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Notice

General Program Test Expanded and Extended: Quota Preprocessing

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Information about this document as published in the Federal Register.

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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 importing carrier, will be expanded to all Customs ports and the duration of the program test will be extended until December 31, 2004.

The quota preprocessing program test is currently being conducted at a selected number of Customs ports and was set to expire on December 31, 2002. The program test is being expanded to all ports and the duration of the test extended so that Customs can continue to evaluate the program's effectiveness on a greatly increased scale pending the initiation and completion of a rulemaking process that will seek to establish the program permanently 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 all Customs ports is effective on October 9, 2002. The expanded program test is scheduled to run until December 31, 2004. 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 Stephen.Silvestri@customs.treas.gov. An application to participate in the program test must be sent to the Customs port(s) (Attention: program coordinator for quota preprocessing) where the applicant intends to submit quota entries for preprocessing. If necessary, information on Customs port addresses may be obtained by contacting the Customs Web site at http://www.customs.gov (Office Locations).

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FOR FURTHER INFORMATION CONTACT:

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

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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 initially 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 Start Printed Page 57272noted 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. Consequently, by a notice published in the Federal Register (66 FR 66018) on December 21, 2001, the test was in fact expanded to a selected number of additional ports in order to enable Customs to further study the program's effectiveness and determine whether the program should be established nationwide on a permanent basis through appropriate amendments to the Customs Regulations.

Specifically, the additional ports selected to participate in the expanded program test pursuant to the December 21, 2001, Federal Register notice were: 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. Because two of the additional ports selected to participate in the program test received shipments by land (Buffalo-Niagara Falls; and Champlain-Rouses Point), Customs allowed quota entries in these circumstances to be presented to Customs after the carrier departed from its location in Canada destined for the U.S. border.

Program Test To Be Further Expanded and Its Duration Extended

In addition to the previously noted ports where the test is ongoing, Customs has now determined that the program test should be expanded to all Customs ports effective as of October 9, 2002, and that the duration of the program test should be extended until December 31, 2004. The test is being further expanded and the duration of the test extended so that Customs can continue to evaluate the program's effectiveness on a greatly increased scale pending the initiation and completion of a rulemaking process that will seek to establish the program permanently through appropriate amendments to the Customs Regulations.

Eligibility Criteria and Application Requirements for the Program Test

The eligibility criteria and application requirements for participation in this latest expansion of the quota preprocessing program test are set out below. They are largely repeated from the December 21, 2001, Federal Register notice, albeit revised as appropriate to reflect the further expansion of the test. Prospective applicants may also consult the December 21, 2001, Federal Register notice as well as the July 24, 1998, Federal Register notice for a more detailed discussion of the quota preprocessing program.

Importer/Entry Eligibility Criteria

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

(2) The quota category for the line must be less than 90% full;

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

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

(5)(a) An importer must use a carrier that is operational on the Automated Manifest System (AMS) through which the carrier will transmit the estimated date of arrival for the quota shipment to Customs, as heretofore required under the program test; however,

(5)(b) For an importer entering merchandise at a land border port of entry where an AMS carrier is not available, the importer may transmit the estimated date of arrival for the quota shipment to Customs through ABI when transmitting the entry/entry summary data for the shipment to Customs.

In this latter regard, Customs port directors at land border ports will be responsible for monitoring the availability of AMS carriers at these ports to ensure that option (5)(b) is only exercised when appropriate. It is noted that, at present, most carriers on the land borders, especially those on the Southern border, are non-AMS. The requirement that an importer use an AMS carrier was imposed initially so that the estimated date of arrival of a preprocessed quota shipment could be provided to Customs electronically. Since the quota preprocessing prototype was begun, however, Customs has determined that, in those circumstances where an AMS carrier is not otherwise available, an importer may transmit the estimated date of arrival of a quota shipment through ABI when transmitting the entry/entry summary data for the shipment to Customs.

If an importer submits a quota entry for preprocessing and the entry does not meet the criteria set forth above in items “(1)” through “(5)(a)” or “(5)(b)” as applicable, 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 to the attention of the program coordinator for quota preprocessing at each port where the applicant intends to submit quota entries for preprocessing. The application must include the following information:

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; and

3. Names and addresses of any entry filers, including Customs brokers, that will be electronically filing entries at Start Printed Page 57273each port under the program on behalf of the importer/participant.

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 additional ports must notify, in writing, the additional port(s) at least 5 working days before submitting entries at such port(s). 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.

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Dated: August 30, 2002.

Jayson P. Ahern,

Assistant Commissioner, Office of Field Operations.

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[FR Doc. 02-22782 Filed 9-6-02; 8:45 am]

BILLING CODE 4820-02-P