[Federal Register Volume 77, Number 167 (Tuesday, August 28, 2012)]
[Notices]
[Pages 52048-52051]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2012-21217]



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DEPARTMENT OF HOMELAND SECURITY

U.S. Customs and Border Protection


Announcement of Test Providing Centralized Decision-Making 
Authority for Four CBP Centers of Excellence and Expertise

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

ACTION: General notice.

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SUMMARY: This document announces U.S. Customs and Border Protection's 
(CBP's) plan to conduct a general test to further develop the Centers 
of Excellence and Expertise (CEEs) to facilitate the entry of 
merchandise imported by companies within certain industries. This 
document involves testing how the following four CEEs will operate with 
broad decision-making authority: the Electronics CEE; Pharmaceuticals, 
Health & Chemicals CEE; the Automotive & Aerospace CEE; and the 
Petroleum, Natural Gas & Minerals CEE. This notice invites public 
comment concerning the methodology of the test program, identifies the 
purpose of the test and the regulations that will be affected, 
determines the length of the test, explains the application process, 
and provides the eligibility and selection criteria for voluntary 
participation in the test. This document also provides the legal 
authority for the test and explains the repercussions and appeals 
process for misconduct under the test.

DATES: Applications for participation in the test may be submitted 
beginning August 28, 2012. The selection of initial test participants 
will begin no later than September 27, 2012. Applications will be 
accepted throughout the duration of this test. Selected applicants will 
be individually notified of their participation date.

ADDRESSES: To submit comments concerning this test program: send an 
email to [email protected]. In the subject line of an email, please use, 
``Comment on CEE test.'' To apply to participate: submit a letter to 
U.S. Customs and Border Protection, Office of Field Operations, Trade 
Operations Division, 1300 Pennsylvania Ave., NW., Suite 2.3D, 
Washington, DC 20229, or an email to [email protected]. The letter or 
email must include the name and contact information for the business 
interested in participating in the test, the business's industry, and 
the business's importer of record (IOR) number(s).

FOR FURTHER INFORMATION CONTACT: Lori Whitehurst, Program Manager, 
Office of Field Operations, at (202) 344-2536; or Thomas Overacker, 
Project Coordinator, Office of International Trade at (859) 331-9020 
ext. 137.

SUPPLEMENTARY INFORMATION: 

Background

    In October 2011, U.S. Customs and Border Protection (CBP) 
established two Centers of Excellence and Expertise (CEEs): The 
Electronics CEE in Long Beach, California and the Pharmaceuticals CEE 
in New York City, New York. Since their initiation in October 2011, the 
CEEs have been staffed with CBP employees who facilitate trade by 
providing account management for Customs-Trade Partnership Against 
Terrorism (C-TPAT) and Importer Self-Assessment (ISA) members in the 
identified industries, and engaging in risk segmentation and trade 
outreach. The CEEs have the ability to review entries and the CEE 
Directors, who are tasked with leading the CEEs, may make entry 
processing recommendations to the Port Directors concerning 
pharmaceutical and electronics entries. The Electronics CEE specializes 
in merchandise related to information technology, integrated circuits, 
automated data processing equipment, and consumer electronics. The 
Pharmaceuticals CEE will now be called the Pharmaceuticals, Health & 
Chemicals CEE, and will specialize in merchandise related to 
pharmaceuticals, health-related equipment, and products of the chemical 
and allied industries.
    On May 10, 2012, the Acting Commissioner of CBP announced at the 
West Coast Trade Symposium two new CEEs: The Automotive & Aerospace CEE 
in Detroit, Michigan, and the Petroleum, Natural Gas & Minerals CEE in 
Houston, Texas. The Automotive & Aerospace CEE will specialize in 
merchandise related to the automotive, aerospace, or other 
transportation equipment and related parts industries. The Petroleum, 
Natural Gas & Minerals CEE will specialize in merchandise related to 
the petroleum, natural gas, petroleum related, minerals, or mining 
industries.
    This document announces a general test to provide broad decision-
making authority to the: Electronics CEE; Pharmaceuticals, Health & 
Chemicals CEE; Automotive & Aerospace CEE; and Petroleum, Natural Gas & 
Minerals CEE. Specifically, the test waives certain regulations to the 
extent that they provide Port Directors with the authority to make 
certain decisions. Those regulations are waived only to the extent to 
allow the CEE Directors for the four identified CEEs to make those 
decisions.
    This document identifies the purpose of the test and the 
regulations that will be affected, determines the length of the test, 
explains the application process, and provides the eligibility and 
selection criteria for voluntary participation in the test. This 
document also provides the legal authority for the test and explains 
the repercussions and appeals process for misconduct under the test.

Purpose of the Test and Suspension of Certain Regulations

    CBP's goal is to incrementally transition the operational trade 
functions that traditionally reside with the ports of entry until they 
reside entirely with the CEEs. By focusing on industry-specific issues 
and providing tailored support for the participating importers, CBP is 
seeking to facilitate trade, to reduce transaction costs, increase 
compliance with applicable import laws, and to achieve uniformity of 
treatment at the ports of entry for the identified industries. CBP 
believes that providing broad decision-making authority to the CEEs for 
entry processing issues will better enable the CEEs to achieve these 
goals for CBP and the trade.
    Currently, pursuant to the CBP regulations in title 19 of the Code 
of Federal Regulations (19 CFR), Port Directors have the authority to 
make decisions regarding products imported into the ports. For this 
test, regulations in the following sections of title 19 of the CFR (19 
CFR) providing Port Directors with certain decision-making authority 
will be waived only to the extent to provide the CEE Directors with the 
authority to make those decisions: Sec. Sec.  10.1, 10.8, 10.9, 10.21, 
10.24, 10.66, 10.67, 10.84, 10.91, 10.102, 10.134, 10.172-10.175, 
10.177, Subparts B-K, M, N, and P of Part 10, Sec. Sec.  12.3, 12.73(j) 
and (k), 12.80, 12.121(a)(2)(ii); Part 113; Sec. Sec.  134.3, 134.25, 
134.26, 134.34, 134.51, 134.52, 134.53, 134.54 (a)\1\, 141.20, 141.35, 
141.38, 141.44, 141.45, 141.46, 141.57, 141.58, 141.88, 141.91, 141.92, 
141.113, 142.13, 144.12, 144.34(a), 144.38, 144.41, 146.63, 151.11, 
152.2, 152.13, 152.101, 159.7, 159.12, 159.58, 162.79b, 163.7, 173.1, 
173.2, 173.4, 173.4a, 174.12, 174.15, 174.16, 174.21,

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174.22, 174.23, 174.24, 174.26, 174.27, 174.29, 174.30, 181.12, 181.13, 
181.22, 181.23, 181.32, 181.33, 181.64, 181.112, 181.113, 181.114, 
181.115, 181.116, 181.121, and 191.61.
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    \1\ Please note that 19 CFR 134.54(a) will be waived only to the 
extent to provide the CEE Directors with the authority to extend the 
number of days from the date of the notice of redelivery for the 
importer to properly mark or redeliver all merchandise previously 
released to him. The Port Director will continue to retain the 
authority for demanding liquidated damages incurred under the bond 
in an amount equal to the entered value of the articles not properly 
marked or redelivered.
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    When test participants file an entry in a port, the required entry 
documents will be routed to the CEE assigned to that importer and 
certain revenue-related functions, including but not limited to those 
indicated below, will be performed by the applicable CEE Director 
instead of the Port Director:
     Determinations, notifications, and processing concerning 
duty refund claims based on 19 U.S.C. 1520(d) (see 19 CFR 10.441, 
10.442, 10.591, 10.592, 181.33, 10.870, and 10.871);
     Requests for computed value information (see 19 CFR 
141.88);
     Waivers of invoice requirements (see 19 CFR 141.92);
     Determinations concerning the time of submission for all 
entry summaries and estimated duties (see 19 CFR 142.13);
     Issuances of all Requests for Information (CBP Form 28) 
(see 19 CFR 151.11);
     Issuances of all Notices of Action (CBP Form 29) (see 19 
CFR 152.2);
     Notifications and processing concerning any commingling of 
merchandise (see 19 CFR 152.13);
     Processing of requests for application of the computed 
value method (see 19 CFR 152.101);
     Extensions and suspensions of liquidations (see 19 CFR 
159.12);
     Reviewing and correcting for errors in transactions (see 
19 CFR 173.1); and
     Reviewing and acting on protests (see 19 CFR 173.2, 
174.21, and 174.29).
    For this test, Sec.  162.74(e)(1) is also waived insofar as test 
participants will be required to file any prior disclosures with their 
designated CEE rather than at the port of entry.

CEE Determinations Not Requiring Regulatory Suspension

    The following determinations do not require the waiver of 
regulations, but are determinations that would usually otherwise be 
made by the Port Directors, and will be made by the CEE Directors under 
this test: performing all validation activities; reviewing and 
processing of post entry amendments and post summary corrections; and 
fixing the final appraisement of merchandise, and fixing the 
classification and duty rate of such merchandise.

Processes That Will Change for Selected Test Participants

    The following is a list of processes that will change for test 
participants effective upon the beginning of this test:
     Requests for entry cancellations must be submitted 
electronically to the CEE;
     Census resolution processes will be handled by the CEE, 
therefore, rejected ACS entry summaries must be electronically 
transmitted to the CEE's email address, unless other arrangements have 
been made with the CEE to resolve Census issues;
     Timely responses to Requests for Information (CBP Form 28) 
and Notices of Action (CBP Form 29) must be sent directly to the CEE;
     Requests for Internal Advice must be submitted 
electronically to the CEE for further coordination with the Office of 
International Trade, Regulations and Rulings; and
     Protests must be filed via the electronic protest module 
in ACS (including a note in the filing that designates the CEE team), 
or, submitted electronically on a scanned copy of the CBP Form 19 with 
all supporting documents to the CEE via the ACE Portal or the CEE's 
email address.

Processes That Will Remain Unchanged For Selected Test Participants

    Unless specified in this document or in the ``Centers of Excellence 
and Expertise Test Guidelines'' (CEE Test Guidelines), which will be 
posted on the web at http://www.cbp.gov/xp/cgov/trade/trade_transformation/industry_int/, all current processes will remain 
unchanged. For example, the following processes will remain unchanged:
     Quota entry summaries will continue to be processed by the 
ports of entry;
     The bulletin notice of liquidation (CBP Form 4333) will 
continue to be posted at the ports of entry;
     Revenue collection and the resolution of discrepancies in 
the amount of monies presented will remain with the ports of entry;
     Requests for further review and requests to void the 
denial of the protests will continue to be issued by Regulations and 
Rulings, Office of International Trade;
     Entry filers must continue to file Electronic Invoice 
Program (EIP) and Remote Location Filing (RLF) entry summaries as usual 
in the Automated Commercial Environment (ACE); and
     Entry filers must continue to submit entry summaries 
through the Automated Commercial System (ACS) or ACE and will not be 
required to change the respective port of entry.

CEE Test Guidelines and Scope of the CEEs' Broad Decision-Making 
Authority

    All of the regulations cited above that require waiving to provide 
the CEE Directors with authority to make decisions that are otherwise 
designated for the Port Director will be waived at the start of the 
test, with the exception of Sec. Sec.  159.7 and 191.61, which will be 
waived on a date that will be indicated in the CEE Test Guidelines. CBP 
will be posting the CEE Test Guidelines on the web to provide 
information regarding CEE operations. Test participants must check the 
CEE Test Guidelines on a weekly basis to determine: (1) How their 
responsibilities and required processes will differ from non-CEE 
participants and the effective date of the new responsibility or 
required processes; (2) whether the new responsibilities and required 
processes are being changed again and the effective date of the change; 
(3) whether there will be a change to any procedure that is required by 
CBP in a manner otherwise than by regulation, e.g., reconciliation test 
notice; and (4) when Sec. Sec.  159.7 and 191.61 will be waived.
    All changes to procedures during the test will be posted in the CEE 
Test Guidelines two weeks before the change goes into effect.
    The broad decision-making authority provided to the CEEs and the 
new processes for entry filers will apply only to participants in the 
test. Port Directors will continue to make these decisions for all 
other importers. Decisions made by a CEE which are within the authority 
granted under this test shall govern the transactions to which they 
pertain; test participants may not seek to have such decisions referred 
to a Port Director or another CEE Director. For efficiency and trade 
facilitation, all consumption entries filed before and during 
participation in the test, except for antidumping and countervailing 
duty entries, will be processed by the designated CEE, regardless of 
the commodity listed on the entry line. These entries will continue to 
be processed by the CEE, even if the test participant voluntarily 
withdraws from the test. Similarly, regardless of whether a protestable 
decision was made by a Port Director or a CEE Director, any protests 
filed after participation in the test commences will be processed and 
decided upon by the CEE Director. The processing and decision-making 
authority for these protests will remain with the CEE Director, even if 
the test participant voluntarily withdraws from the test.

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Timeline for Test

    This test is intended to last three years from October 12, 2012. At 
the conclusion of the test, an evaluation will be conducted to assess 
the effect that providing CEEs with broad decision-making authority has 
on improving trade facilitation, lowering transaction costs for 
importers, and ensuring importers' compliance with applicable import 
laws and CBP uniformity of actions. CBP plans to publish a notice when 
the test closes.

Application Process

    Importers of the products defined in the ``Eligibility Criteria for 
Voluntary Participation'' section of the document, that meet the 
eligibility criteria indicated in that section, and wish to participate 
must submit a letter to U.S. Customs and Border Protection, Office of 
Field Operations, Trade Operations Division, 1300 Pennsylvania Ave., 
NW., Suite 2.3D, Washington, DC 20229, or an email to [email protected]. 
The letter or email must include the name and contact information for 
the business interested in participating in the test, the business's 
industry, and the business's importer of record (IOR) number(s). Only 
businesses that meet the eligibility criteria provided in this document 
are invited to apply for participation. Anyone providing incomplete 
information, or otherwise not meeting participation requirements, will 
be notified and given the opportunity to resubmit. CBP may contact 
applicants with regard to any additional information that may be 
needed.
    Test participants will be required to update their designated CEE 
with any added IOR numbers during the course of the test.
    All C-TPAT and ISA members currently participating in the existing 
CEEs will also need to apply for the test if they wish to participate 
in this test.
    Additional participants may join throughout the duration of the 
test by following the procedures above.

Eligibility Criteria for Voluntary Participants

    For inclusion in the Electronics CEE, applicants must be part of 
the electronics industry, with the highest percentage of their entries 
comprised of related merchandise. For the purposes of this test 
``electronics'' includes merchandise classified under headings 3818, 
8471, 8473, 8501 through 8504, 8517 through 8538, and 8540 through 8548 
of the Harmonized Tariff Schedule of the United States (HTSUS).
    For inclusion in the Pharmaceuticals, Health & Chemicals CEE, 
applicants must be part of the pharmaceuticals, health, or chemical and 
allied industries, with the highest percentage of their entries 
comprised of related merchandise. For purposes of this test, 
``pharmaceuticals'' includes merchandise classified under headings 
2936, 2937, 2939, 2941, 3001 through 3006, HTSUS. For purposes of this 
test, ``health equipment'' includes merchandise classified under 
headings 4014, 9018, 9019, 9021, 9022, and 9402, HTSUS. For purposes of 
this test, ``chemicals'' includes merchandise classified under headings 
2801 through 2935, 2938, 2940, 2942, 3101 through 3302, 3402 through 
3405, 3407 through 3604, 3606 through 3817, and 3819 through 3825, 
HTSUS.
    For inclusion in the Automotive & Aerospace CEE, applicants must be 
part of the automotive, aerospace, or other transportation equipment 
and related parts industries, with the highest percentage of their 
entries comprised of related merchandise. For purposes of this test, 
``automotive'' includes merchandise classified under headings 8701 
through 8711, 8713, 8714, and 8716, HTSUS. For the purposes of this 
test, ``aerospace'' includes merchandise classified under headings 8801 
through 8805, HTSUS. For the purposes of the test ``other 
transportation equipment and related parts'' includes but is not 
limited to merchandise classified under headings 4011 through 4013, 
8406 through 8412, 8512, 8601 through 8609, 8901 through 8908, HTSUS.
    For inclusion in the Petroleum, Natural Gas & Minerals CEE, 
applicants must be part of the petroleum, natural gas, petroleum 
related, minerals, or mining industries, with the highest percentage of 
their entries comprised of related merchandise. For purposes of this 
test, ``petroleum'' and ``natural gas'' include merchandise classified 
under headings 2709 through 2713, HTSUS. For the purposes of this test, 
``petroleum related'' includes merchandise classified under headings 
2701, 2705, 2707, 2708, 2714, 2715 and 2716, HTSUS. For the purposes of 
this test, ``minerals'' or ``mining'' include merchandise classified 
under headings 2501 through 2621, 2702, 2703, 2704, and 2706, HTSUS.
    Participants in any CEE must also have an ACE portal account.

Selection Criteria for Voluntary Participants

    Importers that meet the criteria above may be selected for 
inclusion in the test. In the initial phase of the test priority 
consideration for participation will be given to importers enrolled in 
the C-TPAT Program as Tier 2 or Tier 3 members, and members of the 
Importer Self-Assessment (ISA) Program. CBP will notify the selected 
applicants in writing of their selection, their designated CEE, and the 
starting date of their participation. Selected participants may have 
different starting dates.

Legal Authority for General Testing

    Section 101.9(a) of the CBP regulations (19 CFR 101.9(a)) allows 
CBP to conduct a test program or procedure to evaluate the 
effectiveness of operational procedures regarding the processing of 
passengers, vessels, or merchandise by imposing requirements different 
from those specified in the CBP regulations but only to the extent that 
such different requirements do not affect the collection of the 
revenue, public health, safety, or law enforcement. This test is 
established pursuant to 19 CFR 101.9(a) to test the effectiveness of 
new operational procedures. Revenue collection will continue to be 
handled electronically through the Automated Clearing House (ACH) and 
by the ports of entry and the test will not affect public health, 
safety, or law enforcement.

Misconduct Under the Test

    A CEE test participant may be subject to civil and criminal 
penalties, administrative sanctions, liquidated damages, and/or 
discontinuance from participation in this test for any of the 
following:
     Failure to follow the terms and conditions of this test.
     Failure to exercise reasonable care in the execution of 
participant obligations.
     Failure to abide by applicable laws and regulations that 
have not been waived.
     Failure to deposit duties or fees in a timely manner.
    If the CEE Director finds that there is a basis for discontinuance 
of test participation privileges, the test participant will be provided 
a written notice proposing the discontinuance with a description of the 
facts or conduct warranting the action. The test participant will be 
offered the opportunity to appeal the CEE Director's decision in 
writing within 10 calendar days of receipt of the written notice. The 
appeal must be submitted to U.S. Customs and Border Protection, Office 
of Field Operations, Cargo and Conveyance Security (CCS) Division, 1300 
Pennsylvania Ave., NW., Suite 2.3D, Washington, DC 20229 or by email to 
[email protected]. The Executive Director, Cargo and Conveyance Security, 
Office of Field Operations (OFO), CBP Headquarters, will issue a

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decision in writing on the proposed action within 30 working days after 
receiving a timely filed appeal from the test participant. If no timely 
appeal is received, the proposed notice becomes the final decision of 
the Agency as of the date that the appeal period expires. A proposed 
discontinuance of a test participant's participation privileges will 
not take effect unless the appeal process under this paragraph has been 
concluded with a written decision adverse to the test participant.
    In the case of willfulness or those in which public health, 
interest, or safety so requires, the CEE Director may immediately 
discontinue the test participant's participation privileges upon 
written notice to the test participant. The notice will contain a 
description of the facts or conduct warranting the immediate action. 
The test participant will be offered the opportunity to appeal the CEE 
Director's decision within 10 calendar days of receipt of the written 
notice providing for immediate discontinuance. The appeal must be 
submitted to U.S. Customs and Border Protection, Office of Field 
Operations, CCS Division, 1300 Pennsylvania Ave., NW., Suite 2.3D, 
Washington, DC 20229 or by email to [email protected]. The immediate 
discontinuance will remain in effect during the appeal period. The 
Executive Director, Cargo and Conveyance Security, Office of Field 
Operations (OFO), CBP Headquarters, will issue a decision in writing on 
the discontinuance within 15 working days after receiving a timely 
filed appeal from the test participant. If no timely appeal is 
received, the notice becomes the final decision of the Agency as of the 
date that the appeal period expires.

    Dated: August 21, 2012.
David V. Aguilar,
Acting Commissioner, U.S. Customs and Border Protection.
[FR Doc. 2012-21217 Filed 8-27-12; 8:45 am]
BILLING CODE 9111-14-P