Administrative Exemption on Value Increased for Certain Articles, 58831-58834 [2016-20581]

Agencies

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

[Federal Register Volume 81, Number 166 (Friday, August 26, 2016)]
[Rules and Regulations]
[Pages 58831-58834]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2016-20581]


=======================================================================
-----------------------------------------------------------------------

DEPARTMENT OF HOMELAND SECURITY

U.S. Customs and Border Protection

DEPARTMENT OF THE TREASURY

19 CFR Parts 10, 128, 143, and 145

[CBP Dec. No. 16-13; USCBP-2016-0057]
RIN 1515-AE09


 Administrative Exemption on Value Increased for Certain Articles

AGENCY: U.S. Customs and Border Protection; Department of the Treasury.

ACTION: Interim final rule; solicitation of comments.

-----------------------------------------------------------------------

SUMMARY: This document amends the U.S. Customs and Border Protection 
regulations to implement section 901 of the Trade Facilitation and 
Trade Enforcement Act of 2015 by raising from $200 to $800 the value of 
certain articles that may be imported by one person on one day free of 
duty and tax. This document also makes clarifying and conforming 
amendments to the regulations.

DATES: 
    Effective date: This interim final rule is effective on August 26, 
2016.
    Comment date: Written comments must be submitted on or before 
September 26, 2016.

ADDRESSES: You may submit comments, identified by docket number USCBP-
2016-0057, by one of the following methods:
     Federal eRulemaking Portal: https://www.regulations.gov. 
Follow the instructions for submitting comments.
     Mail: Trade and Commercial Regulations Branch, Regulations 
and Rulings, Office of Trade, U.S. Customs and Border Protection, 90 K 
Street NE., 10th Floor, Washington, DC 20229-1177.
    Instructions: All submissions received must include the agency name 
and docket title for this rulemaking, and must reference docket number 
USCBP-2016-0057. All comments received will be posted without change to 
https://www.regulations.gov, including any personal information 
provided. For detailed instructions on submitting comments and 
additional information on the rulemaking process, see the ``Public 
Participation'' heading of the SUPPLEMENTARY INFORMATION section of the 
document.
    Docket: For access to the docket to read background documents or 
comments received, go to https://www.regulations.gov. Submitted comments 
may also be inspected during

[[Page 58832]]

business days between the hours of 9:00 a.m. and 4:30 p.m. at the 
Office of Trade, U.S. Customs and Border Protection, 90 K Street NE., 
10th Floor, Washington, DC. Arrangements to inspect submitted comments 
should be made in advance by calling Mr. Joseph Clark at (202) 325-
0118.

FOR FURTHER INFORMATION CONTACT: Randy Mitchell, Director, Commercial 
Operation, Revenue and Entry, Trade Policy and Programs, Office of 
Trade, U.S. Customs and Border Protection, (202) 863-6532.

SUPPLEMENTARY INFORMATION: 

Public Participation

    Interested persons are invited to participate in this rulemaking by 
submitting written data, views, or arguments on all aspects of the 
interim rule. U.S. Customs and Border Protection (CBP) also invites 
comments that relate to the economic, environmental, or federalism 
effects that might result from this interim rule. Comments that will 
provide the most assistance to CBP in finalizing these regulations will 
reference a specific portion of the interim rule, explain the reason 
for any recommended change, and include data, information, or authority 
that support such recommended change. CBP is also interested in 
receiving comments regarding the collection of data on behalf of 
Partner Government Agencies (PGAs) for shipments valued below $800. See 
ADDRESSES above for information on how to submit comments.

I. Background

A. Trade Facilitation and Trade Enforcement Act of 2015

    On February 24, 2016, President Obama signed into law the Trade 
Facilitation and Trade Enforcement Act of 2015 (TFTEA) (Pub. L. 114-
125). Prior to enactment of the TFTEA, section 321(a)(2)(C) of the 
Tariff Act of 1930 (19 U.S.C. 1321(a)(2)(C)) authorized CBP to provide 
an administrative exemption to admit free from duty and tax shipments 
of merchandise (other than bona fide gifts and certain personal and 
household goods) imported by one person on one day having an aggregate 
fair retail value in the country of shipment not less than $200. 
Section 901(c) of the TFTEA amended section 1321(a)(2)(C) by increasing 
the value of this administrative exemption from $200 to $800. Pursuant 
to section 901(d) of TFTEA, the effective date of this amendment was 
the 15th day after the date of enactment, i.e., effective as of March 
10, 2016. Section 901 did not change the administrative exemption for 
bona fide gifts and personal or household articles accompanying 
travelers under 19 U.S.C. 1321(a)(2)(A) and 1321(a)(2)(B).

B. Amendments to Regulations To Reflect New Statutory Amount

    CBP implements the administrative exemption provided for in 19 
U.S.C. 1321 in its regulations at 19 CFR 10.151 and 10.153. The 
administrative exemption amount is also referenced in various other 
sections in the CBP regulations: Sec. Sec.  128.21(a)(4)(ii); 128.24(d) 
and (e); 143.21(l)(1); 143.23(j); 143.26; and 145.31. In all of the 
previously listed sections that currently provide that the 19 U.S.C. 
1321(a)(2)(C) administrative exemption amount is $200, CBP is amending 
the regulations to reflect that the new amount is $800.

C. Other Amendments to Administrative Exemption Regulations

    Under 19 U.S.C. 1321(b), the Secretary of the U.S. Department of 
the Treasury is authorized to promulgate regulations to prescribe 
exceptions to any exemption provided for in section 1321(a) whenever 
the Secretary finds that such action is necessary for any reason to 
protect the revenue or to prevent unlawful importations.
    This rule also amends the scope of alcohol and tobacco products 
covered by the limitation in paragraph (e) of section 10.153, to 
conform to other past statutory changes. Perfume is removed from the 
list of products excluded from the administrative exemption because the 
excise tax on such products was eliminated in 1995 pursuant to section 
136 of the Uruguay Round Agreements Act, Public Law 103-465. Paragraph 
(e) of section 10.153 is also amended pursuant to amendments to the 
Internal Revenue Code, Section 5701, which increased excise taxes for 
smokeless tobacco, pipe tobacco, roll-your-own tobacco, and cigarette 
tubes and papers. 26 U.S.C. 5701, as amended by the Children's Health 
Insurance Program Reauthorization Act of 2009 (Pub. L. 111-3).
    This rule also adds a new paragraph (h) in section 10.153 to 
clarify that regarding shipments that qualify for the 19 U.S.C. 1321 
administrative exemption, the importing party is not exempt from having 
to pay any applicable excise taxes collected by other agencies on 
imported goods. It is also noted that pursuant to 19 CFR 24.24(d)(3), 
the harbor maintenance tax will not be assessed on loadings or 
unloadings of cargo in which the shipment would be entitled to be 
entered under informal entry procedures.
    This document also revises paragraph (j) of Sec.  143.23 to clarify 
that different dollar amounts apply to articles that are bona fide 
gifts and articles that are shipped from the Virgin Islands, Guam, and 
American Samoa. This document also revises paragraph (j) of Sec.  
143.23 to reflect that the increase in the value of shipments from $200 
to $800 only applies to shipments that qualify for the administrative 
exemption under sections 10.151 and 128.24(e).

D. Comments

    Interested persons are invited to participate in this rulemaking by 
submitting written data, views, or arguments on all aspects of the 
interim rule. In particular, CBP is seeking comments on how CBP can 
maintain the collection of data required by Partner Government Agencies 
(PGAs) for imported merchandise to prevent unlawful importations when 
shipments of merchandise valued below $800 that qualify for an 
administrative exemption are admitted through ``release from 
manifest.'' (Generally, such shipments are entered by the carrier and 
released by CBP based on information contained on the manifest or bill 
of lading provided by the carrier.) CBP is aware that the manifest 
information may not contain all the necessary information required by 
PGAs for admissibility purposes.

II. Statutory and Regulatory Requirements

A. Inapplicability of Notice and Delayed Effective Date

    The Administrative Procedure Act (APA) requirements in 5 U.S.C. 553 
govern agency rulemaking procedures. Section 553(b) of the APA 
generally requires notice and public comment before issuance of a final 
rule. In addition, section 553(d) of the APA requires that a final rule 
have a 30-day delayed effective date. The APA, however, provides 
exceptions from the prior notice and public comment requirement and the 
delayed effective date requirements, when an agency for good cause 
finds that such procedures are impracticable, unnecessary, or contrary 
to the public interest.
    Treasury and CBP find that prior notice and comment procedures are 
unnecessary and that good cause exists to issue these regulations 
effective upon publication. By immediately effectuating this interim 
rule, CBP can avoid inconsistent application of the exemption and 
eliminate confusion that may arise among importers with regard

[[Page 58833]]

to the scope of the exemption and with regard to payment of excise 
taxes.
    Pursuant to section 901(d) of the TFTEA, Congress established March 
10, 2016, as the effective date of the increase in the administrative 
exemption under 19 U.S.C. 1321(a)(2)(C). The clear intent of Congress 
is that this amendment be rapidly implemented; therefore the 
regulations must be changed to conform to TFTEA's statutory amendment.
    In addition, pursuant to the authority of the Secretary of the 
Treasury under 26 U.S.C. 7805(b)(3), regulations implementing the 
internal revenue laws can be made immediately effective to prevent 
abuse. Under that authority, these regulations reflect intervening 
statutory changes to section 5701 of the Internal Revenue Code, which 
increased excise taxes for smokeless tobacco, pipe tobacco, roll-your-
own tobacco, and cigarette tubes and papers.
    Accordingly, pursuant to 5 U.S.C. 553(b) and (d) and the Secretary 
of the Treasury's authority under 19 U.S.C. 1321(b) and 26 U.S.C. 7805, 
the requirements for prior notice and comment and a delay in effective 
date are inapplicable; however, CBP is soliciting comments on this 
interim rule and will consider all comments received before issuing a 
final rule.

B. Executive Orders 12866 and 13563

    Executive Orders 13563 and 12866 direct agencies to assess the 
costs and benefits of available regulatory alternatives and, if 
regulation is necessary, to select regulatory approaches that maximize 
net benefits (including potential economic, environmental, public 
health and safety effects, distributive impacts, and equity). Executive 
Order 13563 emphasizes the importance of quantifying both costs and 
benefits, of reducing costs, of harmonizing rules, and of promoting 
flexibility. This rule is not a ``significant regulatory action,'' 
under section 3(f) of Executive Order 12866.

C. The Regulatory Flexibility Act

    This section examines the impact of the rule on small entities as 
required by the Regulatory Flexibility Act (5 U.S.C. 601 et seq.), as 
amended by the Small Business Regulatory Enforcement and Fairness Act 
of 1996. A small entity may be a small business (defined as any 
independently owned and operated business not dominant in its field 
that qualifies as a small business per the Small Business Act); a small 
not-for-profit organization; or a small governmental jurisdiction 
(locality with fewer than 50,000 people). The Regulatory Flexibility 
Act applies when agencies are required to publish a general notice of 
proposed rulemaking for a proposed rule. Since a general notice of 
proposed rulemaking is not necessary in this rulemaking, a regulatory 
flexibility analysis is not required by the Regulatory Flexibility Act.

D. Paperwork Reduction Act

    As there is no new collection of information required in this 
document, the provisions of the Paperwork Reduction Act of 1995 (44 
U.S.C. 3507) are inapplicable.
Signing Authority
    This document is being issued in accordance with Sec.  0.1(a)(1) of 
the CBP Regulations (19 CFR 0.1(a)(1)) pertaining to the authority of 
the Secretary of the Treasury (or his/her delegate) to approve 
regulations related to certain customs revenue functions.

List of Subjects

19 CFR Part 10

    Customs duties and inspection, Entry of merchandise, Exports, 
Imports, Reporting and recordkeeping requirements.

19 CFR Part 12

    Customs duties and inspection, Entry of merchandise, Imports, 
Reporting and recordkeeping requirements.

19 CFR Part 128

    Administrative practice and procedure, Customs duties and 
inspection, Entry, Express consignments, Imports, Reporting and 
recordkeeping requirements.

19 CFR Part 143

    Customs duties and inspection, Entry of merchandise, Reporting and 
recordkeeping requirements.

19 CFR Part 145

    Customs duties and inspection, Reporting and recordkeeping 
requirements.

Amendments to the CBP Regulations

    For the reasons stated above in the preamble, CBP amends parts 10, 
12, 128, 143, and 145 of title 19 of the Code of Federal Regulations 
(19 CFR parts 10, 12, 128, 143, and 145) as follows:

PART 10--ARTICLES CONDITIONALLY FREE, SUBJECT TO A REDUCED RATE, 
ETC.

0
1. The general authority citation for part 10 continues to read as 
follows:

    Authority:  19 U.S.C. 66, 1202 (General Note 3(i), Harmonized 
Tariff Schedule of the United States (HTSUS)), 1321, 1481, 1484, 
1498, 1508, 1623, 1624, 3314.
* * * * *


Sec.  10.151  [Amended]

0
2. Amend Sec.  10.151 by removing the figure ``$200'' and adding in its 
place ``$800'' in the section heading and the first sentence.

0
3. Amend Sec.  10.153 by revising paragraph (e) and by adding paragraph 
(h) to read as follows:


Sec.  10.153  Conditions for exemption.

* * * * *
    (e) No alcoholic beverage, cigars (including cheroots and 
cigarillos) and cigarettes containing tobacco, cigarette tubes, 
cigarette papers, smoking tobacco (including water pipe tobacco, pipe 
tobacco, and roll-your-own tobacco), snuff, or chewing tobacco, shall 
be exempted from the payment of duty and tax under Sec.  10.151 or 
Sec.  10.152.
* * * * *
    (h) The exemption provided for in Sec.  10.151 is not to be allowed 
with respect to any tax imposed under the Internal Revenue Code 
collected by other agencies on imported goods.

PART 128--EXPRESS CONSIGNMENTS

0
4. The general authority citation for part 128 continues to read as 
follows:

    Authority:  19 U.S.C. 58c, 66, 1202 (General Note 3(i), 
Harmonized Tariff Schedule of the United States), 1321, 1484, 1498, 
1551, 1555, 1556, 1565, 1624.
* * * * *


Sec.  128.21  [Amended]

0
6. Amend Sec.  128.21 in paragraph (a)(4)(ii) by removing the figure 
``$200'' and adding in its place ``$800''.


Sec.  128.24  [Amended]

0
7. Amend Sec.  128.24 in paragraphs (d) and (e) by removing the figure 
``$200'' and adding in its place ``$800'' in paragraph (d) and in three 
places in paragraph (e) introductory text.

PART 143--SPECIAL ENTRY PROCEDURES

0
8. The general authority citation for part 143 continues to read as 
follows:

    Authority: 19 U.S.C. 66, 1321, 1414, 1481, 1484, 1498, 1624, 
1641.
* * * * *


Sec.  143.21  [Amended]

0
9. Amend Sec.  143.21 in paragraph (l)(1) by removing the figure 
``$200'' and adding in its place ``$800''.

[[Page 58834]]


0
10. Amend Sec.  143.23 by revising paragraph (j) and adding paragraph 
(k) to read as follows:


Sec.  143.23  Form of entry.

* * * * *
    (j) Except for mail importations (see Sec. Sec.  145.31 and 145.32 
of this chapter), or in the case of personal written or oral 
declarations (see Sec. Sec.  148.12, 148.13, and 148.62 of this 
chapter), a shipment of merchandise that qualifies for informal entry 
under 19 U.S.C. 1498 may be entered, including the information listed 
in paragraph (k) of this section, by presenting the bill of lading or a 
manifest listing each bill of lading when:
    (1) The value of the shipment does not exceed $100 in the case of a 
bona fide gift from a person in a foreign country to a person in the 
United States and the shipment meets the requirements in Sec.  10.152 
of this chapter (see Sec.  10.152 of this chapter);
    (2) The value of the shipment does not exceed $200 in the case of 
articles (including bona fide gifts) from the Virgin Islands, Guam, and 
American Samoa and the shipment meets the requirements in Sec.  10.152 
of this chapter (see Sec.  10.152 of this chapter); or
    (3) The value of the shipment does not exceed $800 and the shipment 
satisfies the requirements in Sec.  10.151 of this chapter (see 
Sec. Sec.  10.151 and 128.24(e) of this chapter).
    (k) The following information is required to be filed as a part of 
entry made under paragraph (j) of this section:
    (1) Country of origin of the merchandise;
    (2) Shipper name, address and country;
    (3) Ultimate consignee name and address;
    (4) Specific description of the merchandise;
    (5) Quantity;
    (6) Shipping weight; and
    (7) Value.

0
11. Amend Sec.  143.26 by removing the figure ``$200'' and adding in 
its place ``$800'' in two places each in paragraphs (a) and (b).

PART 145--MAIL IMPORTATIONS

0
12. The general authority citation for part 145 continues to read as 
follows:

    Authority:  19 U.S.C. 66, 1202 (General Note 3(i), Harmonized 
Tariff Schedule of the United States), 1624.
* * * * *


Sec.  145.31  [Amended]

0
13. Amend Sec.  145.31 by removing the figure ``$200'' and adding in 
its place ``$800'' in the section heading and text.

R. Gil Kerlikowske,
Commissioner, U.S. Customs and Border Protection.
    Approved: August 23, 2016.
Timothy E. Skud,
Assistant Secretary of the Treasury.
[FR Doc. 2016-20581 Filed 8-25-16; 8:45 am]
 BILLING CODE 9111-14-P