[Federal Register Volume 83, Number 230 (Thursday, November 29, 2018)]
[Rules and Regulations]
[Pages 61318-61320]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2018-25953]


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DEPARTMENT OF HOMELAND SECURITY

U.S. Customs and Border Protection

19 CFR Part 4

[CBP Dec. 18-12]


Technical Corrections to the Vessel Repair Unit Regulations

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

ACTION: Final rule; technical amendment.

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SUMMARY: This document amends the U.S. Customs and Border Protection 
(CBP) regulations to update provisions relating to the declaration, 
entry and dutiable status of repair expenditures made abroad for 
certain vessels to reflect the port of New Orleans, Louisiana as the 
only Vessel Repair Unit (VRU) location. The amendment will improve the 
efficiency of vessel repair entry processing, ensure the proper 
assessment and collection of duties, and make the regulations more 
transparent.

DATES: The final rule is effective November 29, 2018.

FOR FURTHER INFORMATION CONTACT: Donna Dedeaux, Branch Chief, Cargo and 
Conveyance Security, at [email protected] or (202) 325-2497.

SUPPLEMENTARY INFORMATION: 

Background

    Under section 466, Tariff Act of 1930, as amended (19 U.S.C. 1466), 
purchases for or repairs made to certain vessels while they are outside 
the United States are subject to declaration, entry and payment of ad 
valorem duty. These requirements are effective upon the first arrival 
of the affected vessel in any port of the United States. The vessels 
subject to these requirements include those documented under U.S. law 
for the foreign or coastwise trades, as well as those which were 
previously documented under the laws of some foreign nation or are 
undocumented at the time that the foreign shipyard repairs are 
performed, but which exhibit an intent to engage in those trades.
    The regulations implementing 19 U.S.C. 1466 are found in Sec.  4.14 
of the CBP regulations (19 CFR 4.14). Section 4.14 provides that when a 
vessel subject to the vessel repair statute first arrives into the 
United States or Puerto Rico following a foreign voyage, the owner, 
master, or authorized agent, or vessel operator must submit a vessel 
repair entry and declaration on CBP Form 226

[[Page 61319]]

(Form), a dual-use form used both for entry and declaration purposes. 
If no foreign repair-related expenses were incurred, that fact must 
also be reported either on the Form or by approved electronic means. 
The owner, master, or authorized agent must ensure the declaration is 
ready for presentation in the event that a CBP officer boards the 
vessel. Section 4.14 provides that the CBP port of arrival receiving 
either a positive or negative vessel repair declaration or electronic 
equivalent must immediately forward it to the appropriate Vessel Repair 
Unit (VRU) port of entry via mail, fax, or email. The owner, master, or 
authorized agent, or vessel operator must also file a vessel repair 
entry directly with the VRU. See, 19 CFR 4.14(c), (e). The regulations 
list three VRU locations: New York, New York, San Francisco, 
California, and New Orleans, Louisiana. See, 19 CFR 4.14(g).

Discussion of Regulatory Changes

    Of the three VRUs listed in Sec.  4.14(g), only the New Orleans 
location is currently operational. Over the years, there has been a 
steady decrease in the number of vessel repair entries filed. Based on 
the small volume of entries being received at the VRU locations in New 
York and San Francisco and due to CBP's staffing needs, in 2003-2004, 
CBP informally streamlined VRU operations so that such operations would 
be performed only at the port of New Orleans VRU. As a result of common 
practice, the trade generally submits its vessel repair entries 
directly to the New Orleans VRU.\1\ CBP forwards any entries received 
at the New York or San Francisco VRUs to New Orleans. To reflect this 
practice and for purposes of transparency, this document makes changes 
to Sec.  4.14 to reflect the port of New Orleans as the sole VRU 
location. This document also updates the regulations to reflect a name 
change of the office within CBP Headquarters referenced in Sec.  4.14. 
The referenced office is now known as the Cargo Security, Carriers & 
Restricted Merchandise Branch, Office of Trade. Also, to ensure 
clarity, the document makes additional minor wording changes to the 
regulation.
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    \1\ Since 2003-2004, the port of New Orleans VRU has averaged 
approximately 540 entries per year.
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Inapplicability of Prior Notice and Delayed Effective Date

    According to section 553 of the Administrative Procedure Act (APA) 
(5 U.S.C. 553), rulemaking generally requires prior notice and comment, 
and a 30-day delayed effective date, subject to specified exceptions. 
Pursuant to 5 U.S.C. 553(a)(2), matters relating to agency management 
or personnel are excepted from the requirements of section 553. 
Additionally, as provided in 5 U.S.C. 553(b)(3)(A), the prior notice 
and comment and delayed effective date requirements do not apply when 
agencies promulgate rules concerning agency organization, procedure, or 
practice.
    This rule does not require prior notice and comment because it 
relates to agency management and agency organization, procedures, or 
practice. As explained above, the rule merely updates the regulations 
to reflect the informal streamlining of VRU operations in 2003-2004, so 
that all vessel repair entries are processed by the New Orleans VRU. As 
a result of common practice, the trade generally submits its vessel 
repair entries are now submitted directly to the New Orleans VRU. CBP 
forwards any such entries received in New York or San Francisco to the 
New Orleans VRU for processing. Accordingly, this rule does not affect 
the substantive rights or interests of the public, but merely conforms 
the regulations to existing agency management and agency procedures and 
organization. This rule also makes other minor wording changes for 
clarity and includes a technical update to the regulations to reflect a 
name change in the referenced office within CBP Headquarters.

Executive Orders 12866, 13563, and 13771

    Executive Orders 13563 and 12866 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. Executive Order 13771 (``Reducing Regulation and 
Controlling Regulatory Costs'') directs agencies to reduce regulation 
and control regulatory costs and provides that ``for every one new 
regulation issued, at least two prior regulations be identified for 
elimination, and that the cost of planned regulations be prudently 
managed and controlled through a budgeting process.''
    The Office of Management and Budget (OMB) has not designated this 
rule as a ``significant regulatory action,'' under section 3(f) of 
Executive Order 12866. Accordingly, OMB has not reviewed this 
regulation. This regulation updates CBP's VRU regulations, eliminating 
costs of processing vessel repair entries that must be forwarded to the 
New Orleans VRU. Thus, DHS considers this a deregulatory action under 
Executive Order 13771. See OMB's Memorandum, ``Guidance Implementing 
Executive Order 13771, `Reducing Regulation and Controlling Regulatory 
Costs' '' (April 5, 2017).
    This rule amends an outdated regulation by removing obsolete 
provisions to reflect the streamlining of VRU operations. Of the three 
VRUs listed in Sec.  4.14(g), only the New Orleans location is 
currently operational. Although, as a result of common practice, the 
trade generally submits its vessel repair entries directly to the New 
Orleans VRU for processing, some entries are submitted to the other 
locations listed in the regulations. Vessel Repair Entries are filed on 
paper and submitted via postal mail and each entry can be hundreds of 
pages long. Historically, misdirected entries have been forwarded in 
hard copy to the New Orleans VRU. This rule eliminates the small costs 
in processing vessel repair entries that may be initially submitted to 
the other locations that CBP must then forward to the New Orleans, 
Louisiana VRU. CBP believes the monetized cost savings of the rule to 
be insignificant due to the small number of vessel repair entries 
received each year, an average of 540, of which some are not already 
submitted to the New Orleans VRU. This rule will make the procedures 
for processing vessel repair entries more efficient for both CBP and 
the affected population, with zero additional costs.

Regulatory Flexibility Act

    Because this document is not subject to the notice and public 
procedure requirements of 5 U.S.C. 553, it is not subject to the 
provisions of the Regulatory Flexibility Act (5 U.S.C. 601 et seq.).

Signing Authority

    This document is being issued in accordance with 19 CFR 0.2(a), 
which provides that the authority of the Secretary of the Treasury with 
respect to CBP regulations that are not related to customs revenue 
functions was transferred to the Secretary of Homeland Security 
pursuant to Section 403(l) of the Homeland Security Act of 2002. 
Accordingly, this final rule to amend such regulations may be signed by 
the Secretary of Homeland Security (or his or her delegate).

[[Page 61320]]

List of Subjects in 19 CFR Part 4

    Customs duties and inspection, Entry procedures, Repairs, Reporting 
and recordkeeping requirements, Vessels.

Amendments to the Regulations

    For the reasons stated in the preamble, part 4 of the CBP 
regulations (19 CFR part 4) is amended as set forth below.

PART 4--VESSELS IN FOREIGN AND DOMESTIC TRADES

0
1. The general authority citation for part 4 and the specific authority 
citation for Sec.  4.14 continue to read as follows:

    Authority:  5 U.S.C. 301; 19 U.S.C. 66, 1431, 1433, 1434, 1624, 
2071 note; 46 U.S.C. 501, 60105.
* * * * *

    Section 4.14 also issued under 19 U.S.C. 1466, 1498; 31 U.S.C. 
9701.

* * * * *

0
2. Amend Sec.  4.14 as follows:
0
a. Revise the third and fifth sentences of paragraph (c);
0
b. Revise the fourth sentence of paragraph (d);
0
c. Revise the fourth sentence of paragraph (e);
0
d. Revise the second, fourth, seventh and eighth sentences of paragraph 
(f);
0
e. Revise paragraph (g);
0
f. Revise the eighth and the ninth sentences of paragraph (i)(1);
0
 g. Revise the fifth sentence of paragraph (i)(2);
0
h. Revise the third sentence of paragraph (i)(4).
    The revisions read as follows:


Sec.  4.14  Equipment purchases for, and repairs to, American vessels.

* * * * *
    (c) Estimated duty deposit and bond requirements. * * * At the time 
the vessel repair entry is submitted by the vessel operator to the 
Vessel Repair Unit (VRU) as defined in paragraph (g) of this section, 
that same identifying information must be included on the entry form. * 
* * CBP officials at the port of arrival may consult the VRU as 
identified in paragraph (g) of this section or the staff of the Cargo 
Security, Carriers & Restricted Merchandise Branch, Office of Trade in 
CBP Headquarters in setting sufficient bond amounts. * * *
    (d) Declaration required. * * * The CBP port of arrival receiving 
either a positive or negative vessel repair declaration or electronic 
equivalent will immediately forward it to the VRU as identified in 
paragraph (g) of this section.
    (e) Entry required. * * * The entry must be presented or 
electronically transmitted by the vessel operator to the VRU as 
identified in paragraph (g) of this section, so that it is received 
within ten calendar days after arrival of the vessel. * * *
    (f) Time limit for submitting evidence of cost. * * * If the entry 
is incomplete when submitted, evidence to make it complete must be 
received by the VRU as identified in paragraph (g) of this section 
within 90 calendar days from the date of vessel arrival.
    * * * The VRU may grant one 30-day extension of time to submit 
final cost evidence if a satisfactory written explanation of the need 
for an extension is received before the expiration of the original 90-
day submission period. * * * Questions as to whether an extension 
should be granted may be referred to the Cargo Security, Carriers & 
Restricted Merchandise Branch, Office of Trade in CBP Headquarters by 
the VRU. Any request for an extension beyond a 30-day grant issued by 
the VRU must be submitted through that unit to the Cargo Security, 
Carriers & Restricted Merchandise Branch, Office of Trade, CBP 
Headquarters. * * *
    (g) Location and jurisdiction of vessel repair unit port of entry. 
The VRU, located in New Orleans, Louisiana, processes vessel repair 
entries received from all United States ports of arrival.
* * * * *
    (i) General procedures for seeking relief--(1) Applications for 
relief. * * * Applications must be addressed and submitted by the 
vessel operator to the VRU and will be decided in that unit. The VRU 
may seek the advice of the Cargo Security, Carriers & Restricted 
Merchandise Branch, Office of Trade in CBP Headquarters with regard to 
any specific item or issue which has not been addressed by clear 
precedent. * * *
    (2) Additional evidence. * * * After a decision is made on an 
Application for Relief by the VRU, the applicant will be notified of 
the right to protest any adverse decision.
* * * * *
    (4) Administrative protest. * * * In particular, the applicable 
protest period will begin on the date of the issuance of the decision 
giving rise to the protest as reflected on the relevant correspondence 
from the VRU.
* * * * *

    Dated: November 21, 2018.
Kevin K. McAleenan,
Commissioner, U.S. Customs and Border Protection.
[FR Doc. 2018-25953 Filed 11-28-18; 8:45 am]
 BILLING CODE 9111-14-P