Budget Reconciliation Act of 1985 (19 U.S.C. 58c(b)(9)) by adding new 
requirements for the payment of user fees for customs services provided 
by CBP to express consignment carrier facilities and centralized hub 
facilities in connection with imported letters, documents, shipments or 
other merchandise to which informal entry procedures apply. The 
statutory amendments made by section 337 replaced the annual lump sum 
payment procedure with a quarterly payment procedure based on a 
specific fee for each individual air waybill or bill of lading. In 
addition, section 337(a) amended 19 U.S.C. 58c(b)(9)(B)(i) to authorize 
the Secretary of the Treasury to adjust the $0.66 fee prescribed in 19 
U.S.C. 58c(b)(9)(A)(ii) to an amount that is not less than $0.35 and 
not more than $1.00 per individual air waybill or bill of lading.

Statutory Changes Made by Section 2004(f) of the Miscellaneous Trade 
and Technical Corrections Act of 2004

    The Miscellaneous Trade and Technical Corrections Act of 2004 
(``Trade Act of 2004'') was signed into law by the President on 
December 3, 2004 (Pub. L. 108-429, 18 Stat. 2593). Section 2004(f) of 
the Trade Act of 2004 made further amendments to section 13031(b)(9) of 
the Consolidated Omnibus Budget Reconciliation Act of 1985 (19 U.S.C. 
58c(b)(9)) and authorized the assessment of merchandise processing fees 
provided for in 19 U.S.C. 58c(a)(9), as well as the fees that are 
currently assessed on individual air waybills or bills of lading, for 
merchandise that is formally entered at express consignment carrier 
facilities and centralized hub facilities and valued at $2,000 or less.

Notice of Proposed Rulemaking

    In the Notice of Proposed Rulemaking published in the Federal 
Register (71 FR 42778) on July 28, 2006, CBP proposed amendments to its 
regulations to conform to the statutory changes described above. In 
addition, pursuant to the authority established in 19 U.S.C. 
58c(b)(9)(B)(i), that document set forth a proposed adjustment by the 
Secretary of the Treasury to increase the $0.66 reimbursable fee 
prescribed by 19 U.S.C. 58c(b)(9)(A)(ii) and payable to CBP by express 
consignment carrier facilities and centralized carrier facilities to 
$1.00. The fee increase is necessary to adequately reimburse CBP for 
the actual costs incurred by the agency in processing individual air 
waybills and bills of lading at these sites. The only mechanism for 
reimbursing CBP for these relocation expenses is through the 
established fee, which does not sufficiently cover CBP's regular 
expenses at these sites.
    CBP solicited comments on these proposals.
Discussion of Comments
    Five commenters responded to the solicitation of public comment in 
the proposed rule. A description of the comments received, together 
with CBP's analyses, is set forth below.
    Comment: Four commenters expressed the view that proposed Sec.  
24.23(b)(1)(i)(A), which states, in part, that ``merchandise that is 
formally entered is subject to a $1.00 per individual air waybill or 
bill of lading fee * * *'' does not accurately reflect section 2004(f) 
of the Miscellaneous Trade and Technical Corrections Act of 2004. The 
commenters uniformly interpret section 2004(f) as authorizing the 
assessment of both the merchandise processing fee (MPF) and a 
reimbursable fee for each air waybill or bill of lading only for formal 
entries valued at $2,000 or less.
    CBP's Response: CBP agrees. The final rule will clarify that only 
those formal entries valued at $2,000 or less are subject to both the 
merchandise processing fee and the reimbursable fee assessed per 
individual air waybill or bill of lading.

[[Page 31720]]

    Comment: Four commenters stated that the explanation of actual 
costs incurred by CBP in connection with the processing of an 
individual air waybill or bill of lading is legally insufficient, 
unsubstantiated, and fails to justify an increase in the individual 
airway bill or bill of lading fee.
    CBP's Response: CBP has met the statutory requirement set forth in 
19 U.S.C. 58c(b)(9)(B)(i) which requires that, ``[T]he Secretary shall 
provide notice in the Federal Register of a proposed adjustment [of the 
fee assessed per individual air waybill or bill of lading] * * * and 
the reasons therefore and shall allow for public comment on the 
proposed adjustment.'' CBP published notice in the Federal Register of 
the proposed adjustment and presented both collections received and 
aggregate costs incurred (see 71 FR 42778). The shortfall in 
collections versus actual costs justifies the increase in the fee rate 
assessed for each individual air waybill or bill of lading. CBP is 
entitled to recover both direct and indirect costs (salaries and 
benefits, support, overhead, etc.) incurred in connection with the 
processing of an individual air waybill or bill of lading.
    Regarding the commenters' claims that the cost/collection data 
presented in 71 FR 42778 as the basis for the proposed fee increase are 
unsubstantiated or otherwise insufficient, it is noted that the data 
were generated by the Cost Management Information System (CMIS), an 
agency-wide cost accounting system implemented by CBP in 1998. CMIS 
uses an Activity Based Costing (ABC) methodology, whereby data are 
collected from various CBP sources and compiled in CMIS for a cost-of-
operations perspective of the organization. Under CMIS, user fee costs 
are segregated from all other costs and collections are deposited in 
distinct accounts and can only be used to cover costs authorized by 
their respective legislation. CMIS uses distinct codes to identify the 
hours and activities performed by a CBP Officer at an express facility. 
CBP views the production of CMIS-generated data set forth in the 
proposed rule as a valid and accurate method of substantiating the 
agency's claim that actual costs incurred by CBP in processing 
individual air waybills and bills of lading at express consignment and 
carrier hub facilities exceed collections.
    The table, set forth below, is updated in this final rule to set 
forth the finance data associated with CBP's processing of individual 
air waybills and bills of lading at express consignment facilities and 
centralized hub facilities for FY's 2004, 2005 and 2006. This table 
updates and clarifies the table published in 71 FR 42778 to reflect 
that: (1) The data set forth below for FY 2006 are based on actual 
data, not estimated projections; (2) the heading text describing 
``Estimated Package Volume'' has been replaced with the more accurate 
heading, ``Individual Air Waybills or Bills of Lading''; and (3) 
certain CBP cost/deficit amounts for FY 2005 have been corrected to 
rectify a typographical error in the proposed rule in which CBP Costs 
were identified as $21,393,520.

--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                             CBP's retained
                                                             Individual Air      *Total        portion of
                                                               waybills or     collections      collected                     CBP cost
                        Fiscal year                             bills of     (based on $.66  amount  (based    **CBP costs    per bill     CBP deficit
                                                                 lading         cents per     on $.33 cents
                                                                                  bill)         per bill)
--------------------------------------------------------------------------------------------------------------------------------------------------------
2004.......................................................      47,243,205     $31,180,516     $15,590,258     $19,945,704       0.42      ($4,355,446)
2005.......................................................      45,364,139      29,940,332      14,970,166   ***21,939,520    ***0.48    ***(6,969,354)
2006.......................................................      48,038,188      31,705,204      15,852,602      26,659,626       0.55     (10,807,024)
--------------------------------------------------------------------------------------------------------------------------------------------------------
* Collection information from the Automated Commercial System Monthly Report of Collections (ACSR-CL 134).
** All cost information from the Cost Management Information System.
*** These numbers correct typographical errors in 71 FR 42778 for FY 2005.

    Comment: One commenter questioned CBP's requirement, as described 
in 71 FR 42778, that the fee be paid on the ``lowest level'' air 
waybill or bill of lading contained in a consolidated shipment rather 
than on the master bill that represents the actual shipping document. 
It was also suggested that the ``lowest level'' concept was a means to 
elevate the bill count to increase fees.
    CBP's Response: CBP disagrees. The implementation of the fee was to 
replace the direct reimbursement mechanism by which CBP was reimbursed 
for services provided in the processing of letters, documents, records, 
shipments, merchandise, or any other item. Section 58c(b)(9)(A)(II)(ii) 
states that the fee is assessed ``per individual air waybill or bill of 
lading.'' CBP believes the use of the word ``individual'' indicates 
that applying the fee to a bill at the lowest level is appropriate, as 
opposed to applying the fee to a master bill that covers numerous and 
separate individual bills.
    Comment: Four commenters view the assessment of 19 U.S.C. 1592 
penalties for the underpayment or failure to pay reimbursement fees, as 
prescribed in Sec.  24.23(b)(4)(iv) of title 19 of the CFR, as 
inappropriate because 1592 penalties apply to fraud, gross negligence 
and negligence.
    CBP's Response: Penalties assessed pursuant to 19 U.S.C. 1592 may 
be applied when a false and material statement or omission occurs by 
reason of negligence, gross negligence or fraud in connection with the 
entry or introduction of merchandise into the commerce of the United 
States. Consequently, CBP believes it may be appropriate to apply these 
penalties in cases where a false and material statement or omission is 
made by negligence, gross negligence or fraud regarding the number of 
air waybills subject to the fee. CBP acknowledges that clerical errors 
or mistakes of fact are not violations unless they are part of 
negligent conduct.
    Comment: Two commenters viewed as excessive the provision in Sec.  
113.64(a) of title 19 of the CFR that provides that a late payment is 
subject to liquidated damages equal to two times the fee not paid.
    CBP's Response: The failure to pay the required fee within the 
prescribed time frame is a breach of the international carrier bond 
conditions resulting in liquidated damages. The standard for liquidated 
damages set forth in Sec.  113.64(a) is two times the processing fees 
not timely paid. The proposed rule did not change that standard; it 
merely expands it to include the fees for processing letters, 
documents, records, shipments, merchandise, or other items.
    Comment: Two commenters expressed the opinion that assessment of 19 
U.S.C. 1592 penalties and liquidated damages constitutes double 
penalization.
    CBP's Response: CBP disagrees. As indicated above, 19 U.S.C. 1592

[[Page 31721]]

penalties apply to false and material statements or omissions made by 
fraud, gross negligence and negligence, while liquidated damages result 
under 19 CFR 113.64(a) for the breach of bond conditions, i.e., for 
breach of contract. Thus, liquidated damages are the result of a breach 
of a contract and are not penalties and there is no ``double 
penalization''.
    Comment: Three commenters stated that CBP needs to establish a 
means to protest and appeal decisions regarding the underpayment or 
overpayment of reimbursable fees.
    CBP's Response: CBP believes there are adequate administrative 
review processes available to challenge decisions regarding the 
underpayment or overpayment of the fee. Initially, the Express 
Consignment operator calculates the number of individual air waybills 
or bill of ladings processed for the required calendar quarter and 
remits a payment equal to that number multiplied by the set fee. 
Section 24.23(b)(4)(iii)(A) of title19 of the CFR contains a mechanism 
for challenging an overpayment by providing up to one year to request a 
refund for overpayment. In addition, if CBP assesses a charge or 
exaction, the assessment is subject to an administrative challenge 
through the filing of a protest under 19 U.S.C. 1514.
    Comment: One commenter stated that CBP should address whether there 
were periods when CBP's collections exceeded costs and whether any such 
surplus had occurred.
    The commenter also stated that surplus funds should be carried over 
from one period to another.
    CBP's Response: Since the enactment of the Trade Act of 2002 and 
the implementation of the provisions of 19 U.S.C. 58c, CBP has not had 
a surplus of funds (see collection/cost table in CBP's response to 
second comment, set forth above). However, in the event a surplus 
should occur, CBP will maintain the surplus funds in the user fee 
account for providing services to express consignment operations. The 
funds will remain until expended.
    Comment: One commenter stated that CBP's analysis of costs failed 
to include the collection of fees under the provisions of 19 U.S.C. 
58c(a)(9), i.e., merchandise processing fees (MPF), from many of the 
same shipments subject to the fees of 19 U.S.C. 58c(b)(9).
    CBP's Response: CBP disagrees. The commenter is correct in that 
shipments formally entered and valued at $2,000 or less are subject to 
both the air waybill or bill of lading fee as well as the MPF. However, 
CBP did not include the MPF funds as part of its financial analysis as 
those funds are not available for express consignment operations. MPF 
is collected under 19 U.S.C. 58c(a)(9). Fees collected under that 
paragraph are deposited, by virtue of 19 U.S.C. 58c(f)(1), into the 
Customs User Fee Account. Express consignment fees are excluded from 
collection under 19 U.S.C. 58c(a) by section 58c(a)(10) and 
58c(b)(9)(B). Instead, express consignment fees are collected under 19 
U.S.C. 58c(b)(9).
    Comment: One commenter suggested that if proposed Sec.  
128.11(b)(7)(iv) of title 19 of the CFR requires Express Consignment 
Carrier Facilities operators to report users of the facility on a 
quarterly basis, then the application procedures should include similar 
language.
    CBP's Response: CBP agrees. Section 128.11(b) is amended in this 
final rule to include the requirement to identify prospective users.
    Comment: Two commenters question whether proposed Sec.  
24.23(b)(1)(i)(A) is accurate in requiring that the 0.21 percent ad 
valorem fee be paid by the carrier as the MPF is the responsibility of 
the importer.
    CBP's Response: CBP concurs. The last sentence in Sec.  
24.23(b)(1)(i)(A) will be modified by deleting the phrase, ``by the 
carrier'' so as to clarify that the importer of record is the party 
responsible for paying the 0.21 ad valorem fee. Corresponding changes 
will be made elsewhere to the final regulatory text as necessary.
    Comment: One commenter suggested that the proposed fee increase of 
50% is out of line with federal pay increases for the same period.
    CBP's Response: In August, 2002 the pay grade for journeyman CBP 
officers was elevated to the General Schedule (GS)-11 level. The 
difference between the Fiscal Year (FY) 2002 GS-9 Step 1 and FY 2006 
GS-11 Step 1 was $14,544 or a 38.9% increase. (GS-9/1=$37,428, GS-11/
1=$51,972). Based on these figures, CBP does not view the increase as 
unduly disproportionate.
    Comment: One commenter stated that CBP should detail the cost of 
hiring the 27 new CBP officers mentioned in the notice of proposed 
rulemaking.
    CBP's Response: The hiring costs cited in the proposed rule were 
projected costs for anticipated positions based on resource requests. 
Additional resources are contingent on funding availability. As such, 
these costs have been removed from the footnotes in the collection/cost 
table set forth above.
    Comment: One commenter stated that CBP has, without justification, 
concluded that express consignment operators will simply pass the 
increased per item air waybill and bill of lading fee costs along to 
their customers.
    CBP's Response: CBP noted in the proposed rule that small business 
entities will ``likely pass the costs of the increased fee on to their 
customers to the extent that they are able.'' CBP remains of the view 
that this is the likely option for many of the impacted parties.
    Comment: Two commenters mentioned the CBP employee relocation costs 
associated with a Midwest hub relocation as a contributing factor for 
the fee increase, and further noted that these events are infrequent 
and do not impose regularly recurring costs on CBP.
    CBP's Response: CBP's costs include relocation expenses as 
authorized by law. As such expenses are episodic in nature and vary 
from year to year, CBP does not incur relocation expenses at the same 
rate annually. To the extent that CBP incurs relocation expenses in a 
given fiscal year, such costs will be accounted for in the agency's 
subsequent fiscal year cost analysis.
    Comment: One commenter stated that CBP's ``estimated average annual 
burden per respondent/recordkeeper'' for complying with fee reporting 
requirements is low and requests that CBP explain what data it relied 
upon for these estimates.
    CBP's Response: In the proposed rule, CBP reported the following 
estimated average annual burden per respondent associated with the 
proposed fee reporting requirements: Sec.  24.23(b)(4)(ii)--8 hours; 
Sec.  24.23(b)(4)(iii)--1 hour; and Sec.  128.11(b)--2 hours. Proposed 
Sec.  24.23(b)(4)(ii) requires a respondent to report to CBP the 
identity of the calendar quarter to which the payment relates, the 
identity of the facility to which the payment is made and the 
applicable port code (and, if multiple facilities are used, the 
identity of each facility, its port code and the portion of the payment 
that pertains to each code). Proposed Sec.  24.23(b)(4)(iii) requires 
the respondent to provide CBP with an explanation of any overpayment or 
underpayment accrued in a previous quarter. Proposed Sec.  128.11(b), 
in pertinent part, requires the respondent to provide CBP with a list 
of all carriers or operators that intend to use the facility, are 
currently using the facility, or have ceased to use the facility. CBP 
is of the view that the normal business records already maintained by 
affected business entities provide the basis to calculate and transmit 
the required information and these regulations do not require the 
creation of any new data elements. For this reason, CBP believes

[[Page 31722]]

the information collection burden reported in the proposed rule 
represents a realistic estimate of the recordkeeping burden associated 
with these regulations.
    Comment: Two commenters stated that CBP did not show fiscal year 
2002 and 2003 volumes in its analysis.
    CBP's Response: In the proposed rule, CBP presented the costs and 
collections for Fiscal Years (FY) 2004 and 2005, and set forth 
projected costs for FY 2006. The FY 2003 data are not readily 
available. The figures covering FY 2002 are irrelevant as there was a 
different reimbursement structure in place at the time.
    Comment: One commenter stated that CBP needs to confirm whether the 
cost of data transmission lines are included in the reimbursable cost 
calculation as opposed to separate billings.
    CBP's Response: The data transmission lines are not included in nor 
covered by the reimbursable fee and these costs are not included in 
CBP's costs calculation. CBP currently bills for data transmission 
lines pursuant to authority granted by 19 U.S.C. 58c(b)(9)(B)(ii).
    Comment: One commenter noted that proposed Sec.  24.23(b)(4) should 
be clarified to state that only import shipments are subject to the 
reimbursable fee, i.e., those shipments from a foreign shipper to a 
U.S. consignee.
    CBP's Response: The reimbursable fee applies to the processing of 
airway bills for shipments arriving in the U.S., and not for shipments 
leaving the U.S. The regulatory text set forth in Sec.  24.23(b)(4) 
will be clarified accordingly.
    Comment: One commenter stated that CBP needs to confirm that none 
of the costs are associated with the new class of CBP officers referred 
to as CBP Agriculture Specialists.
    CBP's Response: None of the costs shown in the proposed rule are 
associated with the CBP Agriculture Specialists. There are distinct 
codes within CMIS for the CBP officer and the CBP Agriculture 
Specialist.
    Comment: One commenter noted that the collection/cost table set 
forth in the proposed rule (71 FR 42778) included a column entitled 
``Estimated Package Volume'' with numbers for FY 2004 and FY 2005, and 
estimated numbers for FY 2006. As the statutory provisions for the 
reimbursable fee are based on individual air waybills or bills of 
lading rather than individual shipping pieces, the commenter suggests 
that CBP should revise the table to accurately reflect estimated 
shipment volume, and CBP should also adjust the numbers to reflect the 
actual number of shipments with individual air waybills or bills of 
lading subject to the fee. In addition, it is suggested that CBP verify 
that the subsequent numbers in the ``Total Collections'' column are 
accurate, as they are derived from the numbers in the previously 
published column entitled ``Estimated Package Volume''.
    CBP's Response: CBP agrees that clarification of the table is 
necessary. In this regard, it is noted that the number under the 
erroneous header entitled ``Estimated Package Volume'' was, in fact, 
describing air waybills and bills of lading--not packages. The header 
is correctly named in the table set forth in this document.
    Comment: One commenter notes that, based on the figures provided in 
the collection/cost table set forth in the proposed rule, CBP claims 
its costs have increased by 7.3% and 5.4% while its workload has 
dropped 4% in each of the past two fiscal years. Additionally, a 
footnote to the cost table set forth in the proposed rule states that 
CBP anticipated adding 27 new CBP Officer positions in FY 2006. The 
commenter requests that CBP detail the facilities to which the 27 new 
CBP officer positions are assigned.
    CBP's Response: The collection/cost table set forth in the proposed 
rule indicates workload decreases for each of years FY 2004 and 2006. 
The FY 2006 figures were based on projected estimates. When CBP 
received the actual numbers, the only workload decrease occurred in FY 
2005. The reference to the 27 new employees was based on a hiring 
projection that did not occur.
    An increase in volume will cause an increase in revenue. A decrease 
in volume may not actually result in a decrease in costs. CBP hub 
employees continue to work 8 hours a day regardless of volume; however, 
a decrease in volume could reduce the demand for overtime resulting in 
reduced costs at hub facilities. In either event, pursuant to 19 U.S.C. 
58c(b)(9)(B)(i), the Secretary of the Treasury may once per fiscal year 
adjust the fee to an amount not less than $0.35 and not more than $1.00 
per individual air waybill or bill of lading. In the event that 
collections begin to exceed costs CBP may, pursuant to the authority 
cited above, analyze and adjust the fee downward.
    Comment: Two commenters stated that CBP should clarify the language 
used to describe the unit of measure relevant to this reimbursable 
process and that actual data, rather than estimates, should be 
provided.
    CBP's Response: As noted above, the titles used in the collection/
cost table have been modified to more accurately reflect the nature of 
the program (i.e., individual air waybills or bills of lading). Actual 
data volumes are reflected in the table set forth in this document.

Conclusion

    After analysis of the comments and further review of the matter, 
CBP has determined to adopt as a final rule, with the changes mentioned 
in the comment discussion and with additional non-substantive editorial 
changes, the proposed rule published in the Federal Register (71 FR 
42778) on July 28, 2006.

The Regulatory Flexibility Act

    CBP examined the impacts of the proposed rule on small entities as 
required by the Regulatory Flexibility Act (Pub. L. No. 96-354, 94 
Stat. 1164, codified at 5 U.S.C. chapter 6) and prepared an Initial 
Regulatory Flexibility Act Analysis (IRFA) in the NPRM published in the 
Federal Register (71 FR 42778) on July 28, 2006. Based on annual data 
collected by CBP and set forth in that document, there are 22 
businesses that will be affected by this rule. Of these, 10 are large 
businesses, 11 are small businesses, and 1 is a small, foreign-owned 
business. The 12 small business entities affected by this rule are 
either courier services (NAICS code 492110) or arrange freight 
transportation (NAICS code 488510). Sixteen of these companies (both 
large and small) are members of an association that owns and operates a 
consignment facility. That association acts as a single respondent for 
its members.
    For this Final Regulatory Flexibility Act analysis, CBP analyzed 
annual revenue data for the 12 small businesses affected. To determine 
the impact of the proposed rule on annual revenues, CBP calculated the 
projected difference in costs between the old and proposed fee and 
compared that (as a percentage) to average annual revenues. Based on 
these calculations, CBP estimates that the rule will have a 5-percent 
impact or less on annual revenues for 5 of the small businesses. The 
rule will have a 5- to 10-percent impact on one of the companies and a 
greater than 10-percent impact on four companies. CBP could not find 
data for one small business, and one was foreign-owned. In the course 
of CBP's examination of the impacts on annual revenues for these small 
businesses, CBP determined that these entities may pass the cost of the 
increased fee on to their customers to the extent that they are able.
    CBP concluded that the proposed rule set forth in 71 FR 42778 could 
have a

[[Page 31723]]

significant impact on a substantial number of small entities. CBP 
solicited comments on any of the regulatory requirements that could 
minimize the cost to small businesses.
    One comment was received that pertains specifically to the IRFA set 
forth in the proposed rule. That comment, addressed above in the 
``comments'' section of this document, noted that CBP concluded, 
without justification, that express consignment operators will pass the 
increased cost of the fee along to their customers to the extent 
possible. As set forth above, CBP remains of the view that the impacted 
business entities are likely to pass along the increased fee to their 
customers to the extent that they are able. The agency acknowledges, 
however, that the mechanism by which an individual express consignment 
operator adjusts to the proposed fee increase is an internal business 
decision and, therefore, no definitive conclusion regarding the passing 
along of costs can be made.

Reporting and Recordkeeping

    This rule will change current paperwork requirements. No new 
professional skills will be necessary for the preparations of the 
reports and records. For more detail, see PAPERWORK REDUCTION ACT 
below.

Other Federal Rules

    This rule does not duplicate, overlap, or conflict with other 
federal regulations.

Regulatory Alternatives

    CBP did not consider any alternatives to the rule.

Conclusions

    Based on the above analysis, CBP concludes that the final rule may 
have a significant economic impact on a substantial number of small 
entities.

Paperwork Reduction Act

    The collections of information in this document are contained in 
Sec. Sec.  24.23 and 128.11 (19 CFR 24.23 and 128.11). This information 
is used by CBP to determine whether user fees required by statute have 
been properly paid. The likely respondents are business organizations 
including importers and air carriers.
    The collections of information for paying fees for customs services 
provided in connection with the informal entry or release of shipments 
at express consignment carrier facilities and centralized hub 
facilities was previously approved by the Office of Management and 
Budget under control number 1651-0052. In accordance with the Paperwork 
Reduction Act of 1995 (44 U.S.C. 3507), CBP has submitted to OMB for 
review the following adjustments to the information provided to OMB for 
the previously approved OMB control number to account for the changes 
in this rule. An agency may not conduct or sponsor, and a person is not 
required to respond to, a collection of information unless it displays 
a valid control number assigned by OMB.
    The following is a breakdown of the estimated annual burden per 
respondent associated with the collection of information in this final 
rule:
     An express consignment operator (courier) will incur an 
estimated annual burden of 8 hours to prepare the quarterly payment 
report as per Sec.  24.23(b)(4)(ii).
     An express consignment courier facility operator, as per 
Sec.  128.11(b), will incur an estimated annual burden of 2 hours to 
prepare a quarterly list of all carriers or operators currently using 
an express consignment courier facility.
     An express consignment operator (courier) will incur an 
estimated annual burden of 1 hour to prepare a request for a refund of 
an overpayment as per Sec.  24.23(b)(4)(iii).
    Comments concerning the accuracy of this burden estimate and 
suggestions for reducing this burden should be sent to U. S. Customs 
and Border Protection, Information Services Group, Office of Finance, 
1300 Pennsylvania Avenue, NW., Washington, DC 20229, and to OMB, 
Attention: Desk Officer for the Department of the Treasury, Office of 
Information and Regulatory Affairs, Washington, DC 20503. A copy should 
also be sent to the Trade and Commercial Regulations Branch, Office of 
International Trade, U.S. Customs and Border Protection, 1300 
Pennsylvania Avenue, NW. (Mint Annex), Washington, DC 20229.

Executive Order 12866

    This amendment does not meet the criteria for a ``significant 
regulatory action'' as specified in Executive Order 12866.

Signing Authority

    This document is being issued in accordance with Sec.  0.1(a)(1) of 
the CBP regulations (19 CFR 0.1(a)(1)) pertaining to the authority of 
the Secretary of the Treasury (or his/her delegate) to approve 
regulations related to certain customs revenue functions.

List of Subjects

19 CFR Part 24

    Accounting, Claims, Customs duties and inspection, Exports, 
Imports, Interest, Reporting and recordkeeping requirements, Taxes, 
User fees, Wages.

19 CFR Part 113

    Air carriers, Bonds, Customs duties and inspection, Exports, 
Freight, Imports, Reporting and recordkeeping requirements, Surety 
bonds.

19 CFR Part 128

    Administrative practice and procedure, Carriers, Couriers, Customs 
duties and inspection, Entry, Express consignments, Freight, Imports, 
Informal entry procedures, Reporting and recordkeeping requirements.

Amendments to the Regulations

0
For the reasons set forth in the preamble, parts 24, 113, and 128 of 
title 19 of the CFR (19 CFR Parts 24, 113, and 128), are amended as set 
forth below.

PART 24--CUSTOMS FINANCIAL AND ACCOUNTING PROCEDURE

0
1. The authority citation for part 24 continues to read in part as 
follows:

    Authority: 5 U.S.C. 301; 19 U.S.C. 58a-58c, 66, 1202 (General 
Note 3(i), Harmonized Tariff Schedule of the United States), 1505, 
1520, 1624; 26 U.S.C. 4461, 4462; 31 U.S.C. 9701; Pub. L. 107-296, 
116 Stat. 2135 (6 U.S.C. 1 et. seq.).
* * * * *
    Section 24.17 also issued under 19 U.S.C. 261, 267, 1450, 1451, 
1452, 1456, 1524, 1557, 1562; 46 U.S.C. 2110, 2111, 2112;
    Section 24.23 also issued under 19 U.S.C. 3332;
* * * * *


Sec.  24.17  [Amended]

0
2. In Sec.  24.17:
0
a. The section heading is revised to read as follows: ``Reimbursable 
services of CBP employees.'';
0
b. Paragraphs (a) through (d) are amended by removing the words 
``Customs employee'' where they appear and adding in each place the 
term ``CBP employee''; and
0
c. Paragraphs (a)(12) and (a)(13) are removed and paragraph (a)(14) is 
redesignated as paragraph (a)(12).

0
3. In Sec.  24.23:
0
a. Paragraph (a) is amended by removing the word ``Customs'' each place 
that it appears and adding the term ``CBP'';
0
b. Paragraphs (b)(1)(i)(A) and paragraph (b)(2) are revised;
0
c. New paragraphs (b)(3) and (b)(4) are added;
0
d. The introductory text of paragraph (c)(1) is amended by removing the 
reference ``(b)(2)(i)'' and adding, in its place, the reference 
``(b)(2)'';
0
e. Paragraph (c)(2)(i) is amended by removing the reference 
``(b)(2)(i)'' and adding, in its place, the reference ``(b)(2)'';

[[Page 31724]]

0
f. The first sentence of paragraph (c)(3) is amended by removing the 
reference ``(b)(2)(i)'' and adding, in its place, the reference 
``(b)(2)''; and
0
g. Paragraph (c)(5) is amended by removing the reference ``(b)(2)(i)'' 
and adding, in its place, the reference ``(b)(2)''.
    The revisions and additions read as follows:


Sec.  24.23  Fees for processing merchandise.

* * * * *
    (b) Fees--(1) Formal entry or release--(i) Ad valorem fee--(A) 
General. Except as provided in paragraph (c) of this section, 
merchandise that is formally entered or released is subject to the 
payment to CBP of an ad valorem fee of 0.21 percent. The 0.21 ad 
valorem fee is due and payable to CBP by the importer of record of the 
merchandise at the time of presentation of the entry summary and is 
based on the value of the merchandise as determined under 19 U.S.C. 
1401a. In the case of an express consignment carrier facility or 
centralized hub facility, each shipment covered by an individual air 
waybill or bill of lading that is formally entered and valued at $2,000 
or less is subject to a $1.00 per individual air waybill or bill of 
lading fee and, if applicable, to the 0.21 percent ad valorem fee in 
accordance with paragraph (b)(4) of this section. * * *
* * * * *
    (2) Informal entry or release. Except in the case of merchandise 
covered by paragraph (b)(3) or paragraph (b)(4) of this section, and 
except as otherwise provided in paragraph (c) of this section, 
merchandise that is informally entered or released is subject to the 
payment to CBP of a fee of:
    (i) $2 if the entry or release is automated and not prepared by CBP 
personnel;
    (ii) $6 if the entry or release is manual and not prepared by CBP 
personnel; or
    (iii) $9 if the entry or release, whether automated or manual, is 
prepared by CBP personnel.
    (3) Small airport or other facility. With respect to the processing 
of letters, documents, records, shipments, merchandise, or any other 
item that is valued at $2,000 or less, or any higher amount prescribed 
for purposes of informal entry in Sec.  143.21 of this chapter, a small 
airport or other facility must pay to CBP an amount equal to the 
reimbursement (including overtime) which the facility is required to 
make during the fiscal year under Sec.  24.17.
    (4) Express consignment carrier and centralized hub facilities. 
Each carrier or operator using an express consignment carrier facility 
or a centralized hub facility must pay to CBP a fee in the amount of 
$1.00 per individual air waybill or individual bill of lading for the 
processing of airway bills for shipments arriving in the U.S. In 
addition, if merchandise is formally entered and valued at $2,000 or 
less, the importer of record must pay to CBP the ad valorem fee 
specified in paragraph (b)(1) of this section, if applicable. An 
individual air waybill or individual bill of lading is the individual 
document issued by the carrier or operator for transporting and/or 
tracking an individual item, letter, package, envelope, record, 
document, or shipment. An individual air waybill is the bill at the 
lowest level, and is not a master bill or other consolidated document. 
An individual air waybill or bill of lading is a bill representing an 
individual shipment that has its own unique bill number and tracking 
number, where the shipment is assigned to a single ultimate consignee, 
and no lower bill unit exists. Payment must be made to CBP on a 
quarterly basis and must cover the individual fees for all subject 
transactions that occurred during a calendar quarter. The following 
additional requirements and conditions apply to each quarterly payment 
made under this section:
    (i) The quarterly payment must conform to the requirements of Sec.  
24.1, must be mailed to Customs and Border Protection, Revenue 
Division/Attention: Reimbursables, 6650 Telecom Drive, Suite 100, 
Indianapolis, Indiana 46278, and must be received by CBP no later than 
the last day of the month that follows the close of the calendar 
quarter to which the payment relates.
    (ii) The following information must be included with the quarterly 
payment:
    (A) The identity of the calendar quarter to which the payment 
relates;
    (B) The identity of the facility for which the payment is made and 
the port code that applies to that location and, if the payment covers 
multiple facilities, the identity of each facility and its port code 
and the portion of the payment that pertains to each port code; and
    (C) The total number of individual air waybills and individual 
bills of lading covered by the payment, and a breakdown of that total 
for each facility covered by the payment according to the number 
covered by formal entry procedures, the number covered by informal 
entry procedures specified in Sec. Sec.  128.24(e) and 143.23(j) of 
this chapter, and the number covered by other informal entry 
procedures.
    (iii) Overpayments or underpayments may be accounted for by an 
explanation in, and adjustment of, the next due quarterly payment to 
CBP. In the case of an overpayment or underpayment that is not 
accounted for by an adjustment of the next due quarterly payment to 
CBP, the following procedures apply:
    (A) In the case of an overpayment, the carrier or operator may 
request a refund by writing to Customs and Border Protection, Revenue 
Division/Attention: Reimbursables, 6650 Telecom Drive, Suite 100, 
Indianapolis, Indiana 46278. The refund request must specify the 
grounds for the refund and must be received by CBP within one year of 
the date the fee for which the refund is sought was paid to CBP; and
    (B) In the case of an underpayment, interest will accrue on the 
amount not paid from the date payment was initially due to the date 
that payment to CBP is made.
    (iv) The underpayment or failure of a carrier or operator using an 
express consignment carrier facility or a centralized hub facility to 
pay all applicable fees owed to CBP pursuant to paragraph (b)(4) of 
this section may result in the assessment of penalties under 19 U.S.C. 
1592, liquidated damages, and any other action authorized by law.
* * * * *

PART 113--CUSTOMS BONDS

0
4. The authority citation for part 113 continues to read in part as 
follows:

    Authority: 19 U.S.C. 66, 1623, 1624.
* * * * *

0
5. In Sec.  113.64, paragraph (a) is amended by adding a new sentence 
at the end to read as follows:


Sec.  113.64  International carrier bond conditions.

* * * * *
    (a) * * * If the principal (carrier or operator) fails to pay the 
fees for processing letters, documents, records, shipments, 
merchandise, or other items on or before the last day of the month that 
follows the close of the calendar quarter to which the processing fees 
relate pursuant to Sec.  24.23(b)(4) of this chapter, the obligors 
(principal and surety, jointly and severally) agree to pay liquidated 
damages equal to two times the processing fees not timely paid to CBP 
as prescribed by regulation.
* * * * *

PART 128--EXPRESS CONSIGNMENTS

0
6. The authority citation for part 128 is revised to read as follows:

    Authority: 19 U.S.C. 58c, 66, 1202 (General Note 3(i), 
Harmonized Tariff Schedule of the United States), 1321, 1484, 1498, 
1551, 1555, 1556, 1565, 1624.

[[Page 31725]]


0
7. In Sec.  128.11:
0
a. Paragraphs (b)(2) and (b)(7)(ii)-(v) are revised; and
0
b. Paragraph (c) is amended, in the first sentence, by removing the 
word ``shall'' and adding in its place the word ``must'' and, in the 
second sentence, by removing the word ``Customs'' and adding in its 
place the term ``CBP''.
    The revisions read as follows:


Sec.  128.11  Express consignment carrier application process.

* * * * *
    (b) * * *
    (2) A statement of the general character of the express consignment 
operations that includes, in the case of an express consignment carrier 
facility, a list of all carriers or operators that intend to use the 
facility.
* * * * *
    (7) * * *
    (ii) Sign and implement a narcotics enforcement agreement with U.S. 
Immigration and Customs Enforcement (ICE).
    (iii) Provide, without cost to the Government, adequate office 
space, equipment, furnishings, supplies and security as per CBP's 
specifications.
    (iv) If the entity is an express consignment carrier facility, 
provide to Customs and Border Protection, Revenue Division/Attention: 
Reimbursables, 6650 Telecom Drive, Suite 100, Indianapolis, Indiana 
46278, at the beginning of each calendar quarter, a list of all 
carriers or operators currently using the facility and notify that 
office whenever a new carrier or operator begins to use the facility or 
whenever a carrier or operator ceases to use the facility.
    (v) If the entity is a hub facility or an express consignment 
carrier, timely pay all applicable processing fees prescribed in Sec.  
24.23 of this chapter.
* * * * *

Deborah J. Spero,
Acting Commissioner, U.S. Customs and Border Protection.
    Approved: June 4, 2007.
Timothy E. Skud,
Deputy Assistant Secretary of the Treasury.
 [FR Doc. E7-11071 Filed 6-7-07; 8:45 am]
BILLING CODE 9111-14-P