[Federal Register Volume 61, Number 92 (Friday, May 10, 1996)]
[Notices]
[Pages 21534-21537]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-11734]
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DEPARTMENT OF THE TREASURY
Customs Service
Announcement of National Customs Automation Program Test
Regarding Reconciliation
AGENCY: U.S. Customs Service, Department of the Treasury.
ACTION: General notice.
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SUMMARY: This notice announces Customs plan to conduct a voluntary
prototype test regarding reconciliation. This reconciliation test will
cover entries to which antidumping and countervailing duties apply.
This notice invites public comments concerning any aspect of the
planned test, informs interested members of the public of the
eligibility requirements for voluntary participation in the testing of
this prototype, and describes the basis on which Customs will select
participants.
EFFECTIVE DATES: The test of this prototype will commence no earlier
than July 9, 1996. This test will end when liquidation or reliquidation
of all Reconciliations has become final. Comments concerning the
methodology of this prototype must be received on or before June 10,
1996. To participate in this prototype test, the necessary information,
as outlined in this notice, must be filed with Customs on or before
June 10, 1996.
ADDRESSES: Written comments regarding this notice, and information
submitted to be considered for voluntary participation in this
prototype should be addressed to Reconciliation Prototype Team, U.S.
Customs Service, 1301 Constitution Avenue, N.W., Room 1322, Washington,
D.C. 20229-0001.
FOR FURTHER INFORMATION CONTACT: For questions on reconciliation:
Rychelle Ingram (202) 927-1131.
For questions on Antidumping and Countervailing duties: Frank Crowe
(202) 927-0402.
SUPPLEMENTARY INFORMATION:
Background
Title VI of the North American Free Trade Agreement Implementation
Act (the Act), Public Law 103-182, 107 Stat. 2057 (December 8, 1993),
contains provisions pertaining to Customs Modernization (107 Stat.
2170). Subtitle B of Title VI establishes the National Customs
Automation Program (NCAP)--an automated and electronic system for the
processing of commercial importations. Section 637 of the Act amends
Section 484 of the Tariff Act of 1930 by establishing a new subsection
(b) entitled ``Reconciliation.'' Reconciliation is a planned component
of the NCAP. Section 631 authorizes tests of planned NCAP components.
Section 101.9(b) of the Customs Regulations (19 CFR 101.9(b)),
implements the testing of NCAP components. See T.D. 95-21 (60 FR 14211,
March 16, 1995). This test is established pursuant to those
regulations.
Previous NCAP initiatives include Customs prototype of remote
location filing (60 FR 17605), and the announcement of a reconciliation
prototype for related party importers making upward adjustments to the
price of imported merchandise, pursuant to 26 U.S.C. 482. (60 FR 46141
and 60 FR 64470.)
I. Description of Proposed Test
The Concept of Reconciliation
Reconciliation will allow an importer to provide Customs with
information (other than that related to the admissibility of
merchandise), which is not available at the time of entry summary
filing, at a subsequent time. A notice of intention to file a
Reconciliation (``Notice of Intent'') permits the liquidation of an
entry as to all issues other than those which are transferred to the
Reconciliation. By filing a Notice of Intent, an importer is requesting
that a certain issue be separated from the entry. The importer
voluntarily requests and accepts that the issue identified in the
Notice of Intent remains open and outstanding and is transferred to the
Reconciliation. In this prototype, the issue of liability for
antidumping and countervailing duties (AD/CVD) will be transferred to
the Reconciliation. This permits Customs to liquidate the underlying
entry as to the other issues, e.g., classification, but the issue of
liability for AD/CVD is held open at the request of the importer, and
is transferred to the Reconciliation.
Upon liquidation of the entry, any decision by Customs entering
into that liquidation, e.g., classification, may be protested pursuant
to 19 U.S.C. 1514. When the outstanding information, e.g., final
antidumping duty owed as per the assessed rate, is later furnished in
the Reconciliation, the Reconciliation may be liquidated. The
Reconciliation will operate as an entry for purposes of liquidation and
protest of the issue in the Reconciliation. The liquidation of the
Reconciliation may be protested but
[[Page 21535]]
the protest may only pertain to elements contained in the liquidated
Reconciliation, i.e., the protest may not re-visit elements previously
liquidated in the entry.
The Reconciliation shall be filed within 90 days of posting of
liquidation instructions by the Customs Service. Customs posting of the
liquidation instructions will serve as the notice to the importer by
the Customs Service that a period of review for antidumping or
countervailing duty purposes has been completed. Consequently, because
the Reconciliation is filed after the suspension of liquidation has
been lifted, the liquidation of the Reconciliation is subject to 19
U.S.C. 1504(a), but not subject to 19 U.S.C. 1504(d).
Description of the Reconciliation Prototype
This prototype will commence no sooner than July 9, 1996. Customs
would like to afford the opportunity to participate to all those who
volunteer for this test. However, the number of participants may be
limited in view of the fact that this prototype will be conducted with
minimal computer changes, requiring Customs to manually intervene in
tracking and processing. While all interested parties are encouraged to
apply for participation, Customs, in conjunction with the Department of
Commerce (DOC), will specifically be targeting those AD/CVD cases for
which liquidation instructions will be issued in the short term. All
procedures and processes will be closely coordinated with the selected
and affected parties. The purpose of this prototype is to test such
operational issues as establishment of the Notice of Intent,
liquidation of the underlying entry summaries, and processing and
liquidation of the Reconciliation.
This prototype will cover entries to which antidumping and
countervailing duties apply. As required by Section 637 of the Act,
Customs has coordinated with the DOC in the development of this test,
and will continue to consult with the DOC throughout the test.
There are several reasons Customs has selected AD/CVD for this
reconciliation prototype. First, this test can be initiated prior to
having full computer mainframe programming, partially due to the fact
that drawback cannot be claimed on AD/CVD duties. In addition, Customs
will no longer have to suspend liquidation as to all issues affecting
the entry until final instructions have been issued for all AD/CVD
cases on the entry. Faster processing of refunds will result in a cash-
flow benefit to importers. Should the AD/CVD assessment result in an
increase due Customs, faster processing will enable the government to
collect duties more timely. As intended by the Act, liquidation of the
non-reconciliation issues on the subject entries will result in a
reduction of contingent liabilities for the importer. Finally, this
prototype will result in a workload savings for the government. Of all
entries currently being withheld from liquidation, 75% are suspended
for pending AD/CVD cases. Reconciliation provides Customs with the
authority to liquidate the underlying entries as to all issues other
than the liability for the AD/CVD case, which is identified by the
importer in the Notice of Intent, and at his request, transferred to
the Reconciliation. By submitting a Notice of Intent, an importer is
requesting that the issue of liability for AD/CVD remain open and be
transferred to the Reconciliation.
There are various situations which lend themselves to this
prototype, including (1) entries having one AD/CVD case, for which the
importer wants to reduce its contingent liabilities and leave only the
AD/CVD case open on the Reconciliation, and (2) entries having multiple
AD/CVD cases, one or more of which has been terminated, or one or more
of which has had liquidation instructions issued. Also, parties who
have drawback claims against import entries that are suspended for AD/
CVD will expedite the liquidation of their drawback entries if they use
this prototype to transfer the AD/CVD issue off the import entries.
The following is an example of a situation which would benefit from
this prototype. Importer X has 800 entries filed in the port of
Cleveland, all of which have merchandise which is subject to three
antidumping cases. The DOC has previously provided Customs with
liquidation instructions on two of the cases, each having an assessed
rate lower than the deposit rate. As a result, Customs owes importer X
refunds based on the results of the two cases. However, the 800 entries
presently must continue to be suspended from liquidation, pending
instructions on the third case. No money is refunded until the entries
can be liquidated. In the case of a separate Notice of Intent being
filed for each of the three cases, Customs is capable of isolating each
case on a single Reconciliation and liquidating the underlying entries
as to the other issues. As the DOC provides instructions, each case can
be liquidated individually. In this example, this prototype provides
for more efficient processing by Customs and quicker refunds to the
importer. Additionally, Customs would issue one check for each
Reconciliation, as opposed to the current obligation of issuing 800
separate checks.
Customs posting of the AD/CVD liquidation instructions on the
Customs Electronic Bulletin Board and the Administrative Message System
will initiate the 90 days in which the participant has to file the
Reconciliation. Customs posting of the liquidation instructions will
serve as the notice to the importer by the Customs Service that a
period of review for antidumping or countervailing duty purposes has
been completed. The publication in the Federal Register by the
International Trade Administration (DOC) does not constitute Commerce's
instructions to Customs to liquidate, and as such, will NOT trigger the
90 day period for submission of the Reconciliation.
Prerequisites for Reconciliation Under this Prototype
The following are the prerequisites for this prototype covering AD/
CVD transactions:
A. Common Elements: Each Reconciliation under this prototype will
be limited to entries filed by one importer and one filer, and in one
port location. Importers who file entries at more than one port may
participate if the other prerequisites are met; however, they will have
to file one Notice of Intent/Reconciliation for each port. Each
Reconciliation is limited to one Antidumping or Countervailing duty
case (the individual ten digit case number), and will cover only one
manufacturer/shipper/grower. Each Reconciliation will cover only one
review period, as defined in 19 CFR 353.22 and 19 CFR 355.22.
B. Bonding: Adequate bonding will be required for each
Reconciliation. Since there is no additional liability created on the
Reconciliation, the bond filed on the underlying entries will in most
cases be used to cover the Reconciliation. However, Customs will
analyze each participant's individual situation, and take action to
ensure sufficient bond coverage exists. While Customs prefers to have
one common set of legally responsible parties for each Reconciliation,
importers with entries filed within one review period which were
secured by more than one surety will not be excluded from participation
in this prototype.
C. Eligible Entries: The following types of entries will be
eligible for this prototype: (1) Entry type 03--Antidumping and
Countervailing duty consumption entries, (2) Entry type 06--Foreign
trade zone consumption entries, and (3) Entry type 07--Quota/Visa and
[[Page 21536]]
Antidumping/Countervailing duty consumption entries.
Customs is developing a system to accommodate the details involved
on Reconciliations covering warehouse withdrawals. Importers interested
in filing a Reconciliation on warehouse withdrawals (Entry type 34--
Antidumping/Countervailing duty warehouse withdrawal, and Entry type
38--Quota/Visa and Antidumping/Countervailing duty warehouse
withdrawal) are encouraged to submit comments and apply for
participation, if interested.
D. Time frame: Those entries filed via ABI between February 1, 1990
and the start of this test will be considered eligible for this
prototype. (Entries filed prior to February 1, 1990 are not eligible
for this test because prior to such date, Customs did not track AD/CVD
case information by entry summary line within the Automated Commercial
System.)
E. Notice of Intent/Reconciliation: Once a participant is selected,
a Notice of Intent must be filed. The Notice of Intent is irrevocable.
The Notice of Intent must contain the Reconciliation number and the
common elements of the Reconciliation, (i.e., importer/filer/AD-CVD
case/review period/manufacturer/Port).
The Reconciliation will be due within 90 days of Customs' posting
of the liquidation instructions. For AD/CVD cases which have had
liquidation instructions previously posted by Customs, the filing of
the Notice of Intent will trigger the 90 days for submission of the
Reconciliation. For purposes of this prototype, the Reconciliation will
be submitted to Customs in an ASCII text, tab-delimited file format,
both on hard copy and diskette, and will contain the following
information for each entry line subject to the Reconciliation:
(1) Entry number;
(2) Date of entry;
(3) Date of export from foreign country (if Reconciliation pertains
to CVD case);
(4) Entered value;
(5) AD/CVD duty deposited (Indicate ``B'' if bonded);
(6) Amount of supplemental AD/CVD duty payment(s), if any;
(7) Date(s) of supplemental payment(s), if any;
(8) Total quantity (only if liquidation instructions provide
specific rate of duty);
(9) AD/CVD duty due as per assessed rate; and
(10) Net difference in duty.
Participants will be provided with a sample Reconciliation.
F. Liquidation: Importers who chose to participate in this
prototype will recognize that the liquidation of the underlying entries
pertains only to those issues not identified by the importer on the
Notice of Intent. Upon liquidation of the underlying entries, any
decisions of the Customs Service entering into that liquidation can be
protested pursuant to 19 U.S.C. 1514. The liquidation of the
Reconciliation will be posted to the Bulletin Notice of Liquidation.
The liquidation of the Reconciliation may also be protested, but the
protest may only pertain to elements contained in the liquidated
Reconciliation, i.e. the protest may not re-visit elements previously
liquidated in the entry.
Under this prototype, once the participant files the Notice of
Intent, the referenced entries will be liquidated as to all issues
other than that identified in the Notice of Intent, barring any
outstanding non-reconciliation issue. The AD/CVD liability issue is
transferred to the Reconciliation. The liquidation of tariff
classification/rate of duty and/or the appraised value under 19 U.S.C.
1401a shall not preclude the assessment on the Reconciliation of AD/CVD
duties according to the instructions issued by the DOC to Customs.
Regulatory Provisions Suspended
Section 113.62 of the Customs Regulations (19 CFR 113.62),
pertaining to basic importation and entry bond conditions, will be
suspended during this prototype test. Certain provisions in Part 159 of
the Customs Regulations (19 CFR Part 159), pertaining to liquidation of
duties, will also be suspended during this prototype test.
II. Eligibility Criteria
The following requirements must be met to be considered for
selection in this prototype:
(1) All entries and entry summaries subject to the Reconciliation
must have been filed via ABI on or after February 1, 1990 and before
the start of this test.
(2) There can be no more than 1,000 entries subject to a single
Reconciliation.
(3) Adequate bond coverage must exist for the Reconciliation.
(4) Participants may not be the subject of a current audit or
investigation by the Customs Service. Closed audits/investigations will
not necessarily preclude an importer from participating. However, the
findings will be taken into consideration, as will the importer's
demonstrated efforts to correct past problems.
(5) Participants must be willing and able to supply the information
identified above in the Reconciliation in the specified text, tab-
delimited file format.
(6) Participants must agree to participate in the evaluation of
this test.
Note that participation in this test will not constitute
confidential information and that lists of participants will be made
available on the Customs Electronic Bulletin Board and the
Administrative Message System.
Reconciliation Prototype Application
This notice requests importers, or brokers or attorneys on behalf
of importers, to voluntarily apply for participation in this prototype
by submitting to the Reconciliation Prototype Team, U.S. Customs
Service, 1301 Constitution Avenue, N.W., Room 1322, Washington, D.C.
20229-0001, on or before the date set forth in the effective date
paragraph at the beginning of this notice, the following information:
(1) Importer name and IR number;
(2) Broker name and filer code;
(3) Surety name(s) and surety code(s);
(4) Bond coverage, i.e., whether a continuous bond and/or single
entry bonds were used for coverage on the subject entries;
(5) Supplier name, address, and manufacturer's number;
(6) AD/CVD case number at the 10 digit level and the review period
being reconciled;
(7) Commodities covered under the Reconciliation;
(8) Port(s) at which entries have been filed and at which the
Notice(s) of Intent will be filed;
(9) Number of entries covered under the Reconciliation;
(10) Any supplemental payments made on the subject entries;
(11) Main contact person and telephone number for participation
questions; and
(12) Any comments on prototype participation.
By applying to participate in this test, the importer is agreeing
to participate pursuant to the terms of the test as defined in this
notice.
Basis for Participant Selection
Eligible importers or importers with brokers will be considered for
selection as participants in this prototype. Selection will be based on
electronic capabilities and volume of entries within the designated
criteria. In addition, Customs will work with the DOC to identify those
cases which lend themselves to this prototype. The amount and timing of
supplemental payments made for an AD/CVD case may have impact on
participant selection. Customs is looking for a variety of
circumstances and
[[Page 21537]]
participants in this prototype; however, a limited number of
participants will be selected. This prototype will be limited to 25
Reconciliations, due to the minimal automated programming available to
support this test. We stress that those applicants not selected for
participation, and any interested parties, are invited to comment on
the design, conduct, and evaluation of this prototype. Participants
selected will be notified in writing. The list of participants will be
made available on the Customs Electronic Bulletin Board and the
Administrative Message System.
III. Test Evaluation Criteria
Once participants are selected, Customs and the participants will
meet to review all public comments received concerning any aspect of
the test program or procedures, finalize procedures in light of those
comments, form problem-solving teams, and establish baseline measures
and evaluation methods and criteria. Interim evaluations of the
prototype will be published on the Customs Electronic Bulletin Board,
and the results of the final prototype evaluation will be published in
the Federal Register as required by 19 CFR 101.9(b). The following
evaluation methods and criteria have been suggested:
1. Baseline measurements to be established through dataqueries and
questionnaires;
2. Reports to be run through use of dataquery throughout the
prototype; and
3. Questionnaires from both trade and Customs participants to be
used before, during, and after the prototype period. Preliminary
suggestions for evaluation criteria are workload impact (workload
shifts, cycle time, etc.), cost savings (staff, interest, issuance of
fewer checks or bills, tracking refunds or bills, reduction in
contingent liabilities, etc.), policy and procedural accommodation,
trade compliance impact, problem solving and system efficiency.
Customs will request that test participants be active in the
evaluation, identifying costs and savings experienced in this
prototype.
Customs intends to conduct several prototypes of the reconciliation
component of the NCAP. These tests will determine the system and
operational design of reconciliation which will allow all filers to
participate in this type of entry process at a national level. At this
time, how the final reconciliation program will operate is unknown.
Prototype participants must recognize that these are true prototypes to
test the benefits and potential problems of reconciliation for Customs,
the trade community, and other parties impacted by this program. It is
important to note that time and money spent on these prototypes may not
carry forward to the final program.
The next reconciliation prototype is tentatively scheduled to
commence no sooner than January, 1997. This subsequent prototype will
continue to address operational impact and procedures, and begin
addressing additional systemic needs. This prototype is intended to
include AD/CVD, as well as other issues which lend themselves to
processing by reconciliation. The experience gained from the
reconciliation prototype for AD/CVD transactions will be incorporated
into subsequent prototypes.
Dated: May 6, 1996.
Samuel H. Banks,
Assistant Commissioner, Office of Field Operations.
[FR Doc. 96-11734 Filed 5-9-96; 8:45 am]
BILLING CODE 4820-02-P
