01-31475. Expansion of General Program Test: Quota Preprocessing

AGENCY:

Customs Service, Department of the Treasury.

ACTION:

General notice.

SUMMARY:

This notice announces that the quota preprocessing program test, which provides for the electronic processing of certain quota-class apparel merchandise prior to arrival of the carrier, will be expanded to the following additional ports: Atlanta; Boston seaport; Logan Airport, Boston; Buffalo-Niagara Falls; Champlain-Rouses Point; Chicago; Columbus; Memphis; Miami; Miami International Airport; Newport/Portland, Oregon (area port of Portland); Puget Sound (the ports of Seattle; and Seattle/Tacoma International Airport); San Francisco seaport; and San Francisco International Airport.

The program test is currently being conducted at ports located in New York/Newark and Los Angeles. The test is being expanded to the additional ports so that Customs can evaluate the program's effectiveness on a much larger scale and determine whether the program should be established nationwide on a permanent basis through appropriate amendments to the Customs Regulations. Public comments concerning any aspect of the program test as well as applications to participate in the test are requested.

DATES:

The expansion of the test to include the additional ports is effective on January 1, 2002. The program test is currently scheduled to run until December 31, 2002. Applications to participate in the test and comments concerning the test will continue to be accepted throughout the testing period.

ADDRESSES:

Written comments regarding this notice or any aspect of the program test should be addressed to Stephen Silvestri, Quota Branch, U.S. Customs Service, 1300 Pennsylvania Avenue, NW., Room 5.3-D, Washington, DC 20229, or may be sent via e-mail to [e-mail]. An application to participate in the program test must be sent to the program coordinator for each port where the applicant intends to submit quota entries for preprocessing. The list of ports and corresponding program coordinators are as follows:

(1) Port of Atlanta: Spaulding Wyche, 4641 International Parkway, Suite 600, Atlanta, GA 30354;

(2) Boston seaport and/or Logan Airport: Harry Spirytus, 10 Causeway St., Boston, MA 02222;

(3) Port of Buffalo-Niagara Falls: Jim Neubert, 111 West Huron St., Buffalo, NY 14202;

(4) Port of Champlain-Rouses Point: Brenda Harrigan, 198 West Service Rd., Champlain, NY 12919;

(5) Port of Chicago: Bonita Hooks, 2571 Busse Rd., Elk Grove, IL 60007;

(6) Port of Columbus: Thomas Barnhart, 7400 Alum Creek Drive, Columbus, OH 43217;

(7) Port of Los Angeles: Nancy Petagna, 300 S. Ferry St., Terminal Island, CA 90731;

(8) Los Angeles International Airport: Tony Piscitelli, 11099 S. La Cienaga Blvd., Los Angeles, CA 90045;

(9) Port of Memphis: Terry Wright, 3150 Tchulahoma, Suite 1, Memphis, TN 38118;

(10) Port of Miami; and/or Miami International Airport: Constance Price, P.O. Box 025280, Miami, FL 33102;

(11) Ports of New York/Newark: John Lava, 1210 Corbin Street, Elizabeth, NJ 07201;

(12) JFK Airport: Barry Goldberg, JFK Building 77, Jamaica, NY 11430;

(13) Port of Newport/Portland, Oregon (area port of Portland): Megan Fishel, P.O. Box 55580, Portland, OR 97238;

(14) Port of Puget Sound (ports of Seattle; and Seattle-Tacoma International Airport): Sharon Delawyer, 1000 Second Ave., Suite 2000, Seattle, WA 98104;

(15) San Francisco seaport; and/or San Francisco International Airport: Diana Santiago, 555 Battery St., San Francisco, CA 94111; and/or

FOR FURTHER INFORMATION CONTACT:

Stephen Silvestri, Quota Branch, (202-927-5397).

SUPPLEMENTARY INFORMATION:

On July 24, 1998, Customs published a general notice in the Federal Register (63 FR 39929) announcing the limited testing, pursuant to the provisions of § 101.9(a), Customs Regulations (19 CFR 101.9(a)), of a new operational procedure regarding the electronic processing of quota-class apparel merchandise. The test was to be conducted at the ports located in New York/Newark and Los Angeles.

Quota preprocessing permits certain quota entries (merchandise classifiable in chapter 61 or 62 of the Harmonized Tariff Schedule of the United States (HTSUS)) to be filed, reviewed for admissibility, and to have their quota priority and status determined by Customs prior to arrival of the carrier, similar to the method of preliminary review by which non-quota entries are currently processed. The purpose of quota preprocessing is to reduce Customs processing time for qualified quota entries and to expedite the release of the subject merchandise to the importer. To this end, participants in quota preprocessing have been allowed to submit quota entries to Customs up to 5 days prior to vessel arrival or after the wheels are up on air shipments.

The July 24, 1998, Federal Register notice principally described the new procedure, specified the eligibility and application requirements for participation in the program test, and noted the acts of misconduct for which a participant in the test could be suspended and disqualified from continued participation in the program.

The initial test of the quota preprocessing procedure began on September 15, 1998, and was intended to continue for a six-month period that expired on March 14, 1999. However, on March 25, 1999, and on January 6, 2000, Customs published general notices in the Federal Register (64 FR 14499 and 65 FR 806, respectively) that extended the program test through 1999 and 2000. In addition, on November 30, 2000, Customs published another general notice in the Federal Register (65 FR 71356), further extending the program test through December 31, 2002. These respective extensions of the test procedure were undertaken so that Customs could further evaluate the effectiveness of the program and determine whether the program test should be expanded to other ports.

Customs has now concluded, following successful evaluations of the program to date, that the test should be expanded to other ports in order to enable Customs to evaluate the program's effectiveness on a much larger scale and determine whether the program should be established nationwide on a permanent basis through appropriate amendments to the Customs Regulations.

Expansion of Program Test to Additional Ports

In addition to the ports in Los Angeles and New York/Newark where the test is ongoing, Customs has determined that the program test should be expanded as of January 1, 2002 through December 31, 2002 to a number of additional ports as follows: Atlanta; Boston seaport; Logan Airport, Boston; Buffalo-Niagara Falls; Champlain-Rouses Point; Chicago; Columbus; Memphis; Miami; Miami International Airport; Newport/Portland, Oregon (the area port of Portland); Puget Sound (the ports of Seattle; and Seattle/Tacoma International Airport); San Francisco seaport; and San Francisco International Airport. The expansion of the test to these ports was determined by the volume of quota lines of apparel merchandise entered at these ports.

Furthermore, under the expanded program test, because two of the ports will receive shipments by land (Buffalo-Niagara Falls; and Champlain-Rouses Point), quota entries in these circumstances may be submitted to Customs after the carrier departs from its location in Canada destined for the U.S. border.

Eligibility and Application Criteria for the Program Test

Given the impending significant expansion of the program test and the consequent influx of additional applications to participate in the test that is anticipated, the eligibility criteria and application instructions for the program, based largely on the July 24, 1998, Federal Register notice, are essentially repeated below, albeit revised as appropriate to reflect the expanded test. Prospective applicants may refer to the July 24, 1998, Federal Register notice for a more detailed discussion of the quota preprocessing program.

Importer/Entry Eligibility Criteria

Only importers who currently import qualifying apparel through one or more of the ports listed in item “(6)” below may participate in the expanded program test. Participants are not permitted to change their importing patterns in order to take advantage of quota preprocessing. In this regard, during the test, Customs will monitor import volumes for noticeable increases of eligible quota entries through the ports covered by the expanded test.

Customs will only accept consumption entries of apparel merchandise subject to quota (types 02 and 07) for preprocessing which meet the following criteria:

(1) The entry must be filed using the Automated Broker Interface (ABI);

(2) Payment must be made electronically through the Automated Clearinghouse (ACH);

(3) Arriving carriers must use the Automated Manifest System (AMS);

(4) The quota category must be less than 85% full;

(5) The entry must contain at least one line classifiable in chapter 61 or 62 of the Harmonized Tariff Schedule of the United States (HTSUS); and

(6) The entry must be submitted at one of the following ports: the port of Atlanta (Port code: 1704); Boston seaport (Port code: 0401); Logan Airport, Boston (port code: 0417)); the port of Buffalo-Niagara Falls (Port code: 0901); the port of Champlain-Rouses Point (Port code: 0712); the port of Chicago (Port code: 3901); the port of Columbus (Port code: 4103); the port of Los Angeles (Port code: 2704); Los Angeles International Airport (Port code: 2740); the port of Memphis (Port code: 2006); the port of Miami (Port code: 5201); Miami International Airport (Port code: 5206); the ports of New York/Newark, including JFK Airport (Port codes: 1001/4601/4701); the port of Newport/Portland, Oregon (area port of Portland (Port code: 2904)); the port of Puget Sound (the ports of Seattle (Port codes: 3001, 3002, 3081); and Seattle/Tacoma International Airport (Port code: 3029)); San Francisco seaport (Port code: 2809); or San Francisco International Airport (Port code: 2801).

If an importer submits a quota entry for preprocessing and the entry does not meet all of the criteria in items “(1)” through “(6)” above, the entry summary will be rejected and the filer may not resubmit the entry summary to Customs until after the carrier has arrived. Upon arrival of the carrier, merchandise covered by a preprocessed entry will be released unless Customs decides to perform an examination. In this respect, the fact that merchandise has been processed under the quota preprocessing program will not interfere with or impede Customs ability to examine the merchandise upon its arrival, should such an examination be found to be warranted. If an examination of the merchandise is necessary, the examination will occur during the port's regular inspectional hours.

Application To Participate in Quota Preprocessing

An importer wishing to participate in quota preprocessing must submit a written application that includes the following information to the program coordinator for each port where the applicant intends to submit quota entries for preprocessing:

1. The specific port(s) included under the program where entries of the quota merchandise are intended to be made;

2. The importer of record number(s), including suffix(es), and a statement of the importer's/filer's electronic filing capabilities;

3. Names and addresses of any entry filers, including Customs brokers, that will be electronically filing entries at each port under the program on behalf of the importer/participant; and

4. The total number of consumption quota entries (types 02 and 07) filed at each of the ports subject to the program during the preceding 12-month period and the estimated number of eligible entries expected to be filed at each designated port during the course of the test. If it is expected that a significantly higher number of eligible entries will be filed over the test period than were filed over the preceding 12-month period, an explanation for this increase will be necessary.

Applicants will be notified in writing of their selection or nonselection to participate in quota preprocessing. An applicant denied participation may appeal in writing to the port director at the port where the application was denied.

Current participants in quota preprocessing that also wish to file entries under the program at any of the additional ports must notify in writing, the additional part at least 5 working days before submitting entries at that port. Also, for those that are selected to participate in the test, the July 24, 1998, Federal Register notice should be consulted regarding the acts of misconduct that may result in a participant being suspended from the program and the extent to which a participant may appeal a proposed suspension from the program.

Dated: December 18, 2001.

John H. Heinrich,

Acting Assistant Commissioner, Office of Field Operations.