Announcement of Test Concerning Manifesting and Entry of Residue Found in Instruments of International Traffic (IITs), 52958-52962 [2013-20878]

Agencies

• DEPARTMENT OF HOMELAND SECURITY
• U.S. Customs and Border Protection

[Federal Register Volume 78, Number 166 (Tuesday, August 27, 2013)]
[Notices]
[Pages 52958-52962]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2013-20878]


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DEPARTMENT OF HOMELAND SECURITY

U.S. Customs and Border Protection


Announcement of Test Concerning Manifesting and Entry of Residue 
Found in Instruments of International Traffic (IITs)

AGENCY: U.S. Customs and Border Protection, Department of Homeland 
Security.

ACTION: General notice.

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SUMMARY: This document announces U.S. Customs and Border Protection's 
(CBP's) plan to conduct a test concerning the manifesting and entry of 
residual cargo found in containers arriving as Instruments of 
International Traffic (IIT). The document also announces that CBP will 
begin enforcement of HQ Ruling H026715, dated June 19, 2009, when the 
test announced in this document begins. In HQ Ruling H026715, CBP held 
that in order to ensure the safety and security of the transportation 
of IIT containers and the CBP Officers who may examine or work in close 
proximity to them, IIT containers with residual cargo should not be 
manifested as empty consistent with the advance cargo information 
reporting requirements authorized pursuant to 19 U.S.C. 2071 note. The

[[Page 52959]]

modified ruling, HQ H026715, requires that residue within containers be 
``classified, entered, and manifested.''
    CBP recognizes that the trade community believes that the 
requirement to manifest and enter for residual cargo in accordance with 
the current regulations would be overly burdensome. As a result, CBP, 
with input from the trade, has developed a test in order to determine a 
less burdensome way for the trade to manifest and enter residual cargo 
in IITs while also ensuring the safety and security of CBP Officers and 
the transportation of such IITs. Accordingly, this test will allow for 
a new type of entry designed to capture residue in containers that will 
be cleaned or re-filled that can be made off the manifest through an 
indicator that identifies it as a Residue Entry.
    Parties not wishing to participate in the test, however, will be 
required to ``classify, enter, and manifest'' (formal or informal 
entry) the residual cargo in accordance with the underlying statutes 
and their implementing regulations when the test begins.

DATES: CBP will begin enforcement of the requirement to manifest and 
enter residual cargo beginning November 25, 2013. The test announced in 
this notice will also commence on that date and will run for a period 
of one year, which may be extended. CBP will begin an evaluation of the 
test approximately 90 days after commencement.

ADDRESSES: Comments concerning this notice or any aspect of the test 
may be submitted via email, with a subject line identifier reading 
``Comment on the Residue Manifesting and Entry Test'', to OFO-CARGORELEASE@cbp.dhs.gov.

FOR FURTHER INFORMATION CONTACT: Amy E. Hatfield, Branch Chief, Cargo 
Conveyance & Security, Office of Field Operations, (202) 365-2698.

SUPPLEMENTARY INFORMATION: 

Background

    A notice was published in the Customs Bulletin, Vol. 42, No. 35, on 
August 20, 2008, pursuant to section 625(c)(1), Tariff Act of 1930 (19 
U.S.C. 1625(c)(1)), as amended by section 623 of Title VI (Customs 
Modernization) of the North American Free Trade Agreement 
Implementation Act (Pub. L. 103-182, 107 Stat. 2057, December 8, 1993), 
proposing to modify HQ Ruling 113219, dated July 12, 1994, which 
allowed containers meeting the requirements of 19 U.S.C. 1322(a) and 19 
CFR 10.41a as IITs and containing residual chemicals to be entered as 
empty containers.
    Consistent with CBP's treatment of similar commodities such as 
petroleum slops, and to ensure the safety and security of the 
transportation of such containers and CBP Officers, CBP proposed to 
modify the ruling to hold that the containers should not be manifested 
as empty and that the chemical residue contained therein should be 
``classified, entered, and manifested.'' This position is in 
furtherance of the advance cargo information reporting requirements 
authorized pursuant to 19 U.S.C. 2071 note; and the implementing CBP 
regulations set forth in 19 CFR 4.7, 123.91, and 123.92. The trade was 
invited to submit comments on the proposed modification of the 1994 
ruling.
    Upon review of the comments from the trade on the proposed 
modification, CBP issued a modification of HQ 113219 on June 19, 2009. 
This modification, HQ H026715, was published in the Customs Bulletin, 
Vol. 43, No. 28, on July 17, 2009. The modification ruling confirmed 
the reasoning of the proposed modification, stating that in order to be 
consistent with CBP's treatment of similar commodities, such as 
petroleum slops, and to ensure the safety and security of the 
transportation of such containers and the CBP Officers who may examine 
or work in close proximity to them, these containers should not be 
manifested as empty because these containers are not completely empty. 
CBP has an interest in knowing this for border and CBP Officer 
security. This ruling became effective for containers arriving in the 
United States on or after August 16, 2009.
    Due to concerns voiced by the trade about the burdens imposed by 
this ruling, CBP delayed enforcement of this ruling. CBP established a 
residual cargo working group that included representation from CBP as 
well as trade alliances from each mode of transportation, in order to 
implement this ruling. The working group helped establish manifest 
threshold limits for residual cargo that would be permissible to enter 
as residual cargo. The working group also helped establish methods of 
importation that would comply with the 2009 ruling in a less burdensome 
way. It was determined that CBP would need a test to evaluate the 
effectiveness of the procedures developed by the working group. As CBP 
began developing the test, it met many times with the trade and 
conducted a series of webinars with them. See https://www.cbp.gov/xp/cgov/trade/trade_outreach/info_iits/.

Implementation of an Operational Test

    Through this Notice, CBP is announcing the commencement of the 
Residue Manifesting and Entry Test (``Residue Test'') that will provide 
specific test procedures concerning how to manifest and enter residual 
cargo. The Residue Test will require suspension of certain CBP 
regulations (title 19 of the Code of Federal Regulations (CFR)). 
Current electronic functionality will be used in the implementation of 
this test.

Authority for Test

    The Residue Test is being conducted in accordance with Sec.  
101.9(a) of the CBP regulations (19 CFR 101.9(a)), which prescribes 
general test requirements.

This Test Is Independent From ACE Implementation of Manifest 
Requirements (M1 Vessel and Rail Manifest)

    In a Notice published in the Federal Register on March 29, 2012, 77 
FR 19030, CBP announced that the Automated Commercial Environment (ACE) 
will be the only CBP-approved electronic data interchange (EDI) system 
for submitting required advance cargo information for ocean and rail 
cargo (referred to as the ACE e-manifest Ocean and Rail M1 manifest 
functionality). The March 29, 2012 Notice further announced that the 
effective date of this change was September 29, 2012. This Notice is 
unrelated to the ACE M1 Vessel and Rail Manifest Notice mandating the 
use of ACE in the vessel and rail modes. The Residue Test announced 
here applies to the manifesting and entry of residue notwithstanding 
the system in which the electronic submission of cargo information 
occurs.

Eligibility for the Residue Test

    The Residue Test is open to any party submitting manifest or 
advance cargo information or any other party who has the right to make 
entry under 19 U.S.C. 1484.
    Participants and non-participants in the Residue Test will be 
afforded the ability to help CBP develop procedures and engage CBP in 
discovering efficiencies that might be achieved in the manifesting and 
processing of entries of residual cargo. It should be noted that non-
participation in this test does not relieve one from the obligation to 
manifest and enter residual cargo. Furthermore, one's liability for 
user fees under 19 U.S.C. 58c is not affected by this test.

[[Page 52960]]

Ports Where Test Will Occur

    The Residue Test may be used nationwide.

Test Procedures

    Procedures for each mode (rail, truck, ocean, and air) of transport 
are described separately in this Notice, and are as follows:

1. Test Procedures for Rail Environment

a. In General

    All data must be submitted electronically. All containers must be 
manifested whether they are empty or contain residue.

b. Containers Arriving Clean--No Residue

    Any container arriving clean (i.e., with no residue) must be 
manifested as an empty IIT, consistent with current requirements. Entry 
is not currently required for any empty container manifested in this 
fashion and will not be required under the Residue Test.

c. Containers Arriving With Cargo Exceeding 7%

    Any arriving container that contains cargo exceeding 7% of the 
total capacity of the container by weight or volume, using industry 
standards, must be manifested. A consumption entry will be required, 
either formal or informal, depending upon its value and applicable 
regulations. Entry requirements and payment of duties, taxes, and fees, 
as applicable and as provided by law, will apply.

d. Containers Arriving With Cargo Not Exceeding 7%

    Any arriving container with cargo not exceeding 7% of the 
container's total capacity by weight or volume, using industry 
standards, will be considered to contain residual cargo and the 
container must be manifested and entered as having residue.
    If the residual cargo has no commercial value, i.e., the container 
will either be cleaned in accordance with the law, with the residue 
destroyed, or re-filled for export, CBP will: (1) Accept the 
declaration of the carrier, or the importer of record if other than the 
carrier, that the residue has no commercial value ($0 value) and the 
country of origin is the country from which the container is arriving; 
(2) require that the type of residue be described up to the 6-digit 
HTSUS; and (3) require a residue entry designating that the residue 
cargo has no commercial value.
    CBP will release this merchandise under the low value mechanism of 
19 U.S.C. 1321, so no merchandise processing fee will be due. For 
purposes of the Residue Test, this type of entry will be known as a 
residue entry.
    Regulations concerning the making of entry of low value shipments 
are waived for this portion of the Residue Test. Under the Residue 
Test, the carrier will have the right to make a residue entry and entry 
can be made off the manifest with no further documentary requirements 
if the container is below the set limits.

e. ACE System Procedures for IITs With Residue Not Exceeding 7% (Rail 
Manifest)

    (1) Carrier sends Bill of Lading (BOL) message (X12 309) with Bill 
Type 23 indicated.
    (2) When Bill Type 23 is used, the carrier must also submit value 
(0 to 200) and country of origin information. Additionally, a reference 
identifier, ZF, has been created specifically for this type of 
shipment.
    (3) Bills of Type 23 with the ZF qualifier will be identified by 
the system to the CBP officer reviewing the manifest for review and 
mass posting of release.
    (4) Release Notifications (1C) will be sent electronically to the 
carrier and Secondary Notify Parties as currently enabled in the 
system.

f. Recordkeeping

    A manifest record indicating a residue entry has been filed will be 
sufficient to meet recordkeeping requirements for residue entries under 
the 7% threshold. The record must be maintained by the entry filer in 
accordance with 19 CFR Part 163.

2. Test Procedures for Truck Environment

a. In General

    All data must be submitted electronically. All containers must be 
manifested whether they are empty or contain residue.

b. Containers Arriving Clean--No Residue

    Any container arriving clean (i.e., with no residue) must be 
manifested as an empty IIT, consistent with current requirements. Entry 
is not currently required for any empty container manifested in this 
fashion and will not be required under the Residue Test.

c. Containers Arriving With Cargo Exceeding 3%

    Any arriving container that contains cargo exceeding 3% of the 
total capacity of the container by weight or volume, using industry 
standards, must be manifested. A consumption entry will be required, 
either formal or informal, depending upon its value and applicable 
regulations. Entry requirements and payment of duties, taxes, and fees, 
as applicable and as provided by law, will apply.

d. Containers Arriving With Cargo Not Exceeding 3%

    Any arriving container with cargo not exceeding 3% of the 
container's total capacity by weight or volume, using industry 
standards, must be manifested and entered as having residual cargo.
    If the residual cargo has no commercial value, i.e., the container 
will either be cleaned, in accordance with the law, with the residue 
destroyed or re-filled for export, CBP will: (1) Accept the declaration 
of the carrier or the importer of record if other than the carrier, 
that the residue has no commercial value ($0 value) and the country of 
origin is the country from which the IIT is arriving; (2) require that 
the type of residue be described up to the 6-digit HTSUS; and (3) 
require a residue entry designating that the residue cargo has no 
commercial value.
    CBP will release this merchandise under the low value mechanism of 
19 U.S.C. 1321 so no merchandise processing fee will be due. For 
purposes of the Residue Test, this type of entry will be known as a 
residue entry.
    Regulations concerning the making of entry of low value shipments 
are waived for this portion of the Residue Test. For purposes of the 
Residue Test, the carrier will have the right to make a residue entry 
and entry can be made off the manifest with no further documentary 
requirements if the container is below the set limits.

e. System Procedures for Trucks Arriving with IITs with Residue Not 
Exceeding 3%

    (1) In the Manifest Bill of Lading details the carrier would use 
either type code `13' for Section 321 release without the Food and Drug 
Administration-Bio Terrorism Act (FDA-BTA) considerations, or type code 
`35' for 321 release with FDA-BTA considerations.
    (2) If the carrier uses the ACE Portal for submission, these 
identifiers are all drop down values in the manifest creation screens.
    (3) If either type code is used, the carrier must supply `Customs 
Shipment Value' and `country of origin'.
    (4) Value submitted must currently be greater than 0 and less than 
$200. CBP is working to change this edit to accept 0 but will establish 
a value of $1 as an acceptable alternative to 0 if not available.

[[Page 52961]]

    (5) CBP will review at arrival and post release.
    (6) Release Notifications (1C) will be sent electronically to the 
carrier and Secondary Notify Parties as currently enabled in the 
system.

f. Recordkeeping

    A manifest record indicating a residue entry has been filed will be 
sufficient to meet recordkeeping requirements for residue entries under 
the 3% threshold. The record must be maintained by the entry filer in 
accordance with 19 CFR Part 163.

3. Test Procedures for Ocean Environment

a. In General

    All data must be submitted electronically. All containers must be 
manifested whether they are empty or contain residue.

b. Container Arriving Clean--No Residue

    Any container arriving clean (i.e., with no residue) must be 
manifested as an empty IIT, consistent with current requirements. Entry 
is not currently required for any empty container manifested in this 
fashion and will not be required under the Residue Test.

c. Container Arriving With Cargo Exceeding 3%

    Any arriving container that contains cargo exceeding 3% of the 
total capacity of the container by weight or volume, using industry 
standards, must be manifested. A consumption entry will be required, 
either formal or informal, depending upon its value and applicable 
regulations. Entry requirements and payment of duties, taxes, and fees, 
as applicable and as provided by law, will apply.

d. Container Arriving With Cargo Not Exceeding 3%

    Any arriving container with residual cargo not exceeding 3% of the 
container's total capacity by weight or volume, using industry 
standards, must be manifested and entered as having residue.
    If the residue has no commercial value, i.e., the IIT will either 
be cleaned, in accordance with the law, with the residue destroyed or 
re-filled for export, CBP will: (1) Accept the declaration of the 
carrier, or the importer of record if other than the carrier, that the 
residue has no commercial value ($0 value) and the country of origin is 
the country from which the IIT is arriving; (2) require that the type 
of residue be described up to the 6-digit HTSUS; and (3) require a 
residue entry designating that the residue cargo has no commercial 
value.
    CBP will release this merchandise under the low value mechanism of 
19 U.S.C. 1321, so that no merchandise processing fee or harbor 
maintenance fee will be due. For purposes of the Residue Test, this 
type of entry will be known as a residue entry.
    Regulations concerning the making of entry of low value shipments 
are waived for this portion of the Residue Test. For purposes of the 
Residue Test, the carrier will have the right to make a residue entry 
and entry can be made off the manifest with no further documentary 
requirements if the container is below the set limits.

e. ACE System Procedures for Containers With Residue Not Exceeding 3% 
(Vessel Manifest)

    (1) Regular Bill submitted electronically via EDI process at the 
master or simple bill level.
    (2) Qualifiers for IIT with Residue (TBD) should be the first line 
of text in the description field, which will include value and country 
of origin information.
    (3) A request for clearance should be made to the CBP port of 
arrival via existing port procedures for release request notifications.
    (4) CBP will manually post release in ACE.
    (5) Release Notifications (1C) will be sent electronically to the 
carrier and Secondary Notify Parties as currently enabled in the 
system.

f. Recordkeeping

    A manifest record indicating a residue entry has been filed will be 
sufficient to meet recordkeeping requirements for residue entries under 
the 3% threshold. The record must be maintained by the entry filer in 
accordance with 19 CFR Part 163.

4. Test Procedures for the Air Environment

a. In General

    All data must be submitted electronically. All containers must be 
manifested whether they are empty or contain residue.

b. Container Arriving Clean--No Residue

    Any container arriving clean (i.e., with no residue) must be 
manifested as an empty IIT, consistent with current requirements. Entry 
is not currently required for any empty container manifested in this 
fashion and will not be required under the Residue Test.

c. Container Arriving With Cargo Exceeding 5%

    Any arriving container that contains cargo exceeding 5% of the 
total capacity of the container by weight or volume, using industry 
standards, must be manifested. A consumption entry will be required, 
either formal or informal, depending upon its value and applicable 
regulations. Entry requirements and payment of duties, taxes, and fees, 
as applicable and as provided by law, will apply.

d. Container Arriving With Cargo Not Exceeding 5%

    Any arriving container with cargo not exceeding 5% of the 
container's total capacity by weight or volume, using industry 
standards, must be manifested and entered as having residue.
    If the residual cargo has no commercial value, i.e., the IIT will 
either be cleaned, in accordance with the law, with the residue 
destroyed or re-filled for export, CBP will: (1) Accept the declaration 
of the carrier, or the importer of record if other than the carrier, 
that the residue has no commercial value ($0 value) and the country of 
origin is the country from which the IIT is arriving; (2) require that 
the type of residue be described up to the 6-digit HTSUS; and (3) 
require a residue entry designating that the residue cargo has no 
commercial value.
    CBP will release this merchandise under the low value mechanism of 
19 U.S.C. 1321, so that no merchandise processing fee will be due. For 
purposes of the Residue Test, this type of entry will be known as a 
residue entry.
    Regulations concerning the making of entry of low value shipments 
are waived for this portion of the Residue Test. For purposes of this 
test, the carrier will have the right to make a residue entry and entry 
can be made off the manifest with no further documentary requirements 
if the commercial value is below the set limits.

e. System Procedures for IIT with Residue Not Exceeding 5% (Air 
Manifest)

(1) If Standard Air Freight
    (a) A Regular Bill should be submitted electronically via EDI 
process.
    (b) Qualifiers for IIT with Residue (TBD) should be the first line 
of text in the description field, which will include the value and 
country of origin information.
    (c) A request for clearance should be made to the CBP port of 
arrival via existing port procedures for release request notifications.

[[Page 52962]]

    (d) CBP will manually post release in Air Manifest (AMS).
    (e) Release Notifications (1C) will be sent electronically to the 
carrier and Secondary Notify Parties as currently enabled in the 
system.
(2) If Express Air Shipment
    (a) A request using entry type 86 can be filed in Air AMS Express 
codes.
    (b) If entry type 86, then value and country of origin are required 
fields.
    (c) System identifies shipment to CBP users at arrival port.
    (d) Release Notifications are sent electronically as enabled in the 
system.

f. Air Cargo Advance Screening (ACAS) Filing

    ACAS filings will not be required for containers with residue in 
the air environment.

g. Recordkeeping

    A manifest record indicating a residue entry has been filed will be 
sufficient to meet record keeping requirements for entries of residue 
under the 5% threshold. The record must be maintained by the entry 
filer in accordance with 19 CFR Part 163.

Bonding

    No additional bonding is required for the Residue Test.

Waiver of Regulations

    Any provision in title 19 of the CFR including, but not limited to, 
provisions found in Subpart C to Part 143 and Subpart C to Part 128 
relating to entry/entry summary processing and any manifest reporting 
requirements set forth in Part 4, 122, or 123 that are inconsistent 
with the requirements set forth in this notice are waived for the 
duration of the Residue Test. See 19 CFR 101.9(a).
    Any and all other government agency requirements relating to 
transport, manifesting, and entry must be met, including the 
Environmental Protection Agency requirements that are set forth in 19 
CFR Part 12.

Enforcement

    Residue cargo must be entered and manifested either in compliance 
with the current regulations or in compliance with the test procedures 
set forth in this notice as of 90 days after the date of publication in 
the Federal Register. While CBP plans to phase in enforcement of this 
requirement, both participants and non-participants in this test must 
comply with all other CBP laws and regulations.

Test Duration

    The Residue Test will begin on or about 90 days after the date of 
publication in the Federal Register and will run for one year, unless 
extended. If the Residue Test is successful, amendments to the CBP 
regulations will be proposed.

Test Evaluation

    All interested parties are invited to comment on any aspect of this 
test at any time. To ensure adequate feedback, participants are 
encouraged to provide an evaluation of this test. CBP needs comments 
and feedback on all aspects of this test to determine whether to 
modify, alter, expand, limit, continue, end or implement this program 
by regulation.

    Dated: August 22, 2013.
David J. Murphy,
Acting Assistant Commissioner, Office of Field Operations.
[FR Doc. 2013-20878 Filed 8-26-13; 8:45 am]
BILLING CODE 9111-14-P