[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)
------------------------------------------------------------------------
                                             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 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)
------------------------------------------------------------------------
                                                                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
------------------------------------------------------------------------
    Total present value costs ($        Annualized costs  ($ millions)
              millions)              -----------------------------------
-------------------------------------
        3%                 7%                3%                7%
------------------------------------------------------------------------
       $33.3              $28.4               $3.8              $3.8
------------------------------------------------------------------------

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]
BILLING CODE 9111-14-P