[Federal Register Volume 76, Number 159 (Wednesday, August 17, 2011)]
[Rules and Regulations]
[Pages 50883-50887]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2011-20957]
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DEPARTMENT OF HOMELAND SECURITY
U.S. Customs and Border Protection
DEPARTMENT OF THE TREASURY
19 CFR Part 159
[USCBP-2010-0008; BP Dec. 11-17]
RIN 1515-AD67 (formerly RIN 1505-AC21)
Courtesy Notice of Liquidation
AGENCY: 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 (``CFR'') pertaining to the method by which U.S. Customs
and Border Protection (``CBP'') issues courtesy notices of liquidation
to importers of record whose entry summaries are filed in the Automated
Broker Interface (``ABI''). Courtesy notices of liquidation
[[Page 50884]]
provide informal, advance notice of the liquidation date and are not
required by statute. For importers of record whose entry summaries are
electronically filed in ABI, CBP currently provides an electronic
courtesy notice to the ABI filer (importer of record or a broker that
files as the agent of the importer of record) and a paper courtesy
notice to the importer of record. In an effort to streamline the
notification process and reduce printing and mailing costs, CBP will
discontinue mailing paper courtesy notices of liquidation. All ABI
filers (importers of record and brokers that file as the agent of an
importer of record) will receive electronic courtesy notices. In
addition, all importers of record with an Automated Commercial
Environment (``ACE'') Secure Data Portal Account can monitor the
liquidation of their entries by using the reporting tool in the ACE
Secure Data Portal Account. Importers of record whose entries are not
filed through ABI will continue to receive paper courtesy notices of
liquidation.
DATES: Effective date: September 30, 2011. Implementation date: The
first day on or after September 30, 2011, that CBP can provide
importers with complete liquidation reports, including liquidation
dates, electronically through the ACE Portal. CBP will confirm the date
of implementation through electronic notification (see CBP.gov).
FOR FURTHER INFORMATION CONTACT: Laurie Dempsey, Trade Policy and
Programs, Office of International Trade, Customs and Border Protection,
202-863-6509.
SUPPLEMENTARY INFORMATION:
Background
On March 16, 2010, U.S. Customs and Border Protection (``CBP'')
published a proposed rule in the Federal Register (75 FR 12483)
proposing to amend title 19 of the Code of Federal Regulations (``19
CFR'') to discontinue mailing paper courtesy notices to importers of
record whose entry summaries are filed in the Automated Broker
Interface (``ABI''). The proposed amendments were intended to
streamline the notification process and reduce printing and mailing
costs, as provided in the proposed rule. See 75 FR 12483.
While CBP is not statutorily required to provide advance notice of
the liquidation date to the importer or his agent, CBP does issue
informal, courtesy notices of liquidation (hereinafter ``courtesy
notice'' or ``courtesy notices''). See 19 CFR 159.9(d).
Currently, CBP issues electronic courtesy notices to all ABI
filers: importers of record who file their own entries and customs
brokers who file as the duly authorized agents of the importer of
record. CBP's Technology Center also mails paper courtesy notices, on
CBP Form 4333-A, to all importers of record whose entry summaries are
scheduled 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: An electronic courtesy notice to the ABI
filer, that is either the importer of record or a customs broker filing
on behalf of the importer of record, and a paper courtesy notice to the
importer of record. Therefore, this renders duplicative the paper
courtesy notice sent by CBP to importers of record that file their own
entries in ABI because, as an ABI filer, they already receive an
electronic courtesy notice. See 19 CFR part 143.
Under the proposed rule, when electronic entry summaries are filed
in ABI, ABI filers would only receive electronic courtesy notices;
paper courtesy notices would not also be sent to importers of record
that do not file their own entries. Importers of record filing a paper
formal entry with CBP would continue to receive a mailed courtesy
notice. See 19 CFR parts 141 and 142. In addition, all importers of
record with an Automated Commercial Environment (``ACE'') Secure Data
Portal Account can monitor the liquidation of their entries by using
the reporting tool in the ACE Secure Data Portal Account.
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 an electronic courtesy notice
on their behalf. In FY 2009, CBP sent approximately 7.2 million paper
courtesy notices. Under this 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)
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Number of
Notice destination notices Total cost
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Domestic................................ 5,899,816 $2,595,919
Canada.................................. 379,301 284,475
Mexico.................................. 57,371 45,323
Other Foreign........................... 167,193 163,849
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Total............................... 6,503,681 3,089,566
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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 estimates the cost of contractors employed to print the paper
courtesy notices is $0.08 per copy. Based on this estimate, the cost
savings on 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.
[[Page 50885]]
Exhibit 2--Total Savings From Reducing Paper Courtesy Notices in 2010
(Undiscounted)
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Annual
Cost savings
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Postage.................................................... $3,089,566
Forms...................................................... 175,599
Labor...................................................... 520,294
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Total.................................................. 3,785,460
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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 $3.8 million. Total present
value and annualized savings are presented in Exhibit 3.
Exhibit 3--Total Present Value and Annualized Costs of Additional Data
Elements, 2010-2019
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Total present value costs ($ Annualized costs ($ millions)
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 rule will save the agency $3.8 million
annually by eliminating 90 percent, or approximately 6.5 million, of
the paper courtesy notices currently sent to importers. If more than 90
percent are eliminated, savings could be higher. 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.
CBP solicited public comments on the proposed rule.
Discussion of Comments
Eight commenters responded to the solicitation of public comments
in the proposed rule. Several of these commenters applauded CBP's
effort to achieve cost savings by eliminating the mailing of paper.
However, three commenters objected to CBP entirely eliminating the
paper courtesy notice for ABI filers for several reasons discussed
below, and four commenters requested that the courtesy mailing continue
until CBP develops an alternative means of notifying importers of the
liquidation of their entries.
Comment
Several commenters stated that the proposal will make importers of
record reliant upon their brokers for liquidation information.
Importers stated that they use the liquidation information on the
courtesy notices to: monitor their entries for fraudulent activities;
determine liquidation dates, protest deadlines, and contingent
liability periods; check for errors; and track the status of
antidumping and countervailing duty entries.
Without the courtesy notice, importers who are ABI filers state
that they would need to contact their brokers for the liquidation
information. However, a commenter noted that many importers utilize
more than one customs broker to make their entries, and sometimes, the
importer's broker will use outport brokers (those from other customs
broker districts) to make entry on behalf of the importer for whom they
have a power of attorney.
Moreover, it was noted that brokers sometimes fail to provide
importers with timely notification of liquidation information. When
such instances occur, the broker's liability is limited to $50, whereas
importers may lose their ability to challenge a CBP decision, thereby
potentially resulting in a loss of millions of dollars.
CBP Response
Pursuant to 19 CFR 111.39, ``[a] broker must not withhold
information relative to any customs business from a client who is
entitled to that information.'' Liquidation information is information
related to ``customs business''; therefore, brokers cannot withhold
this information from their importer clients.
In addition, ACE is being reprogrammed to allow all importers of
record to monitor liquidation of entries filed under their importer of
record number(s) through the ACE Portal. Importers can establish an ACE
Portal Account to access reports that will help them monitor entry
filings for potential fraudulent entries and access liquidation dates
for entries filed by any filer using the importer of record number
belonging to the importer, regardless of the filer code used.
Furthermore, whether or not the importer has an ACE Portal Account,
the importer may gain limited access to a broker's ACE Portal Account
to obtain reports for entries filed by the broker using the importer of
record number belonging to that importer, if the broker that filed the
entry grants the importer such access.
Given data storage limitations, at this time, the ACE Portal only
contains entry data for entries filed in the current CBP fiscal year
and the previous four CBP fiscal years. (The CBP fiscal year runs from
October 1 through September 30.) Importers needing liquidation dates
for entries filed beyond that time period may contact their broker, who
can obtain that information by running an ABI query. As for antidumping
and countervailing duty entries, depending on the entry date, importers
may be able to check their status via a report in the ACE Portal.
Please note that contractual terms of liability between importers and
brokers are not controlled by CBP.
Additional information on the ACE Portal capabilities and
instructions for applying for access to the ACE Portal, which is
accessible free of charge, are available on the following Web site:
http://www.cbp.gov/xp/cgov/trade/automated/modernization/ace_app_info/.
The instructions for managing ACE Portal user accounts are
available on the following Web site: http://www.cbp.gov/xp/cgov/trade/automated/modernization/ace_welcome/ace_welcome_package/.
Comment
One commentator was concerned about the accessibility of
liquidation information entered with a filer code that subsequently
became inactive at the time of liquidation.
CBP Response
Even if the filer code is no longer active, the importer will be
able to access the liquidation date associated with the importer's
importer of record
[[Page 50886]]
number using the reporting tool in the ACE Portal.
Comment
Several commenters suggested alternatives to CBP's proposal, such
as: creating a system for importers to obtain the liquidation
information that is available on the courtesy notices; sending courtesy
notifications via e-mail; surveying importers who file their entries
via ABI to determine whether they wish to discontinue receiving mailed
courtesy notices allowing importers to opt out of receiving paper
courtesy notices at the time CBP assigns an importer of record number
for importers, or notifying the importers at that time that that they
will have either to rely upon ABI for liquidation information or
participate in ACE; ensuring that the information listed in ACE is
accurate, particularly the data regarding older entries; and developing
an electronic bulletin notice of liquidation.
Also, several commenters suggested delaying implementation of the
proposal until ACE becomes capable of issuing complete liquidation
reports and/or until all entry filers begin using ACE.
CBP Response
On the effective date of this document, through the ACE Portal
reporting mechanism, CBP will be able to make available complete
liquidation reports to importers with ACE accounts, including
liquidation dates for all entries. Furthermore, an e-mail courtesy
notification of liquidation would just duplicate this information.
CBP does not plan on surveying the trade community to determine
which ABI-filing importers wish to discontinue receiving mailed
courtesy notices, which CBP believes would not garner further
substantial input. CBP agrees that training will help importers
transition into using the ACE system. Currently, CBP provides Web-based
training for new ACE Account holders, and help desk support to aid with
account access, account management, and report generation in the ACE
Portal. Please see the following Web site for further information:
https://nemo.customs.gov/ace_online/.
Although this training resource and the ACE Portal are already
available and functional, importers will have until September 17, 2011
to enroll in the ACE Portal Account and familiarize themselves with the
reporting system.
Moreover, CBP has considered the option of posting an electronic
bulletin notice of liquidation and will continue to explore the
feasibility of that option. Courtesy notices of liquidations, rather
than the statutorily mandated bulletin notice of liquidation, are the
focus of this rulemaking. Accordingly, this suggestion is outside the
scope of this rulemaking.
The purpose of this proposal is to reduce printing and mailing
costs by eliminating duplicative notice to importers that file their
entries via ABI. Therefore, CBP does not intend to provide importers
with the option of receiving paper courtesy notices or opting out of
receiving paper courtesy notices.
Regarding the suggestion that CBP should ensure that the
information in ACE is accurate, particularly regarding older entries,
CBP agrees that maintaining accurate data in any system of record is of
paramount concern. As discussed above, the entry data in the ACE Portal
is confined to the current CBP fiscal year and the previous four CBP
fiscal years because of data storage limitations. ABI filers may run an
ABI query for liquidation dates for entries filed beyond that time
period. Please note that for a historical report on all of an
importer's importation activity over a set time period, an importer can
file a request with CBP for an ITRAC (Importer Trade Activity) report
for a fee, see http://www.cbp.gov/xp/cgov/admin/fl/foia/itrac/itrac.xml. If one is a C-TPAT member, this report is provided free of
cost.
Finally, the ACE report contains the same data elements as the
paper courtesy notice, with the exception of: (1) Importer address; (2)
series; (3) refer inquiries to; and (4) liquidation code. The
``importer address'' data element will not appear in the ACE Portal
report because the report will not be mailed. The ``series'' data
element will not appear because it has not been used since 1986 when
the entry format configuration was changed to eliminate the series,
that is, the ``2-digit Fiscal Year'' code which appeared in the 5th and
6th place of the entry number format. The ``refer inquiries to'' data
element will not appear in the ACE Portal report; however, the report
will provide the name and code for the port of entry. Importers can
refer any inquiries to the appropriate port of entry using the
following Web site: http://www.cbp.gov/xp/cgov/toolbox/contacts/ports/.
Finally, the ``liquidation code'' data element is an internal CBP-
assigned code used for managing various liquidation types and will not
appear in the report.
Comment
One commenter indicated that courtesy notices deemed undeliverable
by the U.S. Postal Service help the Revenue Division update its
importer address database.
CBP Response
The Revenue Division now relies on the importer to keep its address
and contact information current with CBP.
Conclusion
After review of the comments and further consideration, CBP has
decided to adopt the proposed rule published in the Federal Register
(75 FR 12483) on March 16, 2010, without substantive change.
Accordingly, the effective date will be September 30, 2011. The
implementation date will be the first day on or after September 30,
2011, that CBP can provide importers with complete liquidation reports,
including liquidation dates, electronically through the ACE Portal. CBP
will confirm implementation through electronic notification (see http://www.cbp.gov).
Executive Order 12866
This final rule is not a ``significant regulatory action'' per
Executive Order 12866 because it will not result in savings or
expenditures totaling $100 million or more in any one year. The Office
of Management and Budget (``OMB'') has not reviewed this regulation
under that order. The final rule will 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).
This final 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. The primary impact of this final 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. Those importers that do not file using ABI will
continue to receive paper courtesy notices. Those importers that file
via ABI themselves will not be significantly impacted because they will
continue to receive an electronic notification. Those importers that
hire a broker to file via ABI on their behalf (with the broker
[[Page 50887]]
filing as an agent and not an importer of record) will now have to
obtain the notification from their broker or view the information via
CBP's ACE Portal. To the extent that brokers send the notification to
the importer, they will bear a small cost, but because of the low cost
of forwarding this information either electronically or by mail, this
cost does not rise to the level of significance. CBP solicited comments
on the economic impact of this rule on small entities in the Notice of
Proposed Rulemaking, but did not receive any of substance. For these
reasons, CBP certifies that this final rule will not have a significant
economic impact on a substantial number of small entities.
Paperwork Reduction Act
As there is no collection of information in this document, the
provisions of the Paperwork Reduction Act of 1995 (44 U.S.C. 3507) are
inapplicable.
Signing Authority
This document 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.
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 amended as set forth below.
PART 159--LIQUIDATION OF DUTIES
0
1. The general authority citation for part 159 continues to read as
follows:
Authority: 19 U.S.C. 66, 1500, 1504, 1624.
* * * * *
0
2. In Sec. 159.9, paragraph (d) is revised to read 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. 159.11 [Amended]
0
3. In Sec. 159.11, paragraph (a) is amended in the last sentence, by
removing the words ``on CBP Form 4333-A''.
Sec. 159.12 [Amended]
0
4. In Sec. 159.12:
0
a. Paragraph (f)(1) is amended, in the last sentence, by removing the
words ``on CBP Form 4333-A'';
0
b. Paragraph (g) is amended, in the last sentence, by removing the
words ``on CBP Form 4333-A''.
Alan D. Bersin,
Commissioner, U.S. Customs and Border Protection.
Approved: August 12, 2011.
Timothy E. Skud,
Deputy Assistant Secretary of the Treasury.
[FR Doc. 2011-20957 Filed 8-16-11; 8:45 am]
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