02-8218. Single Entry for Unassembled or Disassembled Entities Imported on Multiple Conveyances

AGENCY:

Customs Service, Department of the Treasury.

ACTION:

Proposed rule.

SUMMARY:

This document proposes to amend the Customs 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. The proposed amendments would implement statutory changes made to the merchandise entry laws by the Tariff Suspension and Trade Act of 2000.

DATE:

Comments must be received on or before June 7, 2002.

ADDRESSES:

Written comments may be addressed to and inspected at the Regulations Branch, U.S. Customs Service, 1300 Pennsylvania Avenue, NW., 3rd Floor, Washington, DC 20229.

FOR FURTHER INFORMATION CONTACT:

For operational matters: Tom Heffernan, Office of Field Operations, [phone].

For classification matters: Patricia Fitzpatrick, Office of Field Operations, [phone].

For legal matters: Larry L. Burton, 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 a problem long encountered by the importing community in entering merchandise whose size or nature 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.

Customs determined to proceed first with proposed regulations relating 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 Customs 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.

Customs now proposes regulations concerning a single entry for shipments of unassembled or disassembled merchandise that arrive on more than one conveyance (19 U.S.C. 1484(j)(1)). It is noted that where the proposed regulatory text in this document affects the same sections in the Customs Regulations that the document regarding split shipments affected, this document includes the proposed regulatory text changes in those sections that were previously published for split shipments, as appropriately modified consistent with the present proposal. Accordingly, this document should be read in conjunction with that proposal. It is particularly noted that the other proposal contains in proposed § 141.57 the major requirements for split shipments. Comments with respect to the proposed amendments for split shipments should be submitted in connection with the Federal Register notice for split shipments, cited above. Only comments concerning the proposed amendments for single entities that are shipped unassembled or disassembled on multiple conveyances should be submitted in connection with this document.

An application to file a single entry covering an unassembled or disassembled entity as described in this proposed rulemaking must be made by the importer of record, either by appropriately annotating a CF 3461, a CF 3461 ALT, or electronic equivalent, or by submitting a letter to Customs. 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 accommodated on one conveyance. A copy of the relevant invoice or purchase order, or its electronic equivalent, must accompany the application, along with the proposed appropriate single tariff number under the Harmonized Tariff Schedule of the United States (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.

Unassembled or Disassembled Entity Defined

For the purposes of this proposal, 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 in the United States at the same port at different times. The subject arriving portions are consigned to the same person in the United States.

The Customs Regulations ordinarily require, with certain exceptions not here relevant, that all merchandise arriving on one conveyance and consigned to one consignee be included on one entry (see § 141.51, Customs Regulations (19 CFR 141.51)). There is no provision currently in the Customs Regulations authorizing the filing of a single entry to cover multiple portions of a single entity arriving in the United States at different times on separate conveyances.

Specifically, the proposed regulations would permit the filing of a single entry to cover the importation by separate conveyances of portions of a large unassembled or disassembled entity 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.

Entry or Release of Merchandise

Where a single entry is accepted for multiple portions of an entity which has arrived at different times, the legislation leaves open the question of whether the various portions may be released as they arrive, or whether their release must be delayed until the entire entity has been imported. Customs has determined to provide either option to importers of unassembled or disassembled entities whose portions arrive at different times. Under either option, the proposed regulations require the importer to file Customs Form (CF) 3461 or CF 3461 alternate (CF 3461 ALT), or electronic equivalent, which will cover the entity named on the invoice. In addition, the manifest accompanying each conveyance will be supplemented by a packing list specifying the contents of the particular load.

In the event that each portion of the unassembled or disassembled entity is to be released upon its arrival, and prior to the arrival of the entire shipment, the procedure for releasing merchandise under a special permit for immediate delivery will be used for this purpose, as more fully outlined below. As each portion arrives, the importer must submit a copy of the originally executed CF 3461/3461 ALT, annotated to reflect which portion of the entire invoiced entity is arriving at that time (e.g., third of six portions).

Special Permit for Immediate Delivery

Customs law typically contemplates that merchandise will be imported before it is entered. This raises a potential obstacle to allowing an entry covering an entity to be filed and accepted when only a portion of the unassembled or disassembled entity has thus far arrived. It also presents the difficult question of whether a rate of duty, set at the time of the release of the first portion, may apply to goods not yet imported into the United States. The proposed resolution of these latter two issues lies in requiring the unassembled or disassembled entity to be released under a special permit for immediate delivery. Section 142.21(a)-(g), Customs Regulations (19 CFR 142.21(a)-(g)), describes the circumstances and lists the types of merchandise that are currently eligible to be released under a special permit for immediate delivery. The proposed regulations would differ by not allowing the inclusion of quota class merchandise. In addition, § 142.22(a), Customs Regulations (19 CFR 142.22(a)), permits the submission of a pro forma rather than a commercial invoice. The proposed regulations would require the submission of a commercial invoice only.

Due to the fact that merchandise released under the special permit procedures set forth in § 142.21 is not considered to be entered until the entry/entry summary is filed, all of the portions comprising the entire unassembled or disassembled entity will be imported by the time the entry/entry summary is filed. The rate of duty applied to the merchandise will be the rate in effect for all goods released under the immediate delivery procedures, that is, the rate in effect when the entry/entry summary is filed.

It is proposed to create another category of immediate delivery releases by amending § 142.21 to add a new paragraph (h), in order to provide for the filing of a special permit for immediate delivery when the importer ships an entity on different conveyances due to its size or nature and elects to have each portion separately released as it arrives.

Filing of Entry Summary

Regarding the filing of the entry summary, the importer has two options if he waits until all portions of the entity have arrived. He can make entry of the entity when all portions arrive. If he does this, he must file the entry summary within 10 working days of the time of entry (see § 142.12(b), Customs Regulations (19 CFR 142.12(b))). In the alternative, he may have the entity released under a special permit for immediate delivery after all portions arrive, provided the entity is eligible for the special permit. If he chooses this option, the entry summary, which would serve as both the entry and entry summary, must be filed within 10 working days after the first portion of the entity has been authorized for release under the special permit (see § 142.23, Customs Regulations (19 CFR 142.23)).

Under proposed § 142.21(h), in the case of the arriving portions of a large entity released incrementally under the immediate delivery procedures, the entry summary, which would serve as both the entry and the entry summary, must be filed within 10 working days from the date of the first released portion. 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.

At the time of filing of the entry summary, estimated duties, taxes and fees would be required to be attached. If the entry summary is filed electronically, the estimated duties, taxes and fees would be required to be scheduled at that time for payment pursuant to the Automated Clearinghouse requirements (see § 24.25 of this chapter).

Tariff Classification

While 19 U.S.C. 1484(j) addresses the entry of merchandise, the legislation is silent as to classification under the HTSUS. It is therefore proposed that for Customs classification purposes the separate portions of the subject entity placed on one entry be classified as if they had been imported together. Since the legislation restricts the inclusion on one entry to merchandise purchased and invoiced as a single entity, any spare parts accompanying a portion of the entity must be entered separately.

Failure To Arrive Within the 10 Day Period

The importer of record would be responsible for verifying whether all portions of the entity have arrived within the specified 10 calendar day period. In instances in which all portions have not arrived, the importer of record would be required to file separate entries, or applications for special permit for immediate delivery, as well as separate entry summaries, for the portions of the unassembled or disassembled entity that arrive on different conveyances. Each entry and/or entry summary would reflect the quantities, values, classifications and rates of duty, as appropriate, of the various components conveyed in each shipment, and not the value, classification and rate of duty of the ordered single entity. An importer of portions released incrementally would be required to recall the filed CF 3461/3461ALT application for special permit for immediate delivery and to substitute separate entries, or applications for special permit for immediate delivery, in its place.

Exclusions From Procedure Under 19 U.S.C. 1484(j)(1)

Quota and/or visa class merchandise will not be eligible for treatment under the provisions of 19 U.S.C. 1484(j)(1) and this regulation.

Customs also proposes to reserve the right for the port director to deny use of the incremental release procedure under proposed § 142.21(h) as circumstances warrant, such as in the case where a particular shipment has been selected for examination.

In order to implement 19 U.S.C. 1484(j) insofar as it enables Customs to accept a single entry for separately arriving portions of a single large entity, as described, it is proposed to add a new § 141.58 to the Customs Regulations (19 CFR 141.58). Also, in addition to proposed § 142.21(h), as noted, minor conforming changes would be made to §§ 141.51 and 142.12(b) of the Customs Regulations (19 CFR 141.51, 142.12(b)).

Comments

Before adopting the proposed amendments that provide for a single entry for portions of an entity that arrive at different times, consideration will be given to any written comments that are timely submitted to Customs in this regard. Comments concerning the language in this package concerning split shipments should be submitted in connection with the previously published notice dealing with such shipments (see 66 FR 57688). Customs particularly requests comments on the clarity of this proposed rule and how it may be made easier to understand. Comments submitted will be available for public inspection in accordance with the Freedom of Information Act (5 U.S.C. 552), § 1.4, Treasury Department Regulations (31 CFR 1.4), and § 103.11(b), Customs Regulations (19 CFR 103.11(b)), on regular business days between the hours of 9:00 a.m. and 4:30 p.m. at the Regulations Branch, 1300 Pennsylvania Avenue, NW., 3rd Floor, Washington, DC.

Regulatory Flexibility Act and Executive Order 12866

The proposed rule is intended to implement the amendment to 19 U.S.C. 1484 by the Tariff Suspension and Trade Act of 2000. The proposed rule, if adopted, will engender cost savings by reducing paperwork for importers, and by reducing the number of entries required for separate shipments of unassembled or disassembled entities. Hence, pursuant to the provisions of the Regulatory Flexibility Act (5 U.S.C. 601 et seq.), it is certified that the proposed rule, if adopted, 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 proposed rule result in a “significant regulatory action” under E.O. 12866.

Paperwork Reduction Act

The collections of information encompassed within this proposed rule have already been reviewed and approved by the Office of Management and Budget (OMB) in accordance with the Paperwork Reduction Act of 1995 (44 U.S.C. 3507) and assigned OMB Control Numbers 1515-0065 (Requirement to make entry unless specifically exempt; Requirement to file entry summary form); 1515-0167 (Statement processing and Automated Clearinghouse); 1515-0214 (General recordkeeping and record production requirements); and 1515-0001 (Transportation manifest; cargo declaration). This rule does not propose any substantive changes to the existing approved information collections. An agency may not conduct, and a person is not required to respond to, a collection of information unless the collection of information displays a valid control number assigned by OMB.

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

Proposed Amendments to the Regulations

It is proposed to amend parts 141 and 142, Customs Regulations (19 CFR parts 141 and 142), as set forth below.

PART 141—ENTRY OF MERCHANDISE

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

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

* * * * *

2. It is proposed to revise § 141.51 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 importation 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 of this part.

3. It is proposed to amend subpart D of part 141 by adding a new § 141.58, to read as follows:

§ 141.58

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

(a) At election of importer of record. At the election of the importer of record, a large 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 a large entity which:

(1) Cannot, due to its size or nature, be accommodated 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; and

(4) Involves the first portion and all succeeding portions arriving directly at the same United States port of importation within 10 calendar days of the date of the first portion.

(c) Application by importer. An application to file a single entry covering an entity described in paragraph (b) of this section must be made by the importer of record, either by appropriately annotating a CF 3461, CF 3461 ALT, or electronic equivalent, or by submitting a letter to Customs. 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 accommodated 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 paragraph (d)(1) or (d)(2) of this section, as applicable.

(1) Entry or special permit after arrival of all portions. An importer may file an entry at such time as all portions of the entity have arrived. 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 (see § 142.21(e) of this chapter).

(2) Special permit for immediate delivery after arrival of first portion. 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.

(e) Release. To secure release of an entity after arrival of all portions under paragraph (d)(1) of this section, a Customs Form (CF) 3461 or CF 3461 alternate (CF 3461 ALT), as appropriate, or electronic equivalent, must be filed with Customs. To secure the separate release upon arrival of each portion of a shipment under paragraph (d)(2) of this section, a CF 3461 or CF 3461 ALT, as appropriate, or electronic equivalent, must be filed with Customs after arrival of the first portion. As each successive portion arrives, the importer must submit a copy of the originally submitted CF 3461/CF 3461 ALT, annotated to specifically identify that particular portion. The CF 3461/CF 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). The release of each portion upon arrival as permitted under this paragraph may be restricted due to Customs need to examine the merchandise in accordance with paragraph (f) of this section. In addition, the importer of record must present to Customs either on paper or through an authorized electronic equivalent, specific and detailed information supplementing the CF 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. Examination of any or all portions of the entity may be required. Customs reserves the right to deny incremental release (defined in § 142.21(g) of this chapter) 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 (see § 142.12(b) of this chapter). 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 (see § 142.23 of this chapter).

(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 § 24.25 of this chapter).

(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) Separate entry and entry summary required. When all portions of an entity do not arrive within 10 calendar days of the arrival of the first portion, 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, Customs 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

1. The general authority for part 142 would continue to read as follows:

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

2. It is proposed to amend § 142.21 by removing the second sentence in paragraph (e)(1) and adding in its place three new sentences, by removing the second sentence in paragraph (e)(2) and adding in its place three new sentences, by redesignating paragraph (g) as paragraph (i) and adding two new paragraphs (g) and (h), and by revising newly redesignated paragraph (i) to 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 § 141.58(d)(1) of this chapter. Where a special permit is authorized, an entry summary will be properly presented pursuant to § 132.1 of this chapter within the time specified in § 142.23, or within the quota period, whichever expires first. * * *

(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. Where a special permit is authorized, a proper entry summary must be presented for merchandise so released within the time specified in § 142.23, or within the quota period, whichever expires first. * * *

* * * * *

(g) Split shipments. Merchandise subject to § 141.57(d)(2) of this chapter, which is purchased and invoiced as a single shipment, but which is shipped by the carrier in separate portions to the same port of arrival due to the carrier's inability to accommodate the merchandise on a single conveyance, may be released incrementally under a special permit.

(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 accommodating 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 paragraphs (a), (b), (c), (d), (e), (f), (g), and (h) of this section provided a bond on Customs Form 301 containing the bond conditions set forth in § 113.62 of this chapter is on file.

3. It is proposed to amend § 142.22 by removing the first sentence of paragraph (a) and adding in its place the following two sentences 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 Customs Form 3461, supported by the documentation provided for in § 142.3. A commercial invoice will not be required, except for merchandise released under the provisions of 19 U.S.C. 1484(j). * * *

* * * * *

4. It is proposed to amend § 142.23 by adding a sentence to read as follows:

§ 142.23

Time limit for filing documentation after release.

* * * The time for filing entry summary documentation may be extended as set forth in § 141.58(g)(1) and (g)(2) of this chapter, under the authority of § 141.58(b)(4) of this chapter.

Approved: April 1, 2002.

Robert C. Bonner,

Commissioner of Customs.

Timothy E. Skud,

Acting Deputy Assistant Secretary of the Treasury.