[Federal Register Volume 62, Number 76 (Monday, April 21, 1997)]
[Rules and Regulations]
[Pages 19223-19224]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 97-10250]
=======================================================================
-----------------------------------------------------------------------
POSTAL SERVICE
39 CFR Part 20
Global Package Link
AGENCY: Postal Service.
ACTION: Final rule.
-----------------------------------------------------------------------
SUMMARY: The Postal Service, after considering comments submitted in
response to its request in 61 FR 55 572 (October 28, 1996) for comments
on an interim rule establishing a charge for harmonization of catalog
items for mailers using Global Package Link, hereby gives notice that
it is adopting the interim regulations on a permanent basis, with
modification.
EFFECTIVE DATE: 12:01 a.m., April 21, 1997.
FOR FURTHER INFORMATION CONTACT: Robert Michelson, (202) 268-5731.
SUPPLEMENTARY INFORMATION: On October 28, 1996, the Postal Service
published in the Federal Register interim regulations establishing a
charge of $1.25 per item for catalog harmonization work performed by
the Postal Service for the mailer. Harmonized items are needed for most
GPL destination countries to ensure an expeditious customs clearance
and to allow the USPS to settle the customs charges on behalf of the
mailer. The service includes expedited customs clearance through use of
a software-based information system containing all the applicable duty
and tax rates for specific products being mailed to destination
countries. Of the current GPL destination countries, Brazil, Canada,
Chile, Germany, Japan, and the U.K., only Japan does not require
harmonized items for a GPL clearance.
Comments were due on or before December 15, 1996. Comments were
received from one commenter, a company engaged in international package
mail order, J.C. Penney
[[Page 19224]]
International Catalog, Inc. After considering the comments, the Postal
Service has decided to adopt the rule with modification.
J.C. Penney asserts that harmonization is a basic component of the
GPL service and therefore is included in the GPL rate chart. The Postal
Service does not agree that harmonization is included in the GPL rate
chart. When GPL, then called IPCS, was first implemented in December
1994, Japan was the only destination country and did not require a
harmonized datafile to be transmitted for customs clearance. All
subsequent rates for GPL to other destinations were developed without
inclusion of customs harmonization costs, with the knowledge that at a
later date a specific harmonization fee would be implemented when the
costs to perform this service were fully revealed. By late summer of
1996, the Postal Service had determined its customs harmonization costs
and took action to publish a specific fee in the Federal Register
(October 28, 1996). The Postal Service does not feel it is appropriate
to include these costs in the rate charts for GPL because GPL mailers
have very different levels of need for harmonization. For example, if
the harmonization costs were in the rate charts, a high volume GPL
mailer with a small number of catalog items would be paying for
harmonization services not fully utilized, while a lower volume GPL
mailer with a large catalog and many more harmonized items would be
receiving more services and paying the same rate. Also, some customers
may already have a fully harmonized database of their catalog items at
the time of initiating GPL service, and as such should not be paying
higher rates for a harmonization service that they will not use.
J.C. Penney also asserts that billing for this portion of the
service causes an unnecessary accounting step (separate billing,
invoicing, etc.), creating numerous invoices for small specialty
catalogs (hundreds of dollars) and a disincentive for larger catalogers
with thousands of items. The Postal Service disagrees that invoicing
for small amounts will be an unnecessary accounting step. To our
knowledge, most companies do not excuse payment from customers owing
small amounts just because it is extra effort. The USPS has developed
an accounts receivable infrastructure and as such is able to generate
invoices in an automated manner.
In its last assertion, J.C. Penney claims that a number of private
customs brokers in Canada are already set up to handle pre-customs
advisory and package processing for catalog shipments and do not charge
separate small fees for harmonization but rather incorporate this
feature in the overall rate per package. J.C. Penney asserts that if
the USPS were to add this new fee, GPL service would no longer be
competitive. The Postal Service will not dispute that some Canada
customs brokers include this charge in the overall package delivery
fee, but the USPS is also aware that other Canada customs brokers do
charge separately for harmonization and do not include these charges as
part of the per package fee. Harmonization fees alone are a relatively
small investment for an international mailer to make and therefore is
unlikely to make the GPL service noncompetitive in the marketplace.
After carefully reviewing J.C. Penney's comments and input received
from other sources, the Postal Service has decided to modify the policy
regarding harmonization fees to allow each GPL mailer to have 2,500
catalog items harmonized by the Postal Service at no cost during the
first 12 months after signing a GPL agreement to a destination country
that requires harmonization. This free service will be offered only
once to each customer and only during the first 12 months after signing
a GPL agreement. Any harmonization service performed in excess of 2,500
items and/or after 12 months will be assessed a per-item fee of $1.25.
Accordingly, the Postal Service adopts the following amendments to
the International Mail Manual, which is incorporated by reference in
the Code of Federal Regulations. See 39 CFR 20.1. All other interim
changes in the rule for Global Package Link service which were
published in the Federal Register as amendments of the interim rule
remain in effect as interim rules.
List of Subjects in 39 CFR Part 20
International postal service, Foreign relations.
PART 20--[AMENDED]
1. The authority citation for 39 CFR part 20 continues to read as
follows:
Authority: 5 U.S.C. 552(a); 39 U.S.C. 401, 404, 407, 408.
2. Chapter 6 of the International Mail Manual is amended to read as
follows:
626.4 Customs Clearance
* * * * *
626.421 Catalog Harmonization Services
The Postal Service will provide free catalog harmonization services
for the first 2,500 catalog items presented for harmonization during
the first 12 months following the GPL customer signing an agreement for
a GPL destination country that requires harmonization. Any
harmonization work performed in excess of 2,500 for each customer and/
or after the first 12 months of signing a GPL agreement will be charged
a fee of $1.25 per item. The mailer has the option of performing their
own harmonization, provided it is done in a format compatible with the
Postal Service's Customs Pre-Advisory System (CPAS) software.
* * * * *
Stanley F. Mires,
Chief Counsel, Legislative.
[FR Doc. 97-10250 Filed 4-18-97; 8:45 am]
BILLING CODE 7710-12-P
