Modification of the National Customs Automation Program (NCAP) Test Regarding Reconciliation for Filing Post-Importation Claims Arising Under the Agreement Between the United States of America, the United Mexican States, and Canada (USMCA), 39576-39579 [2020-14200]

Download as PDF 39576 Federal Register / Vol. 85, No. 127 / Wednesday, July 1, 2020 / Notices be collected; and (4) suggestions to minimize the burden of the collection of information on those who are to respond, including through the use of appropriate automated, electronic, mechanical, or other technological collection techniques or other forms of information technology, e.g., permitting electronic submission of responses. The comments that are submitted will be summarized and included in the request for approval. All comments will become a matter of public record. Overview of This Information Collection Title: Bonded Warehouse Proprietor’s Submission. OMB Number: 1651–0033. Form number: CBP Form 300. Current Actions: CBP proposes to extend the expiration date of this information collection with an increase in the burden hours. There is no change to the information collected or CBP Form 300. Type of Review: Extension (without change). Affected Public: Businesses. Abstract: CBP Form 300, The Bonded Warehouse Proprietor’s Submission, is prepared annually by each warehouse proprietor, as mandated under 19 CFR 19.12 (g). The information on CBP Form 300 is used by CBP to evaluate warehouse activity for the year. This form must be completed within 45 days from the end of his business year, pursuant to the provisions of the Tariff Act of 1930, as amended, 19 U.S.C. 66, 1311, 1555, 1556, 1557, 1623 and 19 CFR 19.12. The information collected on this form helps CBP determine all bonded merchandise that was entered, released, and manipulated in the warehouse. CBP Form 300 is accessible at https://www.cbp.gov/document/ forms/form-300-bonded-warehouseproprietors-submission. Estimated Number of Respondents: 1,980. Estimated Number of Annual Responses per Respondent: 1. Estimated Number of Total Annual Responses: 1,980. Estimated Time per Response: 10 hours. Estimated Total Annual Burden Hours: 19,800. Dated: June 26, 2020. Seth D. Renkema, Branch Chief, Economic Impact Analysis Branch, U.S. Customs and Border Protection. [FR Doc. 2020–14158 Filed 6–30–20; 8:45 am] BILLING CODE P VerDate Sep<11>2014 01:53 Jul 01, 2020 Jkt 250001 DEPARTMENT OF HOMELAND SECURITY U.S. Customs and Border Protection Modification of the National Customs Automation Program (NCAP) Test Regarding Reconciliation for Filing Post-Importation Claims Arising Under the Agreement Between the United States of America, the United Mexican States, and Canada (USMCA) U.S. Customs and Border Protection, Department of Homeland Security. ACTION: General notice. AGENCY: This document announces a modification to the Automated Commercial Environment (ACE) National Customs Automation Program (NCAP) reconciliation prototype test to include the flagging for filing of postimportation preferential treatment claims arising under the Agreement Between the United States of America, the United Mexican States, and Canada (the USMCA) as implemented pursuant to the United States-Mexico-Canada Agreement Implementation Act (the USMCA Act). Importers may file USMCA post-importation claims for refunds of certain duties assessed on merchandise that both qualifies for preferential tariff treatment under the USMCA and was entered for consumption, or withdrawn from warehouse for consumption, on or after July 1, 2020. Unless and until the USMCA Act is subsequently amended, refunds for merchandise processing fees (MPF) are excluded from USMCA postimportation claims. Except to the extent expressly announced or modified by this document, all aspects, rules, terms and conditions announced in previously published Federal Register notices regarding the test remain in effect. DATES: The test is modified to allow reconciliation of post-importation preferential tariff treatment claims to be filed on or after July 1, 2020, for refunds of certain duties assessed on merchandise that both qualifies for preferential tariff treatment under the USMCA and was entered for consumption, or withdrawn from warehouse for consumption, on or after July 1, 2020. ADDRESSES: Comments concerning the reconciliation prototype test may be submitted via email to Randy Mitchell, Director, Commercial Operations, Revenue & Entry (CORE) Division, Office of Trade, U.S. Customs and Border Protection at OT-Reconfolder@ cbp.dhs.gov, with a subject line SUMMARY: PO 00000 Frm 00058 Fmt 4703 Sfmt 4703 identifier reading, ‘‘Modification of Reconciliation Test-USMCA’’. FOR FURTHER INFORMATION CONTACT: For policy-related questions, contact Randy Mitchell, Director, Commercial Operations, Revenue & Entry (CORE) Division, Office of Trade, U.S. Customs and Border Protection, at (202) 325– 6532 or via email at OTReconFolder@ cbp.dhs.gov, with a subject line identifier reading ‘‘Modification of Reconciliation Test-USMCA’’. For technical questions related to ACE or Automated Broker Interface (ABI) transmissions, contact your assigned client representative. Interested parties without an assigned client representative should direct their questions to Tonya Perez, Director, Client Services Division, Office of Trade, U.S. Customs and Border Protection, at (571) 421–7477 or via email at gmb.clientrepoutreach@ cbp.dhs.gov. SUPPLEMENTARY INFORMATION: Background This document announces a modification to U.S. Customs and Border Protection’s (CBP’s) Automated Commercial Environment (ACE) reconciliation prototype test (hereinafter ‘‘reconciliation test’’) by adding the processing of post-importation claims arising under the United States-MexicoCanada Agreement Implementation Act (the USMCA Act), Public Law 116–113, 134 Stat. 11 (January 29, 2020) (19 U.S.C. chapter 29), to permit an importer, who did not claim preferential tariff treatment at the time of importation, to file a claim, at any time within one year after the date of importation of qualifying merchandise, to receive a refund of certain excess duties paid on that merchandise at the time of importation. As is further explained below, although the USMCA eliminates the assessment of the merchandise processing fee (MPF) on qualifying goods from Canada and Mexico, the USMCA Act excluded the refund of MPF under 19 U.S.C. 1520(d) post-importation claims for USMCA preferential treatment. Purpose of the Reconciliation Test Reconciliation, a planned component of the National Customs Automation Program (NCAP), is provided for in Title VI (Subtitle B) of the North American Free Trade Agreement Implementation Act (the NAFTA Implementation Act; Pub. L. 103–182, 107 Stat. 2057 (December 8, 1993)) (19 U.S.C. 1411). Section 637 of the Customs Modernization Act amended section 484 of the Tariff Act of 1930 to establish a E:\FR\FM\01JYN1.SGM 01JYN1 Federal Register / Vol. 85, No. 127 / Wednesday, July 1, 2020 / Notices new section (b), entitled ‘‘Reconciliation’’, and a planned component of the NCAP. (19 U.S.C. 1484(b)). Reconciliation is the process that allows an importer, at the time an entry summary is filed, to identify indeterminable information (other than that affecting admissibility) to CBP and to provide that outstanding information at a later date. The importer identifies the outstanding information by means of an electronic ‘‘flag’’ which is placed on the entry summary at the time the entry summary is filed and payment of the applicable estimated duties is deposited. Section 101.9(b) of title 19 of the Code of Federal Regulations (19 CFR 101.9(b)) provides for the testing of NCAP components. See T.D. 95–21, 60 FR 14211 (March 16, 1995). The NCAP reconciliation test was announced in a general notice document published in the Federal Register (63 FR 6257) on February 6, 1998. Clarifications and operational changes were announced in subsequent Federal Register notices: 63 FR 44303 (August 18, 1998); 64 FR 39187 (July 21, 1999); 64 FR 73121 (December 29, 1999); 66 FR 14619 (March 13, 2001); 67 FR 61200 (September 27, 2002) (with a correction document published at 67 FR 68238 (November 8, 2002)); 69 FR 53730 (September 2, 2004); 70 FR 1730 (January 10, 2005); 70 FR 46882 (August 11, 2005); and 71 FR 37596 (June 30, 2006). On September 13, 2000, CBP extended the test indefinitely in a notice published in the Federal Register (65 FR 55326). On July 23, 2016, the NCAP test regarding reconciliation transitioned from the Automated Commercial System (ACS) to ACE. (83 FR 2645). This document announces a modification to the reconciliation test to expand reconciliation to include postimportation preferential tariff treatment claims arising under the USMCA Act, which is permitted under 19 U.S.C. 1520(d). Aside from this modification, the test remains as set forth in the previously published Federal Register notices. Reconciliation Generally Reconciliation is the process that allows an importer, at the time an entry summary is filed, to identify undeterminable information (other than that affecting admissibility) to CBP and to provide that outstanding information at a later date. The importer identifies the outstanding information by means of an electronic ‘‘flag’’ which is placed on the entry summary at the time the entry summary is filed and payment of the applicable estimated duties is deposited. VerDate Sep<11>2014 01:53 Jul 01, 2020 Jkt 250001 The flagged entry summary (the underlying entry summary) is liquidated by CBP for all aspects of the entry except those issues that were flagged. Upon liquidation of an underlying entry summary, any decision by CBP entering into that liquidation, e.g., classification, may be protested pursuant to 19 U.S.C. 1514. The means of providing the outstanding information flagged on the underlying entry summary to be reconciled is through the filing of a reconciliation entry. A reconciliation entry is treated as an entry for purposes of liquidation, reliquidation, and protest. When the outstanding information, e.g., value as determined by the actual costs, is later furnished in the reconciliation entry, CBP will liquidate the reconciliation entry as to the flagged issues. Any adjustments in duties owed will be made at that time. (See February 6, 1998 Federal Register notice (63 FR 6257) for a more detailed presentation of the basic reconciliation process.) The liquidation of the reconciliation entry will be posted in the same manner and place as the notices of liquidation of other entries. Liquidation of a reconciliation entry may be protested pursuant to 19 U.S.C. 1514, but the protest may only pertain to the issue(s) flagged for and contained in the reconciliation entry (i.e., the protest may not address issues previously liquidated on the underlying entry summary). Previously published Federal Register notices have set forth that the issues for which an entry summary may be ‘‘flagged’’ (for the purpose of later reconciliation) are limited and relate to: (1) Value issues other than claims based on latent manufacturing defects; (2) classification issues, on a limited basis; (3) issues concerning value aspects of entries filed under heading 9802, Harmonized Tariff Schedule of the United States (HTSUS) (9802 issues); and (4) issues concerning postimportation claims, under 19 U.S.C. 1520(d), for preferential tariff treatment for merchandise entered under the acts implementing the North American Free Trade Agreement (NAFTA), the United States-Chile Free Trade Agreement, the Dominican Republic-Central AmericaUnited States Free Trade Agreement, the United States-Oman Free Trade Agreement, the United States-Peru Trade Promotion Agreement, the United States-Korea Free Trade Agreement, the United States-Colombia Trade Promotion Agreement, and the United States-Panama Trade Promotion Agreement. The filing of a reconciliation entry, like the filing of a regular consumption PO 00000 Frm 00059 Fmt 4703 Sfmt 4703 39577 entry, is governed by 19 U.S.C. 1484 and can be done only by an importer of record, who is required to exercise reasonable care in filing the underlying entry summary, flagging issues for later reconciliation, and filing the reconciliation entry. Importers are also reminded of the distinction between prior disclosure and reconciliation. A prior disclosure exists when a person discloses the circumstances of a violation of 19 U.S.C. 1592 pursuant to CBP regulations. The person disclosing this information must do so before, or without knowledge of, the commencement of a formal investigation of that violation. Under reconciliation, the importer is not disclosing a violation, but rather identifying information which is indeterminable and will be provided at a later time when the reconciliation entry is filed. Modification of the Reconciliation Test The Agreement Between the United States of America, the United Mexican States, and Canada (the USMCA) was entered into by the governments of the United States of America (United States), the United Mexican States (Mexico), and Canada on November 30, 2018. The USMCA was signed on December 10, 2019, and ratified by all three countries, with final ratification on April 24, 2020. The USMCA covers all merchandise entered for consumption, or withdrawn from warehouse for consumption, on or after July 1, 2020. Section 103 of the USMCA Act authorizes the President to proclaim the tariff modifications and to promulgate the regulations for preferential tariff treatment and other customs related provisions of the USMCA. This notice announces that a post-importation claim under 19 U.S.C. 1520(d) for preferential tariff treatment pursuant to the USMCA may be made under the reconciliation test, but without a refund of merchandise processing fees (MPF) at this time. 1. Use of Current FTA Flag for USMCA Post-Importation Claims Importers that file an entry for USMCA preferential treatment under the reconciliation test must use the existing Free Trade Agreement (FTA) flag, as authorized in this notice. Section 205(a) of the USMCA Act provides for the reliquidation of entries. The USMCA Act repealed the NAFTA Implementation Act. Section 205(a) of the USMCA Act amends section 520(d) of the Tariff Act of 1930 (19 U.S.C. 1520(d)) by removing the reference to ‘‘section 202 North American Free E:\FR\FM\01JYN1.SGM 01JYN1 39578 Federal Register / Vol. 85, No. 127 / Wednesday, July 1, 2020 / Notices Trade Agreement Implementation Act’’ and replacing it with ‘‘section 202 of the United States-Mexico-Canada Agreement Implementation Act (except with respect to any merchandise processing fees)’’. Additionally, Section 205(a) amends the certification of origin requirement in 19 U.S.C. 1520(d) by removing ‘‘(2) copies of all applicable NAFTA Certificates of Origin (as defined in section 1508(b)(1) of this title), or other certificates or certifications of origin, as the case may be; and’’ and replacing it with ‘‘(2) copies of all applicable certificates or certifications of origin; and’’. Accordingly, Section 205 of the USMCA Act effectively replaces reliquidation of entries under NAFTA with the reliquidation of entries under the USMCA, eliminates the refund of MPF under USMCA post-importation preferential treatment claims, and replaces the requirement to submit a NAFTA certificate of origin with the requirement to submit any applicable certificate or certification of origin as part of a post-importation preferential treatment claim (as discussed in Section 204 of the USMCA Act). Consistent with Section 205 of the USMCA Act, the importer must make a post-importation preference claim pursuant to 19 U.S.C. 1520(d), within one year from the date of importation. Post-importation claims for reconciliation are made electronically in ACE and must include the following: (1) A declaration stating that the good qualified as an originating good at the time of importation and the number and date of the entry or entries covering the good (this is provided as part of the electronic submission of the claim containing the special program indicator for the USMCA); (2) A statement indicating whether the entry summary or equivalent documentation was provided to any other person; and (3) A statement indicating whether a protest, petition, or request for reliquidation has been filed relating to the good and identification of such filing(s). Claims for preferential treatment under the USMCA may be made as of July 1, 2020. CBP is publishing an interim final rule (IFR) in the Federal Register (CBP Dec. 20–11) amending part 181 and adding a new part 182 containing several USMCA provisions, including an appendix that contains the trilaterally negotiated and agreed upon Uniform Regulations Regarding the Interpretation, Application, and Administration of Chapter 4 (Rules of Origin) and Related Provisions in Chapter 6 (Textile and Apparel Goods) VerDate Sep<11>2014 01:53 Jul 01, 2020 Jkt 250001 (Uniform Regulations regarding rules of origin) (Appendix A to part 182). In addition to the IFR, persons intending to make USMCA preference claims as of July 1, 2020, may refer to the CBP website at https://www.cbp.gov/ trade/priority-issues/trade-agreements/ free-trade-agreements/USMCA for further guidance (including the U.S. USMCA Implementing Instructions). The United States International Trade Commission has also modified the HTSUS to add a new General Note 11, incorporating the USMCA rules of origin for claiming preferential treatment and providing for the special program indicators ‘‘S or S+’’ for the USMCA in the HTSUS ‘‘special’’ rate of duty subcolumn.1 For ACE, please note that CBP will update the information on USMCA post-importation claims submitted via reconciliation in the Reconciliation Entry Summary Create/ Update chapter of the CBP and Trade Automated Interface Requirements (CATAIR) posted on https:// www.cbp.gov/trade/ace/catair. 2. Entry Into Force of USMCA and Import Eligibility for Reconciliation Section 205(a) of the USMCA Act further provides that these amendments (replacement of NAFTA preference from 19 U.S.C. 1520(d) with USMCA preference) will take place on the date on which the USMCA enters into force on July 1, 2020. Therefore, importers may file USMCA post-importation claims for refunds of certain duties assessed on merchandise that both qualifies for preferential tariff treatment under the USMCA and was entered for consumption, or withdrawn from warehouse for consumption, on or after July 1, 2020. This notice does not modify the current reconciliation test, which waive the requirement to file a certification of origin for post-importation claims, under 19 U.S.C. 1520(d), for preferential tariff treatment for merchandise qualifying under the other agreements covered by the FTA flag. For reconciliation entries making a postimportation claim, under 19 U.S.C. 1520(d), for preferential tariff treatment for qualifying merchandise entered under the USMCA, a certification of origin is not required to be presented at the time of filing the reconciliation entry, but must be in the importer’s possession at that time and must be presented if requested by CBP. The failure to present the certification of origin when requested by CBP may result in the denial of the post1 The S+ indicator is used for certain agricultural goods and textile tariff preference levels (TPLs). PO 00000 Frm 00060 Fmt 4703 Sfmt 4703 importation claim for preferential tariff treatment under the USMCA, the reliquidation of the reconciliation entry, and/or administrative and judicial sanctions including, but not limited to, liquidated damages and recordkeeping or other penalties and may be considered misconduct under the rules, terms and conditions of this test. Importers filing a reconciliation entry making a USMCA post-importation claim for preferential tariff treatment for a covered vehicle, as defined in the Appendix to Annex 4–B of Chapter 4 of the USMCA, are reminded that the following certifications must be filed with CBP in order to receive preferential tariff treatment: (1) A certification providing that the labor value content requirements are met; and, (2) a certification that the steel and aluminum content requirements are met. These certifications are not filed with the reconciliation entry, but would be separately submitted; and, this notice does not waive any requirements related to these certifications for purposes of the reconciliation test. 3. Transition From NAFTA TreatmentReliquidation Section 205 provides for a transition from NAFTA treatment. Consistent with this section, the amendments to 19 U.S.C. 1520(d), as discussed above, do not apply in the case of a good entered for consumption, or withdrawn from warehouse for consumption, before the date in which the USMCA enters into force, which is July 1, 2020. This section further provides that the section 1520(d), as it is in effect (on June 30, 2020) will apply, and shall continue to apply on or after that date with respect to the good. Therefore, importers may submit post-importation claims for NAFTA preference only for those goods entered for consumption, or withdrawn from warehouse for consumption, prior to July 1, 2020. Since importers may file post-importation claims at any time within one year after the date of importation, no post-importation claims for NAFTA preference will be accepted after June 30, 2021. 4. Ineligibility for Post-Importation Refunds of Merchandise Processing Fees Section 203 of the USMCA Act, which amends Section 13031(b)(10) of the Omnibus Budget Reconciliation Act of 1985 (19 U.S.C. 58c(b)(10)), eliminates the refund of merchandise processing fees (MPF) for USMCA post-importation claims. That section also disallows the use of the Customs User Fee Account to refund MPF. Accordingly, not only are refunds of MPF not allowed, but there is also no mechanism available for CBP E:\FR\FM\01JYN1.SGM 01JYN1 Federal Register / Vol. 85, No. 127 / Wednesday, July 1, 2020 / Notices to refund MPF for goods that qualify for preferential treatment under the USMCA. Importers may, however, wish to flag USMCA entries for the possibility of MPF refunds for a post-importation USMCA claim, as CBP will provide for refunds consistent with any legislative changes to 19 U.S.C. 1520(d). Importers are reminded that FTA reconciliation entries must be filed within 12 months of the earliest import date and that the FTA flag expires after 12 months. Remove HCP permit number TE34898D for the Pueblo of Santa Clara; no permit has been issued. Remove permits with numbers TE33765D (VALERO PARTNERS WYNNEWOOD, LLC) and TE113500 (BASTROP COUNTY; MR. PAUL PAPE) from the table. Both are duplicate entries of other issued permits. All other items in the original notice (April 30, 2020; 85 FR 23992) are correct as printed. Dated: June 26, 2020. Brenda B. Smith, Executive Assistant Commissioner, Office of Trade. Gary Frazer, Assistant Director for Ecological Services. [FR Doc. 2020–14200 Filed 6–30–20; 8:45 am] [FR Doc. 2020–14188 Filed 6–30–20; 8:45 am] BILLING CODE 4333–15–P BILLING CODE 9111–14–P DEPARTMENT OF THE INTERIOR DEPARTMENT OF THE INTERIOR Bureau of Indian Affairs Fish and Wildlife Service [201A2100DD/AAKC001030/ A0A501010.999900 253G; OMB Control Number 1076–0017] [FWS–HQ–ES–2020–N085; FF09E42000 189 FXES11130900000] Endangered and Threatened Species; Issuance of Enhancement of Survival and Incidental Take Permits for Safe Harbor Agreements, Candidate Conservation Agreements, Habitat Conservation Plans, and Recovery Activities, January 1, 2019, Through December 31, 2019; Correction Fish and Wildlife Service, Interior. ACTION: Notice; correction. AGENCY: We, the U.S. Fish and Wildlife Service, published a document in the April 30, 2020, Federal Register that provided a list of permits issued under the Endangered Species Act. We inadvertently made unsubstantive errors, which we correct via this notice. FOR FURTHER INFORMATION CONTACT: Amanda Murnane, via phone at 703– 358–2469,viaemailatAmanda_ Murnane@fws.gov,or via the Federal Relay Service at 800–877–8339. SUPPLEMENTARY INFORMATION: We, the U.S. Fish and Wildlife Service, published a document in the April 30, 2020, Federal Register that provided a list of permits we issued under the Endangered Species Act for Candidate Conservation Agreements with Assurances, Safe Harbor Agreements, Habitat Conservation Plans (HCPs), and Recovery Permits for calendar year 2019. We inadvertently made an error, which we correct via this notice. Corrections In FR Doc. 2020–09176, appearing at 85 FR 23992 in the issue of Thursday, April 30, 2020, make the following three corrections in the table on page 23994: 01:53 Jul 01, 2020 Jkt 250001 Bureau of Indian Affairs, Interior. ACTION: Notice of information collection; request for comment. AGENCY: In accordance with the Paperwork Reduction Act of 1995, we, the Bureau of Indian Affairs (BIA) are proposing to renew an information collection with revisions. DATES: Interested persons are invited to submit comments on or before July 31, 2020. ADDRESSES: Send written comments on this information collection request (ICR) to the Office of Management and Budget’s Desk Officer for the Department of the Interior by email at OIRA_Submission@omb.eop.gov; or via facsimile to (202) 395–5806. Please provide a copy of your comments to Ms. Evangeline Campbell, Chief, Division of Human Services, Office of Indian Services, Bureau of Indian Affairs, 1849 C Street NW, MS–4513–MIB, Washington, DC 20240; facsimile: (202) 208–5113; email: Evangline.Campbell@ bia.gov. Please reference OMB Control Number 1076–0017 in the subject line of your comments. FOR FURTHER INFORMATION CONTACT: To request additional information about this ICR, contact Ms. Evangeline M. Campbell by telephone at (202) 513– 7621. You may also view the ICR at http:// www.reginfo.gov/public/do/PRAMain. SUMMARY: SUMMARY: VerDate Sep<11>2014 Agency Information Collection Activities; Submission to the Office of Management and Budget for Review and Approval; Financial Assistance and Social Services PO 00000 Frm 00061 Fmt 4703 Sfmt 4703 39579 In accordance with the Paperwork Reduction Act of 1995, we provide the general public and other Federal agencies with an opportunity to comment on new, proposed, revised, and continuing collections of information. This helps us assess the impact of our information collection requirements and minimize the public’s reporting burden. It also helps the public understand our information collection requirements and provide the requested data in the desired format. A Federal Register notice with a 60day public comment period soliciting comments on this collection of information was published on March 24, 2020 (85 FR 16651). No comments were received. We are soliciting comments on the proposed ICR that is described below. We are especially interested in public comment addressing the following issues: (1) Is the collection necessary to the proper functions of the BIA; (2) will this information be processed and used in a timely manner; (3) is the estimate of burden accurate; (4) how might the BIA enhance the quality, utility, and clarity of the information to be collected; and (5) how might the BIA minimize the burden of this collection on the respondents, including through the use of information technology. Comments that you submit in response to this notice are a matter of public record. Before including your address, phone number, email address, or other personal identifying information in your comment, you should be aware that your entire comment—including your personal identifying information—may be made publicly available at any time. While you can ask us in your comment to withhold your personal identifying information from public review, we cannot guarantee that we will be able to do so. Abstract: The BIA is seeking to renew the information collection it conducts to provide assistance under 25 CFR part 20 to eligible Indians when comparable financial assistance or social services either are not available or not provided by State, Tribal, county, local, or other Federal agencies. The information collection allows BIA to determine whether an individual is eligible for assistance and services. No third party notification or public disclosure burden is associated with this collection. Title of Collection: Financial Assistance and Social Services Program. OMB Control Number: 1076–0017. Form Number: N/A. Type of Review: Revision of a currently approved collection. SUPPLEMENTARY INFORMATION: E:\FR\FM\01JYN1.SGM 01JYN1

Agencies

[Federal Register Volume 85, Number 127 (Wednesday, July 1, 2020)]
[Notices]
[Pages 39576-39579]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2020-14200]


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DEPARTMENT OF HOMELAND SECURITY

U.S. Customs and Border Protection


Modification of the National Customs Automation Program (NCAP) 
Test Regarding Reconciliation for Filing Post-Importation Claims 
Arising Under the Agreement Between the United States of America, the 
United Mexican States, and Canada (USMCA)

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

ACTION: General notice.

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

SUMMARY: This document announces a modification to the Automated 
Commercial Environment (ACE) National Customs Automation Program (NCAP) 
reconciliation prototype test to include the flagging for filing of 
post-importation preferential treatment claims arising under the 
Agreement Between the United States of America, the United Mexican 
States, and Canada (the USMCA) as implemented pursuant to the United 
States-Mexico-Canada Agreement Implementation Act (the USMCA Act). 
Importers may file USMCA post-importation claims for refunds of certain 
duties assessed on merchandise that both qualifies for preferential 
tariff treatment under the USMCA and was entered for consumption, or 
withdrawn from warehouse for consumption, on or after July 1, 2020. 
Unless and until the USMCA Act is subsequently amended, refunds for 
merchandise processing fees (MPF) are excluded from USMCA post-
importation claims. Except to the extent expressly announced or 
modified by this document, all aspects, rules, terms and conditions 
announced in previously published Federal Register notices regarding 
the test remain in effect.

DATES: The test is modified to allow reconciliation of post-importation 
preferential tariff treatment claims to be filed on or after July 1, 
2020, for refunds of certain duties assessed on merchandise that both 
qualifies for preferential tariff treatment under the USMCA and was 
entered for consumption, or withdrawn from warehouse for consumption, 
on or after July 1, 2020.

ADDRESSES: Comments concerning the reconciliation prototype test may be 
submitted via email to Randy Mitchell, Director, Commercial Operations, 
Revenue & Entry (CORE) Division, Office of Trade, U.S. Customs and 
Border Protection at [email protected]hs.gov, with a subject line 
identifier reading, ``Modification of Reconciliation Test-USMCA''.

FOR FURTHER INFORMATION CONTACT: For policy-related questions, contact 
Randy Mitchell, Director, Commercial Operations, Revenue & Entry (CORE) 
Division, Office of Trade, U.S. Customs and Border Protection, at (202) 
325-6532 or via email at [email protected], with a subject line 
identifier reading ``Modification of Reconciliation Test-USMCA''. For 
technical questions related to ACE or Automated Broker Interface (ABI) 
transmissions, contact your assigned client representative. Interested 
parties without an assigned client representative should direct their 
questions to Tonya Perez, Director, Client Services Division, Office of 
Trade, U.S. Customs and Border Protection, at (571) 421-7477 or via 
email at [email protected].

SUPPLEMENTARY INFORMATION:

Background

    This document announces a modification to U.S. Customs and Border 
Protection's (CBP's) Automated Commercial Environment (ACE) 
reconciliation prototype test (hereinafter ``reconciliation test'') by 
adding the processing of post-importation claims arising under the 
United States-Mexico-Canada Agreement Implementation Act (the USMCA 
Act), Public Law 116-113, 134 Stat. 11 (January 29, 2020) (19 U.S.C. 
chapter 29), to permit an importer, who did not claim preferential 
tariff treatment at the time of importation, to file a claim, at any 
time within one year after the date of importation of qualifying 
merchandise, to receive a refund of certain excess duties paid on that 
merchandise at the time of importation. As is further explained below, 
although the USMCA eliminates the assessment of the merchandise 
processing fee (MPF) on qualifying goods from Canada and Mexico, the 
USMCA Act excluded the refund of MPF under 19 U.S.C. 1520(d) post-
importation claims for USMCA preferential treatment.

Purpose of the Reconciliation Test

    Reconciliation, a planned component of the National Customs 
Automation Program (NCAP), is provided for in Title VI (Subtitle B) of 
the North American Free Trade Agreement Implementation Act (the NAFTA 
Implementation Act; Pub. L. 103-182, 107 Stat. 2057 (December 8, 1993)) 
(19 U.S.C. 1411).
    Section 637 of the Customs Modernization Act amended section 484 of 
the Tariff Act of 1930 to establish a

[[Page 39577]]

new section (b), entitled ``Reconciliation'', and a planned component 
of the NCAP. (19 U.S.C. 1484(b)). Reconciliation is the process that 
allows an importer, at the time an entry summary is filed, to identify 
indeterminable information (other than that affecting admissibility) to 
CBP and to provide that outstanding information at a later date. The 
importer identifies the outstanding information by means of an 
electronic ``flag'' which is placed on the entry summary at the time 
the entry summary is filed and payment of the applicable estimated 
duties is deposited.
    Section 101.9(b) of title 19 of the Code of Federal Regulations (19 
CFR 101.9(b)) provides for the testing of NCAP components. See T.D. 95-
21, 60 FR 14211 (March 16, 1995). The NCAP reconciliation test was 
announced in a general notice document published in the Federal 
Register (63 FR 6257) on February 6, 1998. Clarifications and 
operational changes were announced in subsequent Federal Register 
notices: 63 FR 44303 (August 18, 1998); 64 FR 39187 (July 21, 1999); 64 
FR 73121 (December 29, 1999); 66 FR 14619 (March 13, 2001); 67 FR 61200 
(September 27, 2002) (with a correction document published at 67 FR 
68238 (November 8, 2002)); 69 FR 53730 (September 2, 2004); 70 FR 1730 
(January 10, 2005); 70 FR 46882 (August 11, 2005); and 71 FR 37596 
(June 30, 2006). On September 13, 2000, CBP extended the test 
indefinitely in a notice published in the Federal Register (65 FR 
55326). On July 23, 2016, the NCAP test regarding reconciliation 
transitioned from the Automated Commercial System (ACS) to ACE. (83 FR 
2645). This document announces a modification to the reconciliation 
test to expand reconciliation to include post-importation preferential 
tariff treatment claims arising under the USMCA Act, which is permitted 
under 19 U.S.C. 1520(d). Aside from this modification, the test remains 
as set forth in the previously published Federal Register notices.

Reconciliation Generally

    Reconciliation is the process that allows an importer, at the time 
an entry summary is filed, to identify undeterminable information 
(other than that affecting admissibility) to CBP and to provide that 
outstanding information at a later date. The importer identifies the 
outstanding information by means of an electronic ``flag'' which is 
placed on the entry summary at the time the entry summary is filed and 
payment of the applicable estimated duties is deposited.
    The flagged entry summary (the underlying entry summary) is 
liquidated by CBP for all aspects of the entry except those issues that 
were flagged. Upon liquidation of an underlying entry summary, any 
decision by CBP entering into that liquidation, e.g., classification, 
may be protested pursuant to 19 U.S.C. 1514. The means of providing the 
outstanding information flagged on the underlying entry summary to be 
reconciled is through the filing of a reconciliation entry. A 
reconciliation entry is treated as an entry for purposes of 
liquidation, reliquidation, and protest.
    When the outstanding information, e.g., value as determined by the 
actual costs, is later furnished in the reconciliation entry, CBP will 
liquidate the reconciliation entry as to the flagged issues. Any 
adjustments in duties owed will be made at that time. (See February 6, 
1998 Federal Register notice (63 FR 6257) for a more detailed 
presentation of the basic reconciliation process.) The liquidation of 
the reconciliation entry will be posted in the same manner and place as 
the notices of liquidation of other entries. Liquidation of a 
reconciliation entry may be protested pursuant to 19 U.S.C. 1514, but 
the protest may only pertain to the issue(s) flagged for and contained 
in the reconciliation entry (i.e., the protest may not address issues 
previously liquidated on the underlying entry summary).
    Previously published Federal Register notices have set forth that 
the issues for which an entry summary may be ``flagged'' (for the 
purpose of later reconciliation) are limited and relate to: (1) Value 
issues other than claims based on latent manufacturing defects; (2) 
classification issues, on a limited basis; (3) issues concerning value 
aspects of entries filed under heading 9802, Harmonized Tariff Schedule 
of the United States (HTSUS) (9802 issues); and (4) issues concerning 
post-importation claims, under 19 U.S.C. 1520(d), for preferential 
tariff treatment for merchandise entered under the acts implementing 
the North American Free Trade Agreement (NAFTA), the United States-
Chile Free Trade Agreement, the Dominican Republic-Central America-
United States Free Trade Agreement, the United States-Oman Free Trade 
Agreement, the United States-Peru Trade Promotion Agreement, the United 
States-Korea Free Trade Agreement, the United States-Colombia Trade 
Promotion Agreement, and the United States-Panama Trade Promotion 
Agreement.
    The filing of a reconciliation entry, like the filing of a regular 
consumption entry, is governed by 19 U.S.C. 1484 and can be done only 
by an importer of record, who is required to exercise reasonable care 
in filing the underlying entry summary, flagging issues for later 
reconciliation, and filing the reconciliation entry. Importers are also 
reminded of the distinction between prior disclosure and 
reconciliation. A prior disclosure exists when a person discloses the 
circumstances of a violation of 19 U.S.C. 1592 pursuant to CBP 
regulations. The person disclosing this information must do so before, 
or without knowledge of, the commencement of a formal investigation of 
that violation. Under reconciliation, the importer is not disclosing a 
violation, but rather identifying information which is indeterminable 
and will be provided at a later time when the reconciliation entry is 
filed.

Modification of the Reconciliation Test

    The Agreement Between the United States of America, the United 
Mexican States, and Canada (the USMCA) was entered into by the 
governments of the United States of America (United States), the United 
Mexican States (Mexico), and Canada on November 30, 2018. The USMCA was 
signed on December 10, 2019, and ratified by all three countries, with 
final ratification on April 24, 2020. The USMCA covers all merchandise 
entered for consumption, or withdrawn from warehouse for consumption, 
on or after July 1, 2020.
    Section 103 of the USMCA Act authorizes the President to proclaim 
the tariff modifications and to promulgate the regulations for 
preferential tariff treatment and other customs related provisions of 
the USMCA. This notice announces that a post-importation claim under 19 
U.S.C. 1520(d) for preferential tariff treatment pursuant to the USMCA 
may be made under the reconciliation test, but without a refund of 
merchandise processing fees (MPF) at this time.

1. Use of Current FTA Flag for USMCA Post-Importation Claims

    Importers that file an entry for USMCA preferential treatment under 
the reconciliation test must use the existing Free Trade Agreement 
(FTA) flag, as authorized in this notice.
    Section 205(a) of the USMCA Act provides for the reliquidation of 
entries. The USMCA Act repealed the NAFTA Implementation Act. Section 
205(a) of the USMCA Act amends section 520(d) of the Tariff Act of 1930 
(19 U.S.C. 1520(d)) by removing the reference to ``section 202 North 
American Free

[[Page 39578]]

Trade Agreement Implementation Act'' and replacing it with ``section 
202 of the United States-Mexico-Canada Agreement Implementation Act 
(except with respect to any merchandise processing fees)''. 
Additionally, Section 205(a) amends the certification of origin 
requirement in 19 U.S.C. 1520(d) by removing ``(2) copies of all 
applicable NAFTA Certificates of Origin (as defined in section 
1508(b)(1) of this title), or other certificates or certifications of 
origin, as the case may be; and'' and replacing it with ``(2) copies of 
all applicable certificates or certifications of origin; and''. 
Accordingly, Section 205 of the USMCA Act effectively replaces 
reliquidation of entries under NAFTA with the reliquidation of entries 
under the USMCA, eliminates the refund of MPF under USMCA post-
importation preferential treatment claims, and replaces the requirement 
to submit a NAFTA certificate of origin with the requirement to submit 
any applicable certificate or certification of origin as part of a 
post-importation preferential treatment claim (as discussed in Section 
204 of the USMCA Act). Consistent with Section 205 of the USMCA Act, 
the importer must make a post-importation preference claim pursuant to 
19 U.S.C. 1520(d), within one year from the date of importation. Post-
importation claims for reconciliation are made electronically in ACE 
and must include the following:
    (1) A declaration stating that the good qualified as an originating 
good at the time of importation and the number and date of the entry or 
entries covering the good (this is provided as part of the electronic 
submission of the claim containing the special program indicator for 
the USMCA);
    (2) A statement indicating whether the entry summary or equivalent 
documentation was provided to any other person; and
    (3) A statement indicating whether a protest, petition, or request 
for re-liquidation has been filed relating to the good and 
identification of such filing(s).
    Claims for preferential treatment under the USMCA may be made as of 
July 1, 2020. CBP is publishing an interim final rule (IFR) in the 
Federal Register (CBP Dec. 20-11) amending part 181 and adding a new 
part 182 containing several USMCA provisions, including an appendix 
that contains the trilaterally negotiated and agreed upon Uniform 
Regulations Regarding the Interpretation, Application, and 
Administration of Chapter 4 (Rules of Origin) and Related Provisions in 
Chapter 6 (Textile and Apparel Goods) (Uniform Regulations regarding 
rules of origin) (Appendix A to part 182).
    In addition to the IFR, persons intending to make USMCA preference 
claims as of July 1, 2020, may refer to the CBP website at https://www.cbp.gov/trade/priority-issues/trade-agreements/free-trade-agreements/USMCA for further guidance (including the U.S. USMCA 
Implementing Instructions). The United States International Trade 
Commission has also modified the HTSUS to add a new General Note 11, 
incorporating the USMCA rules of origin for claiming preferential 
treatment and providing for the special program indicators ``S or S+'' 
for the USMCA in the HTSUS ``special'' rate of duty subcolumn.\1\ For 
ACE, please note that CBP will update the information on USMCA post-
importation claims submitted via reconciliation in the Reconciliation 
Entry Summary Create/Update chapter of the CBP and Trade Automated 
Interface Requirements (CATAIR) posted on https://www.cbp.gov/trade/ace/catair.
---------------------------------------------------------------------------

    \1\ The S+ indicator is used for certain agricultural goods and 
textile tariff preference levels (TPLs).
---------------------------------------------------------------------------

2. Entry Into Force of USMCA and Import Eligibility for Reconciliation

    Section 205(a) of the USMCA Act further provides that these 
amendments (replacement of NAFTA preference from 19 U.S.C. 1520(d) with 
USMCA preference) will take place on the date on which the USMCA enters 
into force on July 1, 2020. Therefore, importers may file USMCA post-
importation claims for refunds of certain duties assessed on 
merchandise that both qualifies for preferential tariff treatment under 
the USMCA and was entered for consumption, or withdrawn from warehouse 
for consumption, on or after July 1, 2020.
    This notice does not modify the current reconciliation test, which 
waive the requirement to file a certification of origin for post-
importation claims, under 19 U.S.C. 1520(d), for preferential tariff 
treatment for merchandise qualifying under the other agreements covered 
by the FTA flag. For reconciliation entries making a post-importation 
claim, under 19 U.S.C. 1520(d), for preferential tariff treatment for 
qualifying merchandise entered under the USMCA, a certification of 
origin is not required to be presented at the time of filing the 
reconciliation entry, but must be in the importer's possession at that 
time and must be presented if requested by CBP. The failure to present 
the certification of origin when requested by CBP may result in the 
denial of the post-importation claim for preferential tariff treatment 
under the USMCA, the reliquidation of the reconciliation entry, and/or 
administrative and judicial sanctions including, but not limited to, 
liquidated damages and recordkeeping or other penalties and may be 
considered misconduct under the rules, terms and conditions of this 
test.
    Importers filing a reconciliation entry making a USMCA post-
importation claim for preferential tariff treatment for a covered 
vehicle, as defined in the Appendix to Annex 4-B of Chapter 4 of the 
USMCA, are reminded that the following certifications must be filed 
with CBP in order to receive preferential tariff treatment: (1) A 
certification providing that the labor value content requirements are 
met; and, (2) a certification that the steel and aluminum content 
requirements are met. These certifications are not filed with the 
reconciliation entry, but would be separately submitted; and, this 
notice does not waive any requirements related to these certifications 
for purposes of the reconciliation test.

3. Transition From NAFTA Treatment-Reliquidation

    Section 205 provides for a transition from NAFTA treatment. 
Consistent with this section, the amendments to 19 U.S.C. 1520(d), as 
discussed above, do not apply in the case of a good entered for 
consumption, or withdrawn from warehouse for consumption, before the 
date in which the USMCA enters into force, which is July 1, 2020. This 
section further provides that the section 1520(d), as it is in effect 
(on June 30, 2020) will apply, and shall continue to apply on or after 
that date with respect to the good. Therefore, importers may submit 
post-importation claims for NAFTA preference only for those goods 
entered for consumption, or withdrawn from warehouse for consumption, 
prior to July 1, 2020. Since importers may file post-importation claims 
at any time within one year after the date of importation, no post-
importation claims for NAFTA preference will be accepted after June 30, 
2021.

4. Ineligibility for Post-Importation Refunds of Merchandise Processing 
Fees

    Section 203 of the USMCA Act, which amends Section 13031(b)(10) of 
the Omnibus Budget Reconciliation Act of 1985 (19 U.S.C. 58c(b)(10)), 
eliminates the refund of merchandise processing fees (MPF) for USMCA 
post-importation claims. That section also disallows the use of the 
Customs User Fee Account to refund MPF. Accordingly, not only are 
refunds of MPF not allowed, but there is also no mechanism available 
for CBP

[[Page 39579]]

to refund MPF for goods that qualify for preferential treatment under 
the USMCA. Importers may, however, wish to flag USMCA entries for the 
possibility of MPF refunds for a post-importation USMCA claim, as CBP 
will provide for refunds consistent with any legislative changes to 19 
U.S.C. 1520(d). Importers are reminded that FTA reconciliation entries 
must be filed within 12 months of the earliest import date and that the 
FTA flag expires after 12 months.

    Dated: June 26, 2020.
Brenda B. Smith,
Executive Assistant Commissioner, Office of Trade.
[FR Doc. 2020-14200 Filed 6-30-20; 8:45 am]
BILLING CODE 9111-14-P