[Federal Register Volume 84, Number 141 (Tuesday, July 23, 2019)]
[Notices]
[Pages 35405-35409]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2019-15625]


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DEPARTMENT OF HOMELAND SECURITY

U.S. Customs & Border Protection


Section 321 Data Pilot

AGENCY: U.S. Customs and Border Protection, DHS.

ACTION: General notice.

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SUMMARY: This document announces that U.S. Customs and Border 
Protection (CBP) is conducting a voluntary test to collect certain 
advance data related to shipments potentially eligible for release 
under section 321 of the Tariff Act of 1930, as amended. Section 321 
provides for an administrative exemption from duty and taxes for 
shipments of merchandise (other than bona-fide gifts and certain 
personal and household goods) imported by one person on one day having 
an aggregate fair retail value in the country of shipment of not more 
than $800. Pursuant to this test, participants will electronically 
transmit certain data elements pertaining to these shipments to CBP in 
advance of arrival. CBP is conducting this test to determine the 
feasibility of requiring advance data from different types of parties 
and requiring additional data that is generally not required under 
current regulations in order to effectively identify and target high-
risk shipments in the e-commerce environment. Participants may be non-
traditional CBP partners, such as online marketplaces. This notice 
describes the purpose of the

[[Page 35406]]

test and test procedures, and sets forth the eligibility requirements 
for participation. This test will be known as the Section 321 Data 
Pilot.

DATES: The voluntary pilot will begin on August 22, 2019 and run for 
approximately one year. CBP will accept applications from prospective 
pilot participants at any time, including after the pilot commences, 
until CBP has identified a sufficient number of eligible participants.

ADDRESSES: Prospective pilot participants should submit an email to [email protected]. In the subject line of your 
email please indicate ``Application for Section 321 Data Pilot.'' For 
information on what information to include in the email, see section 
II.D (Application Process and Acceptance) of the SUPPLEMENTARY 
INFORMATION heading below.

FOR FURTHER INFORMATION CONTACT: Laurie Dempsey, Director, IPR & E-
Commerce Division at [email protected] or 202-615-0514 and 
Daniel Randall, Branch Chief, Manifest & Conveyance Security at 202-
344-3282.

SUPPLEMENTARY INFORMATION: 

I. Background and Purpose of the Pilot

A. Current Requirements

    CBP has broad authority to collect advance data and inspect cargo 
crossing the border for health, safety, and other risks pursuant to 
various statutory authorities. See, e.g., 6 U.S.C. 211(c) and (g); 19 
U.S.C. 482, 1461, 1589a, 1595a; see also 19 CFR 162.6. Currently, CBP 
requires the electronic transmission of certain information relating to 
commercial cargo prior to its arrival in the United States. Section 
343(a) of the Trade Act of 2002, as amended, authorizes CBP to 
promulgate regulations, in accordance with certain parameters, 
providing for the mandatory transmission of cargo information before 
the cargo is brought into or departs the United States by any mode of 
commercial transportation. Public Law 107-210, 116 Stat. 933 (Aug. 6, 
2002) (codified at 19 U.S.C. 1415). The required cargo information is 
that which is reasonably necessary to enable high-risk cargo to be 
identified for purposes of ensuring cargo safety and security pursuant 
to the laws enforced and administered by CBP. Accordingly, CBP 
promulgated regulations in title 19 of the Code of Federal Regulations 
(19 CFR) to require carriers or other eligible parties to submit 
certain data for cargo in advance, regardless of the mode of 
transportation. See 68 FR 68140 (Dec. 5, 2003); 19 CFR 4.7 (vessel), 
122.48a (air), 123.91 (rail), and 123.92 (truck). Although the required 
data elements differ depending on the mode of transportation and the 
type of shipment, the carrier generally must transmit information such 
as the shipper name and address, the consignee name and address, a 
description of the cargo, including the cargo's quantity and weight, 
and information regarding the cargo's trip, such as trip/flight number, 
carrier code, point of arrival and point of origin.
    The Air Cargo Advance Screening (ACAS) regulations, also issued 
pursuant to the Trade Act of 2002, impose additional requirements for 
cargo arriving by air. See 19 CFR 122.48b. The ACAS regulations require 
carriers or other eligible parties to transmit a subset of the data 
required by the Trade Act of 2002 earlier in the process (i.e., as soon 
as practicable, but no later than prior to loading the cargo into an 
aircraft). See 19 CFR 122.48b(b)(1). Pursuant to the ACAS regulations, 
air carriers must transmit the following data elements prior to 
loading: Shipper name and address, consignee name and address, cargo 
description, total quantity, total weight, and air waybill number. 19 
CFR 122.48b(d)(1).\1\
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    \1\ The above-listed data elements are mandatory in all 
circumstances. Carriers or other ACAS filers may also be required to 
transmit an additional data element, depending on the circumstances, 
and are encouraged to transmit additional data elements. 19 CFR 
122.48b(d).
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    The Security and Accountability for Every Port Act of 2006 (SAFE 
Port Act) authorizes CBP to promulgate regulations to require the 
electronic transmission of additional data elements for improved high-
risk targeting for cargo arriving by vessel. Public Law 109-347, 120 
Stat. 1884 (Oct. 13, 2006) (codified at 6 U.S.C. 901 note). CBP 
promulgated regulations to require importers and carriers to submit 
additional data, in addition to the data required by the Trade Act 
regulations, for cargo arriving by vessels before the cargo is brought 
to the United States. See 19 CFR part 149 (the Importer Security Filing 
or ISF regulations). The data required by the ISF regulations differs 
depending on the type of shipment, but generally includes the name and 
address of the seller, buyer, and manufacturer or supplier, the 
consignee identifying number, the ship to party (the first deliver-to 
party scheduled to receive the goods after the goods have been released 
from customs custody), country of origin, Harmonized Tariff Schedule of 
the United States (HTSUS) number, container stuffing location, and the 
name and address of the consolidator. 19 CFR 149.3(a).
    CBP uses the advance electronic data transmitted pursuant to these 
authorities to identify and target high-risk shipments of commercial 
cargo arriving in the United States.

B. Section 321 Shipments

    Section 321(a)(2)(C) of the Tariff Act of 1930, as amended, 
authorizes CBP to provide an administrative exemption to admit free 
from duty and tax shipments of merchandise (other than bona-fide gifts 
and certain personal and household goods) imported by one person on one 
day having an aggregate fair retail value in the country of shipment of 
not more than $800. 19 U.S.C. 1321(a)(2)(C). CBP regulations provide 
that, subject to the conditions in 19 CFR 10.153, the port director 
shall pass free of duty and tax any shipment of merchandise imported by 
one person on one day having a fair retail value in the country of 
shipment not exceeding $800, unless there is a reason to believe the 
shipment is one of several lots covered by a single order or contract, 
and was sent separately for the express purpose of securing free entry 
or of avoiding compliance with any pertinent law or regulation. 19 CFR 
10.151.
    Prior to the enactment of the Trade Facilitation and Trade 
Enforcement Act (TFTEA) (Pub. L. 114-125, 130 Stat. 223 (Feb. 24, 
2016)), the Section 321 exemption applied only to shipments valued at 
less than $200. Section 901(a) of TFTEA amended Section 321(a)(2)(C) of 
the Tariff Act of 1930 to raise the de minimis threshold from $200 to 
$800. See Public Law 114-125, 130 Stat. 223 (Feb. 24, 2016); 19 U.S.C. 
1321(a)(2)(C). This has greatly increased the number of shipments 
qualifying for the Section 321 exemption. Currently, approximately 1.8 
million shipments a day are released pursuant to Section 321. The 
majority of these Section 321 shipments are arriving by air and truck.

C. Purpose of the Section 321 Data Pilot

    CBP faces significant challenges in targeting Section 321 
shipments, while still maintaining the clearance speeds the private 
sector has come to expect. This is because CBP does not receive 
adequate advance information in order to effectively and efficiently 
assess the security risk of the approximately 1.8 million Section 321 
shipments that arrive each day.
    In the e-commerce environment, traditionally regulated parties, 
such as carriers, are unlikely to possess all of the information 
relating to a shipment's supply chain. While CBP receives some advance 
electronic data for Section 321

[[Page 35407]]

shipments from air, rail, and truck carriers (and certain other parties 
in limited circumstances) as mandated by current regulations described 
above in section I.A (Current Requirements), the transmitted data often 
does not adequately identify the entity causing the shipment to cross 
the border, the final recipient, or the contents of the package. 
Consequently, CBP may not receive any advance information on the entity 
actually causing the shipment to travel to the United States, such as 
the seller or manufacturer. Some carriers may not have this information 
because sellers on e-commerce platforms often contract with other 
entities to act as the seller. Similarly, for the consignee's name and 
address, a carrier might transmit information for the domestic 
deconsolidator, which will not allow CBP to identify in advance of 
arrival, the final recipient of the merchandise in the United States. 
With the growth of e-commerce, shipments are increasingly subject to 
these complex transactions, where information about the shipment is 
limited. As a result, CBP is less able to effectively target or 
identify high-risk shipments in the e-commerce environment and CBP 
Officers must use additional time and resources to inspect Section 321 
shipments upon arrival.
    CBP anticipates that Section 321 shipments will continue to grow 
exponentially. Accordingly, CBP is initiating this voluntary Section 
321 Data Pilot to test the feasibility of obtaining advance information 
from regulated and non-regulated entities, such as online marketplaces, 
as well as requiring additional advance data elements. Online 
marketplaces are internet-based entities that facilitate e-commerce by 
(1) connecting third-party sellers with consumers and (2) receiving and 
processing payment information from consumers, including receiving and 
processing payments on behalf of the third-party sellers. Online 
marketplaces generally have detailed information regarding Section 321 
shipments, including information relating to the party causing the 
product to travel to the United States, the final recipient in the 
United States, and detailed descriptions and pictures of the contents 
of the shipment. Online marketplaces may also assign sellers with 
unique identifiers or develop their own known seller programs. This 
test will enable CBP to assess the ability of online marketplaces to 
transmit information to CBP that enables CBP to better utilize 
resources used in inspecting and processing these shipments and better 
understand the operation of online marketplaces.
    Additionally, CBP is testing whether the transmission of additional 
advance data, beyond the data elements currently required for shipments 
arriving by air, truck, or rail under the authorities cited above in 
section I.A (Current Requirements), will enable CBP to more accurately 
and efficiently target Section 321 shipments. Pursuant to this test, 
participants will provide information that identifies the entity 
causing the shipment to cross the border, the ultimate recipient, and 
the product in the shipment with greater specificity, in advance. CBP 
will test the feasibility of using the additional data elements, 
transmitted by multiple entities for a single shipment, to segment 
risk. For example, CBP may compare a picture of the product 
(transmitted by an online marketplace) to an x-ray image of the package 
(transmitted by the carrier) to determine if the picture of the product 
and x-ray image match. In sum, the pilot will enable CBP to determine 
if requiring additional data and involving non-regulated entities will 
enable CBP to address the threats and complexities resulting from the 
vast increase in Section 321 shipments, while facilitating cross-border 
e-commerce.

II. Description of the Section 321 Data Pilot

    The Section 321 Data Pilot is a voluntary test that will enable 
participants to electronically transmit to CBP certain information 
regarding Section 321 shipments prior to the shipment's arrival in the 
United States. CBP will use the advance information to improve CBP's 
ability to effectively and efficiently identify and target high-risk 
shipments, including for narcotics, counter-proliferation, and health 
and safety risks. CBP will select pilot participants from eligible 
applicants engaged in e-commerce, including carriers, brokers, and 
freight forwarders, as well as online marketplaces. Further details 
about the eligibility requirements and application process are provided 
in section II.C (Eligibility Requirements) and section II.D 
(Application Process and Acceptance) below.
    Participants in the pilot will electronically transmit certain data 
elements specified below in section II.A (Data Elements) in addition to 
other data elements as available and at the participant's discretion. 
CBP must receive the data elements prior to the shipment's arrival in 
the United States. Participants may electronically transmit the 
requested information through an existing point-to-point connection 
with CBP. Alternatively, participants may authorize a carrier or broker 
participating in the pilot and who has an existing point-to-point 
connection with CBP to transmit the information on their behalf. For 
additional information on technology requirements, see section II.C 
(Eligibility Requirements) below. CBP will respond to the data 
transmissions with a confirmation of receipt and will use the 
transmitted information to conduct risk assessments. Risk assessment 
for each shipment will be based on multiple transmissions, as each 
transmission can be from different parties providing different data 
elements at various stages in the supply chain. Messages will be 
maintained in the Automated Targeting System (ATS).
    The Section 321 Data Pilot will not affect any current requirements 
and CBP is not waiving any regulations for purposes of the pilot, 
including all the regulations pertaining to the provision of advance 
data cited above, including the ACAS and ISF regulations. All of the 
existing Trade Act of 2002 requirements and all manifest requirements 
continue to apply. Additionally, CBP will not use the information 
transmitted pursuant to the pilot for entry or release purposes, and 
pilot participants cannot rely on information transmitted through the 
pilot for entry or release purposes.

A. Data Elements

    Participants in the Section 321 Data Pilot must transmit certain 
information for any Section 321 shipments destined for the United 
States for which the participant has information. (For additional 
information on the types of shipments included in the pilot, see 
section II.B (Duration and Scope of the Pilot)). The required data 
elements differ slightly depending on what entity is transmitting the 
data. In general, the required data relates to the entity initiating 
the shipment (e.g., the entity causing the shipment to cross the 
border, such as the seller, manufacturer, or shipper), the product in 
the package, the listed marketplace price, and the final recipient 
(e.g., the final entity to possess the shipment in the United States). 
The data elements are as follows.
    1. All participants. All participants, regardless of filer type, 
must electronically transmit the following elements:

 Originator Code of the Participant (assigned by CBP)
 Participant Filer Type (e.g., carrier or online marketplace)
 One or more of the following:
[cir] Shipment Tracking Number
[cir] House Bill Number
[cir] Master Bill Number

[[Page 35408]]

 Mode of Transportation (e.g., air, truck, or rail)
    2. Participating carriers. In addition to the data elements listed 
above in paragraph 1, participating carriers must also electronically 
transmit the following data elements:

 Shipment Initiator Name and Address (e.g., the entity that 
causes the movement of a shipment, which may be a seller, shipper, or 
manufacturer, but not a foreign consolidator)
 Final Deliver to Party Name and Address (e.g., the final 
entity to receive the shipment once it arrives in the United States, 
which may be a final purchaser or a warehouse, but not a domestic 
deconsolidator)
 Enhanced Product Description (e.g., a description of a product 
shipped to the United States more detailed than the description on the 
manifest, which should, if applicable, reflect the advertised retail 
description of the product as listed on an online marketplace)
 Shipment Security Scan (air carriers only) (e.g., verification 
that a foreign security scan for the shipment has been completed such 
as an x-ray image or other security screening report)
 Known Carrier Customer Flag (e.g., an indicator that 
identifies a shipper as a repeat customer that has consistently paid 
all required fees and does not have any known trade violations)

    3. Participating online marketplaces. In addition to the data 
elements listed above in paragraph 1, participating online marketplaces 
must electronically submit the following data elements:

 Seller Name and Address (e.g., an international or domestic 
company that sells products on marketplaces and other websites), and, 
if applicable, Shipment Initiator Name and Address (as defined in 
Section II.A.2)
 Final Deliver to Party Name and Address (as defined in Section 
II.A.2)
 Known Marketplace Seller Flag (e.g., an indicator provided by 
a marketplace that identifies a seller as an entity vetted by the 
marketplace and has no known trade violations)
 Marketplace Seller Account Number/Seller ID (e.g., the unique 
identifier a marketplace assigns to sellers)
 Buyer Name and Address, if applicable (e.g., the purchaser of 
a good from an online marketplace. This entity is not always the same 
as the final deliver to party.)
 Product Picture (e.g., picture of the product presented on an 
online marketplace), Link to Product Listing (e.g., an active and 
direct link to the listing of a specific product on an online 
marketplace), or Enhanced Product Description (as defined in Section 
II.A.2)
 Listed Price on Marketplace (e.g., the retail price of a 
product that a seller lists while advertising on an online marketplace. 
For auction marketplaces, this price is the price of final sale.)

    Different entities may transmit different data elements for the 
same shipment.

B. Duration and Scope of the Pilot

    The pilot will begin on August 22, 2019 and operate for 
approximately one year.
    The pilot applies to each Section 321 shipment destined for the 
United States, arriving by air, truck, or rail, for which the selected 
participants have information. The pilot will operate in all ports of 
entry utilized by the participants for Section 321 shipments. The pilot 
does not apply to any mail shipments covered by 19 CFR part 145, 
shipments arriving by ocean, or shipments destined for a Foreign Trade 
Zone.

C. Eligibility Requirements

    CBP is seeking participation from stakeholders in the e-commerce 
environment, including carriers, brokers, freight forwarders, as well 
as online marketplaces. There are no restrictions with regard to 
organization size, location, or commodity type. Additionally, online 
marketplaces do not need to offer delivery logistic services in order 
to participate in the pilot. However, participation is limited to those 
parties with sufficient information technology infrastructure and 
support, as described below. Prospective pilot participants will need 
to assess whether they can fulfill the following eligibility 
requirements:
     Technical capability to electronically submit data to CBP 
and to receive messaging responses via an existing point-to-point 
connection with CBP. Alternatively, participants may authorize a 
carrier or broker participating in the pilot and who has an existing 
point-to-point connection with CBP to transmit the information on their 
behalf.
     Participants who establish a new point-to-point connection 
with CBP will need to sign an Interconnect Security Agreement (ISA) or 
amend their existing ISA, if necessary, and adhere to security policies 
defined in the DHS 4300a security guide.

D. Application Process and Acceptance

    Those interested in participating in the pilot should submit an 
email to [email protected], stating their 
interest and their qualifications based on the above eligibility 
requirements. Online marketplaces should indicate the extent to which 
they have information related to the delivery logistics of the products 
sold on their website. The email should also include a point of 
contact. The email will serve as an electronic signature of intent. CBP 
will accept applications from prospective pilot participants at any 
time, including after the pilot commences, until CBP has identified a 
sufficient number of eligible participants. Specifically, CBP is 
looking for pilot participants to include one or more carriers and one 
or more online marketplaces. Applications will be processed in the 
order in which they are received. Once applications are processed, 
those selected as participants will be notified by email. The pilot 
will initially be limited to 9 participants but CBP may expand the 
pilot to additional participants in the future.

E. Costs to Pilot Participants

    The costs of pilot participation will vary depending on the pre-
existing infrastructures of the participants. Costs may include 
communication requirements, such as transmission and receipt of data, 
as well as cost associated with collecting the required information. 
Participants are encouraged to keep track of the costs incurred by 
their participation in the pilot.

F. Benefits to Pilot Participants

    While the benefits of participation may vary, one benefit is that, 
where appropriate, CBP may expedite clearances for low-risk Section 321 
shipments when sufficient test data has been received prior to the 
shipment's arrival.

G. Evaluation of the Pilot

    After the end of the pilot, CBP will evaluate the results of the 
pilot and determine whether to extend the duration of the pilot and/or 
expand the pilot to include additional participants. Additionally, CBP 
will evaluate the results of the pilot to determine whether additional 
mandatory advance reporting requirements are necessary in the e-
commerce environment.

III. Authority

    This pilot is conducted pursuant to 19 CFR 101.9(a), which 
authorizes the Commissioner to impose requirements different from those 
specified in the

[[Page 35409]]

CBP regulations for the purposes of conducting a test program or 
procedure designed to evaluate the effectiveness of new technology or 
operational procedures regarding the processing of passengers, vessels, 
or merchandise.

IV. Privacy

    CBP will ensure that all Privacy Act requirements and applicable 
policies are adhered to during the implementation of this pilot.

V. Paperwork Reduction Act

    The Paperwork Reduction Act (PRA) of 1995 (44 U.S.C. 3507(d)) 
requires that CBP consider the impact of paperwork and other 
information collection burdens imposed on the public. The PRA applies 
to collections of information imposed on ``ten or more persons.'' This 
pilot will initially include fewer than ten participants and as such 
will not require an OMB control number. If CBP expands the pilot to 
include ten or more persons, CBP will adhere to the requirements of the 
PRA.

VI. Misconduct Under the Pilot

    A pilot participant may be subject to civil and criminal penalties, 
administrative sanctions, liquidated damages, or discontinuance from 
participation in the Section 321 Data Pilot for any of the following:
    (1) Failure to follow the rules, terms, and conditions of this 
pilot;
    (2) Failure to exercise reasonable care in the execution of 
participant obligations; or
    (3) Failure to abide by applicable laws and regulations that have 
not been waived.
    If the Director, Intellectual Property Rights and E-Commerce 
Division, Office of Trade, finds that there is a basis for 
discontinuance of pilot participation privileges, the pilot participant 
will be provided a written notice proposing the discontinuance with a 
description of the facts or conduct warranting the action. The pilot 
participant will be offered the opportunity to appeal the decision in 
writing within 10 calendar days of receipt of the written notice. The 
appeal of this determination must be submitted to the Executive 
Director, Trade Policy and Programs, Office of Trade, by emailing [email protected].
    The Executive Director, Trade Policy and Programs, Office of Trade, 
will issue a decision in writing on the proposed action within 30 
working days after receiving a timely filed appeal from the pilot 
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 pilot participant's 
privileges will not take effect unless the appeal process under this 
paragraph has been concluded with a written decision adverse to the 
pilot participant.
    In cases of willfulness or those in which public health, interest, 
or safety so requires, the Director, Intellectual Property Rights and 
E-Commerce Division, Office of Trade, may immediately discontinue the 
pilot participant's privileges upon written notice to the pilot 
participant. The notice will contain a description of the facts or 
conduct warranting the immediate action. The pilot participant will be 
offered the opportunity to appeal the decision within 10 calendar days 
of receipt of the written notice providing for immediate 
discontinuance. The appeal of this determination must be submitted to 
the Executive Director, Trade Policy and Programs, Office of Trade, by 
emailing [email protected].
    The immediate discontinuance will remain in effect during the 
appeal period. The Executive Director, Trade Policy and Programs, 
Office of Trade, will issue a decision in writing on the discontinuance 
within 15 working days after receiving a timely filed appeal from the 
pilot 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.

    Date: July 18, 2019.
Robert E. Perez,
Deputy Commissioner, U.S. Customs and Border Protection.
[FR Doc. 2019-15625 Filed 7-22-19; 8:45 am]
BILLING CODE 9111-14-P