[Federal Register Volume 80, Number 28 (Wednesday, February 11, 2015)]
[Rules and Regulations]
[Pages 7537-7539]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2015-02776]



[[Page 7537]]

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DEPARTMENT OF HOMELAND SECURITY

U.S. Customs and Border Protection

DEPARTMENT OF THE TREASURY

19 CFR Parts 7, 163, and 178

[USCBP-2014-0001; CBP Dec. 15-04]
RIN 1515-AD97


Documentation Related to Goods Imported From U.S. Insular 
Possessions

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

ACTION: Final rule.

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SUMMARY: This final rule amends the U.S. Customs and Border Protection 
(CBP) regulations to eliminate the requirement that a customs official 
at the port of export verify and sign CBP Form 3229, Certificate of 
Origin for U.S. Insular Possessions, and to require only that the 
importer present this form, upon CBP's request, rather than with each 
entry as is currently required. The importer is still required to 
maintain CBP Form 3229 in its possession or may be subject to the 
assessment of a recordkeeping penalty if it cannot be produced.

DATES: Effective March 13, 2015.

FOR FURTHER INFORMATION CONTACT: Seth Mazze, Trade Agreements Branch, 
Trade Policy and Programs, Office of International Trade, (202) 863-
6567, [email protected].

SUPPLEMENTARY INFORMATION: 

Background

    On January 14, 2014, U.S. Customs and Border Protection (CBP) 
published a notice of proposed rulemaking (NPRM) in the Federal 
Register (79 FR 2395) proposing to amend title 19 of the Code of 
Federal Regulations (19 CFR) to eliminate the requirement that a 
customs official at the port of export verify and sign CBP Form 3229, 
Certificate of Origin for U.S. Insular Possessions, and to require only 
that the importer present this form, upon CBP's request, rather than 
with each entry as is currently required. Goods imported into the 
customs territory of the United States from an insular possession may 
be eligible for duty-free treatment under the provisions of General 
Note 3(a)(iv) of the Harmonized Tariff Schedule of the United States 
(HTSUS) (19 U.S.C. 1202). In addition to the specific requirements set 
forth in General Note 3(a)(iv), HTSUS, the CBP regulations at part 7 of 
title 19 of the Code of Federal Regulations (19 CFR part 7) address 
insular possessions.
    This rule also adopts nonsubstantive, editorial amendments to 
update the outdated name of the Form which appears in the list of 
records and information required for the entry of merchandise in the 
Appendix to part 163 (commonly referred to as the ``(a)(1)(A)'' list) 
by amending the listing within section IV for section 7.3(f) to reflect 
the current name of the form from ``CF 3229'' to ``CBP Form 3229''. 
Lastly, this rule makes editorial changes to the sample declarations 
made by the shipper in the insular possession and by the importer in 
the United States by updating the year from the 20th Century, ``19_.'' 
to the 21st Century, ``20_'' in 19 CFR 7.3(f)(2).
    The NPRM solicited for public comments on the proposed rulemaking. 
The public comment period closed on March 17, 2014.

Discussion of Comments

    Five comments were received in response to the solicitation of 
public comments in the proposed rule. All commenters expressed support 
for the proposed amendments indicating an expected savings in time and 
cost as a result of ``streamlining'' the process by eliminating the 
requirement that a customs official at the port of export verify and 
sign CBP Form 3229, Certificate of Origin for U.S. Insular Possessions. 
In addition, two commenters stated that potential recordkeeping 
penalties would be an effective deterrent against false claims.

Conclusion

    After review of the comments, and in light of the fact that all 
comments submitted were positive, CBP has decided to adopt as final the 
proposed rule published in the Federal Register (79 FR 2395) on January 
14, 2014. In accordance with Executive Orders 13563 and 13610, this 
rule streamlines CBP's regulations by lessening the burden in achieving 
its regulatory objectives.

Executive Orders 12866 and 13563

    Executive Orders 12866 and 13563 direct agencies to assess the 
costs and benefits of available regulatory alternatives and, if 
regulation is necessary, to select regulatory approaches that maximize 
net benefits (including potential economic, environmental, public 
health and safety effects, distributive impacts, and equity). Executive 
Order 13563 emphasizes the importance of quantifying both costs and 
benefits, of reducing costs, of harmonizing rules, and of promoting 
flexibility. This rule is not a ``significant regulatory action,'' 
under section 3(f) of Executive Order 12866. Accordingly, OMB has not 
reviewed this regulation.

Regulatory Flexibility Act

    This section examines the impact on small entities as required by 
the Regulatory Flexibility Act (5 U.S.C. 601 et seq.), as amended by 
the Small Business Regulatory Enforcement and Fairness Act of 1996. 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 removes the requirements that an importer present a 
completed CBP Form 3229 with each shipment from an insular possession. 
Once the rule is effective, the importer will only be required to 
present a completed CBP Form 3229 upon CBP's request. The importer will 
still be required to maintain a completed CBP Form 3229 in its records 
in accordance with applicable record keeping requirements. In addition 
to this rule's impact on importers, this rule removes the requirement 
that the shipper of a good from an insular possession obtain a customs 
official's signature and date of signature in order to complete a CBP 
Form 3229.
    In the NPRM, using internal databases, CBP found that from fiscal 
year (FY) 2007 through FY 2012, on average, there have been 
approximately 3,545 shipments of goods each year, imported by 
approximately 135 importers, from insular possessions (see Table 1). 
CBP has since obtained an additional year of data (FY 2013). By 
incorporating these data CBP estimates, on average, the number of 
shipments of goods and the number of importers each year are 3,256 and 
126, respectively.
    Any importer that imports goods from an insular possession will 
need to comply with this rule. Therefore, CBP believes that this rule 
has an impact on a substantial number of small importers. Although this 
rule may have an effect on a substantial number of importers, CBP 
believes that the economic impact of this rule will not be significant. 
Because importers will be required to present a completed CBP Form 3229 
to CBP only upon request by a CBP officer rather than with each 
shipment from an insular possession, CBP estimates that an average 
importer may, at a maximum, print approximately 26 fewer CBP Form 3229s 
annually (this value

[[Page 7538]]

has not changed with the additional year of data). While this would be 
a positive economic impact, CBP believes that this maximum benefit 
realized will be negligible.

                    Table 1--Completed CBP Forms 3229
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            Fiscal year                 Importers       Completed 3229s
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2007..............................                191              7,258
2008..............................                188              4,980
2009..............................                136              3,210
2010..............................                 97              2,183
2011..............................                110              1,897
2012..............................                 89              1,744
2013..............................                 72              1,518
Average...........................                126              3,256
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Source: Internal CBP databases.

    As noted previously, CBP has found that over the last seven fiscal 
years, there have been an average of 3,256 shipments a year of goods to 
the United States from insular possessions (see Table 1). Due to data 
limitations, however, CBP is unable to identify the number of shippers 
that ship these shipments to the United States. Any shipper that ships 
goods to the United States from an insular possession would need to 
comply with this rule. Therefore, CBP believes this rule has an impact 
on a substantial number of small shippers shipping goods from insular 
possessions. Although CBP believes this rule may affect a substantial 
number of shippers, CBP does not believe that this rule will have a 
significant impact on shippers. CBP estimates that it takes a shipper, 
on average, approximately one hour to obtain a customs official's 
signature and date of signature, in order to complete CBP Form 3229.\1\ 
During the comment period for the proposed rule, one commenter (out of 
five total comments received) confirmed CBP's estimate of one hour to 
visit a customs official in order to complete CBP Form 3229. As such, 
CBP estimates that shippers shipping goods from an insular possession, 
including any small entities, will realize time burden reduction (i.e., 
time savings) of one hour per shipment. In the NPRM, CBP estimated the 
average wage of a shipper's employee who is responsible for completing 
the form to be approximately $45.10 per hour. Using the latest figures 
from the Bureau of Labor Statistics, CBP now estimates that the wage of 
a shipper's employee who is responsible for CBP Form 3229 to be $47.86. 
Thus, CBP estimates that each shipper, including any small entities, 
will save approximately $47.86 per shipment. CBP does not believe a 
savings of $47.86 per shipment to be a significant economic impact.
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    \1\ This time burden differs from Paperwork Reduction Act (PRA) 
burden because the PRA burden is for completing the form and does 
not account for travel time.
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    Although CBP believes that a substantial number of small entities, 
both importers and shippers, may be affected by this rule, CBP does not 
believe that the economic impacts will be significant. CBP notes, 
however, that the economic impact of this rule is purely beneficial and 
will result in a small cost savings to both importers and exporters. 
CBP did not receive any comments during the NPRM that would contradict 
this conclusion. Accordingly, CBP certifies that this regulation will 
not have a significant economic impact on a substantial number of small 
entities.

Paperwork Reduction Act

    The collections of information in this document along with proposed 
revisions to CBP Form 3229, Certificate of Origin, will be submitted 
for OMB review in accordance with the requirements of the Paperwork 
Reduction Act (44 U.S.C. 3507) under control number 1651-0016. An 
agency may not conduct or sponsor, and a person is not required to 
respond to, a collection of information unless it displays a valid 
control number assigned by OMB.
    The collections of information in these regulations are contained 
in 19 CFR 7.3(f) and currently set forth in CBP Form 3229, Certificate 
of Origin. This information is required at the time of entry and is 
used by CBP to verify the goods are eligible for duty-free treatment 
under General Note 3(a)(iv), HTSUS.
    The regulations and changes to CBP Form 3229 will reduce the 
estimated time burden on shippers by two minutes per completed form. 
Shippers currently spend an estimated 22 minutes completing CBP Form 
3229, Certificate of Origin. The regulations and changes to CBP Form 
3229 will reduce this time to an estimated 20 minutes to complete the 
form. The time savings comes as a result of the elimination of the 
customs officer signature requirement on the form.
    The likely respondents are businesses which import from U.S. 
insular possessions. Such imports are predominantly petroleum, refined 
in St. Croix, U.S. Virgin Islands. Other such imports include tuna 
fish, watches, organic chemicals, and alcohol. The estimated average 
annual burden associated with the collection of information in this 
final rule is 746 hours.
    Comments concerning the accuracy of this burden estimate and 
suggestions for reducing this burden should be directed to the Office 
of Management and Budget, Attention: Desk Officer for the Department of 
the Treasury, Office of Information and Regulatory Affairs, Washington, 
DC 20503. A copy should also be sent to the Trade and Commercial 
Regulations Branch, Regulations and Rulings, Office of International 
Trade, U.S. Customs and Border Protection, 90 K Street NE., 10th Floor, 
Washington, DC 20229-1177.

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

19 CFR Part 7

    American Samoa, Customs duties and inspection, Guam, Midway 
Islands, Puerto Rico, Wake Island.

19 CFR Part 163

    Administrative practice and procedure, Customs duties and 
inspection, Exports, Imports, Reporting and recordkeeping requirements, 
Trade agreements.

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19 CFR Part 178

    Administrative practice and procedure, Exports, Imports, Reporting 
and recordkeeping requirements.

Amendments to the CBP Regulations

    For the reasons set forth above, parts 7, 163, and 178 of title 19 
of the Code of Federal Regulations (19 CFR parts 7, 163, and 178) are 
amended as set forth below.

PART 7--CUSTOMS RELATIONS WITH INSULAR POSSESSIONS AND GUANTANAMO 
BAY NAVAL STATION

0
1. The general and specific authority citations for part 7 continue to 
read as follows:

    Authority:  19 U.S.C. 66, 1202 (General Note 3(i), Harmonized 
Tariff Schedule of the United States), 1623, 1624; 48 U.S.C. 1406i.


0
2. In Sec.  7.3:
0
a. Paragraphs (b) introductory text, (d) introductory text, (e)(1) 
introductory text, and (e)(2) are amended by removing the word 
``shall'' and adding in its place the word ``will''.
0
b. Paragraph (f)(1) is revised.
0
c. Paragraph (f)(2) introductory text is amended by removing the word 
``shall'' and adding in its place the word ``must.''; and
0
d. Paragraphs (f)(2)(i) and (ii) are amended by removing the year 
designation ``19__'' wherever it appears and adding in its place the 
year designation ``20__''.
    The revision reads as follows:


Sec.  7.3  Duty-free treatment of goods imported from insular 
possessions of the United States other than Puerto Rico.

* * * * *
    (f) Documentation. (1) When goods are sought to be admitted free of 
duty as provided in paragraph (a)(1) of this section, an importer must 
have in his possession at the time of entry or entry summary a 
completed certificate of origin on CBP Form 3229, showing that the 
goods comply with the requirements for duty-free entry set forth in 
paragraph (a)(1) of this section. The importer must provide CBP Form 
3229 upon request by the port director or his delegate. Except in the 
case of goods which incorporate a material described in paragraph 
(c)(3)(ii) of this section, a certificate of origin will not be 
required for any shipment eligible for informal entry under Sec.  
143.21 of this chapter or in any case where the port director is 
otherwise satisfied that the goods qualify for duty-free treatment 
under paragraph (a)(1) of this section.
* * * * *

PART 163--RECORDKEEPING

0
3. The authority citation for part 163 continues to read as follows:

    Authority:  5 U.S.C. 301; 19 U.S.C. 66, 1484, 1508, 1509, 1510, 
1624.
* * * * *

Appendix to Part 163 [Amended]

0
4. In the Appendix to part 163, within section IV, the listing for 
Sec.  7.3(f) is amended by removing the abbreviation ``CF'' and adding, 
in its place, the words ``CBP Form''.

PART 178--APPROVAL OF INFORMATION COLLECTION REQUIREMENTS

0
5. The authority citation for part 178 continues to read as follows:

    Authority:  5 U.S.C. 301; 19 U.S.C. 1624; 44 U.S.C. 3501 et seq.


0
6. In Sec.  178.2, the table is amended by revising the listings for 
Sec.  7.3 to read as follows:


Sec.  178.2  Listing of OMB control numbers.

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         19 CFR section                Description       OMB control No.
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                              * * * * * * *
Sec.   7.3.....................  Claim for duty-free          1651-0116
                                  entry of goods
                                  imported from U.S.
                                  insular possessions..
 
                              * * * * * * *
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    Dated: February 5, 2015.
R. Gil Kerlikowske,
 Commissioner, U.S. Customs and Border Protection.
Timothy E. Skud,
Deputy Assistant Secretary of the Treasury.
[FR Doc. 2015-02776 Filed 2-10-15; 8:45 am]
BILLING CODE 9111-14-P