[Federal Register Volume 78, Number 92 (Monday, May 13, 2013)]
[Notices]
[Pages 27984-27987]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2013-11308]


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DEPARTMENT OF HOMELAND SECURITY

U.S. Customs and Border Protection


Modification of the National Customs Automation Program Test 
(NCAP) Regarding Reconciliation for Filing Certain Post-Importation 
Claims

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

ACTION: General notice.

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SUMMARY: This document announces a modification to the Automated 
Commercial System (ACS) National Customs Automation Program (NCAP) 
Reconciliation prototype test to include the filing of post-importation

[[Page 27985]]

preferential tariff treatment claims arising under the United States-
Oman Free Trade Agreement Implementation Act, the United States-Peru 
Trade Promotion Agreement Implementation Act, the United States-Korea 
Free Trade Agreement Implementation Act, the United States-Colombia 
Trade Promotion Agreement Implementation Act, and the United States-
Panama Trade Promotion Agreement Implementation Act. Other than the 
modification in this notice, the test remains the same as set forth in 
previously published Federal Register notices.

DATES: The test is modified to allow Reconciliation of post-importation 
preferential tariff treatment claims to be filed on or after August 12, 
2013 on those free trade agreements or trade promotion agreements 
listed in this notice. The Reconciliation prototype test commenced on 
October 1, 1998, and was extended indefinitely starting October 1, 
2000. Applications to participate in this test will be accepted 
throughout the duration of the test.

ADDRESSES: If interested in joining the on-going Reconciliation 
prototype test, please send either an email expressing interest to 
participate in this test to [email protected], with a subject 
line identifier reading, ``Participation in Reconciliation Test'', or a 
letter addressed to Mr. Russell Morris, Entry Summary and Drawback 
Branch, Trade Policy and Programs, Office of International Trade, U.S. 
Customs and Border Protection, 1400 L Street NW., 4th Floor, 
Washington, DC 20229-1143. Please note that comments concerning this 
test program may be submitted any time during the test via email, with 
a subject line identifier reading, ``Comment on NCAP test'', to [email protected].

FOR FURTHER INFORMATION CONTACT: Russell Morris, Entry Summary and 
Drawback Branch, Trade Policy and Programs, Office of International 
Trade at (202) 863-6543.

SUPPLEMENTARY INFORMATION:

Background

    This document announces a modification to the U.S. Customs and 
Border Protection's (CBP's) Automated Commercial System (ACS) 
Reconciliation prototype test by adding the processing of post-
importation claims for certain free trade agreements and trade 
promotion agreements that permit an importer, who did not claim tariff 
benefits at the time of importation, to file a claim for a refund of 
any excess duties, taxes, and/or fees paid, at any time within one-year 
after the date of importation of the good. This modification works 
toward the goal of CBP's movement toward a paperless environment.

Purpose of the Test

    Reconciliation, a planned component of the National Customs 
Automation Program (NCAP), as provided for in Title VI (Subtitle B) of 
the North American Free Trade Agreement Implementation Act (the NAFTA 
Implementation Act; Public Law 103-182, 107 Stat. 2057 (December 8, 
1993)), is currently being tested by U.S. Customs and Border Protection 
(CBP) under the CBP Automated Commercial System (ACS) Prototype Test. 
CBP announced and explained the test in a general notice document 
published in the Federal Register (63 FR 6257) on February 6, 1998. 
Clarifications and operational changes were announced in subsequent 
Federal Register notices: 63 FR 44303, published on August 18, 1998; 64 
FR 39187, published on July 21, 1999; 64 FR 73121, published on 
December 29, 1999; 66 FR 14619, published on March 13, 2001; 67 FR 
61200, published on September 27, 2002 (with a correction document 
published at 67 FR 68238 on November 8, 2002); 69 FR 53730, published 
on September 2, 2004; 70 FR 1730, published on January 10, 2005; 70 FR 
46882, published on August 11, 2005 and 71 FR 37596, published on June 
30, 2006. A Federal Register (65 FR 55326) notice published on 
September 13, 2000, extended the prototype indefinitely.
    This document announces a modification to the Reconciliation test 
to expand Reconciliation to include post-entry importation preferential 
tariff treatment claims arising under the United States-Oman Free Trade 
Agreement Implementation Act, the United States-Peru Trade Promotion 
Agreement Implementation Act, the United States-Korea Free Trade 
Agreement Implementation Act, the United States-Colombia Trade 
Promotion Agreement Implementation Act, and the United States-Panama 
Trade Promotion Agreement Implementation Act which are permitted under 
19 U.S.C. 1520(d). Aside from this modification, the test remains as 
set forth in the previously published Federal Register notices.
    For application requirements, see the Federal Register notices 
published on February 6, 1998, and August 18, 1998. Additional 
information regarding the test can be found at http://www.cbp.gov/xp/cgov/trade/trade_programs/reconciliation/participate.xml.

Reconciliation Generally

    Reconciliation is the process that allows an importer, at the time 
an entry summary is filed, to identify undeterminable information 
(other than that affecting admissibility) to CBP and to provide that 
outstanding information at a later date. The importer identifies the 
outstanding information by means of an electronic ``flag'' which is 
placed on the entry summary at the time the entry summary is filed and 
payment (applicable duty, taxes, and fees) is made. Previously 
published Federal Register documents have set forth that the issues for 
which an entry summary may be ``flagged'' (for the purpose of later 
reconciliation) are limited and relate to: (1) Value issues other than 
claims based on latent manufacturing defects; (2) classification 
issues, on a limited basis; (3) issues concerning value aspects of 
entries filed under heading 9802, Harmonized Tariff Schedule of the 
United States (HTSUS) (9802 issues); and (4) issues concerning 
merchandise entered under the North American Free Trade Agreement 
(NAFTA issues/claims), under the United States-Chile Free Trade 
Agreement (CFTA or Chile issues/claims) and the Dominican Republic-
Central America-United States Free
    Trade Agreement (CAFTA-DR issues/claims) that are eligible for 
treatment under 19 U.S.C. 1520(d).
    The flagged entry summary (the underlying entry summary) is 
liquidated for all aspects of the entry except those issues that were 
flagged. The means of providing the outstanding information at a later 
date relative to the flagged issues is through the filing of a 
Reconciliation entry. The flagged issues will be liquidated at the time 
the Reconciliation entry is liquidated. Any adjustments in duties, 
taxes, and/or fees owed will be made at that time. (See the February 6, 
1998 Federal Register notice for a more detailed presentation of the 
basic Reconciliation process.)
    CBP reminds test participants that the filing of a Reconciliation 
entry, like the filing of a regular consumption entry, is governed by 
19 U.S.C. 1484 and can be done only by the importer of record as 
defined in that statute.

Test Modification

The Agreements and the Implementation Acts
United States-Oman Free Trade Agreement Implementation Act
    The United States-Oman Free Trade Agreement (OFTA) was entered into 
by the governments of Oman and the United States. On September 26, 
2006,

[[Page 27986]]

the United States Congress approved the OFTA in the United States-Oman 
Free Trade Agreement Implementation Act (the OFTA Act), Public Law 109-
283; 120 Stat. 1191; 19 U.S.C. 3805 note. The OFTA Act allowed for OFTA 
to take effect on or after January 1, 2007, with the actual 
implementation date to be determined by the President. Sections 201 and 
202 of the OFTA Act authorize the President to proclaim the tariff 
modifications and provide the rules of origin for preferential tariff 
treatment with respect to goods of Oman provided for under the OFTA.
    Presidential Proclamation 8332, dated December 29, 2008 and 
published in the Federal Register on December 31, 2008, implemented the 
OFTA for goods entered or withdrawn from warehouse for consumption on 
or after January 1, 2009. The Proclamation incorporated, by reference, 
Publication 4050 of the United States International Trade Commission 
(USITC). Annex I of Publication 4050 of the USITC, amends the 
Harmonized Tariff Schedule (HTS) by adding a new General Note (GN) 31 
containing specific information regarding the OFTA and a new Subchapter 
XVI to Chapter 99 to provide for temporary tariff rate quotas (TRQs) 
implemented by the OFTA. Annex II of Publication 4050 amends the HTS to 
provide for immediate and staged tariff reductions. The CBP regulations 
on the United States-Oman Free Trade Agreement were published in the 
Federal Register (76 FR 65365) on October 21, 2011. By participating in 
the Reconciliation test, the following regulatory procedures, namely, 
19 CFR 10.869-10.871, concerning the paper procedures for filing a 
post-importation claim for preferential tariff treatment, are waived. 
This is to prevent duplicative filings for the same underlying entry 
summaries.
United States-Peru Trade Promotion Agreement Implementation Act
    The United States-Peru Trade Promotion Agreement Implementation Act 
(PTPA) was entered into by the governments of Peru and the United 
States. On December 14, 2007, the United States Congress approved the 
PTPA in the United States-Peru Trade Promotion Agreement Implementation 
Act (the PTPA Act), Public Law 110-138; 121 Stat. 1455; 19 U.S.C. 3805 
note. The PTPA Act allowed for the PTPA to take effect on or after 
January 1, 2008, with the actual implementation date to be determined 
by the President. Sections 201, 202, and 203 of the PTPA Act authorize 
the President to proclaim the tariff modifications and provide the 
rules of origin for preferential tariff treatment with respect to goods 
provided for under the PTPA.
    Presidential Proclamation 8341, dated January 16, 2009 and 
published in the Federal Register on January 22, 2009 (74 FR 4105), 
implemented the PTPA for goods entered, or withdrawn, from warehouse 
for consumption on or after February 1, 2009. The Proclamation 
incorporated, by reference, Publication 4058 of the USITC. Annex I of 
Publication 4058 amends the HTS by adding GN 32 containing specific 
information regarding the PTPA and a new Subchapter XVII to Chapter 99 
to provide for temporary TRQs implemented by the PTPA. In addition, new 
provisions have been added to Subchapter XXII to Chapter 98. Annex II 
of Publication 4058 amends the HTS to provide for immediate and staged 
tariff reductions. CBP published regulations on the United States-Peru 
Trade Promotion Agreement in the Federal Register (77 FR 64031) on 
October 18, 2012. By participating in the Reconciliation test, the 
following regulatory procedures, namely, 19 CFR 10.910-10.912, 
concerning the paper procedures for filing a post-importation claim for 
preferential tariff treatment, are waived. This is to prevent 
duplicative filings for the same underlying entry summaries.
United States-Korea Free Trade Agreement
    The United States-Korea Free Trade Agreement (UKFTA) was entered 
into by the governments of Korea and the United States. On October 21, 
2011, the United States Congress approved the UKFTA in the United 
States-Korea Free Trade Agreement Implementation Act (the UKFTA Act), 
Public Law No. 112-41, 125 Stat. 428 (codified at 19 U.S.C. 3805 note 
(2012)), and it was signed into law on October 21, 2011. The UKFTA Act 
allowed for the UKFTA to take effect on or after January 1, 2012, with 
the actual implementation date to be determined by the President. 
Section 201 of the UKFTA Act authorizes the President to proclaim the 
tariff modifications and provide the rules of origin for preferential 
tariff treatment with respect to goods provided for in the UKFTA.
    Presidential Proclamation 8783, dated March 6, 2012 and published 
in the Federal Register on March 9, 2012, implements the UKFTA for 
goods entered or withdrawn from warehouse for consumption, on or after 
March 15, 2012. The Proclamation incorporated, by reference, 
Publication 4308 of the USITC. Annex I of Publication 4308 amends the 
HTS by adding GN 33 containing specific information regarding the UKFTA 
and a new Subchapter XX to Chapter 99 to provide for TRQs implemented 
by the UKFTA. In addition, new provisions have been added to Subchapter 
XXII to Chapter 98. Annex II of Publication 4308 amends the HTS to 
provide for immediate and staged tariff reductions. CBP published 
regulations on the United States-Korea Free Trade Agreement in the 
Federal Register (77 FR 15948) on March 19, 2012. By participating in 
the Reconciliation test, the following regulatory procedures, namely, 
19 CFR 10.1010-10.1012, concerning the paper procedures for filing a 
post-importation claim for preferential tariff treatment, are waived. 
This is to prevent duplicative filings for the same underlying entry 
summaries.
United States-Colombia Trade Promotion Agreement
    The United States-Colombia Trade Promotion Agreement (CTPA) was 
entered into by the governments of Colombia and the United States. On 
October 21, 2012, the United States Congress approved the CTPA in the 
United States-Colombia Trade Promotion Agreement Implementation Act 
(the CTPA Act), Public Law 112-42, 125 Stat. 462. The CTPA Act allowed 
for the CTPA to take effect on or after January 1, 2012, with the 
actual implementation date to be determined by the President. Section 
201 of the CTPA Act authorizes the President to proclaim the tariff 
modifications and provide the rules of origin for preferential tariff 
treatment with respect to goods provided for in the CTPA.
    The President issued a Proclamation implementing the CTPA on May 
14, 2012, for goods entered, or withdrawn from warehouse for 
consumption, on or after May 15, 2012. The Proclamation incorporated, 
by reference, Publication 4320 of the USITC. Annex I of Publication 
4320 amends the HTS by adding GN 34 containing specific information 
regarding the CTPA and a new Subchapter XXI to Chapter 99 to provide 
for temporary TRQs implemented by the CTPA. In addition, new provisions 
have been added to Subchapter XXII to Chapter 98. Annex II of 
Publication 4320 amends the HTS to provide for immediate and staged 
tariff reductions. CBP published interim final regulations on the 
United States-Columbia Trade Promotion Agreement in the Federal 
Register (77 FR59064) on September 26, 2012. By participating in the 
Reconciliation Test, the following regulatory provisions, namely, 19 
CFR 10.3010-10.3012, concerning the paper procedures for filing a post-
importation claim for preferential tariff treatment,

[[Page 27987]]

are waived. This is to prevent duplicative filings for the same 
underlying entry summaries.
United States-Panama Trade Promotion Agreement
    The United States-Panama Trade Promotion Agreement (PANTPA) was 
entered into by the governments of Panama and the United States. On 
October 21, 2011, the United States Congress approved the PANTPA in the 
United States-Panama Trade Promotion Agreement Implementation Act (the 
PANTPA Act), Public Law No. 112-43, 125 Stat. 497. The PANTPA Act 
allowed for the PANTPA to take effect on or after January 1, 2012, with 
the actual implementation date to be determined by the President. 
Sections 201 and 203 of the PANTPA Act authorize the President to 
proclaim the tariff modifications and provide the rules of origin for 
preferential tariff treatment with respect to goods provided for under 
the PANTPA.
    The President issued Proclamation 8894 implementing the PANTPA on 
October 29, 2012, for goods entered, or withdrawn from warehouse for 
consumption, on or after October 31, 2012. The Proclamation 
incorporated, by reference, Publication 4349 of the USITC. Annex I of 
Publication 4349 amends the HTS by adding GN 35 containing specific 
information regarding the PANTPA and a new Subchapter XXI to Chapter 99 
to provide for temporary TRQs implemented by the PANTPA. In addition, 
new provisions have been added to Subchapter XXII to Chapter 98. Annex 
II of Publication 4349 amends the HTS to provide for immediate and 
staged tariff reductions. Regulations are currently being drafted to 
implement the PANTPA, and like the other agreements, the applicable 
regulatory provisions covering paper procedures for filing a 1520(d) 
claim will be waived under the test.
Ordinary OFTA, PTPA, UKFTA, CTPA, and PANTPA Post-Importation Claim 
Under 19 U.S.C. 1520(d)
    A claim for preferential tariff treatment for an originating OFTA, 
PTPA, UKFTA, CTPA, and PANTPA good, in accordance with their respective 
Act and applicable procedures as set forth above (see also Subparts P, 
Q, R, S, and T of 19 CFR Part 10), is made at the time of entry 
summary. (See respective GN, HTS, for rules of origin.) However, in 
some instances, an importer may not be able to make the claim at that 
time, usually because the importer does not possess all the information 
or documentation required. In those instances, an importer may make a 
post-importation OFTA, PTPA, UKFTA, CTPA, and PANTPA claim under 19 
U.S.C. 1520(d) (section 1520(d)), pursuant to amendments to that 
section made by the respective free trade agreements Act. Under these 
amendments to section 1520(d), entries of goods qualifying under OFTA, 
PTPA, UKFTA, CTPA, and PANTPA rules of origin are eligible for re-
liquidation when preferential tariff treatment under OFTA, PTPA, UKFTA, 
CTPA, and PANTPA is not claimed at the time of importation, 
notwithstanding that a protest under 19 U.S.C. 1514 (section 1514) is 
not timely filed. (A section 1514 protest is a means of objecting to, 
among other things, the liquidation of an entry by filing the protest 
within 180 days of the liquidation (or other protestable decision or 
action by CBP).) A claimant must file a claim under section 1520(d) 
within one year of the applicable importation and meet other 
requirements, such as applicable documentary requirements, including 
(when requested by CBP) the filing of a certification or information 
demonstrating that the entered goods are originating OFTA, PTPA, UKFTA, 
CTPA, and PANTPA goods.
Post-Importation OFTA, PTPA, UKFTA, CTPA, and PANTPA Claim Under 
Reconciliation
    This notice announces that a post-importation claim for 
preferential tariff treatment under section 1520(d) for an entry filed 
pursuant to the OFTA, PTPA, UKFTA, CTPA, and PANTPA also may be made 
under the Reconciliation test, in the same way as a post-importation 
NAFTA, Chile or CAFTA-DR claim also may be made (see, respectively, 
notices published in the Federal Register on September 27, 2002, 
September 2, 2004, and June 30, 2006, cited previously). This 
alternative requires that an importer follow the Reconciliation test 
procedure which, in contrast to the ordinary section 1520(d) procedure 
described above, requires action at the time of entry. That action is 
to flag the entry summary for the OFTA, PTPA, UKFTA, CTPA, and PANTPA 
issue(s), which will be followed later by the filing of a 
Reconciliation entry within one year of the applicable importation. It 
is noted that OFTA, PTPA, UKFTA, CTPA and PANTPA Reconciliation entries 
cannot include other Reconciliation-eligible issues; i.e., an OFTA, 
PTPA, UKFTA, CTPA, and PANTPA Reconciliation entry is limited to 
covering only OFTA, PTPA, UKFTA, CTPA, and PANTPA issues (claims). 
NAFTA, Chile or CAFTA-DR Reconciliation entries/claims are similarly 
limited.
    This OFTA, PTPA, UKFTA, CTPA, and PANTPA Reconciliation alternative 
is available for eligible importations involving any eligible OFTA, 
PTPA, UKFTA, CTPA, and PANTPA country 90 days after the date this 
notice is published in the Federal Register.
Reconciliation OFTA, PTPA, UKFTA, CTPA, and PANTPA Claim Precludes 
Claims by Other Means
    CBP emphasizes that once an importer flags an entry summary for 
OFTA, PTPA, UKFTA, CTPA, and PANTPA issues for Reconciliation, 
indicating that it is pursuing the post-importation, section 1520(d) 
claim through the Reconciliation process, the only means of perfecting 
the OFTA, PTPA, UKFTA, CTPA, and PANTPA claim is by completing the 
Reconciliation process by filing a timely Reconciliation entry. (See 
the September 27, 2002, Federal Register notice for an explanation of 
this same limitation relative to NAFTA and Chile issues.) By flagging 
the entry summary, the importer makes a commitment to perfect the claim 
only through the Reconciliation process--to, in effect, waive filing 
the claim any other way. Thus, once entries have been flagged for 
Reconciliation of OFTA, PTPA, UKFTA, CTPA, and PANTPA issues, CBP will 
not accept a claim filed for those entries under the ordinary section 
1520(d) procedure. This will prevent dual filings for the same 
underlying entry summaries.
Benefits of Reconciliation
    Finally, CBP recommends the use of the Reconciliation test 
procedure which provides the importer with several benefits. First, 
using the test procedure is a simpler means of filing claims: i.e., the 
importer is able to make potentially thousands of OFTA, PTPA, UKFTA, 
CTPA, and PANTPA claims on one Reconciliation entry.
    Second, the importer can receive one check from CBP rather than 
many (even up to thousands) upon CBP's liquidation of a Reconciliation 
entry and issuance of a refund. Third, because processing OFTA, PTPA, 
UKFTA, CTPA, and PANTPA claims under Reconciliation is simpler for CBP, 
the refund delivery system is more efficient.

    Dated: May 7, 2013.
Allen Gina,
Assistant Commissioner, Office of International Trade.
[FR Doc. 2013-11308 Filed 5-10-13; 8:45 am]
BILLING CODE 9111-14-P