[Federal Register Volume 84, Number 236 (Monday, December 9, 2019)]
[Notices]
[Pages 67279-67281]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2019-26445]


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DEPARTMENT OF HOMELAND SECURITY

U.S. Customs & Border Protection


Modifications to the Section 321 Data Pilot

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

ACTION: General notice.

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SUMMARY: On July 23, 2019, U.S. Customs and Border Protection (CBP) 
published a general notice in the Federal Register (84 FR 35405) 
announcing the Section 321 Data Pilot, a voluntary pilot in which 
participants agree to electronically transmit certain advance data 
elements related to de minimis value shipments potentially eligible for 
release under section 321 of the Tariff Act of 1930, as amended. The 
purpose of the pilot is 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, in the 
e-commerce environment. This notice announces that CBP is modifying the 
Section 321 Data Pilot to include shipments arriving by ocean and to 
include international mail shipments. This notice also modifies the 
provisions governing misconduct under the pilot and extends the 
duration of the pilot an additional twelve months (through August 
2021).

DATES: The voluntary pilot began on August 22, 2019, and will run for a 
total of approximately 24 months, through August 2021. CBP will accept 
applications from prospective pilot participants at any time until CBP 
has identified a sufficient number of eligible participants. At this 
time, the pilot is limited to a maximum of nine 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 to include in the email, see section II.D 
(Application Process and Acceptance) of the notice published in the 
Federal Register on July 23, 2019 (84 FR 35405).

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. Section 321 Data Pilot

    On July 23, 2019, CBP published a general notice in the Federal 
Register (84 FR 35405) (hereafter referred to as the July 2019 notice) 
announcing the voluntary Section 321 Data Pilot. Participants in the 
Section 321 Data Pilot agree to electronically transmit certain data 
elements related to de minimis value shipments potentially eligible for 
release under section 321 of the Tariff Act of 1930, as amended 
(``section 321 shipments''). Section 321 provides for an administrative 
exemption from duty and taxes for shipments of merchandise imported by 
one person on one day having an aggregate fair retail value in the 
country of shipment of an amount specified by the Secretary by 
regulation, but not less than $800. The July 2019 notice provided a 
description of the Section 321 Data Pilot, the eligibility 
requirements, and the application process for participation.
    The Section 321 Data Pilot is intended to improve CBP's ability to 
effectively and efficiently assess the security risks of shipments 
potentially eligible for

[[Page 67280]]

release under section 321 of the Tariff Act of 1930, as amended (19 
U.S.C. 1321(a)(2)(C)). The Section 321 Data Pilot tests the feasibility 
of collecting data elements, beyond those currently required by 
regulations, and of collecting data from non-traditional entities, such 
as online marketplaces. The July 2019 notice stated that the pilot 
would initially be limited to 9 participants and invited participation 
from all stakeholders in the e-commerce environment, including 
carriers, brokers, freight forwarders, and online marketplaces. Pilot 
participants agree to electronically transmit certain advance data 
elements to CBP regarding section 321 shipments arriving by air, truck, 
or rail. CBP excluded from the scope of the pilot shipments arriving by 
ocean, mail shipments covered by 19 CFR part 145, and shipments 
destined for a Foreign Trade Zone. CBP uses the advance information 
transmitted through the pilot to identify and target high-risk 
shipments, including for narcotics, counter-proliferation, and health 
and safety risks. The results of the Section 321 Data Pilot will help 
CBP determine whether additional mandatory advance reporting 
requirements are necessary in the e-commerce environment.

II. Modifications to the Section 321 Data Pilot

    This notice announces that CBP is modifying the Section 321 Data 
Pilot to include shipments arriving by ocean and international mail 
shipments. This document also modifies the provisions governing 
misconduct under the pilot and extends the duration of the pilot an 
additional twelve months.

A. Expansions of the Section 321 Data Pilot To Include Shipments 
Arriving by Ocean

    In the July 2019 notice, CBP stated that the pilot applied to 
section 321 shipments arriving in the United States by air, truck, or 
rail. CBP is now expanding the pilot to include shipments arriving by 
ocean.
    As described in detail in the July 2019 notice, CBP receives 
certain advance electronic data for shipments arriving in the United 
States by ocean. For example, regulations promulgated pursuant to the 
Trade Act of 2002 (Pub. L. 107-210, 116 Stat. 933 (Aug. 6, 2002)) 
require ocean carriers to transmit for each shipment the shipper's name 
and address, the consignee name and address, a description of the 
cargo, including the cargo's quantity and weight, and information 
regarding the vessel's voyage, including carrier code, date of arrival, 
and point of origin. See 19 CFR 4.7a. Additionally, regulations 
promulgated pursuant to the Security and Accountability for Every Port 
Act of 2006 (Pub. L. 109-347, 120 Stat. 1884, October 13, 2006 (SAFE 
Port Act)) require importers and carriers to submit additional data 
before the cargo is brought to the United States. See 19 CFR part 149 
(Importer Security Filing or ISF regulations). The data required by the 
ISF regulations include 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 goods after the 
goods have been released from 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).
    These existing regulatory requirements do not provide CBP with the 
information necessary to effectively and efficiently assess the 
security risks of section 321 shipments arriving by ocean. This is 
because they generally apply to carriers and importers, who may not 
possess all of the relevant information relating to an e-commerce 
shipment's supply chain. In addition, the required information does not 
always adequately identify the entity causing the shipment to cross the 
border, the final recipient, or the contents of the package. For 
instance, under the ISF regulations, an importer may list a domestic 
deconsolidator as the ``ship to party''. There is no specific 
requirement to identify the final recipient of the shipment in the 
United States. This hinders CBP's ability to effectively target or 
identify high-risk shipments and CBP officers must use additional time 
and resources to inspect section 321 shipments. Expansion of the 
Section 321 Data Pilot to include shipments arriving by ocean will 
enable CBP to more effectively target or identify high-risk shipments 
by requiring additional data elements related to such shipments.
    Such expansion will also enable CBP to test the feasibility of 
collecting advance data from typically non-regulated entities utilizing 
ocean transportation. It will also enable CBP to collect data regarding 
additional relevant shipments. Based on the initial operation of the 
pilot, CBP has learned that many e-commerce entities utilize all modes 
of transportation and that excluding ocean shipments from the pilot 
would exclude a substantial number of relevant shipments of potential 
participants. By expanding the scope of the pilot to include all modes 
of shipment (air, rail, truck, and ocean), the results of the pilot 
will be more relevant to possible future regulatory effects, trade 
facilitation benefits, or other initiatives in the e-commerce 
environment as a whole. For these reasons, CBP is expanding the Section 
321 Data Pilot to include shipments arriving in the United States by 
ocean.

B. Expansion of the Section 321 Data Pilot To Include International 
Mail Shipments

    The July 2019 notice stated that the Section 321 Data Pilot would 
not apply to mail shipments covered by 19 CFR part 145. Part 145 
applies to mail importations that are subject to Customs examination. 
CBP has determined that excluding these mail shipments from the pilot 
decreases CBP's ability to develop strategies for section 321 shipments 
as a whole because it is common in the e-commerce environment for 
entities to use international mail to ship section 321 shipments. CBP 
has also learned through the initial operation of the pilot that 
excluding international mail shipments may impose an additional burden 
on pilot participants because they would need to separate data relating 
to mail shipments from data relating to other section 321 shipments.
    Accordingly, CBP is expanding the pilot to include section 321 
shipments covered by 19 CFR part 145.\1\ (Shipments destined for a 
Foreign Trade Zone continue to be excluded from the scope of the 
pilot.)
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    \1\ Under current regulations, there is no requirement to submit 
advance electronic data to CBP for mail shipments. However, section 
8003 of the Synthetics Trafficking and Overdose Prevention Act of 
2018 (Pub. L. 115-271, 123 Stat. 4073) (STOP Act of 2018), requires 
CBP to issue regulations requiring the U.S. Postal Service to 
transmit certain advance electronic data to CBP for international 
mail shipments. CBP is in the process of drafting those regulations.
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C. New Misconduct Section

    The July 2019 notice included a section VI, entitled ``Misconduct 
Under the Pilot'', which described the penalties CBP may impose on 
pilot participants for misconduct and the applicable procedures. CBP is 
revising the section VI language to clarify that those pilot 
participants who are unable to provide data elements contemplated by 
this test will not be subject to civil or criminal penalties, 
administrative sanctions, or liquidated damages solely for such 
inability. However, the revised language clarifies that test 
participants who repeatedly provide false, inaccurate or misleading 
data will be subject, at CBP's discretion, to civil and criminal 
penalties, administrative sanctions, liquidated damages or removal from 
participation. Additionally, the revised

[[Page 67281]]

language clarifies that CBP may immediately remove a participant from 
the pilot for the repeated failure to provide data or the repeated 
submission of false, inaccurate or misleading data. CBP is also 
replacing the phrase ``discontinuance from participation'' with 
``removal from participation'' for clarity. The language below replaces 
in full the misconduct section in the July 2019 notice and reads as 
follows:

VI. Misconduct Under the Pilot

    A pilot participant may be subject to civil and criminal penalties, 
administrative sanctions, liquidated damages, or removal 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.
    Test participants who are unable to provide data elements 
contemplated by this test will not be subject to civil and criminal 
penalties, administrative sanctions, or liquidated damages solely for 
such inability. Test participants who repeatedly provide false, 
inaccurate or misleading data will be subject, at CBP's discretion, to 
civil and criminal penalties, administrative sanctions, liquidated 
damages or removal from participation.
    If the Director, Intellectual Property Rights and E-Commerce 
Division, Office of Trade, finds that there is a basis for removal of 
pilot participation privileges, the pilot participant will be provided 
a written notice proposing the removal 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 removal 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, the repeated failure to provide data, the 
repeated submission of false, inaccurate or misleading data, 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 remove 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 removal from participation. 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 removal 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 removal 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.

D. Twelve Month Extension

    The Section 321 Data Pilot was originally intended to run for 
approximately one year. CBP is extending the pilot to run an additional 
twelve months, through August 2021. The additional time is necessary in 
order for pilot participants to modify their communication systems in 
order to execute the provisions of the pilot and for CBP to collect a 
sufficient amount of data from the participants.
    Subject to the amendments herein, all other provisions of the July 
2019 notice, except for section ``VI. Misconduct Under the Pilot,'' 
remain applicable to the Section 321 Data Pilot. CBP reiterates that it 
is not waiving any regulations for purposes of the pilot. All of the 
existing regulations, including the Trade Act of 2002 requirements and 
the ISF regulations described above, continue to apply to pilot 
participants.

    Dated: December 4, 2019.
Robert E. Perez,
Deputy Commissioner, U.S. Customs and Border Protection.
[FR Doc. 2019-26445 Filed 12-6-19; 8:45 am]
 BILLING CODE 9111-14-P