[Federal Register Volume 84, Number 172 (Thursday, September 5, 2019)]
[Notices]
[Pages 46749-46752]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2019-19147]


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DEPARTMENT OF HOMELAND SECURITY

U.S. Customs and Border Protection


Modification and Clarification of the National Customs Automation 
Program Test Regarding Periodic Monthly Statements

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

ACTION: General notice.

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SUMMARY: This document announces changes to the U.S. Customs and Border

[[Page 46750]]

Protection's (CBP) National Customs Automation Program (NCAP) test 
concerning periodic monthly statements (PMS) to reflect that CBP will 
identify PMS as paid upon the completion of the funds transfer when 
payment is made via Automated Clearinghouse (ACH). The trade community 
will experience no delays, interruptions, or process changes associated 
with the modifications. Except to the extent expressly announced or 
modified by this document, all aspects, rules, terms and conditions 
announced in previous notices regarding the test remain in effect. For 
ease of reference, CBP is reproducing the entire test, with the 
changes, in this document.

DATES: The changes made by this notice are effective September 7, 2019.

ADDRESSES: Comments concerning this test program may be submitted via 
email to Kara Welty at [email protected] with a 
subject line identifier reading, ``Periodic Monthly Statements.''

FOR FURTHER INFORMATION CONTACT: For policy-related questions, contact 
Kara Welty, Debt Management Branch, Revenue Division, Office of 
Finance, [email protected], or (866) 530-4172. 
For technical questions related to transmissions using the Automated 
Broker Interface (ABI), contact your assigned client representative. 
Interested parties without an assigned client representative should 
direct their questions via email to the Client Representative Branch at 
[email protected].

SUPPLEMENTARY INFORMATION:

I. Background on National Customs Automation Program (NCAP) Test 
Concerning PMS

    The National Customs Automation Program (NCAP) was established by 
Subtitle B of Title VI--Customs Modernization in the North American 
Free Trade Agreement (NAFTA) Implementation Act (Customs Modernization 
Act) (Pub. L. 103-182, 107 Stat. 2057, 2170, December 8, 1993) (19 
U.S.C. 1411). Through NCAP, the thrust of customs modernization was on 
trade compliance and the development of the Automated Commercial 
Environment (ACE) as the CBP-authorized electronic data interchange 
(EDI) system. ACE is an automated and electronic system for commercial 
trade processing which is intended to streamline business processes, 
facilitate growth in trade, ensure cargo security, and foster 
participation in global commerce, while ensuring compliance with U.S. 
laws and regulations and reducing costs for CBP and all of its 
communities of interest. The ability to meet these objectives depends 
on successfully modernizing CBP's business functions and the 
information technology that supports those functions. CBP's 
modernization efforts are accomplished through phased releases of ACE 
component functionality. Section 101.9(b) of title 19 of the Code of 
Federal Regulations (19 CFR 101.9(b)) provides for the testing of NCAP 
components.
    On February 4, 2004, CBP published a notice in the Federal Register 
that announced a plan to conduct an NCAP test concerning PMS 
(hereinafter, referred to as the ``PMS test''), which allows an 
importer or an importer's designated broker to deposit estimated 
duties, taxes, and fees on a monthly basis. See 69 FR 5362 (February 4, 
2004). CBP modified and clarified the PMS test in thirteen (13) 
subsequent Federal Register notices published on: September 8, 2004 (69 
FR 54302); February 1, 2005 (70 FR 5199); August 8, 2005 (70 FR 45736); 
September 22, 2005 (70 FR 55623); January 20, 2006 (71 FR 3315); June 
2, 2006 (71 FR 32114); October 17, 2008 (73 FR 61891); December 12, 
2016 (81 FR 89482); January 9, 2017 (82 FR 2385); January 17, 2017 (82 
FR 4900); June 8, 2017 (82 FR 26699); June 30, 2017 (82 FR 29910); and 
November 1, 2017 (82 FR 50656).
    As part of the PMS test, CBP issues a Preliminary PMS for entries 
to NCAP test participants on a monthly basis. NCAP test participants 
must then deposit payment for the estimated duties, taxes, and fees 
attributable to the entries, with CBP, via Automated Clearinghouse 
(ACH). There are two (2) ACH payment processes--the ACH debit process 
and the ACH credit process. In the sections below, this document 
contains a description of the current state of the PMS test as it 
relates to the ACH debit and the ACH credit payment processes, as well 
as the modifications and clarifications to the PMS test made by this 
document. For ease of reference, this document also republishes the PMS 
test in its entirety, with updates to reflect the modifications and 
clarifications made in the past, as well as by this document.

II. ACH Debit Process

A. Background on Payment of PMS via ACH Debit Process

    An ACH debit participant initiates the payment process by 
transmitting one ACH debit authorization per Periodic Daily Statement 
to CBP through ABI. If the ACH debit authorization is error-free, CBP 
accepts the ACH debit authorization and provides the ACH debit 
participant with a message confirming CBP's acceptance of the ACH debit 
authorization. The ACH debit participant is required to ensure that the 
money amount, which will be identified on the Preliminary PMS, is--in 
fact--available in the ACH debit participant's bank account on the 15th 
day of the month following the month in which the merchandise scheduled 
for monthly processing is either entered or released, whichever comes 
first, unless the importer or the importer's designated broker elects 
an earlier date. On that day, CBP transmits the debit authorizations 
compiled in the Preliminary PMS from the Periodic Daily Statements to 
the designated financial institution, and CBP then identifies the 
Preliminary PMS as paid.
    CBP subsequently generates the Final PMS on the night that CBP 
transmits the debit authorizations to the designated financial 
institution, and then transmits the Final PMS to the importer or the 
importer's designated broker. The Final PMS serves as evidence of the 
payment of the Preliminary PMS through an ACH transaction; but, the 
funds transfer is usually not completed until two (2) business days 
after the transmission of the debit authorizations to the designated 
financial institution.

B. PMS Test Modification and Clarification Related to ACH Debit Process

    This document announces that, in order to more accurately reflect 
the status of the funds transfer, CBP will no longer identify an ACH 
debit participant's Preliminary PMS as paid immediately upon the 
transmission of the ACH debit authorizations to the designated 
financial institution by CBP (which occurs on the 15th day of the month 
following the month in which the merchandise scheduled for monthly 
processing is either entered or released, whichever comes first, unless 
the importer or the importer's designated broker selects an earlier 
date). The Preliminary PMS will still be issued; but, instead, CBP will 
issue the Final PMS and identify it as paid upon receiving confirmation 
from the Department of the Treasury (Treasury) that the funds are 
available and transferred to CBP (which marks the completion of the 
funds transfer).
    The modifications announced in this document do not affect the 
timeliness of the payment, which remains based upon the date of CBP's 
acceptance of the ACH debit authorizations for the entries. Once CBP 
receives confirmation from Treasury that the funds are available

[[Page 46751]]

and transferred to CBP, then CBP will treat the date of CBP's 
acceptance of the ACH debit authorizations as the effective payment 
date for purposes of determining the timeliness of the payments for the 
entries. The date of CBP's acceptance of the ACH debit authorizations 
also remains the date for the calculation of interest and/or liquidated 
damages, if applicable; the calculation is unaffected by the 
modifications announced in this document. It is important to note that 
this modification only applies to importers who participate in the test 
program. For all other importers participating in statement processing 
via ABI, the current regulation, 19 CFR 24.25(c)(4), continues to 
govern when CBP identifies a statement as paid.

III. ACH Credit Process

A. Background on Payment of PMS via ACH Credit Process

    The ACH credit process permits participants to electronically 
transmit payment for PMS, through the ACH credit participant's 
financial institution, directly to the CBP account maintained by 
Treasury. The ACH credit participant is required to ensure that CBP 
receives the ACH credit payment no later than the 15th day of the month 
following the month in which the merchandise scheduled for monthly 
processing is either entered or released, whichever comes first, unless 
the importer or the importer's designated broker elects an earlier 
date. If the 15th day of that month falls on a weekend or holiday, the 
ACH credit participant is required to ensure that CBP receives the ACH 
credit payment by the business day directly preceding such weekend or 
holiday. Currently, CBP identifies a Preliminary PMS as paid upon the 
acceptance of the ACH credit payment by CBP, which equates to the 
collection and settlement date. CBP generates the Final PMS on the 
night that CBP accepts the ACH credit payment, and then transmits the 
Final PMS to the importer or the importer's designated broker. The 
Final PMS serves as evidence of the payment of the Preliminary PMS 
through an ACH transaction.

B. Test Modification and Clarification Related to ACH Credit Process

    In order to promote consistency with the modifications of the PMS 
test in relation to ACH debit payments, this document also modifies the 
PMS test to reflect that CBP will identify the Final PMS, as opposed to 
Preliminary PMS, as paid for the ACH credit process. As explained above 
for the ACH debit process, these changes do not affect either the 
timeliness of the payment or the date for the calculation of interest 
and/or liquidated damages, if applicable, for the ACH credit process. 
It is important to note that this modification only applies to 
importers who participate in the test program. For all other importers 
participating in statement processing via ABI, the current regulation, 
19 CFR 24.25(c)(4), continues to govern when CBP identifies a statement 
as paid.

IV. Republication of Periodic Monthly Statement (PMS) Test

A. Overview of Modifications and Clarifications of the Test

    This section provides a description of the process for entries 
scheduled for monthly payment, as of this date, including the 
modifications and clarifications made by this notice. Several 
modifications and clarifications of the PMS test have been announced 
after the PMS test's most recent republication in a Federal Register 
notice on January 20, 2006. See 71 FR 3315 (January 20, 2006). 
Accordingly, this republication of the PMS test reflects several 
substantive modifications and clarifications of the PMS test that were 
not reflected in the PMS test's previous republication in the January 
20, 2006 Federal Register notice.
    First, in order to reflect the modifications and clarifications 
made by this notice, this document addresses the ACH payment processes 
in three (3) separate paragraphs--paragraph f pertains exclusively to 
the ACH debit process, paragraph g pertains exclusively to the ACH 
credit process, and new paragraph h pertains to both ACH payment 
processes.
     Paragraph f establishes when ACH debit participants are 
required to submit the ACH debit authorizations, when CBP will transmit 
the ACH debit authorizations to the financial institution, and when the 
money amount identified on the Preliminary Periodic Monthly Statement 
should, in fact, be available in an ACH debit participant's bank 
account.
     Paragraph g provides when, for ACH credit participants, 
CBP must receive the ACH credit payment.
     New Paragraph h provides that, upon the completion of the 
funds transfer, CBP will issue the Final Periodic Monthly Statement and 
identify it as paid, transmit the Final Periodic Monthly Statement to 
the importer or the importer's designated broker, and treat the date of 
CBP's acceptance as the effective payment date of the PMS for purposes 
of calculation of interest and/or liquidated damages, if applicable. 
Any references to the marking of a PMS as paid and the generation of 
the Final Periodic Monthly Statement (previously contained in 
paragraphs f and g of the republication of the PMS test that was 
published in the January 20, 2006 Federal Register notice) have been 
moved to paragraph h to reflect that, for both ACH debit and ACH credit 
participants, CBP will no longer identify a PMS as paid or issue a 
Final Periodic Monthly Statement prior to the completion of the funds 
transfer.
    Second, new paragraphs i and j contain modifications of the PMS 
test that were announced in a Federal Register notice published on June 
2, 2006. See 71 FR 32114 (June 2, 2006). Paragraph i pertains to the 
payment of estimated duties, taxes, and fees for single entries or 
incremental entries involving split shipments. Paragraph j pertains to 
the payment of estimated duties, taxes, and fees for single entries or 
incremental entries involving unassembled or disassembled entities.

B. Periodic Monthly Statement (PMS) Test

    Entries scheduled for monthly payment will be processed as follows:
    a. As entries are filed with CBP, the importer or the importer's 
designated broker schedules them for monthly payment.
    b. CBP posts all entries that are scheduled for monthly payment on 
the Preliminary Periodic Daily Statement.
    c. The importer or the importer's designated broker processes entry 
summary presentation transactions for each Preliminary Periodic Daily 
Statement within 10 working days of the date of entry.
    d. After summary information has been filed, CBP posts the 
scheduled entries on the Final Periodic Daily Statement.
    e. Entries appearing on the Final Periodic Daily Statements and 
scheduled for monthly payment appear on the Preliminary Periodic 
Monthly Statement. CBP will generate the Preliminary Periodic Monthly 
Statement by the 11th calendar day of the month following the month in 
which the merchandise is either entered or released, whichever comes 
first, unless the importer or the importer's designated broker selects 
an earlier date.
    f. Automated Clearinghouse (ACH) debit participants are required to 
submit one debit authorization for each Preliminary Periodic Daily 
Statement at any time from the creation of the Preliminary Periodic 
Daily Statement until the creation of the related

[[Page 46752]]

Preliminary Periodic Monthly Statement. If an ACH debit participant 
fails to submit an ACH debit authorization for a Preliminary Periodic 
Daily Statement within 10 working days of the date of entry, payment 
for the Preliminary Periodic Daily Statement is considered late; 
however, the ACH debit participant will still be permitted to submit 
the ACH debit authorization. CBP will transmit the debit authorizations 
compiled in the Preliminary Periodic Monthly Statement to the financial 
institution on the 15th working day of the month following the month in 
which the merchandise is either entered or released, whichever comes 
first, unless the importer or the importer's designated broker selects 
an earlier date. ACH debit participants must ensure that the money 
amount identified on the Preliminary Periodic Monthly Statement is, in 
fact, available in their bank account by the 15th working day of that 
month.
    g. For ACH credit participants, CBP must receive the ACH credit 
payment no later than the 15th day of the month following the month in 
which the merchandise scheduled for monthly processing is either 
entered or released, whichever comes first, or if that day falls on a 
weekend or holiday, the business day directly preceding such weekend or 
holiday, unless the importer or the importer's designated broker 
selects an earlier date.
    h. For both ACH credit and ACH debit participants, once CBP 
receives confirmation from Treasury that the funds are available and 
transferred to CBP (which marks the completion of the funds transfer), 
then CBP will: (1) Issue the Final Periodic Monthly Statement and 
identify it as paid; (2) transmit the Final Periodic Monthly Statement 
to the importer or the importer's designated broker; and (3) treat the 
date of CBP's acceptance of the ACH credit or debit payment as the 
effective payment date of the PMS for purposes of the calculation of 
interest and/or liquidated damages, if applicable. CBP will generate 
the Final Periodic Monthly Statement on the night that payment is 
processed.
    i. Importers choosing to file a single entry involving split 
shipments consistent with the provisions of 19 CFR 141.57(d)(1) or 
unassembled or disassembled entities consistent with the provisions of 
19 CFR 141.58(d)(1) may pay estimated duties, taxes, and fees 
attributable to those entries through the method set forth in the PMS 
test. The date of filing of that entry identifies the month in which 
entry is filed and establishes the obligation to pay estimated duties, 
taxes, and fees by the 15th working day of the month following the 
month in which entry is filed.
    j. Importers choosing to file incremental entries involving split 
shipments consistent with the provisions of 19 CFR 141.57(d)(2) or 
unassembled or disassembled entities consistent with the provisions 19 
CFR 141.58(d)(2) as a special permit for immediate delivery after the 
arrival of the first portion (Incremental Release) also may pay 
estimated duties, taxes, and fees attributable to that entry through 
the method set forth in the PMS test. The date that the importer 
obtains release of the first portion of the entity (as provided in 19 
CFR 141.57(e) or 19 CFR 141.58(e)) will identify the month that the 
entry is filed and establishes the obligation to pay estimated duties, 
taxes, and fees by the 15th working day of the month following the 
month in which entry is filed.
    Participants should note that if they voluntarily remove an entry 
from a Periodic Daily Statement before expiration of the 10-working-day 
period after release, that entry may be placed on another Periodic 
Daily Statement falling within the same 10-working-day period. If, 
however, participants remove an entry from a Periodic Daily Statement 
after expiration of the 10-working-day period after release, the entry 
may be the subject of a claim for liquidated damages for late payment.

V. Previous Notices and Suspension of Regulations

    For purposes of this test, any provision in title 19 of the Code of 
Federal Regulations including, but not limited to, the provisions found 
in parts 24, 141, 142, and 143 thereof relating to entry summary filing 
and processing that are inconsistent with the requirements set forth in 
this notice are waived for the duration of the test. See 19 CFR 
101.9(b). This document does not waive any recordkeeping requirements 
found in part 163 of title 19 of the Code of Federal Regulations (19 
CFR part 163) and the Appendix to part 163 (commonly known as the 
``(a)(1)(A) list'').

    Dated: August 29, 2019.
Brenda B. Smith,
Executive Assistant Commissioner, Office of Trade.
[FR Doc. 2019-19147 Filed 9-4-19; 8:45 am]
BILLING CODE 9111-14-P