E6-8498. Single Entry for Unassembled or Disassembled Entities Imported on Multiple Conveyances

AGENCY:

Bureau of Customs and Border Protection, Department of Homeland Security, Department of the Treasury.

ACTION:

Final rule.

SUMMARY:

This document amends the regulations in title 19 of the Code of Federal Regulations to allow an importer of record, under certain conditions, to submit a single entry to cover multiple portions of a single entity which, due to its size or nature, arrives in the United States on separate conveyances. This document implements statutory changes made to the merchandise entry laws by the Tariff Suspension and Trade Act of 2000.

DATES:

Effective Date: July 3, 2006.

FOR FURTHER INFORMATION CONTACT:

For operational matters: Timothy Sushil, Office of Field Operations, [phone].

For legal matters: Emily Simon, Office of Regulations and Rulings, [phone].

SUPPLEMENTARY INFORMATION:

Background

Section 1460 of Public Law 106-476, popularly known as the Tariff Suspension and Trade Act of 2000, amended section 484 of the Tariff Act of 1930 (19 U.S.C. 1484) by adding a new subsection (j) in order to provide for the treatment of certain multiple shipments of merchandise as a single entry.

The amended law, 19 U.S.C. 1484(j), is concerned with two issues. First, section 1484(j)(1) addresses the problem long encountered by the importing community in entering merchandise the size or nature of which necessitates shipment in an unassembled or disassembled condition on more than one conveyance. Second, section 1484(j)(2) offers relief to importers whose shipments, which they intended to be carried on a single conveyance, are divided at the initiative of the carrier. As to both these matters, the legislation is silent as to the affected modes of transportation, thus indicating that the new law is to apply to merchandise shipped by air, land or sea.

The Bureau of Customs and Border Protection (CBP) determined to proceed first with proposed regulations only to shipments which are divided by carriers (19 U.S.C. 1484(j)(2)); these are referred to as “split shipments.” Separate proposals were undertaken because CBP had already begun a project to amend the regulations to provide for one entry for such split shipments prior to the present statutory amendments.

The proposed rule regarding split shipments (RIN 1515-AC91) was published in the Federal Register (66 FR 57688) for public comment on November 16, 2001. The comment period ended on February 14, 2002, and the final rule was published in the Federal Register (68 FR 8713) on February 25, 2003. The final rule regarding split shipments went into effect on March 27, 2003.

On April 8, 2002, CBP published a proposed rule in the Federal Register (67 FR 16664) proposing regulations and requesting comments concerning a single entry for merchandise the size or nature of which necessitates shipment in an unassembled or disassembled condition on more than one conveyance (19 U.S.C. 1484(j)(1)). The comment period ended on June 7, 2002. These final regulations concern single entries for unassembled or disassembled shipments as addressed in 19 U.S.C. 1484(j)(1).

Unassembled or Disassembled Entity Defined

For the purposes of this final rule, an unassembled or disassembled entity consists of merchandise which is not capable of being transported on a single conveyance, but which is purchased and invoiced as a single classifiable entity. By necessity, due to its size or nature, the entity is placed on multiple conveyances which arrive at different times at the same port of entry in the United States. The subject arriving portions are consigned to the same person in the United States.

The current regulations in title 19 of the Code of Federal Regulations (CFR) ordinarily require, with certain exceptions, that all merchandise arriving on one conveyance and consigned to one consignee be included on one entry (see 19 CFR 141.51). With the exception of split shipments regulations in 19 CFR 141.57, there is no provision currently in the regulations authorizing the filing of a single entry to cover multiple portions of a single entity arriving at the same port of entry in the United States at different times on separate conveyances. While today's final regulations permit the acceptance of a single entry in the case of a qualifying unassembled or disassembled shipment, importers may, of course, continue to file a separate entry for each portion of an unassembled or disassembled shipment as it arrives, if they so choose.

Filing of Single Entry for an Unassembled or Disassembled Entity Under the Proposed Rule

In principal part, the April 8, 2002, Federal Register document proposed to permit the filing of a single entry to cover unassembled or disassembled shipment provided that: (1) The subject shipment is not capable of being transported on a single conveyance, but is purchased, invoiced and classified under a single provision of the Harmonized Tariff Schedule of the United States (HTSUS) as a single entity; (2) the arriving portions of the shipment are consigned to the same person in the United States; and (3) the portions covered under the entry arrive directly from abroad at the same port of importation in the United States within 10 calendar days of the date of the portion that arrives first.

Specifically, to implement 19 U.S.C. 1484(j)(1) under which an importer could make a single entry for an unassembled or disassembled shipment, it was proposed to add a new 19 CFR 141.58, in addition to making certain amendments to 19 CFR 141.51. Also, minor conforming changes were to be made to 19 CFR 142.21 and 142.22.

In addition, appearing in this edition of the Federal Register is a notice explaining and extending application of the National Customs Automation Program (NCAP) test concerning the periodic monthly deposit of duties and fees for those duties and fees attributable to entries utilizing this regulation.

Renaming of U.S. Customs as CBP

Sections 403(1) and 411 of the Homeland Security Act of 2002 (Pub. L. 107-296) transferred the U.S. Customs Service and its functions from the Department of the Treasury to the Department of Homeland Security. Pursuant to section 1502 of the Act, the President renamed the “Customs Service” as the “Bureau of Customs and Border Protection,” also referred to as “CBP”. Accordingly, for the sake of consistency throughout the sections in the regulations affected by this final rule (i.e., 19 CFR 141.51, 141.58, 142.21, 142.22 and 142.23), the term “Customs” is removed wherever it appears in those sections and the term “CBP” is added in its place.

Discussion of Comments

CBP solicited written comments on its proposal regarding the implementation of 19 U.S.C. 1484(j)(1). A total of 13 comments were received in response to the April 8, 2002, notice of proposed rulemaking. A review of CBP's response to the issues and questions that were presented by the comments follows.

Comment: The proposed regulations subtly misstate the statutory directive because they add conditions yet fail to take into account the “nature” of the articles. The statute refers to merchandise that is “purchased and invoiced as a single entity but is shipped in an unassembled or disassembled condition in separate shipments due to the size or nature of the merchandise.” In the proposed regulations CBP limits coverage to merchandise that is both large and incapable of being transported on a single conveyance. This would allow a large machine or a knocked-down log home, all parts of which are ready for shipment at the same time but requiring two or more shipments because of size, to qualify for single entry treatment. However, a large turbine generator that could be accommodated on one vessel but the parts of which are made in different locations, necessitating shipment by different conveyances, would not qualify under the proposed regulations. Also precluded would be an entity, such as an industrial equipment installation, which for construction reasons is sent over a period of time. These last two examples would qualify for single entry treatment under the statute but not under the proposed regulation. The proposed regulations should be changed to reflect that the nature of the article and not just size alone is also a criterion that must be taken into account.

CBP Response: CBP agrees with the commenter that the nature of the article not just size alone is a criterion that must be taken into account. Accordingly, the regulatory text has been amended to include the nature of the article as an equal and independent criterion. However, the commenter's examples would not be afforded single entry treatment under the regulations due to the nature of the entity alone. A large turbine generator that could be accommodated on one vessel but the parts of which are made in different locations would not qualify on that basis. CBP believes that the legislation was intended to apply to the components of articles with a single point of origin which are shipped from the same port of export at approximately the same time. Similarly, an entity, such as an industrial installation, would not qualify for single entry treatment on the basis of construction reasons. CBP believes that the legislation was not intended to act as a means to control an importer's inventory or manufacturing processes. An example of an article which may be entered under the regulations due to its nature is an article which, because of safety concerns, must be shipped in an unassembled or disassembled state. In addition, an importer may enter an article which, because of the nature of the article, must be shipped by more than one mode.

Comment: An expansive interpretation of the legislation would benefit trade statistics, because the ensuing entries would reflect the article that is actually being imported, instead of the parts and components that comprise the whole.

CBP Response: CBP has endeavored to promulgate regulations that accurately reflect the underlying statute. There are many laws with differing effects on trade statistics, and the agency's responsibility is to implement the law.

Comment: The proposed 10-calendar day arrival window is too short and does not reflect congressional intent or commercial reality. Its adoption would severely limit the application of the statute, particularly where ocean shipments are involved. The legislative history indicates that the provision was targeted towards single entities shipped unassembled or disassembled “over a period of time”. That time should be sufficient to accommodate the many large machines that are sold as one entity but manufactured in segments, often over a period of time and at different factories. Requiring the importation of machinery within a short time frame may not afford the purchaser sufficient time to install each component before the next one arrives, thereby significantly increasing the storage and project costs. Also, given the size of ocean vessels today, most products can be shipped on a single conveyance. However, often the steamship company does not want an entire hold of a vessel to be filled with several big pieces of machinery, and would impose a very high price to have them shipped together. Suggested alternative time frames include 30 days, one year, 15 months, or a period to be set at the discretion of the port director depending on the circumstances of the transaction.

CBP Response: CBP is sensitive to the interest expressed in extending the time frames. However, CBP in drafting these regulations was constrained by the longstanding rule, expressed both judicially and administratively, that importation of merchandise shall precede its entry. The regulations accomplish this by ensuring that all portions will have arrived either before an entry is filed under the “hold all” procedure of 19 CFR 141.58(d)(1), or before an entry summary—which serves as the entry—is filed when an election has been made to have the portions released incrementally under 19 CFR 141.58(d)(2). Certain time limits necessarily apply to these two different entry methods. General order rules allow merchandise to remain unentered for 15 calendar days after unlading or after arrival at the port of destination if transported in bond. A 10-day arrival window was selected to ensure that this requirement could be met. In deference to the interests of the importing community, CBP will adjust the arrival times to the outermost possible limits within the existing legal framework. The final rule will reflect new arrival times as follows: For entities entered under the “hold all” method, all of the portions of the shipment must arrive within 15 calendar days after the unlading of the first portion or arrival at the destination port if transported in bond; and for those entities released incrementally, all of the portions must arrive within 10 calendar days after the release of the first portion under special permit procedures. This adjustment would extend by five days the arrival window under the “hold all” method, and would potentially give an importer using incremental release an arrival window of 25 days, attained by filing the special permit on the fifteenth calendar day after arrival of the first portion. Section 141.58(b)(4) is amended accordingly. Importers filing unassembled or disassembled entities in a single entry may pay through the method set forth in the National Customs Automation Program (NCAP) test concerning the periodic monthly payment statement process, as announced in a General Notice published in the Federal Register (69 FR 5362) on February 4, 2004, and amended by a General Notice published in the Federal Register (70 FR 5199) on February 1, 2005, and a General Notice published in the Federal Register (70 FR 45736) on August 8, 2005.

Comment: The proposed regulations require, in the case of incremental release, the entry/entry summary to be filed within 10 working days from the date of the first released portion. This may be too restrictive, because it would not take into account delays incurred by the carrier, due to weather, mechanical malfunction, etc. A better alternative would be to require entry summary filing within 10 working days after the arrival of the last portion of the entity. Adoption of the longer filing period may raise interest issues, which could be addressed by developing a unique entry type code and building a new interest calculator into the CBP Automated Commercial System (ACS).

CBP Response: As discussed above, for entities released incrementally, CBP is amending 19 CFR 141.58(b)(4) to allow subsequent portions of an entity to arrive 10 calendar days after the release of the first portion under special permit procedures. Therefore, an importer using incremental release could potentially take advantage of an arrival window of 25 days, attained by filing the special permit on the fifteenth calendar day after arrival of the first portion. Also as mentioned above, CBP believes that the legislation was intended to apply to the components of articles which are shipped at approximately the same time.

Comment: The restriction to arrival at a single port of importation can be a potential problem where shipments are dispatched from different geographic locations. In other cases, some carriers do not offer specialized containers, such as open top units, which may be required for a portion of a particular machine, or such specialized units may not be available from the same underlying carrier when the shipment is ready to move. Since not all carriers serve the same ports, it is quite possible that the different machine components will arrive at different ports. With respect to truck shipments, neither the carrier nor the importer exerts much control over where a particular shipment may cross the border. In some cases, long lines at one border port may prompt the driver to divert to another port of entry. For these reasons, the same arrival port requirement should either be eliminated or a unique entry type developed to accommodate multiple ports of entry.

CBP Response: CBP agrees. Accordingly, proposed 19 CFR 141.58(b)(4) is revised in this final rule by eliminating the requirement that all portions of a qualifying unassembled or disassembled shipment arrive at the same port of importation in the United States. Instead, all portions of the shipment must timely arrive at the same port of entry in the United States. Any portion that arrives at a different port must be transported in-bond to the destination port where entry will be made.

Comment: The proposed rulemaking is somewhat ambiguous regarding the term “port of arrival”, i.e., is this to be the first port of arrival, or the destination port when goods are being transported in-bond?

CBP Response: The changes made in response to the previous comment should serve to clarify that the focal point is the port of entry, which is otherwise known as the destination port when goods are being transported in-bond.

Comment: With respect to the provision granting the port director discretion to deny incremental release, the decision to select one portion (or all of the shipments) for examination should not in itself cause the importer to lose the potential benefit of 19 U.S.C. 1484(j).

CBP Response: A decision to examine one portion or to deny incremental release is not tantamount to a denial of the benefit of the new legislation, because the importer may still file a single entry under the “hold all” procedure, provided all of the requirements for that procedure are met.

Comment: While the entire process is clearly subject to the approval of CBP officers on a case by case basis, there should be an expression that it is the policy of CBP to approve applications for single entry treatment whenever possible.

CBP Response: It will be the policy of CBP to approve applications made under these regulations, provided the shipments fall within the parameters of these regulations.

Comment: Such requirements as advance notice and application for a single entry will allow CBP to meet its regulatory tracking and management obligations. However, this commitment can easily be met by simply requiring advance notice [of an unassembled or disassembled entity] at the first port of entry and then requiring reference to the first entry number, port code, and purchase order or other contract reference on all subsequent related entries.

CBP Response: This comment appears to be based on the mistaken belief that advance notice will be required before the arrival of each portion of an unassembled or disassembled entity. However, the proposed regulation only requires that such notice be provided in advance of the arrival of the first conveyance.

Comment: There is no reason why CBP should require both an explanation as to why a shipment cannot be entered all at once and approval by the port director.

CBP Response: The explanation to which the comment refers is an integral part of the application the importer must make to secure single entry treatment. The statute that gave rise to this provision imposes the application requirement. CBP was thus obligated to include an application process in the regulations. An application by its very nature is either approved or denied, in this case by the port director. Therefore, the need for both an explanation and port director approval is well founded.

Comment: The regulations should expressly state that when a port director denies an application, the denial will be deemed to be an exclusion from entry and eligible for protest pursuant to 19 CFR 174.11(d).

CBP Response: CBP disagrees that a denial of an application amounts to an exclusion from entry, because the merchandise may still be entered, albeit on separate entries.

Comment: By granting port directors discretion to deny incremental release, CBP is defeating the benefits of the legislation.

CBP Response: The legislation confers the benefit of being able to file one entry under circumstances that previously would have required the filing of multiple entries. The denial of incremental release does not remove this benefit, because the importer still retains the option of filing one entry under the “hold all” procedure.

Comment: CBP should have included an option in these proposed regulations that would permit the importer to enter the complete entity on the first shipment and to pay the appropriate duties, fees, and taxes on the known value as witnessed by the purchase order or contract. Where the importer knows that the price is not yet firm he may utilize the reconciliation process to report the final value when determined. CBP could allow subsequent importations on CBP Form 3461 or CBP Form 3461 ALT, properly referenced to the original entry summary for the complete entity. Generally, there are purchase order amendments that follow for some time after the importation of a large piece of equipment, and the value is reconciled with CBP.

CBP Response: The entry process as presented in these new regulations was designed to implement the underlying legislation while at the same time uphold the well-established legal requirement that importation precede entry of goods. The procedure that is suggested in the foregoing comment would not accomplish the latter goal. An election to file one entry under these regulations will not prevent an importer from filing reconciliation entries, should the unresolved issues be of the kind which are entitled to be resolved under the reconciliation program.

Comment: It is unclear whether the application to file a single entry must be submitted by the importer five days prior to the first arrival when such application is made by annotating CBP Form 3461 or CBP Form 3461 ALT.

CBP Response: The 5-day advance application requirement applies equally to applications made in letter format and to those made on a CBP Form 3461 or CBP Form 3461 ALT.

Comment: The requirement to file the application in advance of first arrival is onerous, at least insofar as land border and air modes of transportation are concerned. The air split shipment regulations did not require such notice.

CBP Response: As explained in a response to a previous comment, the advance application is required by statute, and thus must be included in these regulations. As to the requirement being burdensome, an importer seeking to utilize this single entry provision should know well in advance the transportation arrangements that will necessitate shipping on separate conveyances. This is in contrast to the split shipment situation to which you refer whereby the carrier, at its own initiative, decides to divide a shipment and convey its various portions on different conveyances. Quite frequently in the latter scenario the importer only learns of the split after the goods have arrived. In recognition of this fact, CBP in the split shipment regulations (19 CFR 141.57(c)) indicated that “advance notice” of the intent to file a single entry for the various portions may be made as soon as the importer learns of the split but in all cases prior to entry summary filing. The same need for practical accommodation does not apply here.

Comment: Granting the port director discretion to approve or deny an importer's application for single entry treatment and requiring that justification for such treatment be submitted are superfluous, as the importer would know in advance that the particular entity would qualify. The use by importers of experts such as brokers would be the first line of defense against misuse of this provision.

CBP Response: As noted in earlier responses, applications are required by the implementing legislation. When making a determination as to whether to approve or deny a particular application, the port director must rely on the information that is supplied on the application.

Comment: The proposed rulemaking does not address the issue of whether a blanket application would be acceptable. Use of a blanket permit would reduce CBP's workload. While specific invoice or purchase order information would not be available, the entity's specifications should suffice.

CBP Response: Blanket applications are not acceptable because a decision to grant or deny treatment as a single entity will depend on the facts pertaining to each particular shipment.

Comment: The proposed regulations will benefit importers of fiber production equipment which frequently incorporate units of substantial size that must be transported unassembled or disassembled on multiple conveyances.

CBP Response: CBP agrees in principle with the general nature of this comment, which reflects the purpose behind the regulatory proposal.

Comment: The proposed requirement that importers file adjusted CBP Form 3461s for each arriving portion that is released incrementally is burdensome and unnecessary. Instead, CBP should allow incremental release of split shipments without the filing of a CBP Form 3461 as long as the entry summary and carrier manifest data are consistent.

CBP Response: CBP finds that requiring an adjusted copy of the CBP Form 3461 to be submitted for each portion of the shipment is necessary in order to afford a mechanism by which the importer and CBP may easily and effectively keep track of the specific merchandise contained in any given portion of the shipment. However, CBP agrees that multiple CBP Form 3461 copies are unnecessary when both the carrier and the importer are automated. In the case of such automation, adjustments may be made electronically to show the quantity of merchandise contained in each portion of the shipment as it arrives. Proposed 19 CFR 141.58(e) is thus amended in this final rule to reflect that if both the carrier and the importer are automated, such adjustments may be made electronically through the ACS.

Comment: The proposed regulations should provide for the amendment of certificates of origin that are used in preferential trade programs so as to eliminate the need to obtain revised certificates from the importer or producer covering each portion of an unassembled or disassembled shipment that arrives separately.

CBP Response: CBP does not believe that this is necessary. Most certificates of origin are blanket certificates, designed to cover merchandise appearing on many entries. When a certificate of origin covering a single entry pertains to a single entity that is shipped unassembled or disassembled on different conveyances, and separate entries covering different portions of the shipment are filed (either by choice or because a portion of the shipment arrives too late to be covered under the split-shipment entry), copies of the certificate may be made to apply to the additional entries.

Comment: The proposed regulations wrongly preclude quota merchandise from incremental release.

CBP Response: CBP finds that quota and/or visa merchandise is of such a sensitive nature as to warrant its exclusion from incremental release.

Comment: The proposal will compromise the quality of statistics received and recorded by the U.S. government, particularly with respect to freight charges and shipping weight information obtained from the CBP Form 7501 entry summary. It will result in the government losing valuable carrier information. The commenter requests that CBP develop a means of collecting multiple carrier, charges, and shipping weight information on a single entry summary that covers shipments of unassembled or disassembled merchandise that arrives on separate conveyances. It is also suggested that CBP require the importer of record to submit separate carrier, charges, and shipping weight information for each portion of a single entity that arrives in the United States on separate conveyances. Finally, the commenter asks CBP to implement these changes in the Automated Commercial Environment (ACE).

CBP Response: CPB will take these concerns into consideration and attempt to address them in the design and implementation of ACE.

Comment: The commenter periodically imports machines for the production of industrial textile yarns, which by nature of their size and multiple parts cannot be shipped on a single conveyance. This importer firmly favors the proposed rule as this type of equipment is not produced in the United States and must therefore be imported.

CBP Response: CBP agrees that the regulations will facilitate the entry of machines in circumstances such as are described.

Comment: In the Regulatory Flexibility Act and Executive Order 12866 analyses, CBP noted that the implementation of the proposed regulations will engender cost savings by reducing paperwork for importers and by reducing the number of entries required for separate shipments of unassembled and disassembled entities. If CBP issues these regulations as proposed, there will be little, if any, possible usage of this provision because of CBP constraints. The savings that CBP purports will be made simply will not materialize under the burdensome proposed regulations and in the end will force importers to return to Congress for further legislation on this issue.

CBP Response: The commenter did not provide any empirical evidence for this statement, and other commenters including the previous commenter (importer of industrial yarn machines) provided comments contrary to this claim.

The Regulatory Flexibility Act and Executive Order 12866

This rule is intended to implement the amendment of 19 U.S.C. 1484 by the Tariff Suspension and Trade Act of 2000. The rule will engender cost savings by reducing the number of entries required for separate shipments of unassembled or disassembled entities. Therefore, pursuant to the provisions of the Regulatory Flexibility Act (5 U.S.C. 601 et seq.), it is certified that the rule will not have a significant economic impact on a substantial number of small entities. Accordingly, it is not subject to the regulatory analysis or other requirements of 5 U.S.C. 603 and 604. Nor does the rule result in a “significant regulatory action” under E.O 12866.

Signing Authority

The signing authority for this document falls under 19 CFR 0.1(a)(1). The Secretary of the Treasury retained the sole authority to approve any regulations concerning, among other things, the completion of entry. Accordingly, this document must be signed by the Secretary of Homeland Security (or his or her delegate) and the Secretary of the Treasury (or his or her delegate).

List of Subjects

19 CFR Part 141

• Customs duties and inspection
• Entry of merchandise
• Release of merchandise
• Reporting and recordkeeping requirements

19 CFR Part 142

• Computer technology
• Customs duties and inspection
• Entry of merchandise
• Reporting and recordkeeping requirements

Amendments to the Regulations

For the reasons stated above, 19 CFR parts 141 and 142 are amended as follows.

PART 141—ENTRY OF MERCHANDISE

1. The general authority citation for part 141 continues to read as follows:

Authority: 19 U.S.C. 66, 1448, 1484, 1624.

* * * * *

2. Section 141.51 is revised to read as follows:

§ 141.51

Quantity usually required to be in one entry.

All merchandise arriving on one conveyance and consigned to one consignee must be included on one entry, except as provided in § 141.52. In addition, a shipment of merchandise that arrives by separate conveyances at the same port of entry in multiple portions, either as a shipment split by the carrier or as components of a large unassembled or disassembled entity, may be processed under a single entry, as prescribed, respectively, in §§ 141.57 and 141.58.

3. Subpart D of part 141 is amended by adding a new § 141.58, to read as follows:

§ 141.58

Single entry for separately arriving portions of unassembled or disassembled entities.

(a) At election of importer of record. At the election of the importer of record, an unassembled or disassembled entity arriving on multiple conveyances as contemplated under section 484(j)(1), Tariff Act of 1930 (19 U.S.C. 1484(j)(1)), may be processed as a single entry, as prescribed under the procedures set forth in this section.

(b) Unassembled or disassembled entities covered. An unassembled or disassembled entity for purposes of this section is an entity which:

(1) Cannot, due to its size or nature, be shipped on a single conveyance, and is thus imported in an unassembled or disassembled condition;

(2) Is ordered, invoiced and is classifiable under the Harmonized Tariff Schedule of the United States (HTSUS), as a single entity and is consigned to one person in the United States;

(3) Is imported on more than one conveyance to the same port of entry in the United States; and

(4) Involves the first portion and all succeeding portions arriving at the same United States port of entry within either:

(i) 15 calendar days after the unlading of the first portion or arrival at the destination port if transported in bond for entities entered under the “hold all” method permitted in paragraph (d)(1) of this section; or

(ii) 10 calendar days after the release of the first portion under special permit procedures for entities released incrementally as permitted in paragraph (d)(2) of this section.

(c) Application by importer. The importer of record must apply to file a single entry covering an entity described in paragraph (b) of this section. Applications may be made either by appropriately annotating a Customs and Border Protection (CBP) Form 3461, CBP Form 3461 ALT, or electronic equivalent, or by submitting a letter to CBP. The required application must be made no later than 5 working days in advance of the arrival of the first conveyance. Justification for the need for more than one conveyance must be provided in the application, which must include an affirmative statement that the entity cannot, due to its size or nature, be shipped on one conveyance. A copy of the relevant invoice or purchase order, or electronic equivalent, must accompany the application, along with the proposed appropriate single tariff number under the HTSUS. The port director will notify the applicant of the approval or denial of the application within 3 working days of the receipt of the application.

(d) Entry or special permit for immediate delivery. In order to make a single entry for portions of an entity covered under this section that arrive at different times, an importer of record must follow the procedure prescribed in paragraphs (d)(1) or (d)(2) of this section, as applicable.

(1) Entry or special permit after arrival of all portions (Hold All). An importer may file an entry at such time as all portions of the entity have arrived at the same port of entry in the United States. Any portion that arrives at a different port must be transported in-bond to the destination port where entry will be made. In the alternative, the importer may file a special permit for immediate delivery after arrival of all portions of the entity provided that it is eligible for such a permit under § 142.21(a)-(d), (f) and (i) of this chapter.

(2) Special permit for immediate delivery after arrival of first portion (Incremental Release). As provided in § 142.21(h) of this chapter, an importer of record may file an application for a special permit for immediate delivery after the arrival of the first portion of the entity covered by paragraph (b) of this section, and its remaining portions may be released incrementally pursuant to the requirements set forth in paragraph (e) of this section. All portions of the shipment must timely arrive at the same port of entry in the United States. Any portion that arrives at a different port must be transported in-bond to the destination port where entry will be made.

(e) Release. If an importer wishes to secure release of an entity under paragraph (d)(1) of this section after the entity's arrival, the importer must file with CBP a CBP Form 3461 or CBP Form 3461 ALT, as appropriate, or electronic equivalent. To secure the separate release upon arrival of each portion of a shipment under paragraph (d)(2) of this section, the importer must file with CBP a CBP Form 3461 or CBP Form 3461 ALT, as appropriate, or electronic equivalent after arrival of the first portion. As each successive portion arrives, the importer must submit a copy of the originally submitted CBP Form 3461/CBP Form 3461 ALT, annotated to specifically identify that particular portion. The CBP Form 3461/CBP Form 3461 ALT must indicate the order of the arriving portion in relation to the entire shipment as reflected on the invoice (for example, third of six portions). If both the carrier and the importer are automated, such adjustments may be made electronically through the CBP Automated Commercial System (ACS). The release of each portion upon arrival as permitted under this paragraph may be restricted due to CBP's need to examine the merchandise in accordance with paragraph (f) of this section. In addition, the importer of record must present to CBP either on paper or through an authorized electronic equivalent, specific and detailed information supplementing the CBP Form 3461 or 3461 ALT, relating to the merchandise on each conveyance which reflects exact information for that portion of the ordered entity (for example, detailed packing lists).

(f) Examination. CBP may require examination of any or all portions of the entity. CBP reserves the right to deny the release of each portion of such shipments as they arrive (i.e., incremental release) should such an examination of the merchandise be necessary. The denial of incremental release does not preclude the use of the procedures specified in paragraph (d)(1) of this section.

(g) Entry summary. (1) For merchandise entered under paragraph (d)(1) of this section, an entry summary must be filed within 10 working days from the time of entry. For merchandise released under a special permit for immediate delivery, the entry summary, which serves as both the entry and entry summary, must be filed within 10 working days after the first portion of the entity is authorized for release under the special permit.

(2) For merchandise released under a special permit for immediate delivery pursuant to paragraph (d)(2) of this section, the entry summary, which serves as both the entry and the entry summary, must be filed within 10 working days from the date of the first release of a portion of the unassembled or disassembled entity. However, the entry/entry summary for the entity cannot be filed before the last portion of the entity which is to be included on the entry has arrived.

(3) Duty payment. At the time the entry summary is filed under paragraphs (g)(1) and (g)(2) of this section, estimated duties, taxes and fees must be attached. If the entry summary is filed electronically, the estimated duties, taxes and fees must be scheduled for payment at such time pursuant to the Automated Clearinghouse procedures (see 19 CFR 24.25).

(h) Classification. Except as provided in paragraph (j) of this section, for purposes of section 484(j)(1), Tariff Act of 1930 (19 U.S.C. 1484(j)(1)), the merchandise comprising the separate portions of an entity covered by paragraph (b) of this section included on one entry will be classified as though imported together. Any spare parts accompanying a portion of an entity must be classified and entered separately.

(i) When separate entry and entry summary required. When all portions of an entity do not arrive at the port of entry within the time constraints of paragraphs (b)(4)(i) and (ii) of this section, as applicable, a separate entry and entry summary must be filed for each portion that has already arrived, and for each portion that subsequently will arrive on separate conveyances. The merchandise included on each separate entry shall be classified in its condition as imported. Each entry would reflect the quantities, values, classifications and rates of duty, as appropriate, of the various components conveyed in each shipment, and not the value or classification of the ordered single entity.

(j) Exclusions. Merchandise subject to quota and/or visa requirements is entirely excluded from the procedures set forth in this section. Also, CBP reserves the right for the port director to deny use of the incremental release procedure and only release the shipment in its entirety as circumstances warrant, such as in the case where a particular shipment has been selected for examination.

PART 142—ENTRY PROCESS

4. The authority citation for part 142 continues to read as follows:

Authority: 19 U.S.C. 66, 1448, 1484, 1624.

5. Section 142.21 is amended by:

a. Removing the term “Customs” wherever it appears and in its place adding the term “CBP”;

b. Revising the heading of paragraph (e)(1);

c. Removing the second sentence in paragraph (e)(1) and adding in its place two new sentences;

d. Revising the heading of paragraph (e)(2);

e. Removing the second sentence in paragraph (e)(2) and adding in its place two new sentences;

f. Revising paragraph (g);

g. Redesignating paragraph (h) as paragraph (i);

h. Adding a new paragraph (h), and

i. Revising newly designated paragraph (i).

The additions and revisions read as follows:

§ 142.21

Merchandise eligible for special permit for immediate delivery.

* * * * *

(e) Quota-class merchandise—(1) Tariff rate quotas. * * * However, merchandise subject to a tariff-rate quota may not be incrementally released under a special permit for immediate delivery as provided in paragraphs (g) and (h) of this section. Nor is such merchandise eligible for release under a special permit pursuant to 19 CFR 141.58(d)(1). * * *

(2) Absolute quotas. * * * However, merchandise subject to an absolute quota under this paragraph may not be incrementally released under a special permit for immediate delivery as provided in paragraphs (g) and (h) of this section. Nor is such merchandise eligible for release under a special permit pursuant to § 141.58(d)(1) of this chapter. * * *

* * * * *

(g) Split shipments. Merchandise subject to § 141.57(d)(2) of this chapter, which is invoiced and delivered to the carrier as a single shipment, but which, due to the carrier's inability to accommodate the merchandise on a single conveyance, is shipped by the carrier in separate portions to the same port of entry in the United States as listed on the original bill of lading, may be released incrementally under a special permit. Incremental release means releasing each portion of such shipments separately as they arrive.

(h) Entities shipped unassembled or disassembled on multiple conveyances. Merchandise subject to § 141.58(d)(2) of this chapter, which is purchased, invoiced, and classified as a single entity under the Harmonized Tariff Schedule of the United States (HTSUS), and which is shipped in separate portions because its size or nature prevents shipping the entity on a single conveyance, may be released incrementally under a special permit.

(i) When authorized by Headquarters. Headquarters may authorize the release of merchandise under the immediate delivery procedure in circumstances other than those described in § 142.21(a) through (h) provided a bond on CBP Form 301 containing the bond conditions set forth in § 113.62 of this chapter is on file.

6. Section 142.22 is amended by:

a. Removing the term “Customs” wherever it appears and in its place adding the term “CBP”; and

b. Revising the first sentence in paragraph (a) to read as follows:

§ 142.22

Application for special permit for immediate delivery.

(a) Form. An application for a special permit for immediate delivery will be made on CBP Form 3461, supported by the documentation provided for in § 142.3. * * *

* * * * *

Deborah J. Spero,

Acting Commissioner, Bureau of Customs and Border Protection.

Dated: May 26, 2006.

Timothy E. Skud,

Deputy Assistant Secretary of the Treasury.