[Federal Register Volume 84, Number 156 (Tuesday, August 13, 2019)]
[Notices]
[Pages 40079-40082]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2019-17243]


=======================================================================
-----------------------------------------------------------------------

DEPARTMENT OF HOMELAND SECURITY

U.S. Customs and Border Protection


Test Concerning Entry of Section 321 Low-Valued Shipments Through 
Automated Commercial Environment (ACE)

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

ACTION: General notice.

-----------------------------------------------------------------------

SUMMARY: This document announces that U.S. Customs and Border 
Protection (CBP) is conducting a test of new functionalities related to 
the electronic entry filing for low-valued shipments through the 
Automated Commercial Environment (ACE). The Section 321 de minimis 
administrative exemption admits 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. 
During this test, an owner, or purchaser of a Section 321 low-valued 
shipment or, when appropriately designated, a customs broker appointed 
by an owner, purchaser, or consignee, will be able to file a new type 
of informal entry in ACE for Section 321 low-valued shipments. Section 
321 low-valued shipments subject to Partner Government Agency (PGA) 
requirements will also be able to be entered using this new Section 321 
informal entry type. This notice provides a description of the test, 
the requirements for filing the new informal entry type, and the 
regulations that will be waived for test participants. CBP invites 
public comment concerning the test program. The test will be known as 
the ACE Entry Type 86 Test.

DATES: The test will commence no earlier than September 28, 2019 and 
will continue until concluded by an announcement published in the 
Federal Register. Comments will be accepted throughout the duration of 
the test.

ADDRESSES: Comments concerning this notice and any aspect of this test 
may be submitted at any time during the test via email to 
[email protected]. In the subject line of your email, please 
indicate, ``Comment on the ACE Entry Type 86 Test.''

FOR FURTHER INFORMATION CONTACT: Randy Mitchell, Director, Commercial 
Operations, Revenue and Entry Division, Office of Trade, U.S. Customs

[[Page 40080]]

and Border Protection, 202-325-6532, [email protected].

SUPPLEMENTARY INFORMATION: This document announces that U.S. Customs 
and Border Protection (CBP) is conducting a test to allow Section 321 
low-valued shipments, including those shipments subject to Partner 
Government Agency (PGA) data requirements, to be entered by filing a 
new type of informal entry electronically in the Automated Commercial 
Environment (ACE). This will allow CBP to address the growing volume of 
Section 321 low-valued shipments resulting from the global shift in 
trade to an e-commerce platform, test the new functionality in ACE, 
facilitate cross-border e-commerce, and allow Section 321 low-valued 
shipments subject to PGA data requirements to utilize a Section 321 de 
minimis entry process for the first time.

I. Administrative Exemption for Section 321 Low-Valued Shipments

    Section 321(a)(2)(C) of the Tariff Act of 1930 (19 U.S.C. 
1321(a)(2)(C)), as amended by the Trade Facilitation and Trade 
Enforcement Act of 2015 (TFTEA), Section 901, Public Law 114-125, 130 
Stat. 122 (19 U.S.C. 4301 note), 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. The 
regulations issued under the authority of section 321(a)(2)(C) are set 
forth in sections 10.151 and 10.153 of title 19 of the Code of Federal 
Regulations (19 CFR 10.151 and 10.153).
    Section 10.151 of the regulations implements the administrative 
exemption provided for in 19 U.S.C. 1321. A shipment of merchandise 
valued at $800 or less, which qualifies for informal entry under 19 
U.S.C. 1498 and meets the requirements in 19 U.S.C. 1321(a)(2), 
including 19 CFR 10.151, is referred to in this document as a ``Section 
321 low-valued shipment.'' Unless a CBP official has reason to believe 
that a Section 321 low-valued shipment fails to comply with any 
pertinent law or regulation, section 10.153 sets forth the guidance to 
be applied by a CBP officer in determining whether an article or parcel 
shall be exempted from duty and tax under section 10.151 and qualify as 
a Section 321 low-valued shipment. Accordingly, consolidated shipments 
addressed to one consignee shall be treated as one importation; 
alcoholic beverages and cigars (including cheroots and cigarillos) and 
cigarettes containing tobacco, cigarette tubes, cigarette papers, 
smoking tobacco (including water pipe tobacco, pipe tobacco, and roll-
your-own tobacco), snuff, or chewing tobacco are not exempt; any 
merchandise subject to antidumping and countervailing duties is not 
exempt; any merchandise of a class or kind provided for in any absolute 
or tariff-rate quota, whether the quota is open or closed, is not 
exempt; and, there is no exemption from any tax imposed under the 
Internal Revenue Code that is collected by other agencies on imported 
goods.

``Release from manifest'' Process for Section 321 Low-Valued Shipments

    Pursuant to 19 CFR 10.151, merchandise subject to the Section 321 
administrative exemption shall be entered under informal entry 
procedures unless formal entry is deemed necessary. The relevant 
informal entry procedures for Section 321 low-valued shipments are set 
forth in 19 CFR 128.24 and 19 CFR part 143, subpart C. A Section 321 
low-valued shipment may be entered, using reasonable care, by the 
owner, purchaser, or consignee of the shipment, or, when appropriately 
designated by one of these persons, a customs broker licensed under 19 
U.S.C. 1641. See 19 CFR 143.26(b).
    Section 321 low-valued shipments may be entered by presenting the 
bill of lading or a manifest listing each bill of lading. See 19 CFR 
143.23(j)(3). This type of informal entry is termed the ``release from 
manifest'' process. Generally, such shipments are released from CBP 
custody based on the information provided on the manifest or bill of 
lading. Such information may be provided by express consignment 
operators, carriers, or brokers. The following information must be 
provided as part of the ``release from manifest'' process: The country 
of origin of the merchandise; shipper name, address and country; 
ultimate consignee name and address; specific description of the 
merchandise; quantity; shipping weight; and value. See 19 CFR 128.21(a) 
and 19 CFR 143.23(k). No Harmonized Tariff Schedule of the United 
States (HTSUS) subheading or entry summary is required on an advance 
manifest for Section 321 low-valued shipments. See 19 CFR 143.23(k) and 
19 CFR 128.24(e).
    A Section 321 low-valued shipment is not exempt from PGA 
requirements. Many agencies do not have de minimis exemptions for their 
PGA reporting requirements, and require strict accountability of 
imported goods for national security, health and safety reasons and to 
identify specific shipments of potential violative products for 
reporting or enforcement targeting purposes. Low-valued shipments may 
also require the payment of applicable PGA duties, fees or applicable 
excise taxes collected by other agencies. These shipments that have PGA 
data reporting requirements, or require the payment of any duties, 
fees, or taxes may not benefit from the use of a less complex Section 
321 de minimis entry process and must currently be entered using the 
appropriate informal or formal entry process to ensure that the PGA 
requirements are met. All shipments subject to PGA requirements are 
currently ineligible for entry under the ``release from manifest'' 
process.

II. Establishment of an Electronic Entry Process for Section 321 Low-
Valued Shipments Through ACE

    This document announces CBP's plan to conduct a test to authorize a 
new Section 321 de minimis entry process for Section 321 low-valued 
shipments in ACE through the development of a new informal entry type 
``86.'' This test will be called the ACE Entry Type 86 Test. The ACE 
Entry Type 86 Test creates a means for Section 321 low-valued 
shipments, including those subject to PGA data requirements, to benefit 
from the use of a Section 321 de minimis entry process for the first 
time. Prior to the development of entry type ``86,'' Section 321 low-
valued shipments subject to PGA requirements were required to be 
entered using the more complex informal entry type ``11'' or formal 
entry. The ACE Entry Type 86 Test will provide a less complex entry and 
release process for Section 321 low-valued shipments, including those 
subject to PGA data requirements, and will expedite the clearance of 
compliant Section 321 low-valued shipments into the United States 
through the use of ACE. Merchandise imported by mail is excluded from 
the ACE Entry Type 86 Test and may not be entered under the entry type 
``86.''
    In developing the ACE Entry Type 86 Test, CBP has coordinated with 
the Commercial Customs Operations Advisory Committee (COAC), trade 
industry representatives, and PGAs, and has considered the public 
comments received from the ``Administrative Exemption on Value 
Increased for Certain Articles'' interim final rule (Administrative 
Exemption IFR). On August 26, 2016, CBP published the Administrative 
Exemption IFR in the Federal Register (81 FR 58831), which amended the 
CBP regulations to

[[Page 40081]]

implement section 901 of TFTEA by raising the value of the Section 321 
administrative exemption from $200 to $800, and solicited comments 
regarding the collection of data on behalf of PGAs for shipments valued 
at $800 or less. CBP received eight public comments. A more detailed 
analysis of the comments received and CBP's responses to the public 
comments will be addressed at a later date. In summary, of the eight 
public comments, seven addressed the collection of data for Section 321 
low-valued shipments. Among these seven comments, five commenters 
encouraged the automated clearance of Section 321 low-valued shipments 
using ACE and the collection of PGA data using a Section 321 de minimis 
entry process.
    Five of the commenters encouraged CBP to automate Section 321 
clearance using ACE. These commenters pointed out that automating 
Section 321 clearance through ACE will increase CBP's ability to 
provide risk-based targeting of inbound shipments, assure supply chain 
security, enforce trade laws, and protect intellectual property rights. 
Various ACE clearance processes were suggested by the commenters, 
including using the Automated Broker Interface (ABI) to allow the 
owner, purchaser, consignee, or designated customs broker to file the 
necessary information.
    Most commenters also asserted that any ACE Section 321 clearance 
process should allow for the submission of PGA data. One commenter 
pointed out that unless Section 321 low-valued shipments subject to PGA 
requirements could be cleared under a Section 321 de minimis entry 
process, the de minimis exemption would be of little use to the greater 
public because a large percentage of these imported shipments are 
regulated by PGAs. Commenters also noted that the primary purpose of 
increasing the Section 321 administrative exemption was to benefit e-
commerce micro and small businesses engaging in global trade and the 
vast majority of these businesses lack the capacity to comply with 
complex trade rules.
    CBP believes that the development of the new entry type ``86'' 
effectively addresses the public comments; facilitates legitimate trade 
while also allowing CBP to enhance its targeting capabilities; ensures 
that PGAs can identify potential violative products for reporting or 
enforcement targeting purposes while allowing filers to utilize a less 
complex entry process; and decreases the challenges faced by CBP in 
targeting, locating and examining Section 321 low-valued shipments by 
collecting necessary data. Processing Section 321 low-valued shipments 
in ACE utilizes the ``single window'' system, thereby granting all 
government agencies involved with the importation of goods into the 
United States access to data concerning the shipments and gives the 
trade a single mechanism to enter data.

Authorization for the Test

    The test described in this notice is authorized pursuant to 19 CFR 
101.9(a), which grants the Commissioner of CBP the authority to impose 
requirements different from those specified in the CBP regulations for 
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.
    The ACE Entry Type 86 Test will allow CBP to test ACE 
functionality, and to test the new operational procedures involved with 
the new entry type, including any challenges that may result and any 
coordination that is necessary with PGAs. Additionally, the test will 
allow CBP to determine if entry type ``86'' effectively addresses the 
threats and complexities resulting from the global shift in trade to an 
e-commerce platform, the vast increase in Section 321 low-valued 
shipments, and facilitates cross-border e-commerce.

The Process To File an Entry Type ``86''

    A Section 321 low-valued shipment may be entered by the owner, 
purchaser, or consignee of the shipment, or, when appropriately 
designated by one of these persons, a customs broker licensed under 19 
U.S.C. 1641. See 19 CFR 143.26(b). For purposes of the ACE Entry Type 
86 Test, CBP is deviating from this regulation and requiring that 
consignees intending to file an entry type ``86'' appoint a customs 
broker to act as the importer of record (IOR) for the shipment. Customs 
brokers must be designated to enter qualifying shipments through a 
valid power of attorney, and must comply with all other applicable 
broker statutory and regulatory requirements. See 19 CFR 141.46; see 
e.g., 19 U.S.C. 1641; 19 U.S.C. 1484; 19 CFR part 111; 19 CFR part 141. 
The filing of entry type ``86'' is considered ``customs business'' 
under 19 U.S.C. 1641.\1\
---------------------------------------------------------------------------

    \1\ Pursuant to 19 U.S.C. 1641, ``customs business'' is defined 
as those activities involving transactions with CBP concerning the 
entry and admissibility of merchandise, its classification and 
valuation, the payment of duties, taxes, or other charges assessed 
or collected by CBP on merchandise by reason of its importation, or 
the refund, rebate, or drawback of those duties, taxes, or other 
charges. ``Customs business'' also includes the preparation of 
documents or forms in any format and the electronic transmission of 
documents, invoices, bills, or parts thereof, intended to be filed 
with CBP in furtherance of such activities, whether or not signed or 
filed by the preparer, or activities relating to such preparation, 
but does not include the mere electronic transmission of data 
received for transmission to CBP.
---------------------------------------------------------------------------

    To participate in this test, an owner, purchaser, or customs broker 
appointed by an owner, purchaser, or consignee will file an informal 
entry type ``86'' in ACE through ABI. ABI allows participants to 
electronically file all required import data with CBP, and transfers 
that data into ACE. To participate in ABI, a filer must meet the 
requirements and procedures set forth in 19 CFR part 143, subpart A, 
and must meet the technical requirements set forth in the Customs and 
Trade Automated Interface Requirements (CATAIR).\2\
---------------------------------------------------------------------------

    \2\ See General Notice of August 26, 2008 (73 FR 50337) for a 
complete discussion on the procedures for obtaining an ACE Portal 
Account.
---------------------------------------------------------------------------

    The test is open to all owners, purchasers, consignees, and 
designated customs brokers of Section 321 low-valued shipments, 
including those subject to PGA requirements, imported by all modes of 
cargo transportation. CBP encourages all eligible parties to 
participate in this test to test the functionality of the new entry 
type. Importers of Section 321 low-valued shipments that do not contain 
any PGA data requirements may continue to utilize the ``release from 
manifest'' process or may utilize the ACE Entry Type 86 Test.
    When filing an entry type ``86,'' a bond and entry summary 
documentation are not required. Under entry type ``86,'' the importing 
party is exempt from payment of the harbor maintenance tax and 
merchandise processing fee for merchandise released as a Section 321 
low-valued shipment. See 19 CFR 24.23(c)(1)(v) and 24.24(d)(3). 
However, any merchandise that is not exempt from the payment of any 
applicable PGA duties, fees, or taxes imposed under applicable statute 
or regulation by other agencies on imported goods does not qualify as a 
Section 321 low-valued shipment. An entry type ``86'' filing that is 
determined to owe any duties, fees, or taxes will be rejected by CBP 
and must be re-filed using the appropriate informal or formal entry 
process. Additionally, CBP may require formal entry for any merchandise 
if it is deemed necessary for import admissibility enforcement 
purposes, revenue protection, or the efficient conduct of customs 
business. See 19 CFR 143.22.
    An entry type ``86'' requires the owner, purchaser, or customs 
broker

[[Page 40082]]

appointed by the owner, purchaser, or consignee to file the following 
data elements with CBP at any time prior to, or upon arrival, or up to 
15 days after arrival of the cargo:
    (1) The bill of lading or the air waybill number;
    (2) Entry number;
    (3) Planned port of entry;
    (4) Shipper name, address, and country;
    (5) Consignee name and address;
    (6) Country of origin;
    (7) Quantity;
    (8) Fair retail value in the country of shipment;
    (9) 10-digit HTSUS number;
    (10) IOR number of the owner, purchaser, or broker when designated 
by a consignee (conditional).
    The IOR number is a conditional ACE Entry Type 86 Test data element 
and is required when the shipment is subject to PGA data reporting 
requirements. The IOR number provided must be that of the shipment's 
owner, purchaser, or broker when designated by a consignee.
    Upon receipt of the data in an entry type ``86'' filing, CBP will 
determine whether the shipment is subject to PGA data reporting 
requirements. Any PGA data reporting requirements would be satisfied by 
the PGA Message Set and the filing of any supporting documentation via 
the Document Image System (DIS). The PGA Message Set enables the trade 
community to electronically submit all data required by the PGAs only 
once to CBP, eliminating the necessity for the submission and 
subsequent manual processing of paper documents, and makes the required 
data available to the relevant PGAs for import and transportation-
related decision making. See the December 13, 2013 Federal Register 
notice (78 FR 75931) for a further discussion of the PGA Message Set 
and the October 15, 2015 Federal Register notice (80 FR 62082) for a 
further discussion of DIS.
    A ``CBP release'' message indicates that CBP has determined that 
the Section 321 low-valued goods may be released from CBP custody. All 
merchandise released by CBP is released conditionally and remains 
subject to recall through the issuance of a Notice of Redelivery. 
Merchandise that is regulated by one or more PGAs may not proceed into 
commerce until CBP releases the merchandise and all PGAs that regulate 
the merchandise have issued a ``may proceed'' message.
    The definitions of the ACE data elements, the technical 
requirements for submission, and information describing how filers 
receive transmissions are set forth in the CATAIR guidelines for ACE, 
which may be found at https://www.cbp.gov/trade/ace/catair.

III. Waiver of Regulation Under the Test

    For purposes of this test, 19 CFR 10.151 will be waived for test 
participants only insofar as the informal entry procedures for 
``release from manifest'' are inconsistent with the requirements in 
this notice. Additionally, 19 CFR 128.21(a), 128.24(e), 143.23(j) and 
(k), and 143.26(b) will be waived for test participants to the extent 
such procedures are inconsistent with the requirements of this notice.

IV. Comments

    All interested parties are invited to comment on any aspect of this 
test at any time. CBP requests 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 fully implement this new entry process.

V. Paperwork Reduction Act

    In accordance with the Paperwork Reduction Act of 1995 (44 U.S.C. 
3507), an agency may not conduct, and a person is not required to 
respond to, a collection of information unless the collection of 
information displays a valid control number assigned by OMB. The 
collections of information for the ACE Entry Type 86 Test are included 
in an existing collection for CBP Form 3461 (OMB control number 1651-
0024).

VI. Misconduct Under This Test

    A test participant may be subject to civil and criminal penalties, 
administrative sanctions, or liquidated damages for any of the 
following:
    (1) Failure to follow the rules, requirements, terms, and 
conditions of this test;
    (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.

    Dated: August 7, 2019.
Brenda B. Smith,
Executive Assistant Commissioner, Office of Trade.
[FR Doc. 2019-17243 Filed 8-12-19; 8:45 am]
 BILLING CODE 9111-14-P