[Federal Register Volume 85, Number 150 (Tuesday, August 4, 2020)]
[Rules and Regulations]
[Pages 47018-47027]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2020-15663]


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DEPARTMENT OF HOMELAND SECURITY

U.S. Customs and Border Protection

DEPARTMENT OF THE TREASURY

19 CFR Part 24

[Docket No. USCBP-2020-0034; CBP Dec. No. 20-13]
RIN 1515-AE46


Fees for Inbound Express Mail (EMS) Items

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

ACTION: Interim final rule.

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SUMMARY: U.S. Customs and Border Protection (CBP) is amending its 
regulations to implement new subsection 13031(b)(9)(D) of the 
Consolidated Omnibus Budget Reconciliation Act (COBRA), as amended by 
section 8002 of the Synthetics Trafficking and Overdose Prevention Act 
of 2018 (STOP Act). Among other things, the new subsection establishes 
a new fee for processing Inbound Express Mail Service items (Inbound 
EMS items), requires the United States Postal Service to pay a 
percentage of this fee to CBP on a quarterly basis, provides that 
Inbound EMS items that are formally entered are also subject to a 
merchandise processing fee, if applicable, and requires the Secretary 
of the Treasury to issue regulations regarding USPS's quarterly 
remittances to CBP. This rule also makes conforming amendments to CBP 
regulations.

DATES: Effective date: This interim final rule is effective on August 
4, 2020, except for the amendment to Sec.  24.23(c)(1)(v) which is 
effective September 3, 2020.
    Comment date: Comments must be received on or before October 5, 
2020.

ADDRESSES: You may submit comments, identified by docket number, 
through the following method:
     Federal eRulemaking Portal: http://www.regulations.gov. 
Follow the instructions for submitting comments via docket number 
USCBP-2020-0034.
    Due to COVID-19-related restrictions, CBP has temporarily suspended 
its ability to receive public comments by mail.
    Instructions: All submissions received must include the agency name 
and docket number for this rulemaking. All comments received will be 
posted without change to http://www.regulations.gov, including any

[[Page 47019]]

personal information provided. For detailed instructions on submitting 
comments and additional information on the rulemaking process, see the 
``Public Participation'' heading of the SUPPLEMENTARY INFORMATION 
section of this document.
    Docket: For access to the docket to read background documents or 
comments received, go to http://www.regulations.gov. Due to relevant 
COVID-19-related restrictions, CBP has temporarily suspended its on-
site public inspection of submitted comments.

FOR FURTHER INFORMATION CONTACT: Quintin Clarke, Cargo and Conveyance 
Security, Office of Field Operations, U.S. Customs and Border 
Protection, via email at [email protected], or by phone at 
202-344-2524.

SUPPLEMENTARY INFORMATION:

Table of Contents

I. Public Participation
II. Background and Purpose
III. Fees for Inbound EMS Items Pursuant to New Subsection 
13031(b)(9)(D) of COBRA
    A. General Requirements
    B. USPS Remittances to CBP and Supporting Documentation
    C. Adjustment of Inbound EMS Fees Pursuant to New Subsection 
13031(b)(9)(D)
IV. Explanation of Amendments to CBP Regulations
    A. Definitions
    B. Inbound EMS Item Processing Fees
    C. Exclusions
V. Statutory and Regulatory Requirements
    A. Administrative Procedure Act
    B. Executive Orders 12866, 13563, and 13771
    C. Regulatory Flexibility Act
    D. Unfunded Mandates Reform Act
    E. Paperwork Reduction Act
    F. Signing Authority

Regulatory Amendments

I. Public Participation

    Interested persons are invited to participate in this rulemaking by 
submitting written data, views, or arguments on all aspects of this 
interim final rule. U.S. Customs and Border Protection (CBP) also 
invites comments that relate to the economic, environmental, or 
federalism effects that might result from this interim final rule. 
Comments that will provide the most assistance to CBP will reference a 
specific portion of the interim final rule, explain the reason for any 
recommended change, and include data, information, or authority that 
support such recommended change.

II. Background and Purpose

    In response to the ongoing opioid crisis, the Substance Use-
Disorder Prevention that Promotes Opioid Recovery and Treatment for 
Patients and Communities Act (SUPPORT for Patients and Communities 
Act), Public Law 115-271 (2018), was enacted on October 24, 2018. In 
addition to providing resources and support to communities grappling 
with opioid addiction, the legislation directs the United States Postal 
Service (USPS) and CBP to take certain actions to help prevent illicit 
opioids from reaching the United States.
    Title VIII, Subtitle A of the SUPPORT for Patients and Communities 
Act is the Synthetics Trafficking and Overdose Prevention Act of 2018 
(STOP Act). Among other things, the STOP Act amends subsection 
13031(b)(9) of the Consolidated Omnibus Budget Reconciliation Act 
(COBRA) of 1985 (19 U.S.C. 58c(b)(9)), to add a new paragraph (D) 
(hereafter referred to as ``new subsection 13031(b)(9)(D)'' or ``new 
subsection 13031(b)(9)(D) of COBRA''), which requires certain fees for 
the processing of Inbound Express Mail Service (Inbound EMS) items at 
international mail facilities. Inbound Express Mail Service refers to 
the optional postal express service for sending postal items from other 
countries.\1\ CBP is responsible for screening inbound international 
mail and removing packages with illicit goods (including, but not 
limited to, opioids) from the mail stream before delivery to intended 
recipients in the United States.\2\ New subsection 13031(b)(9)(D) of 
COBRA requires a payment of $1 per Inbound EMS item, subject to annual 
adjustment, for services rendered in screening and processing of 
Inbound EMS items and, if an Inbound EMS item is formally entered, a 
payment of the fee provided for under subsection 13031(a)(9) of COBRA, 
if applicable. The fee provided for under subsection 13031(a)(9) is a 
merchandise processing fee.\3\ Under new subsection 13031(b)(9)(D), 
USPS must remit 50 percent of the $1 fee per Inbound EMS item that it 
collects to CBP on a quarterly basis as reimbursement to CBP for 
processing of Inbound EMS items, and retain the other 50 percent to 
cover its processing of these items. The new subsection 13031(b)(9)(D) 
of COBRA requires the Secretary of the Treasury to issue regulations 
regarding the details of the quarterly remittances.\4\
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    \1\ Inbound Express Mail Service (Inbound EMS) is defined in new 
subsection 13031(b)(9)(D) as the service described in the mail 
classification schedule referred to in section 3631 of title 39, 
United States Code and section 3040.104 of title 39 of the Code of 
Federal Regulations. Section 2515.6 of the mail classification 
schedule, issued by the Postal Regulatory Commission, pertains to 
Inbound EMS. It describes Inbound EMS as Inbound Express Mail 
services offered pursuant to negotiated services agreements.
    \2\ In addition to the amendments made to COBRA, section 8003 of 
the STOP Act amends section 343(a)(3)(K) of the Trade Act of 2002 
(19 U.S.C. 1415), to require the Secretary of Homeland Security to 
issue regulations that require USPS to transmit certain advance 
electronic data on international mail shipments destined to the 
United States for risk assessment purposes. The Secretary of 
Homeland Security will be issuing a separate rule to implement these 
provisions.
    \3\ This fee is subject to additional limitations, enumerated in 
subsection 13031(b).
    \4\ The remittance provision in new subsection 13031(b)(9) 
assumes that USPS will be the agency that collects the $1 fee per 
Inbound EMS item. As discussed in section III.B., USPS will collect 
this fee from foreign postal operators and USPS will remit CBP's 
portion of these fees to CBP quarterly in the manner prescribed by 
CBP.
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    CBP is amending its regulations to implement the provisions of new 
subsection 13031(b)(9)(D) pertaining to Inbound EMS items, including 
the applicable fees, adjustments to the fees, details about the 
remittances from USPS to CBP and the required supporting documentation. 
CBP is also amending its regulations to make certain conforming 
amendments to reflect the provisions of the new subsection 
13031(b)(9)(D) of COBRA. First, CBP is amending its regulations to 
reflect the fact that the subsection 13031(a)(9) merchandise processing 
fee will apply to Inbound EMS items as provided in the new subsection 
13031(b)(9)(D). Second, CBP is amending its regulations to reflect that 
the dutiable mail fee previously authorized by subsection 13031(a)(6) 
will no longer apply to Inbound EMS items, based on the amendments made 
to subsection 13031(a)(6) of COBRA by section 8002(b) of the STOP Act 
that specifically exclude Inbound EMS items from the dutiable mail fee.
    As provided in section 8002(c) of the STOP Act, the amendments made 
to COBRA by section 8002 of the STOP Act took effect on January 1, 
2020. This rule is effective on August 4, 2020, except with respect to 
the amendments to Sec.  24.23(c)(1)(v) regarding the merchandise 
processing fee for formally entered Inbound EMS items, which take 
effect on September 3, 2020.
    Further details about these changes are set forth in sections III 
and IV, below.

III. Fees for Inbound EMS Items Pursuant to New Subsection 
13031(b)(9)(D) of COBRA

A. General Requirements

    Section 8002 of the STOP Act amended subsection 13031(b)(9) of

[[Page 47020]]

COBRA (19 U.S.C. 58c(b)(9)), by adding a new paragraph (D) (new 
subsection 13031(b)(9)(D)), which requires certain fees for the 
processing of items that are sent to the United States through the 
international postal network by ``Inbound Express Mail service'' or 
``Inbound EMS'' (as that service is described in the mail 
classification schedule referred to in section 3631 of title 39, United 
States Code).\5\ The initial fee set by Congress is $1 per Inbound EMS 
item (new subsection 13031(b)(9)(D)(i)(I)), plus an additional amount 
for Inbound EMS items that are formally entered (new subsection 
(b)(9)(D)(i)(II)). The Secretary of the Treasury, in consultation with 
the Postmaster General, may adjust the former amount annually by 
regulation. The latter amount is the merchandise processing fee 
provided for under subsection 13031(a)(9) of COBRA, which is subject to 
annual adjustment under subsection 13031(l) of COBRA. The new section 
13031(b)(9)(D) provides that the above amounts shall be the only 
payments required for reimbursement of CBP for services provided in 
connection with the processing of an Inbound EMS item. The new 
subsection 13031(b)(9)(D) requires USPS to remit 50 percent of the $1 
fee it collects to CBP on a quarterly basis in accordance with 
regulations issued by the Secretary of the Treasury. Details about 
these remittances are provided in section III.B., below. Details about 
the method for adjusting the $1 fee in new subsection 
13031(b)(9)(D)(i)(I) are provided in section III.C., below.
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    \5\ Section 2515.6 of the mail classification schedule, issued 
by the Postal Regulatory Commission, pertains to Inbound EMS. As 
noted above, it describes Inbound EMS as Inbound Express Mail 
services offered pursuant to negotiated services agreements.
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B. USPS Remittances to CBP and Supporting Documentation

    The new subsection 13031(b)(9)(D) requires USPS to pay CBP on a 
quarterly basis 50 percent of the amount of the payments required by 
new subsection 13031(b)(9)(D)(i)(I)--initially set by Congress at $1 
per EMS item--in accordance with regulations prescribed by the 
Secretary of the Treasury to reimburse CBP for services provided in 
connection with the processing of Inbound EMS items. USPS is to retain 
the other 50 percent to reimburse it for services it provided in 
connection with the processing of Inbound EMS items. New subsection 
13031(b)(9)(D) requires that the quarterly remittances from USPS to CBP 
must be deposited into the Customs User Fee Account and used to 
reimburse appropriation accounts for amounts paid out of those accounts 
for the costs incurred by CBP in providing services to international 
mail facilities. It also provides that the payments retained by USPS 
with respect to the $1 processing fee for Inbound EMS items are to be 
used for reimbursement purposes only.
    USPS and CBP conferred about the methodology for how these 
quarterly remittances from USPS to CBP will occur. The agreed upon 
methodology takes into account the fact that USPS will collect the $1 
processing fee per Inbound EMS item from foreign postal operators and 
that USPS will reimburse CBP after settlement with foreign postal 
operators has occurred. The quarterly remittances from USPS to CBP will 
be made as follows: USPS will remit to CBP on a quarterly basis 50 
percent of the amount required by new subsection 13031(b)(9)(D)(i)(I) 
of COBRA, for which settlement with foreign postal operators has 
occurred. Except for the first remittance, USPS must make such 
remittances to CBP every calendar quarter to cover preceding calendar 
quarters. As provided in section 8002(c) of the STOP Act, the 
amendments to COBRA took effect on January 1, 2020. Accordingly, the 
first remittance from USPS to CBP is due no later than July 31, 2020. 
It will cover, at a minimum, the first calendar quarter of 2020.\6\ 
This methodology permits USPS to remit the required amounts after 
payment is settled with foreign postal operators and allows for 
standard processing times associated with inter-agency funds transfers. 
Additionally, CBP is requiring USPS to maintain documentation necessary 
for CBP to verify the accuracy of the fee calculations and to provide 
certain supporting documentation with each quarterly remittance.
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    \6\ The timing of the first remittance occurring in the third 
calendar quarter instead of the second calendar quarter is due to 
the nature of the accounting and interagency payment structure. 
Thus, while the first remittance must, at minimum, cover the first 
calendar quarter of 2020, it may also include remittances 
corresponding to the second calendar quarter of 2020.
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    New subsection 13031(b)(9)(D) does not include any specific 
requirements pertaining to the payment of the applicable merchandise 
processing fee, pursuant to subsection 13031(a)(9) of COBRA, for 
Inbound EMS items that are formally entered.\7\ Therefore, CBP will 
collect this fee in the manner that it ordinarily collects a 
merchandise processing fee, which is directly from the importer of 
record.\8\
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    \7\ 19 CFR 24.23(b)(1) is the regulatory provision for the 
merchandise processing fee for formally entered items.
    \8\ 19 U.S.C. 1484(a)(2)(B) is the statutory provision 
identifying the parties who may qualify as the importer of record 
for purposes of affecting formal entry. An importer of record may be 
the owner, purchaser, or consignee of the items, or a duly licensed 
customs broker authorized to make entry on their behalf. The U.S. 
Postal Service which carries formally entered EMS items does not 
qualify as an ``importer of record,'' but the addressee may.
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C. Adjustment of Inbound EMS Fees Pursuant to New Subsection 
13031(b)(9)(D)

    New subsection 13031(b)(9)(D)(iv) provides that, beginning in 
fiscal year 2021, the Secretary of the Treasury, in consultation with 
the Postmaster General, may adjust the amount new subsection 
13031(b)(9)(D)(i)(I), initially $1 per Inbound EMS item, no more than 
once per fiscal year. The adjustment is not to exceed the costs of 
services provided in connection with the processing of inbound EMS 
items \9\ and must be consistent with the obligations of the United 
States under international agreements. CBP is incorporating this 
provision into its regulations. For the reasons noted below, the 
regulations will provide that this fee is not subject to the annual 
inflation adjustment requirement in subsection 13031(l) of COBRA.
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    \9\ The costs of services include the costs incurred by CBP and 
USPS for the processing of Inbound EMS items.
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    Subsection 13031(l) of COBRA authorizes the Secretary of the 
Treasury to adjust the fees established under subsections 13031(a) and 
(b)(2), (b)(3), (b)(5), (b)(6), (b)(8), and (b)(9) of COBRA at the 
beginning of each fiscal year to reflect the percentage of the increase 
in the average of the Consumer Price Index for the preceding 12-month 
period. Although subsection 13031(l) references subsection 13031(b)(9), 
as noted above, the new subsection 13031(b)(9)(D) explicitly specifies 
an alternative procedure for adjustment of the $1 Inbound EMS item fee. 
In addition, it does not specify that the $1 per Inbound EMS item fee 
is ``subject to adjustment under subsection (l).'' This is in contrast 
to all the other provisions that are referenced in subsection 13031(b), 
which explicitly provide that the respective fees imposed by those 
provisions are ``subject to adjustment under subsection (l).'' CBP is 
of the view that by providing a separate and distinct adjustment 
procedure for the $1 Inbound EMS item fee, and by conspicuously 
omitting from new subsection 13031(b)(9)(D) any explicit reference to 
adjustment under subsection 13031(l), the new subsection 
13031(b)(9)(D)(iv) is the sole applicable

[[Page 47021]]

adjustment procedure--to the exclusion of the annual inflation 
adjustment procedures specified in subsection 13031(l) of COBRA. Any 
adjustment to the $1 fee will be done by regulation. USPS, CBP, and 
Treasury will consult on such adjustments.
    Consistent with subsection 13031(a)'s explicit provision that the 
fees listed therein are all ``subject to adjustment under subsection 
(l)'', the annual adjustment under subsection 13031(l) of COBRA will 
apply to the subsection 13031(a)(9) merchandise processing fee 
pertaining to formally entered Inbound EMS items.

IV. Explanation of Amendments to CBP Regulations

    CBP is amending its regulations to incorporate the fee provisions 
of new subsection 13031(b)(9)(D) regarding Inbound EMS items and to 
make the necessary conforming amendments pertaining to the merchandise 
processing fee and the dutiable mail fee. These amendments are 
explained in detail below.
    Part 24 of Title 19 of the Code of Federal Regulations (CFR) sets 
forth the CBP regulations regarding customs financial and accounting 
procedures (19 CFR part 24). Section 24.22 (19 CFR 24.22) describes the 
customs COBRA user fees for certain services, and when such fees are 
required and subject to limitations and/or adjustments. Section 24.23 
(19 CFR 24.23) sets forth the terms and conditions for when the fees 
for processing merchandise are required. These two sections will 
incorporate the fees associated with processing of Inbound EMS items 
that are subject to the new subsection 13031(b)(9)(D) of COBRA.

A. Definitions

    First, CBP is amending the definitions in Sec. Sec.  24.22 and 
24.23 to define the term ``Inbound Express Mail service'' or ``Inbound 
EMS''. As described in new subsection 13031(b)(9)(D), ``Inbound Express 
Mail service'' or ``Inbound EMS'' is the service described in the mail 
classification schedule referred to in section 3631 of title 39, United 
States Code. The mail classification schedule referred to in section 
3631 of title 39, United States Code, is further described in section 
3040.104 of title 39 of the Code of Federal Regulations.

B. Inbound EMS Item Processing Fees

    CBP is amending Sec.  24.22 to add a new paragraph (l) to 
incorporate the new processing fees as provided in new subsection 
13031(b)(9)(D) of COBRA. Paragraph (l)(1) implements the amendments 
made in new subsection 13031(b)(9)(D), which require the payment of $1 
per Inbound EMS item and, for formally entered Inbound EMS items, an 
additional merchandise processing fee provided for under subsection 
(a)(9) of section 13031 of COBRA (19 U.S.C. 58c(a)(9)). Specifically, 
paragraph (l)(1)(i) requires the payment of $1 per Inbound EMS item, as 
adjusted in accordance with the terms of paragraph (1)(3), rather than 
the annual adjustment inflation provided for in 19 CFR 24.22(k). Next, 
paragraph (l)(1)(ii) requires that if an Inbound EMS item is formally 
entered, the merchandise processing fee provided in 19 CFR 24.23(b)(1) 
must be paid.\10\
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    \10\ As discussed previously, 19 CFR 24.23(b)(1) is the 
regulatory provision for formally entered items that is provided for 
in subsection 13031(a)(9) of COBRA.
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    Paragraph (l)(2) specifies how the remittance of payments required 
by subsection 13031(b)(9)(D)(i)(I) of COBRA will occur between USPS and 
CBP. As required by new subsection 13031(b)(9)(D)(iii)(I)(aa) of COBRA, 
paragraph (l)(2) states that USPS will remit to CBP on a quarterly 
basis 50 percent of the payments required by paragraph (l)(1) to 
reimburse CBP for services provided in connection with the processing 
of Inbound EMS items.\11\ Paragraph (l)(2)(i) describes the method of 
remittance, in which USPS must remit 50 percent of payments required in 
paragraph (l)(1)(i) for which settlement with foreign postal operators 
has occurred.
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    \11\ For example, USPS must remit fifty cents to CBP and will 
retain fifty cents for one Inbound EMS item.
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    Paragraph (l)(2)(i) requires USPS to make such remittances on a 
quarterly basis to cover preceding calendar quarters, with the first 
remittance due no later than July 31, 2020 to cover, at minimum, the 
first calendar quarter of 2020. Paragraph (l)(2)(ii) requires USPS to 
maintain documentation necessary for CBP to verify the accuracy of the 
fee calculations and to provide supporting documentation with its 
quarterly remittances, which shows: (1) The total quantity of Inbound 
EMS items for which 50 percent of the payments required by paragraph 
(l)(1)(i) of this section are being remitted; (2) the receiving 
international mail facility location of each Inbound EMS item for which 
50 percent of the payments required by paragraph (l)(1)(i) of this 
section are being remitted; (3) the total amount of payments required 
by paragraph (l)(1)(i) of this section for which settlement with 
foreign postal operators has occurred; and (4) for any Inbound EMS 
items sent to the United States through the international postal 
network in preceding calendar quarters for which settlement with 
foreign postal operators concerning the payments required by paragraph 
(l)(1)(i) of this section has not occurred, the receiving international 
mail facility location of each such Inbound EMS item and the total 
quantity of any such Inbound EMS items received at each affected 
international mail facility location. The above requirements ensure 
that CBP has the supporting documentation necessary to track USPS's 
remittances to CBP to ensure that the statutory requirements are met.
    Paragraph (l)(3) provides that beginning in fiscal year 2021, the 
Secretary of the Treasury may adjust by regulation the payments 
required in (l)(1)(i) after consultation with the Postmaster General. 
It further provides that such adjustments may be made not more 
frequently than once per fiscal year, and only to an amount that does 
not exceed the costs of services provided in connection with the 
processing of Inbound EMS items and consistent with the obligations of 
the United States under international agreements.
    Finally, with respect to fees, CBP amends Sec.  24.23(c) that 
pertains to exemptions from the merchandise processing fee. Section 
24.23(c) provides exemptions and limitations to when the merchandise 
processing fee, surcharge, or specific fees provided under section 
24.23 will not apply. Among other exemptions, Sec.  24.23(c)(1)(v) 
currently exempts merchandise imported by mail from the fees in Sec.  
24.23. However, pursuant to the newly amended subsection 
13031(b)(9)(D)(i)(II) of COBRA, Inbound EMS items that are formally 
entered are subject to a merchandise processing fee. Thus, CBP is 
amending Sec.  24.23(c)(1)(v) to exclude formally entered Inbound EMS 
items from this exemption.

C. Exclusions

    To effectuate the new subsection 13031(b)(9)(D)(i) of COBRA, CBP is 
also amending Sec.  24.22 to exclude the $1 fee per Inbound EMS item 
from the annual adjustment inflation mechanism provided in Sec.  
24.22(k) and exclude Inbound EMS items from the dutiable mail fee in 
Sec.  24.22(f).
    Specifically, CBP is amending the introductory paragraph of Sec.  
24.22 to exclude the $1 processing fee contained in the newly added 
subparagraph (l) from the annual adjustment for inflation

[[Page 47022]]

provision contained in Sec.  24.22(k) (19 CFR 24.22(k)).\12\
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    \12\ The merchandise processing fee applicable to Inbound EMS 
items that are formally entered will be subject to the annual 
inflation adjustment methodology in 19 CFR 24.22(k).
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    CBP is amending Sec.  24.22(f) to exclude Inbound EMS items from 
the dutiable mail fee. Current Sec.  24.22(f) provides that the 
addressee of each item of dutiable mail for which a CBP officer 
prepares documentation will be assessed a processing fee.\13\ This fee 
is authorized by subsection 13031(a)(6) of COBRA and current section 
24.22(f) and is referred to as the dutiable mail fee. CBP is amending 
Sec.  24.22(f) to conform with the amendment made by section 8002(b) of 
the STOP Act to subsection 13031(a)(6) of COBRA that specifically 
excludes Inbound EMS items from the dutiable mail fee. CBP is also 
amending Appendix A to Part 24 to reflect the numbering change in the 
dutiable mail fee provision from 24.22(f) to 24.22(f)(1).
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    \13\ The dutiable mail fee under 24.22(f) is subject to the 
annual inflation adjustment of the Fixing America's Surface 
Transportation (FAST) Act. The fee for FY 2020 is $5.89. See CBP 
Dec. 19-08 (84 FR 37902).
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V. Statutory and Regulatory Requirements

A. Administrative Procedure Act

    The Administrative Procedure Act (APA) generally requires agencies 
to publish a notice of proposed rulemaking in the Federal Register (5 
U.S.C. 553(b)) and provide interested persons the opportunity to submit 
comments (5 U.S.C. 553(c)). However, the APA provides an exception to 
these requirements ``when the agency for good cause finds (and 
incorporates the finding and a brief statement of reasons therefor in 
the rules issued) that notice and public comment thereon are 
impracticable, unnecessary, or contrary to the public interest.'' 5 
U.S.C. 553(b)(B). For the reasons specified below, CBP has determined 
that there is good cause to publish this rule without prior notice and 
comment procedures.
    This rule implements the amendments made to subsection 13031(b)(9) 
of COBRA by section 8002 of the STOP Act. The new subsection 
13031(b)(9)(D) of COBRA prescribes the relevant requirements for the 
new fees for processing Inbound EMS items. Subsection 13031(b)(9)(D) of 
COBRA establishes the fee amount (initially $1 per item plus the 
merchandise processing fee if the item is formally entered), what the 
fees cover (reimbursement for costs incurred in providing services in 
connection with the processing of Inbound EMS items), the percentage of 
the fee to be remitted to CBP from USPS (50 percent of the $1 per 
Inbound EMS item), how often USPS must remit such amounts to CBP (on a 
quarterly basis), the account in which such payments to CBP are to be 
deposited (Customs User Fee Account), how often the $1 fee may be 
adjusted by the Secretary of the Treasury in consultation with the 
Postmaster General (beginning in fiscal year 2021, and not more 
frequently than once each fiscal year) and considerations for how such 
adjustments are to be made (not to exceed the costs of services 
provided in connection with the processing of Inbound EMS items, 
consistent with obligations of the United States under international 
agreements).
    As described above, this rule implements the amendments made to 
subsection 13031(b)(9) of COBRA by section 8002 of the STOP Act, which 
establish nondiscretionary requirements with respect to payments for 
the processing of Inbound EMS items at international mail facilities. 
Virtually all of the substantive provisions regarding the new fees are 
specifically provided by statute. This rule simply implements those 
requirements and makes necessary conforming amendments to CBP 
regulations.\14\ The only discretionary matter that was left for 
regulations was the specific method by which USPS must remit payments 
to CBP. Since CBP was given very little discretion regarding the 
implementation of new subsection 13031(b)(9)(D), CBP believes that 
prior notice and public comment procedure would be impracticable, 
unnecessary, and contrary to the public interest. Accordingly, CBP 
finds that there is good cause to issue this rule without prior notice 
and comment.
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    \14\ The nondiscretionary conforming amendments refer to 
amending CBP regulations to subject Inbound EMS items that are 
formally entered to the merchandise processing fee under subsection 
13031(a)(9) of COBRA, and the amendments made to subsection 
13031(a)(6) of COBRA by section 8002(b) of the STOP Act that exclude 
Inbound EMS items from the dutiable mail fee provided for in that 
subsection.
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    CBP has also concluded that this rule is exempt from the prior 
notice and comment rulemaking procedures under 5 U.S.C. 553(b)(A), 
which states that such procedures do not apply to ``rules of agency 
organization, procedure, or practice.'' 5 U.S.C. 553(b)(A). CBP 
considers this rule to fall within that exemption, as the rule adopts 
and implements the substantive requirements under the newly amended 
subsection 13031(b)(9) of COBRA, as amended by section 8002 of the STOP 
Act, and simply sets forth the procedures that will apply with regard 
to certain remittances from USPS to CBP. As discussed above, Congress 
established the substantive provisions of the fees for processing 
Inbound EMS items, including the fee amount, method of remittances, 
authorized uses upon receipt of payment, and discretion to adjust the 
$1 fee once implemented after a year.
    These regulations set forth the statutory requirements and the 
agency procedures for remitting the payments required under new 
subsection 13031(b)(9)(D) of COBRA. Specifically, the regulations 
detail the procedures regarding how USPS will remit the payments 
required by new subsection 13031(b)(9)(D) of COBRA. These regulations 
do not impose any obligations or costs to the public, and are 
procedural in nature.
    Although this rule is exempt from the prior notice and comment 
procedure, CBP is requesting public comments on this interim final rule 
and will take into account public comments received before issuing a 
final rule.

B. 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.''
    This rule is a ``significant regulatory action,'' although not an 
economically significant regulatory action, under section 3(f) of 
Executive Order 12866. Accordingly, the Office of Management and Budget 
(OMB) has reviewed this rule. Federal spending regulatory actions that 
cause only income transfers between taxpayers and program beneficiaries 
are not covered by Executive Order 13771. However, such regulatory 
actions may impose requirements apart from transfers and, in those 
cases, the actions would need

[[Page 47023]]

to be offset to the extent they impose more than de minimis costs.\15\ 
This rule is not expected to be subject to the requirements of 
Executive Order 13771 because this rule is expected to result in no 
more than de minimis costs. CBP has prepared a regulatory impact 
analysis of this rule in accordance with Executive Orders 12866 and 
13563. CBP is unable to publish the full analysis because it uses 
proprietary, non-public USPS data. As such, CBP has included the 
following summary of the analysis to help inform stakeholders of this 
rule's impacts.
---------------------------------------------------------------------------

    \15\ See U.S. Office of Management and Budget's memorandum 
titled, ``Implementing Executive Order 13771, Titled `Reducing 
Regulation and Controlling Regulatory Costs' '' (April 5, 2017).
---------------------------------------------------------------------------

1. Background and Purpose of Rule
    As mentioned above, the STOP Act amends the Consolidated Omnibus 
Budget Reconciliation Act (COBRA) of 1985, 19 U.S.C. 58c(b)(9), to 
create new subsection 13031(b)(9)(D), which requires certain fees for 
the screening and processing of Inbound Express Mail Service (Inbound 
EMS) items at international mail facilities. Express Mail Service 
refers to the optional express delivery service for international 
postal items that provides reliable and high-speed service for sending 
postal items to other countries. USPS is responsible for processing and 
delivering these items in the United States, while CBP is responsible 
for screening such items and removing packages with illicit goods from 
the mail stream before delivery to intended recipients in the United 
States.
    New subsection 13031(b)(9)(D) of COBRA requires a payment of $1 per 
Inbound EMS item (``Inbound EMS item fee''), subject to annual 
adjustment, for services rendered in the screening and processing of 
Inbound EMS items. Under this new subsection, USPS must pay 50 percent 
of the designated $1 fee per Inbound EMS item that it collects to CBP 
on a quarterly basis as reimbursement to CBP for processing of Inbound 
EMS items and retain the other 50 percent to cover its processing of 
these items. Depending on postal procedures, the $1 Inbound EMS item 
fee may ultimately be paid by foreign postal operators, shippers, or 
other entities. New subsection 13031(b)(9)(D) of COBRA also specifies 
that the ad valorem merchandise processing fee (MPF) currently under 
subsection 13031(a)(9) of COBRA shall be required if applicable to 
Inbound EMS items that are formally entered; these new implementing 
regulations will make the MPF applicable to formally entered Inbound 
EMS items prospectively by removing the current regulatory 
exemption.\16\ With this change, importers of record, who are 
addressees or addressees' brokers in the inbound mail environment, will 
be required to now pay an ad valorem MPF on any formally entered 
Inbound EMS items directly to CBP, consistent with current entry and 
entry summary procedures for other mail fees. For fiscal year (FY) 
2020, this ad valorem MPF is 0.3464 percent, though it cannot exceed 
$519.76 and cannot be less than $26.79.\17\ These maximum and minimum 
fee values are determined each fiscal year and published via Federal 
Register notice.
---------------------------------------------------------------------------

    \16\ Formally entered items generally include those valued at 
over $2,500, but they may also include other items with a value less 
than $2,500, such as commercial shipments containing textiles and 
apparel and products regulated by other government agencies. MPFs 
are paid by the importer of record, who are addressees or 
addressees' brokers in the inbound mail environment. See 19 CFR 
145.12 and https://help.cbp.gov/app/answers/detail/a_id/121/kw/formal%20entry%20filing/related/1/session/L2F2LzEvdGltZS8xNTY3MTczOTg0L3NpZC81WjVwS0Jubw%3D%3D. Accessed 
August 30, 2019.
    \17\ See CBP Dec. 19-08 (84 FR 37902).
---------------------------------------------------------------------------

    Under existing regulations, CBP also assesses duties, taxes, and 
fees on applicable Inbound EMS items, including a dutiable mail fee. 
Currently, all dutiable mail items for which a CBP officer prepared 
documentation (i.e., formal entries and informal entries subject to 
duties) are subject to a dutiable mail fee. This dutiable mail fee, 
which is currently $5.89 and is subject to annual adjustment for 
inflation, is generally paid by addressees of dutiable Inbound EMS 
items and other dutiable mail items.\18\ When the mail item is 
delivered by USPS generally for informal entries, the dutiable mail fee 
generally is collected at the time of delivery of the merchandise, 
along with any duties and taxes due. CBP may also collect the fee 
directly from an addressee. The amendments made to COBRA by the STOP 
Act exclude Inbound EMS items from this dutiable mail fee.
---------------------------------------------------------------------------

    \18\ In accordance with the Fixing America's Surface 
Transportation Act of 2015 (FAST Act), the dutiable mail fee is 
updated to account for inflation each fiscal year. The FY 2020 fee 
is $5.89. See CBP Dec. 19-08 (84 FR 37902).
---------------------------------------------------------------------------

    As provided in the STOP Act, the aforementioned amendments to the 
COBRA fees took effect on January 1, 2020, though not all changes have 
been implemented. Through this rule, CBP is amending its regulations to 
implement all of the STOP Act's COBRA amendments that pertain to 
Inbound EMS items, including statutorily-prescribed fees, adjustments 
to fees, fee revenue remittances from USPS to CBP, and the elimination 
of the dutiable mail fee for Inbound EMS items. CBP is also requiring 
USPS to maintain and provide supporting documentation to the agency to 
ensure the accuracy of the fee remittances with this rule. Table 1 
summarizes the COBRA user fees applicable to Inbound EMS items with and 
without the COBRA amendments and this rule.
---------------------------------------------------------------------------

    \19\ See CBP Dec. 19-08 (84 FR 37902).
    \20\ Informal entries may include shipments that are subject to 
the de minimis administrative exemption, which generally exempts 
from duties and taxes shipments of merchandise imported by one 
person on one day and having an aggregate fair retail value in the 
country of shipment of not more than $800 (bona-fide gifts and 
certain personal and household goods are subject to different 
requirements in order to qualify for separate administrative 
exemptions). See 19 U.S.C. 1321(a)(2); 19 CFR 10.151 and 145.31. In 
accordance with the Trade Facilitation and Trade Enforcement Act of 
2015, the de minimis value changed from $200 to $800 on March 10, 
2016. See https://www.cbp.gov/newsroom/national-media-release/de-minimis-value-increases-800. Accessed July 24, 2019. De minimis 
shipments will be subject to this rule's Inbound EMS item fee.

     Table 1--Inbound EMS Item User Fees With and Without the COBRA
                           Amendments and Rule
------------------------------------------------------------------------
                                  Without COBRA
  Inbound EMS item entry type     amendments and   With COBRA amendments
                                       rule               and rule
------------------------------------------------------------------------
Formal Entry (Generally         Dutiable mail fee  $1.00 Inbound EMS
 >$2,500 in value).              for dutiable       item fee and Ad
                                 items (FY 2020     valorem MPF of
                                 fee is $5.89)      0.3464 percent (In
                                 \19\.              FY 2020 the maximum
                                                    amount of the fee
                                                    cannot exceed
                                                    $519.76 and cannot
                                                    be less than
                                                    $26.79).
Informal Entry \20\ (Generally  Dutiable mail fee  $1.00 Inbound EMS
 < or = $2,500).                 for dutiable       item fee.
                                 items (FY 2020
                                 fee is $5.89).
------------------------------------------------------------------------
Source: Email communication with CBP's Office of Finance on June 21,
  2019. Also see 19 CFR 145.12 and https://help.cbp.gov/app/answers/detail/a_id/121/kw/formal%20entry%20filing/related/1/session/L2F2LzEvdGltZS8xNTY3MTczOTg0L3NpZC81WjVwS0Jubw%3D%3D. Accessed August
  30, 2019.


[[Page 47024]]

2. Historical and Projected Inbound Mail Volumes and Fees
    Between FY 2017 and FY 2019, Inbound EMS items slightly declined, 
while total inbound mail items decreased at a higher rate. During this 
period, Inbound EMS items represented a small portion of total inbound 
mail. In the absence of robust data on formally and informally entered 
inbound mail items, CBP estimates that a small percentage of the total 
Inbound EMS items delivered between FY 2017 and FY 2019 were formally 
entered based on subject matter expert input and the FY 2017 to FY 2019 
shares of total inbound mail items that were Inbound EMS items.\21\ An 
even smaller number of total inbound mail items between FY 2017 and FY 
2019 were dutiable items with dutiable mail fee collections. Without 
more specific dutiable mail fee data, CBP estimates that the share of 
total dutiable mail fee items with dutiable mail fee collections 
between FY 2017 and FY 2019 that corresponded to Inbound EMS items was 
consistent with the FY 2017 to FY 2019 share of total inbound mail 
items that were Inbound EMS items. CBP uses the historical Inbound EMS 
items data and assumptions to project future Inbound EMS items with and 
without this rule. In the absence of any rulemakings, CBP projects that 
the volume of Inbound EMS items will continue to decline at its FY 2017 
to FY 2019 compound annual growth rate (CAGR) each year under the 
baseline from FY 2020 to FY 2024 (using FY 2019 as a basis for the 
initial projection). CBP also projects that the number of Inbound EMS 
items with dutiable mail fee collections will also decline at the FY 
2017 to FY 2019 Inbound EMS item CAGR each year under the baseline from 
FY 2020 to FY 2024 (using FY 2019 as a basis for the initial 
projection). Based on the approximate share of Inbound EMS items that 
were formally entered from FY 2017 to FY 2019, CBP estimates that a 
small percentage of the projected Inbound EMS item volumes for FY 2020 
to FY 2024 will correspond to formal entries.
---------------------------------------------------------------------------

    \21\ Source: Email communication with CBP's Office of Trade on 
June 24, 2019; August 7, 2019; and September 10, 2019, and email 
communication with CBP's Office of Field Operations on September 10, 
2019.
---------------------------------------------------------------------------

    Based on input from USPS subject matter experts, CBP predicts that 
the rule's $1 Inbound EMS item fee and the ad valorem MPF for Inbound 
EMS items are likely to lead to decreases in Inbound EMS item volumes; 
however, the exact amounts of the decreases are unknown.\22\ As such, 
CBP analyzes the impacts of this rule under three Inbound EMS item 
changes compared to the baseline. Under the first projection method, 
CBP predicts that the rule will have no impact on future Inbound EMS 
item volumes relative to the baseline. Thus, CBP projects that the 
changes in Inbound EMS item volumes with this rule will be the same as 
those predicted under the baseline, decreasing by a small percentage 
each year starting from their FY 2019 value. Under the second 
projection method, CBP projects that Inbound EMS item volumes will 
decline by a slightly greater percentage point relative to the baseline 
each year starting from the FY 2019 total volume of Inbound EMS items. 
Under the third projection method, CBP projects that Inbound EMS item 
volumes will decline by an even greater additional percentage relative 
to the baseline each year starting from the FY 2019 total volume of 
Inbound EMS items. CBP will also no longer assess or collect dutiable 
mail fees for dutiable Inbound EMS items with this rule, meaning that 
there will be no corresponding fee collections during the period of 
analysis with this rule.
---------------------------------------------------------------------------

    \22\ Source: Email communication with USPS on May 7, 2020.
---------------------------------------------------------------------------

    CBP is aware that the outbreak of COVID-19 will likely reduce the 
volume of future inbound mail in the short run. Consequently, using 
historical growth rates and figures from FY 2017 to FY 2019 to estimate 
Inbound EMS item volumes for FY 2020 through FY 2024 will not reflect 
any impacts from the COVID-19 pandemic. It is not clear what level of 
reductions the pandemic will have on Inbound EMS item volumes or how 
CBP would estimate such an impact with any precision given available 
data. Therefore, the Inbound EMS item projections CBP uses in this 
analysis are expected to be overestimations for the period of analysis, 
resulting in potential overestimations of this rule's costs and 
benefits.
3. Transfer Payments From Rule
    This rule's $1 Inbound EMS item fee and ad valorem MPF for formally 
entered Inbound EMS items are payments required for the reimbursement 
to USPS and CBP for services rendered during the screening and 
processing of Inbound EMS items. In accordance with OMB's Circular A-4 
(Regulatory Impact Analysis: A Primer), these fees to government 
agencies for services rendered are monetary transfers from fee payers 
to the U.S. Government for costs realized by the U.S. Government 
(specifically, USPS and CBP).\23\ The dutiable mail fee for dutiable 
Inbound EMS items is also a monetary transfer from fee payers to the 
U.S. Government, which will be eliminated with this rule.
---------------------------------------------------------------------------

    \23\ Source: U.S. Office of Management and Budget. Circular A-4. 
Regulatory Impact Analysis: A Primer. Available at https://www.reginfo.gov/public/jsp/Utilities/circular-a-4_regulatory-impact-analysis-a-primer.pdf. Accessed July 24, 2019.
---------------------------------------------------------------------------

    To calculate this rule's monetary transfers, CBP considered the new 
or eliminated fee amounts and the projected number of Inbound EMS items 
respectively subject to these fee changes. In particular, to calculate 
the total Inbound EMS item fee payments resulting from this rule, CBP 
multiplied the $1 Inbound EMS item fee by the projected number of 
Inbound EMS items delivered by USPS from FY 2020 to FY 2024. To 
determine the ad valorem MPF payments from importers of record, who are 
addressees or addressees' brokers in the inbound mail environment, to 
the U.S. Government under this rule, CBP used an estimate of the 
average ad valorem MPF assessed for each formally entered Inbound EMS 
item multiplied by the projected number of formally entered Inbound EMS 
items over the period of analysis. In the absence of robust data on the 
value of formally entered Inbound EMS items, CBP estimated that the 
average MPF assessed for each formally entered Inbound EMS item will be 
equal to the minimum MPF for FY 2020 of $26.79 between FY 2020 and FY 
2024.\24\ To measure the total amount of forgone dutiable mail fee 
transfer payments from addressees of dutiable Inbound EMS items to the 
U.S. Government, CBP multiplied the FY 2020 dutiable mail fee of $5.89 
by the projected number of Inbound EMS items that will be subject to 
the dutiable mail fee under the baseline from FY 2020 to FY 2024. 
According to these calculations, the U.S. Government will enjoy an 
undiscounted net transfer payment from fee payers of at least $54.3 
million from this rule between FY 2020 and FY 2024 according to the

[[Page 47025]]

projection method used (see Table 2). When discounted, this net 
transfer payment equals at least $47.9 million in present value and at 
least $10.9 million on an annualized basis (using a 7 percent discount 
rate; see Table 2). To the extent that fee payers make more (fewer) 
transfer payments to the U.S. Government with this rule than estimated, 
the actual net transfers to the U.S. Government will be higher (lower).
---------------------------------------------------------------------------

    \24\ CBP based this estimate on U.S. Department of 
Transportation data on the total value of merchandise imported via 
multiple modes and mail for 2018 and USPS data on the total number 
of inbound mail shipments for FY 2018. CBP found that the average 
merchandise value of inbound mail shipment was less than the MPF of 
$26.79 that will generally be applicable to Inbound EMS items 
formally entered under this rule; hence, the minimum MPF fee of 
$26.79 will apply. Source of merchandise value data: U.S. Department 
of Transportation, Bureau of Transportation Statistics and Federal 
Highway Administration. Freight Analysis Framework, version 4.5.1, 
2019. ``Value of shipments by transportation mode'' table. Trade 
type: Imports, Mode: Multiple Modes and Mail, 2018. Available at 
https://www.bts.gov/faf. Accessed May 7, 2020.

 Table 2--Total Potential Monetized Present Value and Annualized Net Transfer Payments of Rule, FY 2020-FY 2024
                                               [2020 U.S. Dollars]
----------------------------------------------------------------------------------------------------------------
                                                         3% Discount rate                7% Discount rate
                                 -------------------------------------------------------------------------------
                                   Undiscounted    Present value    Annualized     Present value    Annualized
----------------------------------------------------------------------------------------------------------------
Total Net Transfer Payment from
 Fee Payers to U.S. Government:
    Projection Method 1 *.......  ..............  ..............  ..............  ..............  ..............
    Projection Method 2.........     $57,735,540     $54,527,317     $11,559,504     $50,783,914     $11,575,443
    Projection Method 3.........      54,342,534      51,385,168      10,893,385      47,931,993      10,925,390
----------------------------------------------------------------------------------------------------------------
* These estimates were excluded from the table for commercial sensitivity reasons.
Note: The estimates in this table are contingent upon CBP's projections as well as the discount rates applied.

4. Costs and Benefits of Rule
    Together with transfer payments, this rule will introduce costs to 
USPS, CBP, and fee payers. USPS will incur initial costs to set up 
accounts to collect the new $1 Inbound EMS item fee and to remit a 
portion of the fee to CBP. USPS does not currently have estimates for 
the one-time costs that this new collection and remittance process will 
impose. However, because USPS already collects and processes other 
inbound mail fees, including some CBP-specific fees, CBP expects the 
cost of collecting and remitting an additional fee payment to be 
minimal. Along with these one-time costs, USPS will sustain recurring 
costs from this rule's requirement for USPS to maintain and provide 
supporting documentation to CBP to ensure the accuracy of the $1 
Inbound EMS item fee remittances. The supporting documentation should 
show Inbound EMS item volume data as well as Inbound EMS item fee 
collections that are being remitted to CBP and outstanding balances. 
USPS must provide this documentation to CBP on a quarterly basis. This 
requirement will also likely impose a minimal burden on USPS.\25\
---------------------------------------------------------------------------

    \25\ Source: Communication with USPS on September 20, 2019.
---------------------------------------------------------------------------

    CBP's Office of Finance will experience some time burdens 
associated with the review of USPS's $1 Inbound EMS item fee 
documentation. CBP staff will have to match supporting documentation 
provided by USPS with funds remitted to CBP. There will also be 
periodic audits by CBP's Regulatory Audit and Agency Advisory Services 
Directorate to ensure Inbound EMS item volumes reported by USPS and the 
funds remitted to CBP match the volumes indicated in CBP's system. CBP 
will conduct these reviews and audits in conjunction with other 
remittance reviews and audits. CBP estimates that the monetized time 
burden of these reviews and audits will be very small each year.\26\ As 
such, this Inbound EMS item user fee documentation review and auditing 
will not meaningfully affect CBP operations.
---------------------------------------------------------------------------

    \26\ Source: Email communication with CBP's Office of Finance on 
July 25, 2019.
---------------------------------------------------------------------------

    With this rule, CBP processing of Inbound EMS items will largely 
remain the same, except CBP will now collect an ad valorem MPF for each 
formally entered Inbound EMS item and CBP will no longer assess the 
dutiable mail fee on Inbound EMS items. CBP will now collect the ad 
valorem MPF on formally entered items consistent with existing entry 
and entry summary procedures for other mail fees. Likewise, CBP 
officers at international mail facilities will ensure the payment of 
this MPF electronically in the same manner as other items currently 
subject to MPF and related duties, taxes, and fees. Thus, CBP does not 
believe that the collection of the ad valorem MPF for formally entered 
Inbound EMS items will impose an added processing time burden on 
CBP.\27\ CBP also does not believe that the rule's elimination of the 
dutiable mail fee for Inbound EMS items will generally result in time 
savings to CBP.\28\
---------------------------------------------------------------------------

    \27\ Source: Communication with CBP's Office of Field Operations 
on September 9, 2019.
    \28\ Source: Communication with CBP's Office of Field Operations 
on September 9, 2019.
---------------------------------------------------------------------------

    In addition to the U.S. Government, CBP estimates that this rule's 
new fee collections will impose nominal time burdens on fee payers, as 
they will generally pay the fees with other duties, taxes, and fees 
currently assessed on their Inbound EMS items.
    Besides enabling CBP and USPS to comply with the amendments made to 
COBRA by the STOP Act, CBP believes this rule will produce negligible 
benefits.
5. Summary
    In summary, this rule will mostly result in transfer payments 
between fee payers and the U.S. Government (specifically, USPS and 
CBP). On net, payers will transfer at least an estimated $10.9 million 
in annualized fee payments to the U.S. Government from FY 2020 to FY 
2024 (using a 7 percent discount rate). These estimates are based on 
historical growth rates and shares. The transfer payments resulting 
from this rule could be understated if future inbound mail volumes 
increase more than estimated, or they could be overstated if future 
inbound mail volumes decrease more than estimated, like during the 
COVID-19 pandemic. To the extent that fee payers make more (fewer) 
transfer payments to the U.S. Government with this rule than estimated, 
the actual net transfers to the U.S. Government from this rule will be 
higher (lower). USPS, CBP, and fee payers will likely incur minimal 
costs from this rule.

C. 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 agencies to prepare and make available to the public a 
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

[[Page 47026]]

for this rule, CBP is not required to prepare a regulatory flexibility 
analysis for this rule.

D. Unfunded Mandates Reform Act of 1995

    This rule will not result in the expenditure by State, local, and 
tribal governments, in the aggregate, or by the private sector, of $100 
million or more in any one year, and it will not significantly or 
uniquely affect small governments. Therefore, no actions are necessary 
under the provisions of the Unfunded Mandates Reform Act of 1995.

E. Paperwork Reduction Act

    The Paperwork Reduction Act 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. This IFR imposes a burden on 
a partner government agency, USPS, and as such, the provisions of the 
Act do not apply to this rule. Therefore, CBP has determined that there 
is no collection of information which requires a control number 
assigned by the Office of Management and Budget.

F. Signing Authority

    This regulation is being issued in accordance with 19 CFR 0.1(a)(1) 
pertaining to the Secretary of the Treasury's authority (or that of his 
delegate) to approve regulations related to certain customs revenue 
functions.

List of Subjects in 19 CFR Part 24

    Accounting, Claims, Customs duties and inspection, Harbors, 
Reporting and recordkeeping requirements, Taxes.

Amendments to the Regulations

    For the reasons set forth above, part 24 of title 19 of the Code of 
Federal Regulations (19 CFR part 24) is amended as follows:

PART 24--CUSTOMS FINANCIAL AND ACCOUNTING PROCEDURE

0
1. The general authority citation for part 24 continues and the 
separate authority citations for Sec. Sec.  24.22 and 24.23 are revised 
to read as follows:

    Authority:  5 U.S.C. 301; 19 U.S.C. 58a-58c, 66, 1202 (General 
Note 3(i), Harmonized Tariff Schedule of the United States), 1505, 
1520, 1624; 26 U.S.C. 4461, 4462; 31 U.S.C. 3717, 9701; Pub. L. 107-
296, 116 Stat. 2135 (6 U.S.C. 1 et seq.).
* * * * *
    Section 24.22 also issued under Sec. 892, Pub. L. 108-357, 118 
Stat. 1418 (19 U.S.C. 58c); Sec. 32201, Pub. L. 114-94, 129 Stat. 
1312 (19 U.S.C. 58c); Pub. L. 115-271, 132 Stat. 3895 (19 U.S.C. 
58c).
    Section 24.23 also issued under 19 U.S.C. 3332; Sec. 892, Pub. 
L. 108-357, 118 Stat. 1418 (19 U.S.C. 58c); Sec. 32201, Pub. L. 114-
94, 129 Stat. 1312 (19 U.S.C. 58c); Pub. L. 115-271, 132 Stat. 3895 
(19 U.S.C. 58c).
* * * * *

0
2. Amend Sec.  24.22 by:
0
a. In the introductory text, adding the words ``Except as provided in 
paragraph (1)(1)(i) of this section,'' to the beginning of the second 
sentence;
0
b. Adding paragraph (a)(5);
0
c. Revising paragraph (f);
0
d. Adding paragraph (l).
    The additions and revision read as follows:


Sec.  24.22   Fees for certain services.

    (a) * * *
    (5) The term Inbound Express Mail service or Inbound EMS means the 
service described in the mail classification schedule referred to in 
section 3631 of title 39, United States Code and 39 CFR 3040.104.
* * * * *
    (f) Fee for dutiable mail--(1) Dutiable mail other than Inbound EMS 
items. Except as provided in paragraph (f)(2) of this section, the 
addressee of each item of dutiable mail for which a CBP officer 
prepares documentation will be assessed a processing fee in the amount 
of $5.50, as adjusted in accordance with the terms of paragraph (k) of 
this section. When the merchandise is delivered by the Postal Service, 
the fee will be shown as a separate item on the entry and collected at 
the time of delivery of the merchandise along with any duty and taxes 
due. When CBP collects the fee directly from the importer or his agent, 
the fee will be included as a separate item on the informal entry or 
entry summary document.
    (2) Dutiable Inbound EMS items. The fee specified in paragraph 
(f)(1) of this section does not apply to dutiable Inbound EMS items.
* * * * *
    (l) Fees for Inbound Express Mail service (Inbound EMS) items. (1) 
Amounts. As provided in subsection (b)(9)(D) of section 13031 of the 
Consolidated Omnibus Budget Reconciliation Act (COBRA), as amended by 
section 8002 of the Synthetics Trafficking and Overdose Prevention Act 
of 2018 (STOP Act of 2018) (19 U.S.C. 58c(b)(9)(D)), with respect to 
the processing of items that are sent to the United States through the 
international postal network by `Inbound Express Mail service' or 
`Inbound EMS', the following payments are required:
    (i) $1 per Inbound EMS item, as adjusted in accordance with the 
terms of paragraph (l)(3) of this section, and
    (ii) If an Inbound EMS item is formally entered, the fee provided 
for under Sec.  24.23(b)(1).
    (2) Remittances from United States Postal Service to CBP. As 
provided in subsection (b)(9)(D) of section 13031 of the COBRA, as 
amended by section 8002 of the STOP Act of 2018 (19 U.S.C. 
58c(b)(9)(D)), United States Postal Service must remit to CBP on a 
quarterly basis 50 percent of the payments required by paragraph 
(l)(1)(i) of this section, to reimburse CBP for customs services 
provided in connection with the processing of Inbound EMS items. United 
States Postal Service will retain 50 percent of the amounts of the 
payments required by paragraph (l)(1)(i) of this section, to reimburse 
the Postal Service for services provided in connection with the 
processing of Inbound EMS items.
    (i) Method of Remittance. United States Postal Service must remit 
to CBP, on a quarterly basis, 50 percent of the payments required by 
paragraph (l)(1)(i) of this section for which settlement with foreign 
postal operators has occurred. Except for the first remittance, United 
States Postal Service must make such remittances to CBP every calendar 
quarter to cover preceding calendar quarters. The first remittance to 
CBP, due no later than July 31, 2020, must at a minimum cover the first 
calendar quarter of 2020.
    (ii) Supporting Documentation. United States Postal Service must 
maintain documentation necessary for CBP to verify the accuracy of the 
fee calculations. With each quarterly remittance to CBP, United States 
Postal Service must provide a supporting document that shows:
    (A) The total quantity of Inbound EMS items for which 50 percent of 
the payments required by paragraph (l)(1)(i) of this section are being 
remitted;
    (B) The receiving international mail facility location of each 
Inbound EMS item for which 50 percent of the payments required by 
paragraph (l)(1)(i) of this section are being remitted;
    (C) The total amount of payments required by paragraph (l)(1)(i) of 
this section for which settlement with foreign postal operators has 
occurred; and
    (D) For any Inbound EMS items sent to the United States through the 
international postal network in preceding calendar quarters for which 
settlement with foreign postal operators concerning the payments 
required by paragraph (l)(1)(i) of this section has not occurred, the 
receiving international

[[Page 47027]]

mail facility location of each such Inbound EMS item and the total 
quantity of any such Inbound EMS items received at each affected 
international mail facility location.
    (3) Adjustment of User Fee for Inbound Express Mail items. 
Beginning in fiscal year 2021, the Secretary of the Treasury, in 
consultation with the Postmaster General, may adjust by regulation, not 
more frequently than once each fiscal year, the amount described in 
paragraph (l)(1)(i) of this section to an amount not to exceed the 
costs of services provided in connection with the customs processing of 
Inbound EMS items, consistent with the obligations of the United States 
under international agreements.

0
3. Amend Sec.  24.23 by:
0
a. Adding paragraph (a)(6); and
0
b. Revising paragraph (c)(1)(v).
    The addition and revision read as follows:


Sec.  24.23   Fees for processing merchandise.

    (a) * * *
    (6) Inbound Express Mail service or Inbound EMS. Inbound Express 
Mail service or Inbound EMS means the service described in the mail 
classification schedule referred to in section 3631 of title 39, United 
States Code and 39 CFR 3040.104.
* * * * *
    (c) * * *
    (1) * * *
    (v) Merchandise described in General Note 19, HTSUS, merchandise 
released under 19 U.S.C. 1321, and merchandise imported by mail, other 
than Inbound EMS items that are formally entered on or after September 
3, 2020
* * * * *

Appendix A to Part 24 [Amended]

0
4. In Appendix A to Part 24 amend the entry for (a)(6) by removing, in 
the second column, ``(f) and adding in its place ``(f)(1)''.

    Dated: July 15, 2020.
Mark A. Morgan,
Chief Operating Officer and Senior Official Performing the Duties of 
Commissioner, U.S. Customs and Border Protection.

Approved:

Timothy E. Skud,
Deputy Assistant Secretary of the Treasury.
[FR Doc. 2020-15663 Filed 8-3-20; 8:45 am]
BILLING CODE 9111-14-P