[Federal Register Volume 75, Number 50 (Tuesday, March 16, 2010)]
[Proposed Rules]
[Pages 12483-12485]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2010-5635]


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DEPARTMENT OF HOMELAND SECURITY

Bureau of Customs and Border Protection

DEPARTMENT OF THE TREASURY

19 CFR Part 159

[USCBP-2010-0008]
RIN 1505-AC21


Courtesy Notice of Liquidation

AGENCY: Customes and Border Protection, Department of Homeland 
Security; Department of the Treasury.

ACTION: Notice of proposed rulemaking.

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SUMMARY: This document proposes to amend title 19 of the Code of 
Federal Regulations (CFR) pertaining to the method by which CBP issues 
courtesy notices of liquidation. Courtesy notices of liquidation 
provide informal, advanced notice of the liquidation date and are not 
required by statute. Currently, CBP provides an electronic and a paper 
courtesy notice for importers of record whose entry summaries are 
electronically filed in the Automated Broker Interface (ABI). In an 
effort to streamline the notification process and reduce printing and 
mailing costs, CBP proposes to discontinue mailing paper courtesy 
notices of liquidation to importers of record whose entry summaries are 
filed in ABI.

DATE: Comments must be received on or before May 17, 2010.

ADDRESSES: You may submit comments, identified by USCBP docket number, 
by one of the following methods:
     Federal eRulemaking Portal: http://www.regulations.gov. 
Follow the instructions for submitting comments via docket number 
USCBP-2010-0008.
     Mail: Trade and Commercial Regulations Branch, Regulations 
and Rulings, Office of International Trade, U.S. Customs and Border 
Protection, 799 9th Street, NW. (Mint Annex), Washington, DC 20229-
1179.
    Instructions: All submissions received must include the agency name 
and USCBP docket number for this rulemaking. All comments received will 
be posted without change to http://www.regulations.gov, including any 
personal information provided. For detailed instructions on submitting 
comments and additional information on the rulemaking process, see the 
``Public Participation'' heading of the SUPPLEMENTARY INFORMATION 
section of this document.
    Docket: For access to the docket to read background documents or 
comments received, go to http://www.regulations.gov. Submitted comments 
may also be inspected during regular business days between the hours of 
9 a.m. and 4:30 p.m. at the Trade and Commercial Regulations Branch, 
Regulations and Rulings, Office of International Trade, U.S. Customs 
and Border Protection, 799 9th Street, NW., 5th Floor, Washington, DC.
    Arrangements to inspect submitted comments should be made in 
advance by calling Joseph Clark at (202) 325-0118.

FOR FURTHER INFORMATION CONTACT: Laurie Dempsey, Trade Policy and 
Programs, Office of International Trade, Customs and Border Protection, 
202-863-6509.

SUPPLEMENTARY INFORMATION: 

Public Participation

    Interested persons are invited to participate in this rulemaking by 
submitting written data, views, or arguments on all aspects of the 
proposed rule. Customs and Border Protection (CBP) also invites 
comments that relate to the economic, environmental, or federalism 
effects that might result from this proposed rule. If appropriate to a 
specific comment, the commenter should reference the specific portion 
of the proposed rule, explain the reason for any recommended change, 
and include data, information, or authority that support such 
recommended change.

Background

    Section 1500(e) of title 19 of the United States Code (19 U.S.C. 
1500(e)) requires CBP to provide notice of liquidation to the importer 
or his agent and authorizes CBP to determine the form and manner by 
which to issue the notice. Section 159.1 of the CBP regulations (19 CFR 
159.1) defines ``liquidation'' as the final calculation of duties (not 
including vessel repair duties) or drawback accruing on an entry. 
``Duties'' is defined in 19 CFR 101.1 as ``[c]ustoms duties and any 
internal revenue taxes which attach upon importation.'' Accordingly, in 
the customhouse at each port of entry, CBP posts the official bulletin 
notice of liquidation indicating the date of liquidation for the 
entries listed therein. 19 CFR 159.9(c). The posting of the bulletin 
notice of liquidation is ``legal evidence of liquidation.'' 19 CFR 
159.9(c).
    CBP also has the discretion to provide advance notice of the 
liquidation date to the importer or his agent by issuing informal, 
courtesy notices of liquidation (hereinafter ``courtesy notice'' or 
``courtesy notices''). 19 CFR 159.9(d). The courtesy notice is not 
required by 19 U.S.C. 1500(e) and does not trigger the date upon which 
an importer may file a protest under 19 U.S.C. 1514 challenging certain 
aspects of the liquidation.
    CBP intends to make certain changes to the distribution of courtesy 
notices of liquidation. Courtesy notices are mailed and/or issued 
electronically to two parties who use the Automated Broker Interface 
(ABI) to file their entry summaries: Importers of record and customs 
brokers who are duly authorized agents of the Importers.
    Currently, CBP's Technology Center transmits, on a weekly basis, 
electronic courtesy notices to all ABI filers and mails paper courtesy 
notices, on CBP Form 4333-A, to all importers of record whose entry 
summaries are set to liquidate by each port of entry. As a result, two 
courtesy notices are issued for importers of record whose electronic 
entry summaries are filed in ABI: the ABI filer receives an electronic 
courtesy notice on behalf of the importer of record; and, the importer 
of record receives a paper courtesy notice. If the importer of record 
is the ABI filer, then the importer of record receives both an 
electronic and a paper courtesy notice. See 19 CFR part 143. If an 
importer files a paper formal entry with CBP, that importer receives a 
mailed courtesy notice. See 19 CFR parts 141 and 142.
    In an effort to streamline the notification process and reduce 
printing and mailing costs, CBP is proposing to discontinue mailing the 
paper courtesy notice to importers of record whose entry summaries are 
filed in ABI. The ABI filer, who is either the importer of record or a 
customs broker, already receives an electronic courtesy notice thereby 
rendering the paper courtesy notice duplicative. If the proposal is 
adopted, ABI filers would only receive electronic courtesy notices. 
Below is an analysis of the cost savings that will result if CBP 
discontinues paper courtesy notices to these recipients.

Cost Savings

    The following analysis details the cost savings that would be 
realized by the agency as a result of eliminating paper courtesy 
notices to importers of record who personally receive an electronic 
courtesy notice or whose broker receives

[[Page 12484]]

an electronic courtesy notice on their behalf. In FY 2009, CBP sent 
approximately 7.2 million paper courtesy notices. CBP estimates that 
99.6 percent of all summaries are currently filed electronically using 
ABI. Under the proposed rule, CBP estimates that over 90 percent of 
paper courtesy notices will be eliminated. For the purpose of this 
analysis, we assume 6.5 million paper notices (90 percent) will be 
eliminated. Additionally, we assume that the number of notices does not 
change from year to year.

Quantified Savings

1. Postage

    By decreasing the number of paper courtesy notices distributed, CBP 
will significantly reduce postage costs required to mail the notices. 
Current U.S. Postal Service first-class letter rates are 44 cents 
within the United States, 75 cents to Canada, 79 cents to Mexico, and 
98 cents to the rest of the world. Exhibit 1 shows the total estimated 
savings on postage in 2010, an estimated $3 million.

               Exhibit 1--Total Savings on Postage in 2010
                             [Undiscounted]
------------------------------------------------------------------------
                                                 Number of
              Notice  destination                 notices     Total cost
------------------------------------------------------------------------
Domestic......................................    5,899,816   $2,595,919
Canada........................................      379,301      284,475
Mexico........................................       57,371       45,323
Other Foreign.................................      167,193      163,849
                                               -------------------------
    Total.....................................    6,503,681    3,089,566
------------------------------------------------------------------------

2. Forms

    CBP estimates that each courtesy notice form costs $0.027. 
Decreasing the number of paper forms by 6.5 million will save the 
agency approximately $175,599 per year.

3. Labor

    CBP employs contractors to print the paper courtesy notices and 
estimates the cost of labor is $0.08 per copy. Based on this estimate, 
the cost savings of labor for printing is approximately $520,294 per 
year.

Total Quantified Savings

    Exhibit 2 displays all of the cost savings that have been 
quantified for this analysis.

  Exhibit 2--Total Savings from Reducing Paper Courtesy Notices in 2010
                             [Undiscounted]
------------------------------------------------------------------------
                                                                Annual
                            Cost                               savings
------------------------------------------------------------------------
Postage....................................................   $3,089,566
Forms......................................................      175,599
Labor......................................................      520,294
                                                            ------------
    Total..................................................    3,785,460
------------------------------------------------------------------------

    We total these savings over the next 10 years at a 3 and 7 percent 
discount rate, per guidance provided in the OMB's Circular A-4. Total 
estimated savings range from $28.4 million to $33.3 million over the 
period of analysis. Annualized savings are $3.8 million. Total present 
value and annualized savings are presented in Exhibit 3.

        Exhibit 3--Total Present Value and Annualized Costs of Additional Data Elements, 2010-2019, $2010
----------------------------------------------------------------------------------------------------------------
          Total present value costs ($millions)                        Annualized costs ($millions)
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             3%                           7%                          3%                          7%
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                $33.3                        $28.4                         $3.8                        $3.8
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Additional Savings Not Quantified

    CBP has service contracts with fixed monthly costs for the 
equipment used to print and mail the paper courtesy notices. Current 
maintenance costs are approximately $45,048 per year for two printers 
and approximately $3,478 per year for a finishing machine. CBP is 
exploring lower cost options to replace these machines, but we are 
unable to quantify these savings or predict when they might occur.
    Additional costs associated with the printing and distribution of 
paper courtesy notices include labor by government employees on the CBP 
Mail Management Team and mainframe processing time. Reducing the number 
of paper notices will allow both Mail Management Team and mainframe 
resources to be used for other purposes. While we do not have enough 
data to quantify these savings at this time, they are important to 
consider in the analysis of the total impact of the reduction of paper 
courtesy notices.

Summary of Cost Savings

    CBP estimates that this proposed rule will save the agency $3.8 
million annually by eliminating 90%, or approximately 6.5 million, of 
the paper courtesy notices currently sent to importers. Quantified 
savings include reduced postage, forms, and contract labor costs. 
Additional savings may be realized by reducing maintenance costs on 
equipment used to produce the paper notices and allowing more efficient 
use of other government resources, but we do not have enough data to 
quantify these at this time.

Explanation of Proposed Amendments

    This document proposes to amend section 159 of the CBP regulations 
(19 CFR 159) by removing any reference to Customs Form 4333-A, when 
used in connection with courtesy notices. This change is necessary to 
reflect that electronic courtesy notices in ABI are not set forth on 
CBP Form 4333-A; however, the form will continue to be used when paper 
courtesy notices are distributed. Moreover, this document proposes to 
amend 19 CFR 159.9(c)(1) by removing the last sentence, which refers to 
electronic courtesy notices, because section 159.9(d) discusses 
courtesy notices generally.
    The proposed changes will not affect CBP's continuing legal 
obligation to post the official bulletin notice of liquidation in the 
customhouse at all ports of entry pursuant to 19 CFR 159.9(b). 
Moreover, the proposed amendment will not affect the use of CBP Form 
4333-A as a notice of extension and suspension. 19 CFR 159.12(b)-(c).
    In addition, this document proposes non-substantive amendments to 
Sec. Sec.  159.9, 159.10, 159.11, and 159.12 of the CFR to reflect the 
nomenclature changes effected by the transfer of CBP to the Department 
of Homeland Security and other minor editorial edits.

Executive Order 12866

    This proposed rule is not a ``significant regulatory action'' per 
Executive Order 12866 because it will not result in expenditures 
totaling $100 million or more in any one year. The Office of Management 
and Budget (OMB) has not reviewed this regulation

[[Page 12485]]

under that order. The proposed rule would result in cost savings as 
discussed earlier in the preamble.

Regulatory Flexibility Act

    The Regulatory Flexibility Act (5 U.S.C. 601 et seq.) requires 
Federal agencies to examine the impact a rule would have on small 
entities. A small entity may be a small business (defined as any 
independently owned and operated business not dominant in its field 
that qualifies as a small business per the Small Business Act); a small 
not-for-profit organization; or a small governmental jurisdiction 
(locality with fewer than 50,000 people).
    It is noted that this proposal does not directly affect small 
entities because these proposed amendments place no new regulatory 
requirements on small entities to change their business practices. This 
proposed rule will eliminate paper courtesy notices that are sent to 
importers who file entry summaries via ABI or who hire a third party to 
file via ABI on their behalf. Those importers who do not file using ABI 
are likely to be small businesses or individuals making entry on 
personal goods, all of whom will continue to receive paper courtesy 
notices. As such, this rule should not adversely impact those 
importers. The primary impact of this proposed rule will be the savings 
realized by CBP as a result of eliminating a large portion of its 
annual printing and mailing costs associated with paper courtesy 
notices. For these reasons, we believe the effects of this proposed 
rule will not have an impact on a substantial number of small entities 
and that any effect would not rise to the level of a ``significant'' 
economic impact.
    We welcome comments on this conclusion.

Paperwork Reduction Act

    As there is no collection of information proposed in this document, 
the provisions of the Paperwork Reduction Act of 1995 (44 U.S.C. 3507) 
are inapplicable.

Signing Authority

    This proposed regulation is being issued in accordance with 19 CFR 
0.1(a)(1) pertaining to the Secretary of the Treasury's authority (or 
that of his delegate) to approve regulations related to certain customs 
revenue functions.

List of Subjects in 19 CFR Part 159

    Antidumping, Countervailing duties, Customs duties and inspection, 
Foreign currencies.

Proposed Amendments to the CBP Regulations

    For the reasons set forth in the preamble, part 159 of title 19 of 
the CFR (19 CFR Part 159) is proposed to be amended as set forth below.

PART 159--LIQUIDATION OF DUTIES

    1. The general authority citation for part 159 continues to read as 
follows:

    Authority: 19 U.S.C. 66, 1500, 1504, 1624.
* * * * *
    2. In Sec.  159.9:
    a. Paragraph (a) is amended by removing the word ``Customs'' and 
adding in its place the term ``CBP''.
    b. Paragraph (c)(1) is amended by removing the word ``shall'' from 
the first and second sentence and adding in its place the word 
``will''; and, by removing the last sentence.
    c. Paragraph (d) is revised.
    The revision reads as follows:


Sec.  159.9  Notice of liquidation and date of liquidation for formal 
entries.

* * * * *
    (d) Courtesy notice of liquidation. CBP will endeavor to provide 
importers or their agents with a courtesy notice of liquidation for all 
entries scheduled to be liquidated or deemed liquidated by operation of 
law. The courtesy notice of liquidation that CBP will endeavor to 
provide will be electronically transmitted pursuant to an authorized 
electronic data interchange system if the entry summary was filed 
electronically in accordance with part 143 of this chapter or on CBP 
Form 4333-A if the entry was filed on paper pursuant to parts 141 and 
142 of this chapter. This notice will serve as an informal, courtesy 
notice and not as a direct, formal, and decisive notice of liquidation.


Sec.  159.10  [Amended]

    3. In Sec.  159.10:
    a. Paragraph (a)(2) is amended by removing the word ``Customs'' and 
adding in its place the term ``CBP''.
    b. Paragraphs (c)(1) and (3) are amended by removing the word 
``Customs'' where it appears and adding in each place the term ``CBP''; 
and in paragraphs (c)(1) through (3) by removing the word ``shall'' 
each place that it appears and adding in its place the word ``will''.


Sec.  159.11  [Amended]

    4. In Sec.  159.11:
    a. Paragraph (a) is amended by removing the word ``shall'' each 
place that it appears and adding in its place the word ``will'', by 
removing the word ``Customs'' the first two places it appears and 
adding in its place the term ``CBP'', and, in the last sentence, by 
removing the words ``on Customs Form 4333-A''.
    b. Paragraph (b) is amended by removing the word ``shall'' each 
place that it appears and adding in its place the word ``will''.


Sec.  159.12  [Amended]

    5. In Sec.  159.12:
    a. Paragraphs (a)(1)(i) and (ii), (b), (c), and (d)(1) are amended 
by removing the word ``Customs'' each place that it appears and adding 
in its place the term ``CBP''.
    b. Paragraph (f)(1) is amended, in the first sentence, by removing 
the word ``shall'' and adding in its place the word ``will'' and, in 
the last sentence, by removing the word ``Customs'' at its first 
occurrence and adding in its place the term ``CBP'' and removing the 
words ``on Customs Form 4333-A''.
    c. Paragraph (f)(2) is amended by removing the word ``shall'' and 
adding in its place the word ``will''.
    d. Paragraph (g) is amended, in the first sentence, by removing the 
word ``shall'' and adding in its place the word ``will'', and by 
removing the word ``Customs'' and adding in its place the term ``CBP''; 
and, in the last sentence, by removing the word ``Customs'' at its 
first occurrence and adding in its place the term ``CBP'', and by 
removing the words ``on Customs Form 4333-A''.

    Approved: March 10, 2010.
David V. Aguilar,
Acting Deputy Commissioner, U.S. Customs and Border Protection.
Timothy E. Skud,
Deputy Assistant Secretary of the Treasury.
[FR Doc. 2010-5635 Filed 3-15-10; 8:45 am]
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