Amendment to Statement Processing and Automated Clearinghouse (ACH), 46678-46681 [2019-19149]

Agencies

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

[Federal Register Volume 84, Number 172 (Thursday, September 5, 2019)]
[Rules and Regulations]
[Pages 46678-46681]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2019-19149]


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DEPARTMENT OF HOMELAND SECURITY

U.S. Customs and Border Protection

DEPARTMENT OF THE TREASURY

19 CFR Part 24

[USCBP-2019-0032; CBP Dec. No. 19-10]
RIN 1515-AE47


Amendment to Statement Processing and Automated Clearinghouse 
(ACH)

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

ACTION: Interim final rule; solicitation of comments.

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SUMMARY: This document amends the U.S. Customs and Border Protection 
(CBP) regulations regarding statement processing and Automated 
Clearinghouse (ACH) to reflect that CBP will identify final statements 
as paid upon the completion of the funds transfer. Additionally, this 
document makes certain technical corrections to the CBP regulations on 
statement processing and ACH.

DATES: This interim final rule is effective September 7, 2019; comments 
must be received by November 4, 2019.

ADDRESSES: You may submit comments, identified by docket number USCBP-
2019-0032, by one of the following methods:
     Federal eRulemaking Portal at https://www.regulations.gov. 
Follow the instructions for submitting comments via Docket No. USCBP-
2019-0032.
     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 number for this rulemaking. 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 this document.
    Docket: For access to the docket to read background documents or 
comments received, go to https://www.regulations.gov. Submitted comments 
may be inspected during regular business days between the hours of 9 
a.m. and 4:30 p.m. at the 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. Arrangements to 
inspect submitted comments should be made in advance by calling Mr. 
Joseph Clark at 202-325-0118.

FOR FURTHER INFORMATION CONTACT: Kara Welty, Debt Management Branch, 
Revenue Division, Office of Finance, (866) 530-4172, 
[email protected].

SUPPLEMENTARY INFORMATION:

I. Public Participation

    Interested persons are invited to participate in this rulemaking by 
submitting written data, views, or arguments on all aspects of this 
interim final rule. See ADDRESSES above for information on how to 
submit comments. CBP also invites comments that relate to the economic, 
environmental, or federalism effects that might result from this 
regulatory change. Comments that will provide the most assistance to 
CBP will reference a specific portion of the rule, explain the reason 
for any recommended change, and include data, information or authority 
that support such recommended change.

II. Background on Statement Processing

    Upon importation, the importer becomes liable to CBP for the amount 
of duties, taxes, and fees estimated to be payable on the merchandise. 
See 19 U.S.C. 1505(a) and sections 141.1(a), (b) and 141.3 of title 19 
of the Code of Federal Regulations (19 CFR 141.1(a), 141.1(b), and 
141.3). One way in which estimated duties, taxes, and fees can be 
deposited with CBP is by transmitting the estimated duties, taxes, and 
fees to CBP pursuant to statement processing, as described in 19 CFR 
24.25. See 19 CFR 141.101.
    Statement processing is a voluntary automated program for 
participants in the Automated Broker Interface (ABI), allowing the 
grouping of entry/entry summaries and entry summaries, by either 
importer or by filer, on a daily basis. See 19 CFR 24.1(a)(8) and 
24.25(a). Any duties, taxes, and fees (as well as interest, if 
applicable) that are related to the grouped entry/entry summaries and 
entry summaries may be paid with a single payment, rather than by 
individual checks for each entry. See 19 CFR 24.25(a) and 143.32(p).
    The ABI filer must elect whether payment for a particular entry 
summary will be by individual check or by statement processing upon the 
transmission of entry/entry summary and entry summary data to CBP 
through ABI. See 19 CFR 24.25(c)(1). The election of statement 
processing for a particular entry summary also requires the ABI filer 
to elect (1) whether the entry summary is to be grouped by the importer 
or broker, and (2) a valid scheduled statement date, which shall be 
within ten (10) days of entry, but not on a Saturday, Sunday, or 
holiday. See 19 CFR 24.25(c)(1) and (e).
    On the scheduled statement date, CBP provides the ABI filer with a 
preliminary statement that is transmitted electronically to the filer 
using a CBP-authorized Electronic Data Interchange (EDI) system. 19 CFR 
24.25(c)(2) and 143.32(p). The preliminary statement contains all 
entry/entry summaries and entry summaries scheduled for that statement 
date and the amount of duties, taxes, and fees due for payment. See 19 
CFR 24.1(a)(8), 24.25(c)(2), and 143.32(p). The ABI filer is required 
to ensure that payment is made on each preliminary statement within ten 
(10) working days of the entry of the related merchandise. See 19 CFR 
24.25(c)(2), (c)(3), and (e).
    The preferred method of payment for ABI users of statement 
processing is by ACH, except where the importer has provided a separate 
check payable to ``U.S. Customs and Border Protection'' for customs 
charges (mixing of payment methods for a single statement is 
prohibited). See 19 CFR 24.1(a)(8) and 24.25(a). There are two (2) ACH 
payment processes--the ACH debit process and the ACH credit process, 
each of which is explained below with respect to its current state and 
how that will change under the amended regulations.

[[Page 46679]]

III. ACH Payment Processes

A. ACH Debit Process

    The ACH debit process is an arrangement in which the filer 
electronically provides payment authorization for the Department of the 
Treasury (Treasury)-designated ACH processor bank to perform an 
electronic debit to the payor's bank account. See 19 CFR 24.25(a). ABI 
filers using this process are required to provide CBP with the bank 
account and routing number for each account from which ACH payments are 
to be electronically debited. See 19 CFR 24.25(b)(2). The ABI filer 
initiates the payment process by transmitting one ACH debit 
authorization per preliminary statement to CBP through ABI. See 19 CFR 
24.25(a) and (c). If the ACH debit authorization is error-free, then 
CBP will accept the ACH debit authorization and provide the ABI filer 
with a message confirming CBP's acceptance of the ACH debit 
authorization. See 19 CFR 24.25(c)(4).
    Currently, upon CBP's acceptance of the ACH debit authorization, 
CBP identifies the preliminary statement as paid and posts the 
appropriate amounts to the related entries. CBP then initiates the 
funds transfer by sending an electronic message to the Treasury-
designated ACH processor bank instructing the Treasury-designated ACH 
processor bank to perform an electronic debit to the payor's bank 
account. See 19 CFR 24.25(a) and (c)(4). CBP generally makes the final 
statement available to the ABI filer the day following the acceptance 
of the ACH payment. See 19 CFR 24.25(c)(4). A final statement serves as 
evidence of the payment of a preliminary statement through an ACH 
transaction. See 19 CFR 24.25(c)(4).
    Even though the preliminary statement is currently identified as 
paid upon acceptance of the ACH debit authorization, the funds transfer 
is usually not completed until two (2) business days after CBP's 
acceptance of the ACH debit authorization. To more accurately reflect 
the status of the funds transfer, CBP is amending its regulations to 
remove the requirement to identify the preliminary statement as paid. 
The preliminary statement will still be issued; but, instead, the 
amended regulations will require CBP to identify the final statement as 
paid and post the appropriate amounts to the related entries upon 
receiving confirmation from Treasury that the funds are available and 
transferred to CBP (which marks the completion of the funds transfer).
    The amendments to the CBP regulations do not affect the timeliness 
of the payment, which remains based upon the date of CBP's acceptance 
of the ACH debit authorization. Once CBP receives confirmation from 
Treasury that the funds are available and transferred to CBP, then CBP 
will treat the date of CBP's acceptance of the ACH debit authorization 
as the effective payment date for purposes of determining the 
timeliness of the payment. The date of CBP's acceptance of the ACH 
debit authorization also remains the date for the calculation of 
interest and/or liquidated damages, if applicable; the calculation is 
unaffected by this amendment to the CBP regulations pertaining to ACH 
debit payments.

B. ACH Credit Process

    Pursuant to 19 CFR 24.26(a), ACH credit is an optional payment 
method that allows a payor to electronically transmit statement 
processing payments under 19 CFR 24.25, deferred tax payments under 19 
CFR 24.4, or bill payments under 19 CFR 24.3, through its financial 
institution, directly to the CBP account maintained by Treasury. 
Currently, when an importer uses the ACH credit process, CBP will, upon 
the acceptance of the credit payment, identify the preliminary 
statement as paid and post the appropriate amounts to the related 
entries. See 19 CFR 24.25(c)(4).
    In order to promote consistency with the amendments to the ACH 
debit process, CBP is also amending 19 CFR 24.25(c)(4) to reflect that 
CBP will identify final statements, as opposed to preliminary 
statements, as paid for the ACH credit process. As explained above for 
the ACH debit process, these changes do not affect either the 
timeliness of the payment or the date for the calculation of interest 
and/or liquidated damages, if applicable, for the ACH credit process.

C. Implementation of Changes

    In order to provide for the changes to the ACH payment processes 
discussed above, and to provide clarity regarding which aspects of the 
payment processes are not affected, this document amends Sec.  
24.25(c)(4) by revising this provision and by splitting this provision 
into three (3) subparagraphs--paragraphs (c)(4)(i) through (iii).
    Paragraph (c)(4)(i) of Sec.  24.25 reflects that, for purposes of 
determining the timeliness of the statement payment (as well as the 
calculation of any interest and/or liquidated damages, if applicable), 
CBP will continue to use the date of acceptance of the ACH debit 
payment authorization or ACH credit payment as the payment date once 
CBP receives confirmation from Treasury that the funds are available 
and transferred to CBP.
    Paragraph (c)(4)(ii) of Sec.  24.25 reflects the changes to CBP's 
internal accounting procedures; particularly, that CBP will, upon 
receiving confirmation from Treasury that the funds are available and 
transferred to CBP, identify the final statement as paid and post the 
appropriate amounts to the related entries.
    Paragraph (c)(4)(iii) of Sec.  24.25 reflects that CBP will 
continue to generally make available to the filer the final statement 
on the day following the receipt of the ACH payment by CBP. This 
paragraph also clarifies that CBP continues to accept final statements 
(for ACH transactions) and cancelled checks as evidence that can be 
used to prove that statement payment has occurred.

IV. Nomenclature Updates

    This document also proposes to update the nomenclature in Sec.  
24.25, due to the renaming of the U.S. Customs Service to U.S. Customs 
and Border Protection. Specifically, this document is amending 
paragraph (a) of Sec.  24.25, by replacing the reference to ``U.S. 
Customs Service'' with ``U.S. Customs and Border Protection'', as well 
as making a grammatical change to the phrase ``Customs charges'' to be 
in the lower case. Second, due to the renaming of the U.S. Customs 
Service to U.S. Customs and Border Protection, this document proposes 
to replace references to ``Customs'' with ``CBP'' in Sec.  24.25.

V. 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. CBP finds that prior notice and comment are 
unnecessary and that good cause exists to issue this rule effective 
upon publication.

[[Page 46680]]

    Prior notice and comment are unnecessary because the rule does not 
substantively alter the underlying rights or interests of importers or 
filers. Instead, the rule is essentially technical by merely modifying 
the regulations to reflect the marking of a statement as paid to 
coincide with the completion of the funds transfer for the ACH debit 
and credit payment processes. CBP will continue to treat the date of 
CBP's acceptance of the ACH debit authorization and the ACH credit 
payment as the effective payment date for purposes of determining the 
timeliness of the statement payment (as well as for the calculation of 
any interest and/or liquidated damages, if applicable) once CBP 
receives confirmation from Treasury that the funds are available and 
transferred to CBP. Accordingly, the trade community will experience no 
delays, interruptions or process changes associated with this change to 
the regulations. This change only affects CBP's internal accounting 
procedures and does not alter the substantive rights of the members of 
the trade community.

B. Executive Orders 13563, 12866 and 13771

    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. Executive Order 13771 directs agencies to reduce 
regulation and control regulatory costs and provides that ``for every 
one new regulation issued, at least two prior regulations be identified 
for elimination, and that the cost of planned regulations be prudently 
managed and controlled through a budgeting process.''
    This interim final rule is not a ``significant regulatory action,'' 
under section 3(f) of Executive Order 12866. Accordingly, the Office of 
Management and Budget (OMB) has not reviewed this regulation. As this 
rule is not a significant regulatory action, this rule is exempt from 
the requirements of Executive Order 13771. See OMB's Memorandum titled 
``Guidance Implementing Executive Order 13771, Titled `Reducing 
Regulation and Controlling Regulatory Costs' '' (April 5, 2017).

C. Regulatory Flexibility Act

    The Regulatory Flexibility Act (5 U.S.C. 601 et seq.), as amended 
by the Small Business Regulatory Enforcement and Fairness Act of 1996, 
requires an agency to prepare and make available to the public a 
regulatory flexibility analysis that describes the effect of a proposed 
rule on small entities (i.e., small businesses, small organizations, 
and small governmental jurisdictions) when the agency is required to 
publish a general notice of proposed rulemaking for a rule. Since a 
general notice of proposed rulemaking is not necessary for this rule, 
CBP is not required to prepare a regulatory flexibility analysis for 
this rule.

D. Paperwork Reduction Act

    This interim final rule does not impose an additional information 
collection burden under the Paperwork Reduction Act of 1995 (44 U.S.C. 
3507) and does not involve any material change to the existing approved 
information collection by the Office of Management and Budget (OMB) 
under assigned OMB control number 1651-0078.
    An agency may not conduct or sponsor, 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.

E. Signing Authority

    This document is being issued by CBP 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 in 19 CFR Part 24

    Accounting, Claims, Harbors, Reporting and recordkeeping 
requirements, Taxes.

Amendments to the Regulations

    For the reasons stated above, part 24 of title 19 of the Code of 
Federal Regulations (19 CFR part 24) is amended as set forth below:

PART 24--CUSTOMS FINANCIAL AND ACCOUNTING PROCEDURE

0
1. The general authority citation for part 24 continues to read as 
follows:

    Authority: 5 U.S.C. 301; 19 U.S.C. 58a-58c, 66, 1202 (General 
Note 3(i), Harmonized Tariff Schedule of the United States), 1505, 
1520, 1624; 26 U.S.C. 4461, 4462; 31 U.S.C. 3717, 9701; Pub. L. 107-
296, 116 Stat. 2135 (6 U.S.C. 1 et seq.).
* * * * *

0
2. In Sec.  24.25:
0
a. Paragraph (a), third sentence, is amended by:
0
1. Removing the phrase `` ``U.S. Customs Service'' '' and adding the 
phrase `` ``U.S. Customs and Border Protection'' '' in its place;
0
2. Removing the phrase ``Customs charges'' and adding the phrase 
``customs charges'' in its place; and
0
3. Removing the word ``Customs'' before the phrase ``(see Sec.  
111.29(b) of this chapter)'' and adding the word ``CBP'' in its place.
0
b. Paragraph (a), seventh sentence is amended by removing the word 
``Customs'' and adding the word ``CBP'' in its place;
0
c. Paragraph (b) is amended by removing the word ``Customs'' in each 
place that it appears and adding in each place the word ``CBP'';
0
d. Paragraph (c)(2) is amended by removing the word ``Customs'' in each 
place that it appears and adding in each place the word ``CBP'';
0
e. Paragraph (c)(4) is revised;
0
f. Paragraph (d) is amended by removing the word ``Customs'' in each 
place that it appears and adding in each place the word ``CBP''; and
0
g. Paragraph (e) is amended in the last sentence by removing the word 
``Customs'' and adding in its place the word ``CBP''.
    The revision reads as follows:


Sec.  24.25  Statement processing and Automated Clearinghouse.

* * * * *
    (c) * * *
    (4) Payments made through ACH are processed as follows:
    (i) Payment date; interest and liquidated damages. The date of 
acceptance of the ACH debit payment authorization or ACH credit payment 
for the preliminary statement is the payment date when determining 
compliance with the due date for scheduled statements and for purposes 
of Sec.  24.3a of this part, and subject to the provisions of Sec.  
113.62(a)(1)(i) and (m)(4) of this chapter.
    (ii) Issuance of final statement. CBP shall, upon confirmation from 
the Department of the Treasury that funds are available and transferred 
to CBP, identify the final statement as paid and post the appropriate 
amounts to the related entries.
    (iii) Evidence of payment. The final statement generally shall be 
available to the filer the day following the receipt of the ACH payment 
by CBP. The final statement may be utilized as evidence that statement 
payment has occurred through an ACH transaction. In other

[[Page 46681]]

instances, a cancelled check may serve as evidence of payment.
* * * * *

Robert E. Perez,
Deputy Commissioner, U.S. Customs and Border Protection.
    Approved: August 29, 2019.
Timothy E. Skud,
Deputy Assistant Secretary, Department of the Treasury.
[FR Doc. 2019-19149 Filed 9-4-19; 8:45 am]
BILLING CODE 9111-14-P