[Federal Register Volume 85, Number 100 (Friday, May 22, 2020)]
[Rules and Regulations]
[Pages 31054-31057]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2020-10802]



[[Page 31054]]

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DEPARTMENT OF HOMELAND SECURITY

U.S. Customs and Border Protection

19 CFR Part 103

[CBP Dec. 20-09]
RIN 1651-AB36


Announcement of Vessel Manifest Confidentiality Online 
Application and Update of Mailing and Email Addresses for Submission of 
Vessel Manifest Confidentiality Certifications

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

ACTION: Final rule; technical amendment.

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SUMMARY: This document makes technical amendments U.S. Customs and 
Border Protection (CBP) regulations in the Code of Federal Regulations 
by updating the mailing address and codifying the email address for 
submitting requests for confidential treatment of vessel manifest 
certifications. In addition, this document amends the regulations to 
announce a new way to submit requests for confidential treatment of 
vessel manifest certifications--via the Vessel Manifest Confidentiality 
Online Application, an online portal on www.CBP.gov. This document also 
makes other technical conforming changes, specifically updating names 
and references.

DATES: The final rule is effective May 22, 2020.

FOR FURTHER INFORMATION CONTACT: William G. Jackson, Trade 
Transformation Office, Office of Trade, [email protected] 
or (571) 468-5110.

SUPPLEMENTARY INFORMATION: 

Background

    U.S. Customs and Border Protection's (CBP) regulations implementing 
the Freedom of Information Act (5 U.S.C. 552a) are contained in part 
103 of title 19, Code of Federal Regulations (19 CFR part 103). These 
regulations prescribe rules governing disclosure and production of 
documents and information under various circumstances. Subpart C of 
part 103 contains exceptions to these general disclosure requirements 
by listing certain information that is subject to restricted access.
    Section 103.31 generally provides for limited disclosure of vessel 
manifests and statistical reports. Section 103.31(d), the subject of 
this rulemaking, describes a process by which parties can request that 
CBP keep certain manifest information confidential. For an inward 
manifest, an importer or consignee may request confidential treatment 
of its name and address, including identifying marks and numbers. See 
19 CFR 103.31(d)(1). For an outward manifest, a shipper, or authorized 
employee or official of the shipper, may request confidential treatment 
of the shipper's name and address. See 19 CFR 103.31(d)(2). Currently, 
the regulations provide a mailing address to submit confidentiality 
requests, and parties can also submit their requests via email.

Discussion of Changes

    This document amends the regulations to update the mailing address, 
codify the email address and create an electronic window to submit 
requests for confidential treatment of vessel manifest information to 
CBP. For mail submissions, CBP is updating the mailing address to the 
following: Vessel Manifest Program Manager, Office of Trade (Mail Stop 
1354), U.S. Customs and Border Protection, 1801 N Beauregard Street, 
Alexandria, VA 22311. For email submissions, CBP is codifying the email 
address, which is [email protected]. Finally, 
CBP is providing for submissions via an online portal on www.CBP.gov, 
known as the Vessel Manifest Confidentiality Online Application. This 
new portal allows CBP to review confidentiality requests more 
efficiently by automating the submission process, reducing the 
processing time to as little as 24 hours in most cases.

Technical Amendments

    Due to the renaming of the U.S. Customs Service to U.S. Customs and 
Border Protection (CBP), this document amends 19 CFR 103.31 by 
replacing several references to ``Customs'' with ``CBP.''
    This document also amends 19 CFR 103.0 and 103.2 to remove 
references to 19 CFR 103.35 because Sec.  103.35 no longer exists. On 
November 22, 2016, the Department of Homeland Security (DHS) revised 
its Freedom of Information Act regulations,\1\ which moved the 
regulations pertaining to CBP's disclosure procedures for confidential 
commercial information from 19 CFR 103.35 to the DHS regulations, 6 CFR 
5.12. Because of this change, this document makes conforming changes to 
19 CFR 103.0 and 103.2.
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    \1\ Freedom of Information Act Regulations, 81 FR 83625 (Nov. 
22, 2016).
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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) and 553(d)(2), the 
prior notice and comment and delayed effective date requirements do not 
apply when agencies promulgate rules concerning agency organization, 
procedure, or practice.
    This final 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 methods 
through which CBP will receive requests for confidential treatment of 
vessel manifests by updating the mailing address, codifying the email 
address, and establishing an automated portal on www.CBP.gov. 
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.

Executive Orders 12866, 13563, and 13771

    Executive Orders 12866 (``Regulatory Planning and Review'') and 
13563 (``Improving Regulation and Regulatory Review'') 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

[[Page 31055]]

``significant regulatory action,'' under section 3(f) of Executive 
Order 12866. Accordingly, OMB has not reviewed this regulation. This 
regulation updates the regulations surrounding the process by which an 
importer, consignee, or shipper \2\ may request confidentiality for its 
vessel manifest, eliminating some of the costs of processing the vessel 
manifest requests and increasing efficiency by providing an electronic 
option. This is a deregulatory action under Executive Order 13771,\3\ 
with an estimated net regulatory cost saving of $50,245 on an 
annualized basis (in 2016 U.S. dollars, using a 7 percent discount rate 
over a perpetual time horizon and discounted back to 2016).
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    \2\ For the purposes of this analysis, a shipper may include an 
authorized employee or official of the shipper.
    \3\ See OMB's Memorandum, ``Guidance Implementing Executive 
Order 13771, `Reducing Regulation and Controlling Regulatory Costs' 
'' (April 5, 2017).
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    Currently, certain vessel manifest information is available to the 
public.\4\ However, importers, consignees, and shippers have the option 
to request that CBP keep certain elements of vessel manifests 
confidential. These elements include the consignee name and address, 
notify party name and address, and shipper name(s) and address(es). 
Importers, consignees, or shippers may choose to keep this information 
confidential to prevent their competitors from linking their manifest 
data to their company name(s). Certified requests may be sent by the 
importer, consignee, or shipper either by hard copy through the mail or 
by email to CBP, and requests must be renewed every two years.
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    \4\ See 19 CFR 103.31.
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    Though vessel manifest confidentiality requests were formerly sent 
to CBP's Office of Privacy, as of January 2, 2015, requests should be 
submitted to CBP's Trade Transformation Office (TTO). However, the 
current regulations do not reflect this change. The Office of Privacy 
thus currently forwards all requests received to TTO. This rule amends 
the vessel manifest confidentiality request regulation by updating the 
address to which paper requests and renewal requests should be sent. 
The rule further provides for an electronic window for submitting the 
confidentiality request. Updating the regulation with the address of 
the correct office and including the electronic submission window would 
reduce the overall mailing and processing time for importers, 
consignees, shippers, and CBP alike.
    In prior years, CBP has advised importers that it takes 60-90 days 
to process manifest confidentiality requests.\5\ This was due to a 
significant backlog of requests.\6\ TTO, which is responsible for 
processing the requests, has cleared the backlog, and processing of 
paper or email requests now takes no more than five days from 
receipt.\7\ Processing requires that CBP take the information in the 
request, regardless of how it was submitted, and transcribe it into the 
Automated Commercial Environment (ACE). With the electronic option 
described in this rule, processing would take no more than 24 hours, as 
the system would upload requests into ACE each night.\8\
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    \5\ Source: U.S. Customs and Border Protection, Trade 
Information Notice: Automation of the Electronic Vessel Manifest 
Confidentiality Request. 2019. Available at https://www.cbp.gov/document/technical-documentation/electronic-vessel-manifest-confidentiality. Accessed October 30, 2019.
    \6\ Source: Correspondence with CBP's Trade Transformation 
Office on October 29, 2019.
    \7\ Id.
    \8\ The portal does not reside in ACE. Instead, data is uploaded 
from the portal to ACE each night.
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    Approximately 12,000 manifest confidentiality requests are 
processed each year. Of these, about 90 percent, or 10,800, are sent 
via email. The remaining 10 percent, or 1,200, are sent by mail. CBP 
believes that it would continue to process 12,000 of these requests 
each year,\9\ but that most importers and consignees would choose to 
use the electronic window when it becomes available on publication of 
this rule due to the increased convenience, reduction in errors, and 
faster processing time. Submitted identifier information will be 
instantly validated to ensure it matches the previously submitted 
information that is already in CBP systems, making the portal easier, 
faster, and less prone to errors than mail or email submissions. CBP 
estimates that 95 percent of these requests, or 11,400, would be filed 
via the electronic portal with this rule.\10\ The remaining 600 would 
continue to be submitted either by mail or email.
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    \9\ TTO does believe there is a small chance that request 
submissions could spike as more importers, consignees, and shippers 
learn of the new electronic option. However, there is no similar 
program release to use as a comparison, so there is no way to 
accurately predict how many more importers, consignees, or shippers 
might exercise the option of confidentiality only once they can do 
so through the electronic window.
    \10\ Source: Correspondence with CBP's Trade Transformation 
Office on October 29, 2019.
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    This rule would eliminate several costs in processing these vessel 
manifest requests. Importers, consignees, and shippers would no longer 
need to pay to print and mail their requests if they choose to use the 
electronic option over the paper mail-in option. There is no prescribed 
format for a vessel manifest confidentiality request. It must be 
certified by the importer, consignee, or shipper and contain the 
party's Internal Revenue Service Employer Number, if available, as well 
as the information the party wishes to keep confidential. The majority 
of requests are therefore only a page or two in length. TTO believes 
that due to the portal's relative speed, ease of use, and data 
validation, of the 10 percent of requests currently submitted by the 
paper mail-in option, about half would move to the electronic option 
with this rule. Parties who switch would collectively save 
approximately $330.00 per year on postage.\11\ Those parties would also 
save about $30.00 in printing costs each year.\12\
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    \11\ 50 percent x 1,200 mailed requests = 600 requests x first-
class postage cost of $0.55 avoided = $330 cost saving. As of 
October 2019, a first-class stamp for a standard-sized envelope 
costs $0.55. See United States Postal Service, First-Class Mail. 
Available at https://www.usps.com/ship/first-class-mail.htm. 
Accessed October 30, 2019. Printing cost per page based on: U.S. 
Department of State. Supporting Statement for Paperwork Reduction 
Act Submission OMB Number 1405-0068: Medical History and Examination 
for Foreign Service. June 20, 2017. Available at https://www.reginfo.gov/public/do/PRAViewDocument?ref_nbr=201706-1405-001. 
Accessed October 23, 2019.
    \12\ 50 percent x 1,200 mailed requests = 600 requests x $0.05 
printing cost per page avoided = $30 cost saving.
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    This rule's electronic option would also benefit importers, 
consignees, and shippers by reducing processing times and errors, thus 
mitigating risk to their confidentiality during processing. 
Historically, processing took anywhere from 60-90 days as CBP worked 
through a significant backlog in requests. Currently, processing may 
take up to five days, which would be reduced to 24 hours with the 
rule's electronic option. Utilizing the electronic option also would 
not increase the time burden on importers, consignees, and shippers to 
complete a request as they would submit the same amount of information 
via the electronic portal as they would provide on their paper-based 
form. Submitting a request through the electronic window would also 
eliminate the need for TTO employees to transcribe the requests into 
ACE manually as they do now, reducing the likelihood of human error.
    CBP would see savings as well, primarily because TTO employees 
would no longer need to manually enter all requests into ACE.\13\ Until 
the

[[Page 31056]]

electronic window is available, all requests, regardless of how they 
are submitted, are transcribed into ACE. Once the window is available, 
TTO employees would no longer need to transcribe the 11,400 (95 
percent) requests received via the window. The majority of these 
requests (90 percent) take about 5 minutes (0.0833 hours) to 
process.\14\ The other 10 percent of requests are longer, usually sent 
in by large corporations with many name and address variations.\15\ 
These requests currently take an average of 30 minutes (0.5 hours) to 
process.\16\ Eliminating the transcription of these requests would save 
CBP about $115,967 annually based on the current time burdens for TTO 
employees and their assumed hourly time value of $81.38.\17\ Table 1 
summarizes the annual cost savings of this rule to importers, 
consignees, shippers, and CBP.
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    \13\ CBP would also need to forward fewer requests from office 
to office as a result of updating the address to which paper 
requests can be sent. However, because a small number of importers, 
consignees, and shippers are expected to continue using the paper 
option, these savings are negligible.
    \14\ Source: Correspondence with CBP's Trade Transformation 
Office on October 29, 2019.
    \15\ Id.
    \16\ Id.
    \17\ 90 percent x 11,400 transcribed requests = 10,260 shorter 
transcribed requests x 0.0833-hour transcription time burden to CBP 
per request = 855-hour (rounded) transcription time burden x assumed 
$81.38 hourly time value of TTO employees = $69,580 (rounded) time 
cost saving; 10 percent x 11,400 transcribed requests = 1,140 longer 
transcribed requests x 0.5-hour transcription time burden to CBP per 
request = 570-hour (rounded) transcription time burden x assumed 
$81.38 hourly time value of TTO employees = $46,387 (rounded) time 
cost saving; $69,580 time cost avoided for shorter requests + 
$46,387 (rounded) time cost avoided for longer requests = $115,967 
total transcription time cost saving. CBP bases the $81.38 hourly 
wage on the FY 2020 salary, benefits, and non-salary costs (i.e., 
fully loaded wage) of the national average of CBP Trade and Revenue 
positions. Source: Email correspondence with CBP's Office of Finance 
on June 12, 2019.

     Table 1--Total Monetized Annual Cost Savings (Benefits) of Rule
                    [Undiscounted 2020 U.S. dollars]
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                                                            Annual cost
             Party                     Savings type           savings
------------------------------------------------------------------------
Importer/Consignee/Shipper.....  Postage................            $330
Importer/Consignee/Shipper.....  Printing...............              30
CBP............................  Transcription..........         115,967
                                                         ---------------
    Total......................  .......................         116,327
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    Along with benefits, the rule would introduce some costs. In 2019, 
CBP incurred $270,177 in costs to set up the electronic submission 
system, including development, testing, and training.\18\ CBP would 
incur costs of approximately $30,000 per year for ongoing maintenance 
of the electronic submission system.\19\ Importers, consignees, and 
shippers would not face any new costs from this rule.
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    \18\ CBP has adjusted the $266,447 in initial costs to 2020 
dollars using the GDP deflator of +1.4%. Source: Bureau of Economic 
Analysis, ``GDP Deflator.'' Updated April 30, 2020. https://www.bea.gov/data/prices-inflation/gdp-price-deflator. Accessed May 
8, 2020.
    \19\ Source: Email correspondence with CBP's Trade 
Transformation Office on October 22, 2019.
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    Overall, this rule would make the process of requesting vessel 
manifest confidentiality more efficient for CBP, importers, consignees, 
and shippers, with minimal ongoing costs. Over a five-year period, this 
rule would result in an undiscounted net cost saving (i.e., benefit) of 
$191,458 (see Table 2). Table 3 contains the present value and 
annualized cost and cost saving amounts for a five-year period of 
analysis using discount rates of 3 percent and 7 percent. On net, this 
rule would result in an estimated regulatory cost saving of $31,582 on 
an annualized basis over a 5 year period (in 2020 US dollars, using a 7 
percent discount rate).

                                  Table 2--Total Monetized Net Impacts of Rule
                                        [Undiscounted 2020 U.S. dollars]
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                                                                                                     Net cost
                              Year                                 Cost savings        Costs          savings
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1...............................................................        $116,327        $270,177       -$153,850
2...............................................................         116,327          30,000          86,327
3...............................................................         116,327          30,000          86,327
4...............................................................         116,327          30,000          86,327
5...............................................................         116,327          30,000          86,327
                                                                 -----------------------------------------------
    Total.......................................................         581,635         390,177         191,458
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                    Table 3--Total Monetized Present Value and Annualized Net Impacts of Rule
                                       [5-Year period, 2020 U.S. dollars]
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                                                      3% Discount rate                  7% Discount rate
                                            --------------------------------------------------------------------
                                              Present value      Annualized      Present value      Annualized
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Cost Savings...............................         $532,741         $116,327          $476,962         $116,327
Costs......................................          370,573           80,916           347,470           84,745
    Net Cost Savings.......................          162,169           35,410           129,491           31,582
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[[Page 31057]]

Regulatory Flexibility Act

    The Regulatory Flexibility Act (5 U.S.C. 601 et seq.), as amended 
by the Small Business Regulatory Enforcement and Fairness Act of 1996, 
requires an agency to prepare and make available to the public an 
initial regulatory flexibility analysis that describes the effect of a 
proposed rule on small entities (i.e., small businesses, small 
organizations, and small governmental jurisdictions) when the agency is 
required to publish a general notice of proposed rulemaking for a rule. 
Since a general notice of proposed rulemaking is not necessary for this 
rule, CBP is not required to prepare an initial regulatory flexibility 
analysis for this rule.

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).

List of Subjects in 19 CFR Part 103

    Administrative practice and procedure, Confidential business 
information, Courts, Freedom of information, Law enforcement, Privacy, 
Reporting and recordkeeping requirements.

Amendments to the Regulations

    For the reasons set forth above, part 103 of the CBP regulations 
(19 CFR part 103) is amended as set forth below.

PART 103--AVAILABILITY OF INFORMATION

0
1. The authority citation for part 103 continues to read in part as 
follows:

    Authority:  5 U.S.C. 301, 552, 552a; 19 U.S.C. 66, 1624; 31 
U.S.C. 9701.
    Section 103.31 also issued under 19 U.S.C. 1431;
* * * * *


Sec.  103.0  [Amended]

0
2. Section 103.0 is amended by removing the phrase ``Except for 19 CFR 
103.35, the'' and adding, in its place, the word ``The''.


Sec.  103.2  [Amended]

0
3. Section 103.2 is amended by:
0
a. Removing from paragraph (a) the words ``except as provided in 
paragraph (b) of this section,'';
0
b. Removing the paragraph designation ``(a)'' and the paragraph 
heading; and
0
c. Removing paragraph (b).

0
4. Section 103.31 is amended by removing the word ``Customs'' and 
adding, in its place, the term ``CBP'' in paragraphs (a)(3), (b), and 
(c) and revising paragraphs (d)(1)(iii) and (iv) and (d)(2)(iii) to 
read as follows:


Sec.  103.31   Information on vessel manifests and summary statistical 
reports.

* * * * *
    (d) * * *
    (1) * * *
    (iii) The certification must be submitted to the Vessel Manifest 
Program Manager, Office of Trade (Mail Stop 1354), U.S. Customs and 
Border Protection, 1801 N Beauregard Street, Alexandria, VA 22311; or 
submitted electronically via an email transmission at 
[email protected] or via the Vessel Manifest 
Confidentiality Online Application on CBP's public website, 
www.CBP.gov.
    (iv) Each initial certification will be valid for a period of two 
years from the date of receipt. Renewal certifications should be 
submitted to the Vessel Manifest Program Manager at least 60 days prior 
to the expiration of the current certification. Information so 
certified may be copied, but not published, by the press during the 
effective period of the certification. An importer or consignee shall 
be given written notification by CBP of the receipt of its 
certification of confidentiality.
    (2) * * *
    (iii) The certification must be submitted to the Vessel Manifest 
Program Manager, Office of Trade (Mail Stop 1354), U.S. Customs and 
Border Protection, 1801 N Beauregard Street, Alexandria, VA 22311; or 
submitted electronically via an email transmission at 
[email protected] or via the Vessel Manifest 
Confidentiality Online Application on the CBP's public website, 
www.CBP.gov.
* * * * *

    Dated: May 14, 2020.
Mark A. Morgan,
Acting Commissioner, U.S. Customs and Border Protection.
[FR Doc. 2020-10802 Filed 5-21-20; 8:45 am]
 BILLING CODE 9111-14-P