[Federal Register Volume 59, Number 210 (Tuesday, November 1, 1994)]
[Unknown Section]
[Page 0]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 94-26955]
[[Page Unknown]]
[Federal Register: November 1, 1994]
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DEPARTMENT OF THE TREASURY
Customs Service
19 CFR Part 10
RIN 1515-AB51
Treatment of Reusable Shipping Devices Arriving From Canada or
Mexico
AGENCY: Customs Service, Department of the Treasury.
ACTION: Proposed rule.
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SUMMARY: This document proposes to amend the Customs Regulations to
allow certain foreign-manufactured shipping devices arriving from
Canada or Mexico to be released, under specified conditions, without
entry and payment of duty at the time of arrival and without the
devices being serially numbered or marked, if they are always
transported on or within either intermodal and similar containers or
containers which are themselves vehicles or vehicle appurtenances and
accessories. As millions of these devices are used annually in hundreds
of millions of transportation moves between the United States and
Canada or Mexico, Customs recognizes that requiring the importing and
exporting communities to individually mark and track these devices
places a burden on commerce that Customs should attempt to alleviate.
DATES: Comments must be received on or before January 3, 1995.
ADDRESSES: Comments (preferably in triplicate) must be submitted to
U.S. Customs Service, ATTN: Regulations Branch, Franklin Court, 1301
Constitution Avenue, NW., Washington, D.C. 20229, and may be inspected
at the Regulations Branch, 1099 14th Street, NW., Suite 4000,
Washington, D.C.
FOR FURTHER INFORMATION CONTACT: Louis Hryniw, Office of Regulatory
Audit, (202-927-1100).
SUPPLEMENTARY INFORMATION:
Background
Pursuant to Chapter 98, Subchapter III, U.S. Note 3, Harmonized
Tariff Schedule of the United States (HTSUS) (19 U.S.C. 1202), in order
to facilitate the prompt clearance at ports of entry of certain
substantial containers and holders, the Secretary of the Treasury is
authorized to permit the admission of the containers without entry and
to permit any duties thereon to be paid cumulatively from time to time
either before or after their importation when conditions exist which
permit adequate Customs controls to be maintained. Pursuant to
subheading 9803.00.50, HTSUS, substantial containers and holders which
are of foreign production and previously imported and duty (if any)
thereon paid, or if of a class specified by the Secretary of the
Treasury as instruments of international traffic (IITs) are free of
duty. Pursuant to 19 U.S.C. 1322, instruments of international traffic
shall be excepted from the application of the customs laws to such
extent and subject to such terms and conditions as may be prescribed in
regulations or instruction of the Secretary of the Treasury.
Current regulations regarding shipping devices are set forth in
Secs. 10.41a and 10.41b, Customs Regulations (19 CFR 10.41a and
10.41b). According to Sec. 10.41a, certain containers are designated as
IITs and, as such, may be released without entry or duty subject to the
provisions of the section. According to Sec. 10.41b, other substantial
containers and holders are required to be serially numbered and marked
in order to be released without entry or payment of duty. Section
10.41b(b), (c) and (d) currently describe the numbering and marking
requirements.
In this latter regard, Customs has received a petition from, and
has met with representatives of, the American Automobile Manufacturers
Association (AAMA) concerning an amendment to the Customs Regulations
intended to ease the burden of serially numbering and marking certain
containers arriving from Canada or Mexico. According to the AAMA, the
business community cannot efficiently and economically individually
mark and track the millions of these smaller shipping devices that hold
goods, such as racks, holders, pallets, totes, and packaging material,
that are used annually in hundreds of millions of transportation moves
between the United States and Canada or Mexico without placing an
excessive and undue burden on commerce. In the highly integrated
manufacturing environment of today's economy, programs which place
strict reporting, control and usage requirements on reusable shipping
devices, beyond what is actually necessary for Customs to acquit its
responsibilities, create an unusual and unnecessary burden on the
growth and competitiveness of companies located in the U.S.
Restrictions on the use and control of these reusable shipping devices
needlessly increase the cost of goods and materials in the U.S.
After reviewing the AAMA proposal, Customs believes that the
requirements to serially number and mark the substantial holders and
containers in question can be eased without risking a loss of revenue.
Accordingly, Customs is proposing to amend Sec. 10.41b to allow an
importer or his agent to apply to a district director of Customs for
permission to have certain foreign-made shipping devices arriving from
Canada or Mexico released without entry and payment of duty at the time
of arrival and without the devices being serially numbered or marked.
The application would, among other things, describe the subject
shipping devices, identify the ports where they would arrive and depart
the U.S., and set forth the proposed program for accounting for and
reporting the shipping devices to Customs. If the application is
approved, the importer or agent would submit to Customs a periodic
report for the shipping devices, which could not be less frequent than
annual, using his own accounting and recordkeeping procedures to keep
track of the devices. Records supporting the periodic reports of the
shipping devices would have to be retained for at least 3 years from
the date the reports are filed with Customs. Any duty applicable to the
devices would have to be tendered cumulatively at the time specified in
the approved application. Such tender could not occur more than 90 days
following the end of the related reporting period.
In the event the application should be denied, in whole or in
part, by the district director, the applicant could appeal the denial
to the regional commissioner.
By eliminating the serial numbering and marking of the shipping
devices concerned, and by permitting a consolidated accounting or
reporting period for such devices, the real benefit of the proposal, it
is believed, will be reduced operating costs for the international
trade community.
In this respect, the proposed rule would achieve the desired
purposes for those who wish to apply, by supplanting the existing
system which depends upon physical examination of the shipping devices
concerned as well as the maintenance of elaborate and costly
identification systems, with a system based upon the applicant's own
books and records, including, most importantly, acquisition and repair
cost records. Since duty would be due on all shipping devices acquired
within the period covered by the periodic report which the applicant
would undertake to file, even though the devices may not have yet been
used in transborder traffic, accounting for specific movements of the
devices or for diversions would be superfluous.
The proposed amendments to the Customs Regulations are set forth
below.
Comments
Before adopting the proposed amendments, consideration will be
given to any written comments timely submitted to Customs. Comments
submitted will be available for public inspection in accordance with
the Freedom of Information Act (5 U.S.C. 552), Sec. 1.4, Treasury
Department Regulations (31 CFR 1.4), and Sec. 103.11(b), Customs
Regulations (19 CFR 103.11(b)), on regular business days between the
hours of 9 a.m. and 4:30 p.m. at the Regulations Branch, Franklin
Court, 1099 14th Street, NW., Suite 4000, Washington, DC.
Regulatory Flexibility Act and Executive Order 12866
For the reasons set forth in the preamble, pursuant to the
provisions of the Regulatory Flexibility Act (5 U.S.C. 601 et seq.), it
is certified that, if adopted, the proposed amendments will not have a
significant economic impact on a substantial number of small entities.
Accordingly, the amendments are not subject to the regulatory analysis
or other requirements of 5 U.S.C. 603 and 604. Nor would the proposed
amendments result in a ``significant regulatory action'' under E.O.
12866.
Paperwork Reduction Act
The collection of information contained in this notice of proposed
rulemaking has been submitted to the Office of Management and Budget
for review in accordance with the Paperwork Reduction Act of 1980 (44
U.S.C. 3504(h)). Comments on this collection of information should be
sent to the Office of Management and Budget, Attention: Desk officer
for the Department of the Treasury, Office of Information and
Regulatory Affairs, Washington, DC 20503. A copy should also be sent to
Customs at the address set forth previously.
The collection of information in these proposed regulations is in
Sec. 10.41(b). The information is necessary so that Customs may
determine whether the plan submitted by the importer or his agent to
keep track of and pay duty on his shipping devices is acceptable. The
likely respondents would be business organizations.
Estimated total annual reporting and/or recordkeeping burden:
Estimated average annual burden per respondent/recordkeeper:
Estimated number of respondents and/or recordkeepers:
Estimated annual frequency of responses:
Drafting Information
The principal author of this document was Russell Berger,
Regulations Branch, U.S. Customs Service. However, personnel from other
offices participated in its development.
List of Subjects in 19 CFR Part 10
Alterations, Bonds, Customs duties and inspection, Exports,
Imports, Preference programs, Repairs, Reporting and recordkeeping
requirements, Trade agreements.
Proposed Amendments to the Regulations
It is proposed to amend part 10, Customs Regulations (19 CFR part
10), as set forth below:
PART 10--ARTICLES CONDITIONALLY FREE, SUBJECT TO A REDUCED RATE,
ETC.
1. The general authority citation for part 10 would continue to
read as follows, and the specific sectional authority for part 10 would
be amended by adding specific authority for Sec. 10.41b, in appropriate
numerical order thereunder, to read as follows:
Authority: 19 U.S.C. 66, 1202, 1481, 1484, 1498, 1508, 1623,
1624;
* * * * *
Section 10.41b also issued under 19 U.S.C. 1202 (Chapter 98,
Subchapter III, U.S. Note 3, Harmonized Tariff Schedule of the U.S.
(HTSUS)).
* * * * *
2. It is proposed to amend section 10.41b by redesignating
paragraphs (b), (c), (d), (e), (f), (g) and (h) as (c), (d), (e), (f),
(g), (h) and (i), respectively, and by adding a new paragraph (b) to
read as follows:
Sec. 10.41b Clearance of serially numbered substantial holders or
outer containers.
* * * * *
(b) Subject to the approval of a district director pursuant to the
procedures described in this paragraph, certain foreign-manufactured
shipping devices arriving from Canada or Mexico, including racks,
holders, pallets, totes, boxes and cans, need not be serially numbered
or marked if they are always transported on or within either intermodal
and similar containers or containers which are themselves vehicles or
vehicle appurtenances and accessories such as twenty and forty foot
containers of general use and ``igloo'' air freight containers.
(1) An importer or his agent, regardless of whether the importer is
the owner of the foreign-manufactured shipping devices, may apply to a
district director of Customs at one of the importer's chiefly utilized
Customs districts or the district within which the importer's or
agent's recordkeeping center is located for permission to have such
shipping devices arriving from Canada or Mexico released without entry
and payment of duty at the time of arrival and without the devices
being serially numbered or marked. Application may be filed in only one
district. Although no particular format is specified for the
application, it must contain the information enumerated in paragraph
(b)(2) of this section. Any duty which may be due on these shipping
devices shall be tendered and paid cumulatively at the time specified
in an approved application, which may be either before or after the
arrival of the shipping devices in the U.S. (e.g., at the time a
contract, purchase order or lease agreement is issued).
(2) The application shall:
(i) Describe the types of shipping devices covered, their
classification under the Harmonized Tariff Schedule of the U.S.
(HTSUS), their countries of origin, and whether and to whom required
duty was paid for them or when it will be paid for them, including
duties for repair and modifications to such shipping devices while
outside the U.S.;
(ii) Identify the ports where the shipping devices will be arriving
and departing the U.S., as well as the particular movements and
conveyances in which they are intended to be utilized;
(iii) Describe the applicant's proposed program for accounting for
and reporting these shipping devices;
(iv) Identify the reporting period (which shall in no event be less
frequent than annual), as well as the payment period within which
applicable duty and fees must be tendered (which shall in no event
exceed 90 days following the close of the related reporting period);
(v) Describe the type of inventory control and recordkeeping,
including the specific records, to be maintained to support the reports
of the shipping devices; and
(vi) Provide the location in the United States where the records
supporting the reports will be retained by law and will be made
available for inspection and audit upon reasonable notice. (The records
supporting the reports of the shipping devices must be kept for a
period of at least 3 years from the date such reports are filed with
the district director.)
(3) The application shall be filed along with a continuous bond
containing the conditions set forth in Sec. 113.66 of this chapter. If
the application is approved by the district director and the conditions
set forth in the application or of the bond are violated, the district
director may issue a claim for liquidated damages equal to the domestic
value of the container. If the domestic value exceeds the amount of the
bond, the claim for liquidated damages will be equal to the amount of
the bond.
(4) The district director receiving the application shall evaluate
the program proposed to account for, report and maintain records of the
shipping devices. The district director may suggest amendments to the
applicant's proposal. The district director shall notify the applicant
in writing of his decision on the application within 90 days of its
receipt, unless this period is extended for good cause and the
applicant so informed in writing. The district director shall have
authority to approve the application and procedures for utilization in
each district or area identified in the application.
(5) If the decision is to deny the application, in whole or in
part, the district director shall specify the reason for the denial in
a written reply, and inform the applicant that such denial may be
appealed to the regional commissioner within 21 days of its date. If
the decision is appealed, the regional commissioner shall coordinate
his review thereof with the district director. The regional
commissioner's decision shall be issued, in writing, within 30 days of
the receipt of the appeal, and shall constitute the final Customs
determination concerning the application.
(6) If the application is approved, an importer may later apply to
amend his application to add or delete particular types of shipping
devices listed in the application and districts and areas identified in
the application in which the procedures set forth in the application
may be utilized. If a requested amendment to an approved application
should be denied, in whole or in part, by the district director, the
appeal process described in paragraph (b)(5) of this section shall
apply.
(7) Application for and approval of a reporting program shall not
limit or restrict the use of other alternative means for obtaining the
release of holders, containers and shipping devices.
* * * * *
George J. Weise,
Commissioner of Customs.
Approved: October 13, 1994.
John P. Simpson,
Deputy Assistant Secretary of the Treasury.
[FR Doc. 94-26955 Filed 10-31-94; 8:45 am]
BILLING CODE 4820-02-P
