[Federal Register Volume 76, Number 113 (Monday, June 13, 2011)]
[Notices]
[Pages 34246-34248]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2011-14536]


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DEPARTMENT OF HOMELAND SECURITY

U.S. Customs and Border Protection


Automated Commercial Environment (ACE); Announcement of National 
Customs Automation Program Test of Automated Procedures for In-Bond 
Shipments Transiting Through the United States From One Point in Canada 
to Another Point in Canada

AGENCY: U.S. Customs and Border Protection, Department of Homeland 
Security.

ACTION: General notice.

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SUMMARY: This document announces that U.S. Customs and Border 
Protection (CBP) plans to conduct a National Customs Automation Program 
(NCAP) test relating to highway movements of commercial goods that are 
transported in-bond through the United States from one point in Canada 
to another point in Canada. The NCAP test designates a new filing code 
in CBP's Automated Commercial Environment (ACE) Truck Manifest System 
to identify the shipment as being part of a joint CBP and Canada Border 
Services Agency (CBSA) In-Transit Project and requires test 
participants to transmit the manifest electronically and to submit an 
additional data element. The new filing code and additional data 
element will enable CBP and the CBSA to better track the movement of 
these goods, to share information about the in-bond movement and to 
streamline procedures for test participants. This notice provides a 
description of the NCAP test process, sets forth eligibility 
requirements for participation, and invites public comment on any 
aspect of the planned test.

DATES: The test will commence no earlier than July 13, 2011. Comments 
concerning this notice and all aspects of the announced test may be 
submitted at any time during the test period.

ADDRESSES: Written comments concerning program, policy and technical 
issues should be submitted to Mr. Gary Schreffler, Chief, Cargo Control 
Branch, Office of Field Operations, U.S. Customs and Border Protection, 
via e-mail at [email protected].

SUPPLEMENTARY INFORMATION:

Background

    The National Customs Automation Program (NCAP) was established in 
Subtitle B of Title VI--Customs Modernization, in the North American 
Free Trade Agreement Implementation Act (Pub. L. 103-182, 107 Stat. 
2057, 2170, December 8, 1993) (Customs Modernization Act). See 19 
U.S.C. 1411. The Customs Modernization Act provides the Commissioner of 
CBP with authority to conduct limited test programs or procedures 
designed to evaluate planned components of the NCAP. This test is 
authorized pursuant to Sec.  101.9(b) of the CBP Regulations (19 CFR 
101.9(b)) which provides for the testing of NCAP programs or 
procedures. See T.D. 95-21.
    Section 343(a) of the Trade Act of 2002, as amended (the Trade Act; 
19 U.S.C. 2071 note), requires CBP to promulgate regulations providing 
for the mandatory transmission of electronic cargo information by way 
of a CBP approved electronic data interchange (EDI) system before the 
cargo is brought into or departs the United States by any mode of 
commercial transportation (sea, air, rail or truck). The required cargo 
information is that which is reasonably necessary to enable high-risk 
shipments to be identified for purposes of ensuring cargo safety and 
security and preventing smuggling pursuant to the laws enforced and 
administered by CBP.
    On December 5, 2003, CBP published a final rule in the Federal 
Register (68 FR 68140) to effectuate the provisions of the Trade Act. 
In particular, a new Sec.  123.92 (19 CFR 123.92) was added to the 
title 19 regulations to implement the requirements for cargo brought 
into the United States by truck. As provided in Sec.  123.92, for any 
inbound truck required to report its arrival under Sec.  123.1(b) that 
will have commercial cargo aboard, CBP must electronically receive 
certain information regarding that cargo through a CBP-approved EDI 
system no later than either 30 minutes or one hour prior to the 
carrier's reaching the first port of arrival in the United States. As 
explained in the preamble of the 2003 final rule, the 30 minute time 
frame applies to truck carriers arriving with shipments qualified for 
clearance under the FAST (Free and Secure Trade) program.
    In a notice published in the Federal Register on October 27, 2006 
(71 FR 62922), CBP designated the ACE Truck Manifest System as the 
approved system for receipt of EDI transmissions of required land 
border crossing manifest data. ACE was phased in as the required 
transmission system over a six month period at various ports of entry 
and CBP now requires ACE to be used for the transmission of advance 
electronic truck cargo information at every land border port in which 
CBP had planned to require the use of ACE. See, 72 FR 53789, September 
20, 2007.
    Highway movements of commercial goods that are transported through 
the United States from one point in Canada to another point in Canada 
must be transported in-bond and processed as Transportation and 
Exportation (T&E) entries. The procedures for these in-bond shipments 
are addressed in 19 CFR 123.42. Among other things, this regulation 
requires the filing of a manifest and various reports to CBP and the 
CBSA regarding the movement of the goods. Although reference is made to 
a paper manifest, CBP's in-bond process for T&E entries is supported in 
the ACE Truck Manifest System. The ACE Truck Manifest System enables 
carriers to submit T&E entries by filing an e-Manifest. This NCAP test 
requires participants to file their T&E entries using an e-Manifest in 
the ACE Truck Manifest System and eliminates one of the reporting 
requirements.

Arrangement Between the Canada Border Services Agency and the 
Department of Homeland Security, United States Customs and Border 
Protection Regarding the Highway In-Transit Project

    On March 10, 2011, CBP and the CBSA finalized a memorandum of 
understanding (MOU) titled, ``Arrangement Between the Canada Border 
Services Agency and the Department of Homeland Security, United States 
Customs and Border Protection Regarding the Highway In-Transit 
Project.'' In the MOU, CBP and the CBSA state their intention to 
implement the Highway In-Transit Project (In-Transit Project) on a 
pilot basis for shipments transiting through the United States (from 
one point in Canada to another point in Canada) and to later jointly 
assess whether to begin implementing the In-Transit Project on a pilot 
basis for shipments transiting through Canada (from one point in the 
United States to another point in the United States), or on a permanent 
basis for one or both types of transit movements. The MOU provides for 
the automation of the reporting of in-transit highway movements of 
commercial goods between Canada and the United States. The MOU 
specifies the criteria that highway carriers must meet in order to 
participate in the In-Transit

[[Page 34247]]

Project and provides for the transmission of pre-arrival cargo 
(manifest) and conveyance information using mutually identified 
electronic data interchange (EDI) highway cargo (manifest) and 
conveyance transaction sets. The MOU further allows for the 
confidential electronic sharing between the CBSA and CBP of certain 
manifest information to be used for the purposes of risk assessment and 
tracking of in-transit highway movement of commercial goods between 
Canada and the United States.

Implementation of the NCAP Test

    In order to facilitate implementation of the In-Transit Project for 
shipments transiting the United States from one point in Canada to 
another point in Canada, CBP is implementing this NCAP test to 
designate a new filing code in the ACE Truck Manifest System for truck 
carriers participating in the In-Transit Project to indicate that their 
shipments are being shipped as part of the In-Transit Project. 
Additionally, under the NCAP test, carriers will file an additional 
data element, the Canadian Cargo Control Number (CCN), consisting of a 
CBSA-issued carrier code and a unique reference number assigned by the 
carrier. The CCN will allow the CBSA and CBP to track in-bond shipments 
being transported under the NCAP test and will facilitate the closing 
out of these T&E entries. Carriers will only be required to report 
their arrival to CBP at the United States port of export and the CBSA 
will notify CBP when the shipment enters into Canada. At that point, 
the T&E will be updated in the system as exported.

Eligibility and Acceptance

    To participate in this NCAP test, a truck carrier must be a bonded 
carrier with CBP and the CBSA, be accepted by the CBSA to participate 
in the In-Transit Project, and must be able to transmit an e-Manifest 
using the American National Standards Institute (ANSI) X12 format to 
CBP. For information on how to participate in the In-Transit Project go 
to the CBSA Web site at: http://www.cbsa-asfc.gc.ca/prog/manif/transit-eng.html.
    Carriers that wish to participate in this NCAP test should send a 
letter or e-mail to CBP stating that they meet the eligibility 
requirements and that they wish to participate in the NCAP Test of 
Automated Procedures for Canada-United States-Canada In-Transit 
Movements. The letter or e-mail must include (1) The carrier's name, 
(2) Internal Revenue Service number (IRS number), and (3) proof of 
acceptance by the CBSA to participate in the In-Transit Project. CBP 
will accept the first nine eligible carriers that apply and will notify 
the carriers that they have been accepted to participate in the NCAP 
test. Applications can be submitted at any time during the test and 
should be submitted to Gary Schreffler, Chief, Cargo Control Branch, 
Office of Field Operations, U.S. Customs and Border Protection, via e-
mail at [email protected].

Method of Transmission of Advance Data and Content

    Truck carriers participating in this NCAP test will be required to 
file a T&E entry for the in-bond movement by submitting a complete e-
Manifest to CBP using the ANSI X12 format (referred to as a 309 
manifest) no later than either 30 minutes or one hour (as applicable) 
before entering the United States. A complete e-Manifest using the ANSI 
X12 format includes the following components: Trip, crew, conveyance, 
equipment, and complete shipment data. At this time, the ACE Secure 
Data Portal and the United Nations/Electronic Data Interchange for 
Administration, Commerce and Transport (UN/EDIFACT) are not available 
for use.

New Filing Code and Data Element

    Carriers will indicate that the T&E entry is being filed as part of 
the In-Transit Project by designating the entry as a type 70 filing. 
Type 62 filings are currently used for Canadian T&E entries transiting 
the United States. Additionally, carriers will file an additional data 
element, the CCN, issued by the CBSA when the shipment leaves Canada. 
The CCN consists of a CBSA-issued carrier code and a unique reference 
number assigned by the carrier. The CCN is not required under CBP's 
current process. The CCN will be used by CBP to notify the CBSA when 
the shipment crosses into the United States and by the CBSA to notify 
CBP when the shipment is exported back into Canada.

Processing and Tracking the In-Bond Shipment

    The 309 manifest will be processed and retained in ACE as a normal 
manifest. Upon arrival in the United States, CBP will generate a 
``transit movement authorized'' message (referred to as a 350 message) 
that will be sent to the carrier and to the CBSA. The shipment will 
then be able to transit the United States and proceed to the United 
States port of export as a T&E entry. When the shipment arrives at the 
United States port of export, the carrier will report the arrival of 
the shipment to CBP via an EDI message or through their ACE portal 
account. When the shipment exits the United States and arrives in 
Canada, the CBSA will transmit a message (referred to as a 353 message) 
notifying CBP that the shipment has entered Canada. CBP will generate 
another 350 message and send it to the carrier notifying the carrier 
that the shipment has entered Canada and that the T&E entry status is 
exported. At this point the T&E entry will be closed with CBP.

No Diversions of In-Bond Shipment Permitted

    Carriers transporting a shipment through the United States as part 
of this NCAP test will be required to complete the T&E entry by 
exporting their shipment to Canada. Carriers will not be allowed to 
divert these shipments to a port that is not a land crossing port 
between the United States and Canada.

Future Expansion of the Test

    Any future expansion in ACE to include a new in-bond filing code 
for in-transit movements through Canada and back to the United States 
(U.S-Canada-U.S) or expansion of this test to include other 
transmission methods, i.e., UN/EDIFACT or ACE Secure Data Portal, will 
be announced via a separate Federal Register Notice.

Regulatory Provisions Affected

    Regulations that conflict with the terms and conditions of this 
test, namely regulations contained in parts 18 and 123, including 
section 123.42, are suspended and overridden to the extent of the 
conflict for the duration of this test for those participants in this 
test and only to the extent of their participation in this test.

Misconduct

    If a test participant fails to abide by the rules, procedures, or 
term and conditions of this and all other applicable Federal Register 
Notices, fails to exercise reasonable care in the execution of 
participant obligations, or otherwise fails to comply with all 
applicable laws and regulations, then the participant may be suspended 
from participation in this test and/or subjected to penalties, 
liquidated damages, and/or other administrative or judicial sanction. 
Additionally, CBP has the right to suspend a test participant based on 
a determination that an unacceptable compliance risk exists. Any 
decision proposing suspension may be appealed in writing to the 
Assistant Commissioner (Office of Field Operations) within 15 days of 
the decision date. Such proposed suspension will apprise the 
participant

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of the facts or conduct warranting suspension. Should the participant 
appeal the notice of proposed suspension, the participant should 
address the facts or conduct charges contained in the notice and state 
how he has or will achieve compliance. However, in the case of 
willfulness or where public health interests are concerned, the 
suspension may be effective immediately.

Test Evaluation Criteria

    All interested parties are invited to comment on any aspect of this 
test at any time. To ensure adequate feedback, participants are 
required to take part in an evaluation of this test. CBP needs comments 
and feedback on all aspects of this test, including the design, conduct 
and implementation of the test, in order to determine whether to 
modify, alter, expand, limit, continue, end or implement this program 
by regulation. The final results of the evaluation will be published in 
the Federal Register and the Customs Bulletin as required by section 
101.9 of the CBP Regulations.

Paperwork Reduction Act

    As noted above, CBP will be accepting only nine participants in the 
NCAP test. This means that fewer than ten persons will be subject to 
any information collections under the NCAP test. Accordingly, 
collections of information encompassed within this notice are exempted 
from the requirements of the Paperwork Reduction Act of 1995 (44 U.S.C. 
3502 and 3507).

    Dated: June 7, 2011.
Thomas Winkowski,
Assistant Commissioner, Office of Field Operations.
[FR Doc. 2011-14536 Filed 6-10-11; 8:45 am]
BILLING CODE 9111-14-P