[Federal Register Volume 81, Number 81 (Wednesday, April 27, 2016)]
[Notices]
[Pages 24837-24839]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2016-09858]


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DEPARTMENT OF HOMELAND SECURITY

U.S. Customs and Border Protection


Automated Commercial Environment (ACE); Announcement of National 
Customs Automation Program Test of the In-Transit Manifest Pilot 
Program

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

ACTION: General notice.

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SUMMARY: This document announces that U.S. Customs and Border 
Protection (CBP) plans to conduct a National Customs Automation Program 
(NCAP) test relating to truck shipments of commercial goods that 
transit from a point of origination in Canada through the United States 
to a point of destination in Canada. Under the NCAP test, CBP will use 
a new filing code to identify shipments as being part of the In-Transit 
Manifest Pilot Program in CBP's Automated Commercial Environmental 
(ACE) Truck Manifest System. Test participants will submit 
electronically an in-transit manifest with a relaxed validation for the 
value data element and they will not have to provide the Harmonized 
Tariff Schedule (HTS) number. This notice provides a description of the 
NCAP test and specifies the duration and locations of the test. It also 
invites public comment on any aspect of the test.

DATES: The test will commence no earlier than May 27, 2016 and will run 
for approximately six months at the following ports: Port Huron, 
Michigan; Pembina, North Dakota; and Blaine, Washington. Comments 
concerning this notice and all aspects of the announced test may be 
submitted at any time during the test period.

ADDRESSES: Written comments concerning program, policy and technical 
issues should be submitted to Manuel Garza, Director, Manifest and 
Conveyance Security Division, U.S. Customs and Border Protection, via 
email at [email protected].

SUPPLEMENTARY INFORMATION: 

I. Background

A. CBP Regulations

    Under CBP regulations, a truck with merchandise that transits the 
United States during a trip that originates and terminates in Canada 
must present a paper manifest form, the United States-Canada Transit 
Manifest, known as Customs Form 7512-B Canada 8\1/2\, to CBP when it 
crosses the border at the U.S. ports of arrival and exit. The 
procedures for these in-transit shipments are addressed in 19 CFR 
123.42 (Truck shipments transiting the United States). Among other 
things, the regulation provides that trucks transiting the United 
States must be sealed at the U.S. port of arrival. The regulation also 
provides that merchandise transported in trucks shall be forwarded in 
accordance with the general provisions for transportation in-bond (19 
CFR 18.1-18.8).
    In addition to the requirement to present a paper manifest when a 
truck crosses the border, CBP also requires electronic filing of 
certain information regarding the cargo carried by a truck in advance 
of the truck's arrival at the border. Under 19 CFR 123.92(a), with a 
few exceptions, for any inbound truck required to report its arrival 
under 19 CFR 123.1(b) that will have commercial cargo aboard, CBP must 
electronically receive certain information regarding the cargo to a 
CBP-approved EDI system \1\ no later than either 30 minutes \2\ or one 
hour prior to the

[[Page 24838]]

carrier's reaching the first port of arrival in the United States. This 
includes cargo arriving by truck for transportation through the United 
States from one point to another in the same foreign country.
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    \1\ In a notice published in the Federal Register on October 27, 
2006 (71 FR 62922), CBP designated the ACE Truck Manifest System as 
the approved EDI for the transmission of required data and announced 
that the requirement to transmit advance electronic cargo 
information through ACE would be phased in by groups of ports-of-
entry. Through a series of Federal Register notices published from 
the October 27, 2006 notice and concluding with a November 13, 2007 
notice (72 FR 63805), CBP mandated the use of ACE for the 
transmission of advance electronic truck cargo information at all 
land border ports-of-entry.
    \2\ As explained in the preamble of the final rule implementing 
section 123.92, published in the Federal Register on December 5, 
2003 (68 FR 68140), the 30 minute timeframe applies to truck 
carriers arriving with shipments qualified for clearance under the 
FAST (Free and Secure Trade) Program. The FAST program is a 
cooperative effort between CBP and the governments of Canada and 
Mexico which provides expedited border processing for known, low-
risk commercial drivers at the U.S.-Canada and U.S.-Mexico borders.
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    Truck carriers have been providing up to 69 data elements 
(including 1 optional data element) as part of their e-Manifest in the 
ACE Truck Manifest System, as a result of prior NCAP tests performed in 
conjunction with the Federal Motor Carrier Safety Administration. See 
69 FR 55167 (September 13, 2004) and 70 FR 13514 (March 21, 2005) and 
related test notices identified therein. For the purposes of this test, 
the same data elements will be required, except as otherwise provided 
for in this notice. The ACE Truck Manifest System enables truck 
carriers with merchandise transiting the United States from point to 
point in Canada to file an e-Manifest and enter the merchandise as a 
Transportation & Exportation (T&E) in-bond entry.

B. Beyond the Border Initiative

    On February 4, 2011, President Obama and Prime Minister Harper 
announced the United States-Canada joint declaration, Beyond the 
Border: A Shared Vision for Perimeter Security and Economic 
Competitiveness (``Beyond the Border''). Beyond the Border articulates 
a shared approach to security in which both countries work together to 
address threats within, at, and away from the U.S.-Canada border, while 
expediting lawful trade and travel.
    On December 7, 2011, President Obama and Prime Minister Harper 
released the Beyond the Border Action Plan, which sets out joint 
priorities and specific initiatives for achieving this vision. The 
Beyond the Border Action Plan proposed a number of pilot projects to 
test new approaches to facilitating the secure movement of goods, 
including a U.S. pilot that would involve ``the testing of a new in-
bond module for processing in-transit/in-bond (Canada-United States-
Canada) cargo traveling by truck.'' See Beyond the Border Action Plan 
(December 7, 2011). CBP is conducting this NCAP test to assess a new 
automated process for in-transit shipments in the ACE Truck Manifest 
System.

II. Authorization for the NCAP Test

    The National Customs Automation Program (NCAP) was established in 
Subtitle B of Title VI--Customs Modernization, in the North American 
Free Trade Agreement Implementation Act (Pub. L. 103-182, 107 Stat. 
2057, 2170, December 8, 1993) (Customs Modernization Act). See 19 
U.S.C. 1411. The Customs Modernization Act provides the Commissioner of 
CBP with authority to conduct limited test programs or procedures 
designed to evaluate planned components of the NCAP. The NCAP test of 
In-Transit Manifest Pilot Program (referred to hereafter as ``the NCAP 
test'' or ``the test'') is authorized pursuant to 19 CFR 101.9(b) which 
provides for the testing of NCAP programs or procedures. See T.D. 95-
21.

III. In-Transit Manifest Pilot Program

    This notice announces CBP's In-Transit Manifest Pilot Program to 
test a new electronic in-transit manifest in the ACE Truck Manifest 
System. The details are provided below.

A. Description of Test

    The NCAP test applies to the transportation of commercial cargo 
from a point of origination in Canada through the United States to a 
point of destination in Canada (CAN-US-CAN in-transit shipments). These 
shipments are essentially domestic Canadian shipments that transit 
through the United States. Under the test, participating truck carriers 
transporting cargo in CAN-US-CAN in-transit shipments will be required 
to submit an e-Manifest in the ACE Truck Manifest System no later than 
30 minutes \3\ prior to arrival in the United States under a new filing 
type code for these in-transit shipments. Participating carriers must 
submit an e-Manifest to CBP using the ANSI X12 format or the ACE Secure 
Data Portal. Participating carriers will not be required to submit the 
paper manifest form, Customs Form 7512-B Canada 8\1/2\, that is 
required under 19 CFR 123.42. Participating carriers are still required 
to submit the paper manifest form required under Canadian law to 
Canadian ports of entry.
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    \3\ Thirty minutes is the time-frame specified in 19 CFR 
123.92(a) that applies to truck carriers using FAST commercial 
drivers. This is the applicable time-frame for participating truck 
carriers because as a condition of participation in this test, each 
carrier must use commercial drivers cleared under the FAST program. 
See part III.B of this notice.
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    Currently, CAN-US-CAN in-transit shipments are filed under shipment 
release type 62 as Transportation & Exportation (T&E) in-bond entries, 
which includes a complete ANSI X12 manifest (referred to as a 309 
manifest) with the following information: Trip, shipment (including the 
value of the merchandise and the Harmonized Tariff Schedule (HTS) 
number), conveyance, equipment, crew and passenger data. Under the 
test, a new shipment release type 70 for CAN-US-CAN in-transit 
shipments will be used by participating carriers. Under shipment 
release type 70, participating carriers will be required to submit the 
same set of data elements as a 309 manifest but with a relaxed 
validation for the value data element. They will not be required to 
provide the HTS number.
    For the value data element, CBP will accept a value amount of $2 
per pound when the actual value is not available. With regard to the 
HTS number, an e-Manifest filed under shipment release type 62 requires 
an HTS number to the 6-digit level under which the cargo will be 
classified and a description of the cargo. For an e-Manifest filed by 
test participants under shipment release type 70, only a precise 
description of the cargo will be required.
    Trade associations for Canadian trucking companies have identified 
these two data elements--value and the HTS number--as being the most 
problematic for CAN-US-CAN in-transit shipments. Canadian truck 
carriers rarely know the value and/or the exact HTS classification 
number for such in-transit cargo and in practice often file incorrect 
data when filing an e-Manifest under shipment release type 62. By 
relaxing the validation for the value data and removing the HTS number 
requirement, CBP intends to reduce the reporting burden on the industry 
and improve trade efficiencies between Canada and the United States.
    The in-transit manifest will be processed and retained in ACE in 
the same manner as a type 62 manifest. Upon arrival in the United 
States, CBP will generate a ``transit movement authorized'' message 
(referred to as a 350 message) that will be sent to the carrier. The 
shipment will then be able to transit the United States and proceed to 
the United States port of export as an in-transit entry. When the 
shipment arrives at the United States port of export, the carrier will 
report the arrival of the shipment to CBP via an EDI message or through 
the carrier's ACE portal account. CBP will issue another 350 message to 
the carrier notifying the carrier that the shipment has entered Canada 
and that the in-transit entry is closed.
    Requiring participating carriers to file an in-transit manifest 
electronically under new shipment release type 70, along with relaxing 
the validation for

[[Page 24839]]

the value data element and eliminating the HTS number requirement, will 
facilitate the in-transit manifest process for both the trade and CBP. 
Canadian carriers will be able to route certain domestic shipments 
through the United States with greater efficiency and CBP will benefit 
from an entirely electronic in-transit manifest.

B. Test Participants and Conditions of Participation

    Participation in the In-Transit Manifest Pilot Program is currently 
limited to nine Canadian truck carriers that have been selected by CBP 
in consultation with the Canadian Border Services Agency (CBSA). Each 
participating carrier is a bonded carrier and a certified member of the 
Customs-Trade Partnership Against Terrorism (C-TPAT), a voluntary 
supply chain security program led by CBP that is focused on improving 
the security of private companies' supply chains with respect to 
terrorism. As a condition of participation, each carrier must use 
commercial drivers cleared under the FAST program. FAST driver 
identification provides CBP with a full set of identifying information 
regarding the driver, including the driver's name, date of birth, 
gender, citizenship, and address. Another condition of participation in 
this NCAP test is that no passengers are permitted on the Canadian 
trucks transiting the United States, with the exception of additional 
drivers also cleared under the FAST program. As provided in Section VI, 
participants are also required to take part in an evaluation of the 
test.

C. Test Duration and Locations

    The NCAP test will be conducted for approximately six months from 
its start at the following ports of entry: Port Huron, Michigan; 
Pembina, North Dakota; and Blaine, Washington. Any future expansion of 
this NCAP test to additional ports and/or extension of the time period 
will be announced on CBP's Web site at www.cbp.gov. Participants will 
also be notified of any expansion.

IV. Regulatory Provisions Affected

    Regulations in 19 CFR parts 18 and 123 that conflict with the terms 
and conditions of the NCAP test are suspended and overridden to the 
extent of the conflict for the duration of the test for test 
participants and only to the extent of their participation in this 
test.

V. Misconduct

    If a test participant fails to abide by the rules, procedures, or 
term and conditions of this and all other applicable Federal Register 
notices, fails to exercise reasonable care in the execution of 
participant obligations, or otherwise fails to comply with all 
applicable laws and regulations, then the participant may be suspended 
from participation in this test and/or subjected to penalties, 
liquidated damages, and/or other administrative or judicial sanction. 
Additionally, CBP has the right to suspend a test participant based on 
a determination that an unacceptable compliance risk exists. Any 
decision proposing suspension may be appealed in writing to the 
Assistant Commissioner (Office of Field Operations) within 15 days of 
the decision date. Such proposed suspension will apprise the 
participant of the facts or conduct warranting suspension. Should the 
participant appeal the notice of proposed suspension, the participant 
should address the facts or conduct charges contained in the notice and 
state how he has or will achieve compliance. However, in the case of 
willfulness or where public health interests are concerned, the 
suspension may be effective immediately.

VI. Test Evaluation Criteria

    All interested parties are invited to comment on any aspect of this 
test at any time. To ensure adequate feedback, participants are 
required to take part in an evaluation of this test. CBP needs comments 
and feedback on all aspects of this test, including the design, conduct 
and implementation of the test in order to determine whether to modify, 
alter, expand, limit, continue, end or implement this program by 
regulation. The final results of the evaluation will be published in 
the Federal Register and the Customs Bulletin as required by 19 CFR 
101.9.

VII. Paperwork Reduction Act

    As noted above, CBP is accepting only nine participants in the NCAP 
test. This means that fewer than ten persons will be subject to any 
information collections under the NCAP test. Accordingly, collections 
of information encompassed within this notice are exempted from the 
requirements of the Paperwork Reduction Act of 1995 (44 U.S.C. 3502 and 
3507).

    Dated: April 22, 2016.
Todd Owen,
Assistant Commissioner, Office of Field Operations.
[FR Doc. 2016-09858 Filed 4-26-16; 8:45 am]
 BILLING CODE 9111-14-P