[Federal Register Volume 85, Number 234 (Friday, December 4, 2020)]
[Rules and Regulations]
[Pages 78234-78236]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2020-26129]


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POSTAL SERVICE

39 CFR Part 501


Authorization To Manufacture and Distribute Postage Evidencing 
Systems

AGENCY: Postal ServiceTM.

ACTION: Final rule.

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SUMMARY: In this final rule, the Postal Service withdraws all 
authorizations to distribute (decertifies) Postage Evidencing Systems 
(PES) that are not producing compliant Intelligent Mail Indicia (IMI) 
on June 30, 2024. IMI compliant PES are defined in the IMI Performance 
Criteria (IMI-PC) and produce only IMI-Minimum (IMI-MIN), IMI-Standard 
(IMI-STD), and IMI-Maximum (IMI-MAX) indicia constructs (as stated in 
the IMI-PC). All PES that are not IMI-PC compliant, also referenced as 
Phase VI-IBI and Phase VII-PC Postage (collectively Phase VI and Phase 
VII PES), will become decertified Postage Evidencing Systems on June 
30, 2024. The decertified Postage Evidencing Systems must be withdrawn 
from service by December 31, 2024. As of December 31, 2024, the 
decertified PES must be marked inactive in the USPS PES management 
systems, including in the National Meter Accounting and Tracking System 
(NMATS). Postage indicia printed by Decertified PES will no longer be 
considered valid postage for use or refunds after June 30, 2025.

DATES: This final rule is effective December 4, 2020.

FOR FURTHER INFORMATION CONTACT: Ezana Dessie, Principal Business 
Systems Analyst, [email protected], (202) 268-5686.

SUPPLEMENTARY INFORMATION: In response to a notice of proposed 
rulemaking (85 FR 30671, May 20, 2020) to decertify and withdraw all 
non-Intelligent Mail Indicia (IMI) compliant Postage Evidencing Systems 
(PES) by June 30, 2024, the Postal Service received industry comments 
and feedback. The comments and feedback can be grouped into three 
areas: (I) Requests for an extension on the proposed dates for both the 
withdrawal of Decertified PES and the decertification of non IMI-
postage indicia; (II) provision of more specificity on IMI-PC 
compliance and clarification on several items related to the 
decertification; and (III) additional clarification on the support the 
Postal Service will provide to the PES providers on the PES migration 
(from Information Based Indicia Program

[[Page 78235]]

(IBIP) to IMI-PC). We will address all three areas in turn below.
    I. Requests for an extension on the proposed dates for both the 
withdrawal of Decertified PES and the decertification of non-IMI 
postage indicia.
    The Postal Service has taken into consideration the concerns of the 
industry and is extending the dates for withdrawal of decertified PES 
and decertified indicia. The new withdrawal date will be December 31, 
2024; the last date non-IMI indicia will be accepted for use as postage 
or for refunds will be June 30, 2025. Some commenters argued that 
changes to the IMI-PC before June 30, 2024 should extend the 
decertification date. The Postal Service will strive to minimize the 
number of changes it requires, but some changes will be inevitable and 
will not extend the timeline.
    II. Provision of more specificity on IMI-PC compliance and 
clarification on several items related to the decertification.
    Like any other institution, the Postal Service needs accurate, 
complete, and timely data to operate effectively; the IMI-PC supports 
these key business objectives for the Postal Service. The IMI-PC 
requires the PES providers to submit more detailed transaction data, 
with increased transparency and frequency; it also employs higher 
security specifications which address the rising security threats and 
challenges. IMI-PC enables the USPS to provide more detailed corporate 
reporting, more accurately price shipping/mailing products, attain 
operational efficiency by automating many functions (including postage 
refunds), improve the USPS Federal Regulatory compliance, and better 
secure Postal Service and customer data. Finally, the IMI-PC provides 
the USPS a better platform to bring improvements and updates to the 
USPS PES related products and services.
    Phase VI and Phase VII PES no longer meet the USPS PES requirements 
adequately. Commercial Payment has shared with each provider a list of 
Phase VI and Phase VII PES that are not IMI-PC compliant. A PES is IMI-
PC compliant when conforming to IMI-PC specifications and all other 
current PES related guidelines, regulations, and technical 
requirements; this includes the rules and regulations in the Domestic 
Mail Manual, International Mail Manual, Publication 199, Notice 123, 
Code of Federal Regulations, and having a Postal Security Device (PSD) 
that has a valid Federal Information Processing Standards (FIPS) 
certificate at the time of authorization. The decertification and 
withdrawal of the Phase VI and Phase VII PES will allow for the full 
implementation of Phase VIII-IMI PES, in which both PC Postage and 
physical PES are validated under the current edition of the IMI-PC.
    In keeping with the June 30, 2024 decertification date and the 
December 31, 2024 withdrawal date, the providers must stop leasing non-
IMI-PC compliant PES for lengths extending beyond the withdrawal date. 
Postage indicia printed by Decertified PES will not be considered valid 
postage after June 30, 2025; also, refund requests for all unused 
postage indicia need to be completed before this date. As the 
withdrawal date for PES approaches, the providers must coordinate with 
Commercial Payment (or its successor) to invalidate and remove the non-
IMI-PC compliant PES from USPS PES product-service-line, in accordance 
with IMI-PC PES withdrawal guidelines.
    In rare and select cases, for unique service/business reasons that 
the Postal Service deems appropriate, PES providers may request a 
waiver to operate non-IMI-PC compliant PES beyond the December 31, 2024 
withdrawal date. The waiver request form can be obtained from 
Commercial Payment. Any waiver granted will be in writing from 
Commercial Payment, or its successor.
    III. Additional clarification on the support the Postal Service 
will provide to the PES providers on the PES migration (from 
Information Based Indicia Program (IBIP) to IMI-PC).
    The updated withdrawal date (December 31, 2024) is based on the 
feedback and comments from the PES industry, the impact of the COVID-19 
pandemic on the mailing and shipping industry, current market needs, 
and the USPS long-term PES product support/management strategies. The 
USPS believes the updated withdrawal date allows the PES providers to 
execute the decertification and withdrawal process and complete the 
IBIP to IMI-PC transition with minimal impact to our customers. The 
USPS is committed to supporting the providers in the decertification 
and withdrawal process to minimize the impact of the transition to our 
PES customers. To this end, the USPS will provide the providers with 
three support tools for communication with their end customers: (1) A 
publication on the importance/value of IMI-PC for USPS (this will be 
available on PostalPro for the providers to utilize for their customer 
communications); (2) a license agreement for use of an IMI logo and 
wordmark to support the providers' PES transition and IMI PES marketing 
work; and (3) USPS-led customer outreach in collaboration with the 
providers, when the Postal Service deems it necessary.

List of Subjects in 39 CFR Part 501

    Administrative practice and procedure, Postal Service.

    For the reasons stated in the preamble, the Postal Service amends 
39 CFR part 501 as follows:

PART 501--[AMENDED]

0
1. The authority citation for part 501 continues to read as follows:

    Authority: 5 U.S.C. 552(a); 39 U.S.C. 101, 401, 403, 404, 410, 
2601, 2605; Inspector General Act of 1978, as amended (Pub. L. 95-
452, as amended); 5 U.S.C. App. 3.


0
2. Amend Sec.  501.7 by revising paragraph (c) introductory text to 
read as follows:


Sec.  501.7   Postage Evidencing System requirements.

* * * * *
    (c) The provider must ensure that any matter printed by a Postage 
Evidencing System, whether within the boundaries of the indicia or 
outside the clear zone as defined in DMM 604.4.0 and the Intelligent 
Mail Indicia Performance Criteria (IMI-PC), is:
* * * * *

0
3. Amend Sec.  501.17 by adding paragraph (f) to read as follows:


Sec.  501.17   Decertified Postage Evidencing Systems.

* * * * *
    (f) Postage Evidencing Systems that do not comply with the then 
current Intelligent Mail Indicia Performance Criteria will be 
Decertified Postage Evidencing Systems on June 30, 2024. The withdrawal 
date for those systems will be December 31, 2024.

0
4. Amend Sec.  501.20 by revising paragraph (b) to read as follows:


Sec.  501.20   Discontinued Postage Evidencing Indicia.

* * * * *
    (b) Effective December 31, 2024 all Postage Evidencing Systems that 
do not to produce Intelligent Mail Indicia (IMI) for evidence of pre-
paid postage must be withdrawn from service. Non-IMI indicia, which are 
not compliant with the then-current version of the IMI-PC, will be 
decertified and may not be used as a valid form of postage evidence. 
These decertified indicia may not be

[[Page 78236]]

recognized as valid postage for use or refunds, after June 20, 2025.

Ruth Stevenson,
Attorney, Federal Compliance.
[FR Doc. 2020-26129 Filed 12-3-20; 8:45 am]
BILLING CODE 7710-12-P