[Federal Register Volume 76, Number 63 (Friday, April 1, 2011)]
[Proposed Rules]
[Pages 18132-18134]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2011-7815]


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DEPARTMENT OF HOMELAND SECURITY

U.S. Customs and Border Protection

Department of The Treasury

19 CFR Parts 4 and 24

[Docket No. USCBP-2008-0085]
RIN 1515-AD74


Interest on Untimely Paid Vessel Repair Duties

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

ACTION: Notice of proposed rulemaking.

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SUMMARY: This document proposes to amend title 19 of the Code of 
Federal Regulations (19 CFR) to provide that where an owner or master 
of a vessel documented under the laws of the United States fails to 
timely pay the duties determined to be due to Customs and Border 
Protection (CBP) that are associated with the purchase of equipment 
for, or repair to, the vessel while it is outside the United States, 
interest will accrue on the amounts owed to CBP and that person will be 
liable for interest. The purpose of this document is to ensure that 
title 19 of the CFR reflects that CBP collects interest as part of its 
inherent revenue collection functions in situations where an owner or 
master of a vessel fails to pay the vessel repair duties determined to 
be due within 30 days of CBP issuing the bill.

DATES: Comments must be received on or before May 31, 2011.

ADDRESSES: You may submit comments, identified by docket number, by one 
of the following methods:
    <bullet> Federal eRulemaking Portal: http://www.regulations.gov. 
Follow the instructions for submitting comments via docket number USCBP 
2008-0085.
    <bullet> Mail: Trade and Commercial Regulations Branch, Regulations 
and Rulings, Office of International Trade, Customs and Border 
Protection, 799 9th Street, NW. (Mint Annex), Washington, DC 20229-
1179.
    Instructions: All submissions received must include the agency name 
and docket number for this proposed rulemaking. All comments received 
will be posted without change to http://www.regulations.gov, including 
any personal information provided. For detailed instructions on 
submitting comments and additional information on the proposed 
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 http://www.regulations.gov. Submitted comments 
may also 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 International Trade, Customs and 
Border Protection, 799 9th Street, NW., 5th Floor, Washington, DC. 
Arrangements to inspect submitted comments should be made in advance by 
calling Joseph Clark at (202) 325-0118.

FOR FURTHER INFORMATION CONTACT: Carrie Owens, Chief, Entry Process and 
Duty Refunds, Regulations and Rulings, Office of International Trade, 
(202) 325-0266.

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 
proposed rule. Customs and Border Protection (CBP) also invites 
comments that relate to the economic, environmental, or federalism 
effects that might result from this proposed rule. If appropriate to a 
specific comment, the commenter should reference the specific portion 
of the proposed rule, explain the reason for any recommended change, 
and include data, information, or authority that support such 
recommended change.

Background

    Section 466 of the Tariff Act of 1930, as amended (19 U.S.C. 1466), 
and Subchapter XVIII, Chapter 98, Harmonized Tariff Schedule of the 
United States (19 U.S.C. 1202), provide, in pertinent part, that 
equipment purchased for, or repairs made to, an American vessel in a 
foreign country are subject to entry and the payment of ad valorem duty 
on the first arrival of the affected vessel in any port of the United 
States.
    Section 498 of the Tariff Act of 1930 (19 U.S.C. 1498) provides 
that the Secretary of the Treasury is authorized to prescribe rules and 
regulations for the declaration and entry of merchandise. Within that 
statute, paragraph (a)(10) provides, in pertinent part, that the 
Secretary may prescribe rules and regulations pertaining to the entry 
of merchandise within the provisions of section 1466 of this title 
(relating to vessel repairs and equipment purchases).
    The Federal Claims Collection Act of 1966, codified at 31 U.S.C. 
3701-3720A, as amended, establishes general federal claim and interest 
collection authority. Section 3717(a) directs the head of an executive, 
judicial, or legislative agency to charge interest on any outstanding 
debt to the United States Government. Sections 3737(b) and (d) provide 
that interest accrues from the date notice is mailed, however no 
interest will be charged if the amount on the claim is paid within 30 
days from the mailing date.
    Based on the authority conferred by these statutory provisions, 
this document proposes to amend title 19 of the Code of Federal 
Regulations (19 CFR) to provide that where an owner or master of a 
vessel documented under the laws of the United States fails to timely 
pay the duties determined to be due to Customs and Border Protection 
(CBP) that are associated with the purchase of equipment for, or repair 
to, the vessel while it is outside the United States, interest will 
accrue on the amounts owed to CBP and that person will be liable for 
interest. The purpose of this document is to ensure that title 19 of 
the CFR reflects that CBP collects interest as part of its inherent 
revenue collection functions in situations where an owner or master of 
the vessel fails to pay the vessel repair duties determined to be due 
within 30 days of CBP issuing the bill.
    These proposed changes, other than those involving non-substantive 
editorial changes, are discussed below in more detail.

[[Page 18133]]

Explanation of Amendments

Section 4.14

    Section 4.14 of title 19 of the Code of Federal Regulations (19 CFR 
4.14) sets forth the regulatory provisions applicable to equipment 
purchases for, and repairs to, American vessels and provides that the 
costs associated with such expenditures are subject to declaration, 
entry and payment of ad valorem duty.
    Section 4.14(i) sets forth the general procedures for seeking 
relief from the assessment of vessel repair duties and prescribes the 
manner by which an Application for Relief from such duties must be 
submitted to CBP. Within Sec.  4.14(i), this document proposes to 
redesignate existing paragraph (i)(3) as paragraph (i)(4) and to add a 
new paragraph (i)(3). Newly proposed Sec.  4.14(i)(3), entitled 
``Application for Relief; failure to file or denial in whole or in 
part,'' will provide that if no Application for Relief is filed, or if 
a timely filed Application for Relief is denied in whole or in part, 
the VRU (vessel repair unit) will determine the amount of duty due and 
issue a bill to the party who filed the vessel repair entry. If the 
bill is not timely paid, interest will accrue as provided in Sec.  
24.3a(b)(1) of this chapter.
    It is also proposed to amend Sec.  4.14(j)(1), which prescribes the 
penalties for failure to report, enter, or pay vessel repair duties, to 
state that the owner or master of the vessel who fails to timely pay 
the duty determined to be due will be liable for interest as provided 
in section 24.3a(b)(1) of this chapter.

Section 24.3a

    It is proposed to make conforming changes to Sec. Sec.  24.3a(a) 
and (b) (19 CFR 24.3a(a) and (b)) which, respectively, prescribe the 
payment due date for CBP bills and provide for the assessment of 
interest charges if payment is not received by CBP on or before the 
late payment date appearing on the bill. The proposed changes to 
paragraph (a) specifically would include ``vessel repair duties'' as 
among the types of bills CBP issues. In paragraph (b), it is proposed 
to include ``vessel repair duties'' as among the types of bills for 
which CBP may assess interest charges from the date the bill is issued.

The Regulatory Flexibility Act and Executive Order 12866

    Because these proposed amendments merely reflect the agency's 
revenue collection functions and rights, and impose no additional 
regulatory burden on the importing public, pursuant to the provisions 
of the Regulatory Flexibility Act, 5 U.S.C. 601 et seq., it is 
certified that, if adopted, the proposed amendments will not have a 
significant economic impact on a substantial number of small entities. 
Further, these proposed amendments do not meet the criteria for a 
``significant regulatory action'' as specified in Executive Order 
12866.

Paperwork Reduction Act

    As there are no new collections of information proposed in this 
document, the provisions of the Paperwork Reduction Act of 1995 (44 
U.S.C. 3507) are inapplicable.

Signing Authority

    This proposed rulemaking is being issued in accordance with 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 CBP 
revenue functions.

List of Subjects

19 CFR Part 4

    Administrative practice and procedure, Cargo vessels, Customs 
duties and inspection, Entry, Passenger vessels, Penalties, Repairs, 
Reporting and recordkeeping requirements, Shipping, Vessels.

19 CFR Part 24

    Accounting, Claims, Customs duties and inspection, Exports, 
Imports, Interest, Reporting and recordkeeping requirements, Taxes, 
User fees, Wages.

Proposed Amendments to the Regulations

    For the reasons set forth in the preamble, parts 4 and 24 of title 
19 of the CFR (19 CFR Parts 4 and 24) are proposed to be amended as set 
forth below.

PART 4--VESSELS IN FOREIGN AND DOMESTIC TRADE

    1. The general authority citation for part 4 continues, and the 
specific authority citation for Sec.  4.14 is revised, to read as 
follows:

    Authority:  5 U.S.C. 301; 19 U.S.C. 66, 1431, 1433, 1434, 1624, 
2071 note; 46 U.S.C. 501, 60105.
* * * * *
    Section 4.14 also issued under 19 U.S.C. 1466, 1498; 31 U.S.C. 
9701.
* * * * *
    2. In Sec.  4.14:
    a. The heading text is revised;
    b. Existing paragraph (i)(3) is redesignated as paragraph (i)(4) 
and a new paragraph (i)(3) is added; and
    c. Paragraph (j)(1) is amended by adding a new third sentence.
    The additions to Sec.  4.14 read as follows:


Sec.  4.14  Equipment purchases for, and repairs to, American vessels.

* * * * *
    (i) * * *
    (3) Application for Relief; failure to file or denial in whole or 
in part. If no Application for Relief is filed, or if a timely filed 
Application for Relief is denied in whole or in part, the VRU will 
determine the amount of duty due and issue a bill to the party who 
filed the vessel repair entry. If the bill is not timely paid, interest 
will accrue as provided in Sec.  24.3a(b)(1) of this chapter.
    (j) * * *
    (1) * * * The owner or master of the vessel who fails to timely pay 
the duty determined to be due is liable for interest as provided in 
Sec.  24.3a(b)(1) of this chapter.
* * * * *

PART 24--CUSTOMS FINANCIAL AND ACCOUNTING PROCEDURE

    3. The general authority citation for part 24 is revised 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; Public Law 
107-296, 116 Stat. 2135 (6 U.S.C. 1 et seq.).
* * * * *
    4. Section 24.3a is amended:
    a. In the heading text, by adding after the word ``assessment'' the 
words ``on bills'';
    b. In paragraph (a): by adding after the word ``reliquidation)'' 
the language ``, or vessel repair duties,''; and by removing the words 
``shall be'' and adding in their place the word ``are'';
    c. In the heading text to paragraph (b)(1), by adding after the 
word ``for'' the words ``vessel repair duties,'';
    d. In paragraph (b)(2)(i) introductory text, by removing the word 
``shall'' and adding in its place the word ``will'';
    e. In paragraph (b)(2)(i)(A), by removing the word ``shall'' and 
adding in its place the word ``will'';
    f. In paragraph (b)(2)(i)(B) introductory text, by removing the 
word ``shall'';
    g. In paragraph (b)(2)(i)(B)(1), by removing the word ``shall'' and 
adding in its place the word ``will'';
    h. In paragraph (b)(2)(i)(B)(2), by removing the word ``shall'' and 
adding in its place the word ``will'';
    i. In paragraph (b)(2)(i)(B)(3), by removing the word ``shall'' 
wherever it appears and adding in each place the word ``will'';

[[Page 18134]]

    j. In paragraph (b)(2)(i)(B)(4), by removing the word ``shall'' and 
adding in its place the word ``will'';
    k. In paragraph (b)(2)(i)(C), by removing the word ``shall'' and 
adding in its place the word ``will'';
    l. In paragraph (b)(2)(ii), by removing the word ``shall'' wherever 
it appears and adding in each place the word ``will''; and
    m. In paragraph (c)(1), by removing the words ``CBP Office of 
Finance, Indianapolis, Indiana'' and adding in their place the language 
``CBP's Revenue Division, Office of Administration''.

Alan Bersin,
Commissioner, U.S. Customs and Border Protection.
    Approved: March 29, 2011,
Timothy E. Skud,
Deputy Assistant Secretary of the Treasury.
[FR Doc. 2011-7815 Filed 3-31-11; 8:45 am]
BILLING CODE 9111-14-P