[Federal Register: September 22, 2005 (Volume 70, Number 183)]
[Notices]
[Page 55623-55625]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr22se05-44]
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DEPARTMENT OF HOMELAND SECURITY
Bureau of Customs and Border Protection
Automated Commercial Environment (ACE): Elimination of Bond Rider
Requirement for Participation in Periodic Monthly Statement Payment
Process
AGENCY: Customs and Border Protection; Department of Homeland Security.
ACTION: General notice.
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SUMMARY: This notice announces changes in the Bureau of Customs and
Border Protection's (CBP) National Customs Automation Program (NCAP)
test concerning periodic monthly deposit of estimated duties and fees.
Participants in the Periodic Monthly Statement test are no longer
required to provide a bond rider covering the periodic payment of
estimated duties and fees. Nonpayment or untimely payment of estimated
duties and fees, however, may result in action by CBP to impose
sanctions on the delinquent importer of record or to allow the surety
to terminate its basic importation bond. If the bond principal is a
participant in the Periodic Monthly Statement test, sureties will now
be allowed, under certain conditions, to terminate bonds with 3
business days notice to the bond principal and CBP.
EFFECTIVE DATES: The elimination of the requirement to provide a bond
rider covering the periodic payment of estimated duties is effective
immediately.
ADDRESSES: Comments concerning this notice should be submitted to
Robert B. Hamilton via e-mail at Robert.B.Hamilton@dhs.gov.
SUPPLEMENTARY INFORMATION:
Background
On February 4, 2004, the Bureau of Customs and Border Protection
(CBP) published a General Notice in the Federal Register (69 FR 5362)
announcing the National Customs Automation Program (NCAP) test for
Periodic Monthly Payment Statement Process. The test, which is part of
CBP's Automated Commercial Environment (ACE), benefits participants by
giving them access to operational data through the ACE Secured Data
Portal (``ACE Portal''), which provides them the capability to interact
electronically with CBP, and by allowing them to deposit estimated
duties and fees on a monthly basis based on a Periodic Monthly
Statement generated by CBP.
When the test started, only importers were eligible to apply for
the test. Eligibility was later expanded to allow brokers to apply if
they were specifically designated by an ACE importer.
On September 8, 2004, CBP published a General Notice in the Federal
Register (69 FR 54302) which invited customs brokers, regardless of
whether they were designated by participating importers to make
Periodic Monthly Statement payments on their behalf, to apply to
participate in the test. That notice set
[[Page 55624]]
forth eligibility requirements for both importers and brokers.
On February 1, 2005, CBP published a General Notice in the Federal
Register (70 FR 5199) announcing that applicants seeking to establish
importer or broker accounts so as to access the ACE Portal, or to
participate in any ACE test (including the test for Periodic Monthly
Payment Statement Process), are no longer required to provide a
statement certifying participation in the Customs Trade Partnership
Against Terrorism (C-TPAT).
On August 8, 2005, CBP published a General Notice in the Federal
Register (70 FR 45736) changing the time period allowed for the deposit
of the duties and fees from the 15th calendar day to the 15th working
day of the month following the month in which the goods are either
entered or released. That change was made in order to comply with the
provisions of section 2004 of the Miscellaneous Trade and Technical
Corrections Act of 2004, Public Law 108-429, which extended the time of
deposit of those estimated duties and fees. The document also advised
that entries containing Census errors are eligible to be placed on a
Periodic Daily Statement and designated for monthly payment. Finally,
the document described those situations where liquidated damages would
be imposed for failing to pay estimated duties in a timely manner.
As provided in the February 4, 2004 General Notice announcing the
test, participants in the Periodic Monthly Statement test are required
to schedule entries for monthly payment. A Periodic Monthly Statement
will list Periodic Daily Statements that have been designated for
monthly payment. The Periodic Monthly Statement can be created on a
port basis by the importer or broker, as was the case with existing
daily statements in the Automated Commercial System (ACS) (ACE is the
successor to ACS). The Periodic Monthly Statement can be created on a
national basis by an Automated Broker Interface (ABI) filer. If an
importer chooses to file the Periodic Monthly Statement on a national
basis he must use his filer code and schedule and pay the monthly
statements timely. The Periodic Monthly Statement will be routed under
existing CBP procedures. Brokers will only view/receive information
that they have filed on an importer's behalf. ACE will not route a
Periodic Monthly Statement to a broker through ABI if that statement
lists information filed by another broker.
The February 4, 2004, Notice also stated that, in addition to other
responsibilities, test participants are required to provide a bond
rider covering the periodic payment of estimated duties.
Elimination of the Periodic Monthly Statement Payment Bond Rider
In order to open participation in the Periodic Monthly Statement
test to the widest number of importers, CBP will no longer require that
an applicant, in order to participate in the test, submit a bond rider
as required by the Federal Register Notice of February 4, 2004. CBP has
determined that the rider is not necessary, inasmuch as the terms and
conditions of the basic importation bond under section 113.62 of the
CBP Regulations (title 19 Code of Federal Regulations (CFR), section
113.62) require the bond obligors to deposit, in the time period
prescribed by law or regulation, any duties, taxes, and charges
imposed, or estimated to be due, at the time of merchandise release or
withdrawal.
Submission of the bond rider does have the effect of alerting the
surety guaranteeing performance that the bond principal is
participating in the Periodic Monthly Statement test. CBP agrees that,
as a result of elimination of the rider submission requirement, it will
notify sureties, electronically, of a bond principal's participation in
the test.
Failure To Pay, or To Timely Pay, Estimated Duties and Fees
A bond principal who fails to meet its obligation to pay estimated
duties and fees under the test should not continue to enjoy the
benefits of the deferred payment of estimated duties and fees. Such an
allowance would further stress the bond amount and place the revenue in
jeopardy. As such, CBP, through this notice, suspends those regulations
in Part 142 relating to the delinquent payment of CBP bills as they
relate to non-payment or late payment of estimated duties and fees made
under the Periodic Monthly Statement test. Any bond principal who is
late with an estimated monthly statement estimated duty payment by more
than 2 business days will be notified by CBP, either electronically or
by paper notification, that immediately it shall be required to file
entry summary documentation with estimated duties and fees attached
before its merchandise may be released from any CBP port. The surety on
the affected bond will also be notified. The bond principal will only
be released from such a requirement upon full payment of any unpaid
estimated duties and fees that have come due under the Periodic Monthly
Statement test.
During the test, CBP will retain the right to deny Periodic Monthly
Statement payment privileges to any importer that is repeatedly
delinquent in the payment of estimated duties and fees due.
Termination of Bonds
For purposes of the test, the provisions of 19 CFR part 113
relating to termination of bonds will be suspended, in certain
situations, insofar as sureties will be permitted to terminate bonds
with 3 business days notice to the bond principal and CBP. Section
113.27(b) of the CBP Regulations (19 CFR 113.27(b)) generally requires
a 30-day notice (with exceptions) for surety termination of a bond.
Sureties may now terminate bonds with 3 business days notice when
termination by the surety occurs because the surety does not accept the
risk relating to participation by the bond principal in the Periodic
Monthly Statement test. Sureties may also terminate bonds with 3
business days notice when termination is a result of the failure of the
bond principal to perform obligations arising as a result of
participation in the test; however, a termination under these
circumstances can only take place after the surety has satisfied its
obligations which have arisen as a result of the principal's failure to
perform. The importer whose bond is terminated by a surety will be
suspended from participation in the test unless a new surety is
obtained. Notification of termination to CBP shall be provided to the
Revenue Division, Office of Finance, 6650 Telecom Dr., Suite 100, Attn:
Bond Team, Indianapolis, Indiana 46278. Notice of termination to CBP
must be in writing and must be delivered by overnight mail, other
express delivery service, or fax. Notice of termination to the bond
principal must be in writing and must be delivered by overnight mail or
other express delivery service. Any notice of termination provided to
CBP must include a declaration that the bond principal has been
notified of termination.
Suspension of the Regulations
During the testing of the Periodic Monthly Statement process, CBP
will suspend provisions in Parts 24, 141, 142, and 143 of the Customs
and Border Protection Regulations (Title 19 Code of Federal
Regulations) pertaining to financial, accounting, entry procedures,
deposit of estimated duties and fees, and the delinquent payment of CBP
bills. CBP will also suspend the provisions of Part 113 of the Customs
and Border Protection Regulations with regard to surety termination of
bonds only in the manner and for the reasons
[[Page 55625]]
discussed in this Notice. All other provisions of Part 113 of the
Customs and Border Protection Regulations remain in effect during this
test. All of the terms of the test and criteria for participation
therein, as announced in the previous notices identified above,
continue to be applicable unless changed by this notice.
Dated: September 19, 2005.
Thomas S. Winkowski,
Acting Deputy Assistant Commissioner, Office of Field Operations.
[FR Doc. 05-18912 Filed 9-21-05; 8:45 am]
BILLING CODE 9110-06-P