[Federal Register Volume 85, Number 187 (Friday, September 25, 2020)]
[Notices]
[Pages 60479-60483]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2020-21151]


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DEPARTMENT OF HOMELAND SECURITY

Customs and Border Protection


Modification of Test Program Regarding Electronic Foreign Trade 
Zone Admission Applications

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

ACTION: General notice.

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SUMMARY: This document announces modifications to U.S. Customs and 
Border Protection's (CBP's) test program for submitting electronic 
Foreign Trade Zone (FTZ) admission applications. Specifically, this 
notice announces that the zone identification number is being expanded 
from seven to nine digits and that test participants will now have the 
ability to submit ``replace'' requests to modify parts of an admission 
while retaining the original filing date, submit post-admission 
correction requests, and cancel permit to transfer transactions. 
Further, for ease of reference, this notice also reproduces the current 
test requirements in full.

DATES: As of September 26, 2020, the modifications to the test 
announced in this notice, with the exception of the expanded nine-digit 
zone identification number, will become operational. The expanded zone 
identification number will be implemented as of January 25, 2021. This 
test will continue until concluded by way of announcement in the 
Federal Register.

ADDRESSES: Comments concerning this notice and any aspect of this test 
may be submitted at any time during the test via email to Cargo & 
Conveyance Security, Office of Field Operations, U.S. Customs and 
Border Protection, at [email protected], with a subject line 
identifier reading ``Comment on Electronic FTZ Admission Application 
FRN.''

FOR FURTHER INFORMATION CONTACT: For operational questions, contact 
Lydia Jackson, Cargo & Conveyance Security, Office of Field Operations, 
U.S. Customs and Border Protection, at 202-344-3055 or 
[email protected]. For technical questions, contact Arnold 
Buratty, Cargo Systems Program Directorate, Office of Information and 
Technology, U.S. Customs and Border Protection, at 571-468-5309 or 
[email protected].

SUPPLEMENTARY INFORMATION: 

I. Background

A. National Customs Automation Program Test

    The National Customs Automation Program (NCAP) was established by 
Subtitle B of Title VI--Customs Modernization in the North American 
Free Trade Agreement (NAFTA) Implementation Act (Customs Modernization 
Act) (Pub. L. 103-182, 107 Stat. 2057, 2170, December 8, 1993) (19 
U.S.C. 1411). Through NCAP, the thrust of customs modernization was on 
trade compliance and the development of the Automated Commercial 
Environment (ACE), the planned successor to the Automated Commercial 
System (ACS), as the electronic data interchange (EDI) system 
authorized by U.S. Customs and Border Protection (CBP). ACE is an 
automated and electronic system for commercial trade processing, which 
is intended to streamline business processes, facilitate growth in 
trade, ensure cargo security, and foster participation in global 
commerce, while ensuring compliance with U.S. laws and regulations and 
reducing costs for CBP and all of its communities of interest. The 
ability to meet these objectives depends on successfully modernizing 
CBP's business functions and the information technology that supports 
those functions.
    CBP's modernization efforts are accomplished through phased 
releases of ACE component functionality designed to replace specific 
legacy ACS functions and add new functionality. Section 101.9(b) of 
title 19 of the Code of Federal Regulations (19 CFR 101.9(b)) provides 
for the testing of NCAP components. See T.D. 95-21, 60 FR 14211 (March 
16, 1995).

B. Electronic Foreign Trade Zone (FTZ) Admission Application Test

    On August 19, 2005, CBP published a notice in the Federal Register 
(70 FR 48774) announcing an NCAP test concerning the electronic 
submission of FTZ admission data. The test notice provided that 
participants would electronically submit data contained in the 
``Application for Foreign-Trade Zone Admission and/or Status 
Designation'' (CBP Form 214; the electronic version of the form is 
referred to as e214). The notice described the test program in detail, 
identified the regulatory provisions suspended for the test, and set 
forth the test commencement date as no earlier than September 30, 2005, 
with a test period of approximately 6 months. The test notice also set 
forth the prototype procedures and listed the required data elements 
that must be provided to CBP when filing an electronic FTZ admission 
application. Participants were required to participate in an evaluation 
of this test to take place at the end of the 6-month period.
    Due to low participation in the test program and insufficient data 
collected, CBP announced that the test would be run again, in the 
Federal Register (72 FR 14128) on March 26, 2007. The newly announced 
test program was intended to encourage greater participation by the 
trade and thereby provide more meaningful data to CBP to assess the 
feasibility of implementing the test program on a permanent basis. CBP 
made certain clarifications regarding required data elements and 
announced that ACE would be the only

[[Page 60480]]

CBP-approved EDI for the test, in a Federal Register notice published 
on August 16, 2017 (82 FR 38923). Initially, in that notice, CBP 
provided an effective date of September 17, 2017. However, the 
effective date was later shifted to December 9, 2017. See 82 FR 43395 
(Sept. 15, 2017). The test remains in progress and will continue until 
concluded by way of announcement in the Federal Register.

II. New Test Modifications for Electronic Foreign Trade Zone Admission 
Applications

    This notice announces changes to the test program for submitting 
the electronic FTZ admission applications (hereinafter Electronic FTZ 
test). The zone identification number is being expanded from seven to 
nine digits and test participants will now have the ability to submit 
``replace'' requests to modify parts of an admission while retaining 
the original filing date, submit post-admission correction requests, 
and cancel a permit to transfer transaction. The changes are discussed 
separately below, and further information is contained in the ACE 
Foreign Trade Zone (e214) chapter of the CBP and Trade Automated 
Interface Requirements (CATAIR), available at: https://www.cbp.gov/trade/ace/catair. Filers not participating in the test will continue to 
submit FTZ admission applications on CBP Form 214 (Application for 
Foreign-Trade Zone Admission and/or Status Designation). For ease of 
reference, the complete test requirements (including the new 
modifications) are provided further at the end of this notice.

A. Expansion of the Zone Identification Number

    CBP assigns unique identifiers for all FTZ site locations. The 
length of the alpha-numeric zone identification number (Zone ID number) 
will be expanded from seven to nine digits to accommodate additional 
Subzones and sets of General Purpose (GP) Zone Acreage, as well as 
additional FTZ site locations associated with a Subzone or a set of GP 
Zone Acreage. The expanded nine-digit Zone ID number will consist of 
the following, in the listed order:

 3 numeric digits representing the FTZ designation;
 3 alpha-numeric characters representing, as appropriate, 
either:
    --the Subzone designation; or,
    --the GP Zone Acreage designation; and
 3 alpha-numeric characters representing, as appropriate, 
either:
    --the Subzone Site designation; or,
    --the GP Site designation.

As noted in the DATES section above, the transition to the expanded 
Zone ID number will be completed 120 days from the date of publication 
of this notice.
    CBP will coordinate internally prior to and throughout the 120-day 
period following publication of this notice to transition to the 
expanded nine-digit system by aiding the local port offices with 
issuing the expanded Zone ID numbers to the FTZ operators. The FTZ 
operators are responsible for ensuring the type 04 FTZ bond associated 
with each FTZ site profile in ACE is up to date and active. As needed, 
CBP Client Representatives will assist software vendors and trade 
filers as the primary point of contact during this time. At the 
conclusion of the 120-day transition period, all existing Zone ID 
numbers will have been replaced with system-generated expanded Zone ID 
numbers and all Zone ID numbers issued in the future will consist of 
nine digits.

B. Replace Requests To Modify a Previously Submitted Admission While 
Retaining the Original Date of Filing

    Currently, for modifications to FTZ admission data, an admission 
must first be deleted and then a complete replacement of the admission 
must be filed. This process causes a break in custody by generating a 
new admission date. Retaining the original admission date is necessary 
to ensure that privileged foreign status duty rates are correctly 
applied, and that is critical to maintain the integrity of the FTZ 
operator's foreign status inventory. Without maintaining the original 
admission date, inventory could be subject to higher duty rates that 
become effective subsequent to the original admission date. 
Accordingly, in order to ensure the integrity of the zone inventory, 
CBP has added new functionality to the Electronic FTZ test to allow for 
``replace'' requests to modify an admission while retaining the 
original admission date.
    To make a ``replace'' request for a modification, filers of the 
e214 must submit one of the mandatory reason codes and provide a 
contact name and contact phone number. Reason codes for modifications 
can be found in the CATAIR and are as follows: 01 Change/Add 
Conveyance(s); 02 Delete Conveyance(s); 03 Change/Add Bill of 
Lading(s); 04 Delete Bill of Lading(s); 05 Change/Add HTSUS Line(s); 06 
Delete HTSUS Line(s); 07 Change Admitted Quantity; and 08 Other. CBP 
will consider replace requests for modifications on a transactional 
basis and, upon CBP review, the filer will receive a message with a 
disposition code indicating whether the request was approved or denied.

C. Submission of Post-Admission Correction Requests

    Changes to an admission that has been fully accepted into the zone 
(via a process known as concurrence) are not permitted in the 
Electronic FTZ test. The process of replacing an entire admission 
creates a cumbersome process that affects other transactions associated 
with the bills of lading on the initial admission, which could lead to 
delays in cargo movement. Therefore, CBP has added the ability to 
request a post-admission correction to the Electronic FTZ test that 
will allow for modification after the admission has been concurred and 
fully accepted into the zone operator's inventory and recordkeeping 
system. The post-admission correction process described here does not 
affect the bond liability that would otherwise exist absent the 
correction.
    To request a modification for an admission that has been fully 
accepted into the zone, which will be considered by CBP on a 
transactional basis, filers must submit one of the mandatory reason 
codes and must also submit a contact name and contact phone number.
    Reason codes for post-admission correction requests can be found in 
the CATAIR and are as follows: 01 Clerical error; 02 Admission replaced 
by CBP Form 7512 (Replacement in-bond number required; must be 
authorized by CBP); 03 Merchandise cleared under another admission 
(Replacement admission number already on file required); 04 Admission 
replaced by a formal entry (Replacement entry number already on file 
required); 05 Merchandise cleared under informal entry (Replacement 
entry number already on file required); 06 Merchandise seized; 07 
Merchandise destroyed; 08 Non-arrival; 09 Shipment refused by importer/
zone operator; 10 Shipment not authorized for import (refused by PGA); 
and 11 System error. Moreover, there is a 15-day time limit from the 
date of arrival in the port in which to request a post-admission 
correction; for any correction requests outside of the 15-day time 
limit, please contact your local port. Upon CBP review, the filer will 
receive a message with a disposition code indicating whether the post-
admission correction request was approved or denied.

D. Cancellation of Permit To Transfer (PTT) Transactions

    Currently, PTT transactions are not permitted to be cancelled. A 
PTT is a

[[Page 60481]]

permit to transfer cargo from one bonded location in a CBP Port of 
Entry to another bonded location within the same CBP Port of Entry. In 
the case of the e214 processes, the bonded movement is only to an FTZ 
site, which is represented by its CBP-assigned Facilities Information 
and Resources Management Systems (FIRMS) code. This limitation makes it 
difficult to facilitate instances where the diversions of cargo to 
other designated locations is required for purposes such as inspections 
or to effectuate a withhold release order. In order to alleviate this 
issue, CBP has added new functionality to the Electronic FTZ test that 
will allow for PTT Cancel transactions by the filer or by CBP.
    For each electronic PTT, filers receive a response with a CBP-
generated PTT unique identifier (PID). This PID is required to request 
the cancellation of the associated PTT. Upon CBP review, the filer will 
receive a message with a disposition code indicating whether the PTT 
Cancel transaction request was approved or denied, as there can be 
errors encountered during processing.

III. Complete Requirements for Test Program Regarding Electronic 
Foreign Trade Zone Admission Applications

    The Electronic FTZ test has been running continuously since March 
26, 2007. CBP will inform the public of CBP's decision to conclude the 
test program by way of announcement in the Federal Register. For ease 
of reference, the complete test requirements (including the new 
modifications) are provided below.

A. Regulatory Provisions Suspended

    Subpart C to part 146 of the CFR prescribes the conditions 
applicable to admission of merchandise into a foreign trade zone. To 
the extent that certain provisions within subpart C to part 146 may be 
incompatible with the terms of this test program, the affected 
regulatory provisions will be suspended for the duration of the test.

B. Participant Eligibility

    Eligible participants in the Electronic FTZ Admissions Application 
test program include: FTZ operators; FTZ Admission Applicants; Agents 
of FTZ Operators; and Agents of FTZ Admission Applicants. Participation 
in the test is voluntary and there are no application procedures.

C. Prototype Procedures

1. Submission of Electronic CBP Form 214 and Related Data
    Test participants must request permission to admit merchandise into 
an FTZ by electronically transmitting the CBP Form 214 data elements to 
CBP. The data transmission may cover a single shipment of merchandise 
or be a consolidated transmission that covers multiple shipments to a 
single zone. CBP must receive the CBP Form 214 before the merchandise 
can be authorized for admission into the FTZ. An exception to this 
requirement exists for test participants who are authorized to use the 
FTZ direct delivery procedures, as discussed below.
2. Prior Notice Reporting Requirements
    Test participants, including those approved to participate under 
direct delivery procedures, must comply with the prior notice reporting 
requirements stipulated in the Public Health Security and Bioterrorism 
Preparedness and Response Act of 2002 (``the Bioterrorism Act''), 
Public Law 107-188. Title III of the Bioterrorism Act contains 
provisions relating to providing the Department of Health and Human 
Services with prior notice regarding certain information about foods 
that are imported or offered for import into the United States.
3. Direct Delivery Procedures
    As a general rule, a test participant who is also authorized to use 
the direct delivery procedures prescribed in 19 CFR 146.39 to admit 
merchandise into an FTZ may transmit the required data to CBP on an 
electronic CBP Form 214 no later than the close of business on the 
business day following receipt of the merchandise into the FTZ 
inventory control and recordkeeping system. With regard to the 
applicability of direct delivery procedures in the context of the test 
program, two exceptions to the above rule are noted. First, as stated 
above, direct delivery participants are subject to any applicable prior 
notice reporting requirements set forth in the Bioterrorism Act. 
Second, in the absence of a CBP Form 7512, or its electronic 
equivalent, authorizing an in-bond movement, a test participant may 
electronically transmit a permit to transfer request for the intra-port 
bonded movement of the merchandise to the FTZ site.
4. FTZ Operators as Test Participants
    Under the test program, an FTZ operator will be able to transmit 
the following transactions via the Automated Broker Interface (ABI): 
Submit a permit to transfer request for merchandise coming to its FTZ 
Site; submit requests to cancel a specific existing permit to transfer 
request; submit application for admission on behalf of the applicant 
for imported zone status merchandise, zone status merchandise 
transferred from another zone, and domestic status merchandise; agree 
to, or refuse to, accept custodial responsibility for an admission 
submitted by an entity other than itself as the Operator; report 
arrival of merchandise to the FTZ; assume custodial responsibility for 
the admission authorized merchandise; submit a request on behalf of the 
applicant for a change of zone status on specific merchandise; and 
submit request for post-admission correction.
5. Transmittal of Statistical Data to the Bureau of Census
    After the FTZ Operator has concurred the admission CBP will 
transmit statistical data to the Bureau of the Census through an 
automated link.

D. Required Data Elements

    Participants in the test must provide CBP with the following data 
elements, which consist of the previously required data elements and 
the newly announced data elements:
     A code representing the action to be taken (e.g., add, 
delete, replace).
     The line item number.
     The Zone ID number. This zone identification number is 
comprised of the FTZ number designation, any Subzone or General Purpose 
Zone designation and a physical FTZ Site designation. Currently Zone 
IDs are seven characters in length. The transaction will now 
accommodate the expanded nine-character CBP-assigned Zone ID when its 
use becomes mandatory.
     The port code where the FTZ is located as shown in 
Schedule D, Harmonized Tariff Schedule of the United States (HTSUS).
     An indicator specifying whether the merchandise is being 
admitted into the FTZ under direct delivery procedures.
     The Automated Broker Interface (ABI) filer code.
     The ABI routing code and optional office extension for one 
additional ABI participant who will receive a copy of the electronic 
CBP Form 214 and subsequent electronic notifications.
     The Importer of Record Number applicant.
     An indicator specifying the admission type.
     The mode of transportation code. Valid codes are listed in 
Appendix B of the Customs and Trade Automated Interface Requirements 
(CATAIR), Pub # 0875-0419.
     The name of the conveyance (if not a vessel, the name of 
the transportation company).
     The vessel voyage, truck or rail trip, or aircraft flight 
number.

[[Page 60482]]

     The country of export.
     The export date. For merchandise arriving in the United 
States by vessel: The month, day and year on which the vessel departed 
the last port of the country of exportation. For merchandise exported 
by air: The month, day and year on which the aircraft departed the last 
airport of the country of exportation. For merchandise exported by 
truck or rail: The month, day and year in which the carrier crossed the 
border of the country of exportation.
     The import date. For merchandise arriving in the United 
States by vessel: The month, day and year on which the vessel 
transporting the merchandise from the foreign country arrived within 
the limits of the U.S. port at which the merchandise was unladen. For 
merchandise arriving in the United States other than by vessel: The 
month, day and year in which the merchandise arrived within U.S. 
customs territory.
     The zone admission number (which is made up of the Zone ID 
(described above in more detail), the two-digit calendar year (of the 
current year), and the control number (the unique admission designation 
assigned by the Applicant or Operator).
     The U.S. port of unlading (the port at which the 
merchandise was unladen). Valid codes are listed in Schedule D, HTSUS.
     The foreign port of lading.
     The bill of lading or airway bill number.
     The house bill number.
     The Standard Carrier Alpha Code (SCAC) identifier of the 
importing carrier.
     The immediate transportation (IT) number assigned to in-
bond shipments and the date the CBP Form 7512 was prepared.
     The number of packages. An indication of the quantity and 
unit of measure (cartons, cases, bundles, etc.) in the shipment as 
stated in the Customs Automated Manifest Interface Requirements 
(CAMIR). For containerized merchandise, an indication of the number of 
packages within the container(s) and the container number(s). For bulk 
shipments, show ``1 Bulk.''
     Country of origin code, provided in Annex B, ISO code, 
HTSUS, which represents the country of origin in which the product was 
manufactured, mined, or grown. Labor work or material added to an 
article in another country must affect a substantial transformation in 
order for such other country to become the actual ``country of 
origin.'' If the merchandise is from more than one country of origin, 
the country of origin will be indicated separately against each HTSUS 
subheading or group of subheadings.
     A detailed description of the merchandise at the line item 
level.
     The Manufacturer Identification (MID) number (as required 
for type 01 entries).
     The applicable HTSUS number(s).
     The statistical reporting quantity of the merchandise for 
each HTSUS number.
     The quota category (if applicable).
     The gross weight in kilograms of the merchandise. Supply 
separate gross weight information for each HTSUS subheading.
     The separate value and aggregate charges: For each HTSUS, 
enter the purchase price (in U.S. dollars) or, if the merchandise was 
not acquired by purchase, the equivalent of such price. Also, report 
the aggregate cost (in U.S. dollars) of freight, insurance, and all 
other costs, charges and expenses incurred in bringing the merchandise 
from alongside the carrier at the foreign port of exportation in the 
country of exportation in addition to unlading the merchandise at the 
first U.S. port of entry.
     The indicator designating a special program and country 
affecting duty payments (if applicable).
     If applicable, a qualifier code and reference identifier 
associated with the shipment. Valid qualifiers are listed in the 
CATAIR.
     The Harbor Maintenance Fee (if applicable).
     The zone status designation of the merchandise.
     The container number if a permit to transfer is requested.
     Concurrence data relating to the admission application.
     The Importer of Record number of the bonded carrier 
nominated for a permit to transfer request to move merchandise to an 
FTZ site.
     The Facilities Information and Resources Management 
Systems (FIRMS) code identifying the location where the merchandise 
(moving on a permit to transfer transaction) is being delivered.
     An indicator if the merchandise is subject to Bioterrorism 
Act of 2002 requirements.
     Under 19 CFR 12.145 and 360.101(c), the steel import 
license number needs to be provided on CBP Form 214 at the time of 
filing under 19 CFR part 146, in the case of merchandise admitted into 
an FTZ.
     The unique identifying number of Kimberley Process 
Certificate (if applicable). The Kimberley Process Certificate must be 
presented in connection with an importation of rough diamonds into an 
FTZ and exportation out of an FTZ if demanded by a CBP official 
pursuant to 31 CFR 592.404 and 592.301.
     For replace requests to modify a previously submitted 
admission while retaining the original filing date, filers must include 
the reason code and the contact name and contact phone number.
     To submit post-admission correction requests after an 
admission has been concurred (fully accepted into a zone), filers must 
include the reason code and the contact name and contact phone number.
     For requests to cancel a permit to transfer (PTT) 
transaction, filers must include a permit to transfer transaction 
unique identifier (PID).
     The Importer of Record Number of the Zone Operator.
     The Facilities Information and Resources Management 
Systems (FIRMS) code identifying the FTZ Site location where the 
merchandise is to be admitted.
    Test participants are responsible for the accuracy and completeness 
of all data transmitted under the prototype.

E. Processing of Electronic FTZ Admission Applications

    Upon approval of an electronic FTZ admission application, CBP will 
transmit electronic notice to the test filer authorizing admission of 
the merchandise into the FTZ. As noted above, this approval process 
does not apply to merchandise admitted to an FTZ under direct delivery 
procedures.
    Upon approval of an electronic request for a permit to transfer, 
CBP will electronically transmit approval/denial to transfer the 
merchandise into the FTZ electronically to the test filer, and to the 
carrier of the merchandise. CBP will also provide electronic notice to 
these parties as to whether the merchandise is subject to CBP 
examination. In addition, test program participants and carriers will 
be able to receive electronic notification concerning the status of an 
admission request.
    A test participant whose FTZ admission application is rejected by 
CBP will be provided with an opportunity to correct the reported error. 
A complete re-transmission of the entire admission application is 
required by CBP.

F. Misconduct Under the Test

    A test participant may be subject to civil and criminal penalties, 
administrative sanctions, liquidated damages, and/or suspension from 
this test for any of the following:

[[Page 60483]]

     Failure to abide by the terms and conditions of this test, 
and any applicable laws and regulations.
     Failure to exercise reasonable care in the execution of 
participant obligations.
     Misuse of the automated CBP Form 214 (i.e., engaging in 
unauthorized disclosure or any activity which interferes with the 
successful evaluation of the new technology).
    The Director, Cargo Security and Control Division, will administer 
suspensions for misconduct. A written notice proposing suspension will 
be provided to the participant. Such notice will apprise the 
participant of the alleged facts or conduct warranting suspension and 
will inform the participant of the date that the suspension will begin. 
Any decision proposing suspension of a participant may be appealed in 
writing to the Executive Assistant Commissioner, Office of Field 
Operations, 1300 Pennsylvania Ave. NW, Washington, DC 20229, within 15 
calendar days of the notification date. An appeal must address the 
alleged facts or conduct charges contained in the notice and state how 
compliance has been or will be achieved. In cases of non-payment, late 
payment, willful misconduct or where public health interests or safety 
are concerned, the suspension may be effective immediately. The same 
appeal procedures apply in cases of immediate suspension.

G. Test Evaluation Criteria

    To ensure adequate feedback, participants are required to 
participate in an evaluation of this test. CBP also invites all 
interested parties to comment on the design, conduct and implementation 
of the test at any time during the test period. CBP will publish the 
final results in the Federal Register and the Customs Bulletin as 
required by section 101.9(b) of Title 19 of the CFR.
    The following evaluation methods and criteria have been suggested:

1. Baseline measurements to be established through data analysis;
2. Questionnaires from both trade participants and CBP addressing such 
issues as:
     Workload impact (workload shifts/volume, cycle times, 
etc.)
     Cost savings
     Policy and procedure accommodation
     Trade compliance impact
     Problem resolution
     System efficiency
     Operational efficiency
     Other issues identified by the participant group

    Dated: September 21, 2020.
William A. Ferrara,
Executive Assistant Commissioner, Office of Field Operations.
[FR Doc. 2020-21151 Filed 9-24-20; 8:45 am]
BILLING CODE 9111-14-P