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[Federal Register Volume 76, Number 161 (Friday, August 19, 2011)]
[Proposed Rules]
[Pages 51914-51916]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2011-21275]

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DEPARTMENT OF HOMELAND SECURITY

U.S. Customs and Border Protection

DEPARTMENT OF THE TREASURY

19 CFR Parts 10 and 163

[USCBP-2011-0030]
RIN 1515-AD75

Duty-Free Treatment of Certain Visual and Auditory Materials

AGENCY: U.S. 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 the U.S. Customs and Border 
Protection (CBP) regulations pertaining to the filing of documentation 
related to free entry of certain merchandise under Chapter 98 of the 
Harmonized Tariff Schedule of the United States (HTSUS). The proposed 
amendment would permit an applicant to file the documentation required 
for duty-free treatment of certain visual and auditory materials of an 
educational, scientific, or cultural character under subheading 
9817.00.40, HTSUS, at any time prior to the liquidation of the entry. 
The regulation currently requires the filing of this documentation 
within 90 days of the date of entry. The proposed change would provide 
more time for the importer to provide the necessary certification 
documentation to CBP and would serve to align the filing of required 
certification documentation with a change in CBP policy that extended 
the liquidation cycle for entries in the ordinary course of business 
from 90 days to 314 days after the date of entry. The change is 
consistent with other regulations that govern the duty-free treatment 
of merchandise under Chapter 98, HTSUS.

DATES: Written comments must be received on or before October 18, 2011.

ADDRESSES: You may submit comments, identified by docket number, by one 
of the following methods:
     Federal eRulemaking Portal: http://www.regulations.gov. 
Follow the instructions for submitting comments via Docket No. USCBP 
2011-0030.
     Mail: Trade and Commercial Regulations Branch, Regulations 
and Rulings, U.S. 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 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 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, U.S. 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: Robert Dinerstein, Valuation and 
Special Programs Branch, Regulations and Rulings, Office of 
International Trade, (202) 325-0132.

SUPPLEMENTARY INFORMATION: 

Public Participation

    Interested persons are invited to participate in this rulemaking by 
submitting written data, views, or arguments on all aspects of this 
proposed 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 proposed rule. Comments that will 
provide the most assistance to CBP in developing these procedures will 
reference a specific portion of the proposed rule, explain the reason 
for any recommended change, and include data, information, or authority 
that supports such recommended change. See ADDRESSES above for 
information on how to submit comments.

Background

    The United States signed the ``Agreement for Facilitating the 
International Circulation of Visual and Auditory Materials of an 
Educational, Scientific, and Cultural Character'' made at Beirut, 
Lebanon (also referred to as the ``Beirut Agreement'') in 1948. By 
Public Law 89-634, 80 Stat. 879, 19 U.S.C. 2501 (October 8, 1966), 
which amended the Tariff Schedules of the United States, and Executive 
Order 11311, 31 FR 13413 (Oct. 18, 1966), the United States implemented 
its obligations under the Agreement to

[[Page 51915]]

allow certain qualifying visual and auditory materials to be imported 
into the United States duty-free. The provision for duty-free treatment 
for these materials is now set forth under subheading 9817.00.40 of the 
Harmonized Tariff Schedule of the United States (HTSUS).
    CBP coordinates with the U.S. Department of State in administering 
the obligations of the United States under the Beirut Agreement. The 
Department of State is the agency responsible for determining whether 
articles qualify under the Agreement for duty-free treatment under 
subheading 9817.00.40 of the HTSUS, and CBP is responsible for ensuring 
that duty-free treatment for merchandise entered under that HTSUS 
subheading is provided only if the Department of State has certified 
that the articles qualify. The relevant regulations of the Department 
of State are set forth in 22 CFR part 61 and the regulation detailing 
the Department of State's issuance of the certification document is set 
forth at 22 CFR 61.8. The relevant CBP regulation is 19 CFR 10.121. As 
the program currently is administered, an applicant is required to file 
the Department of State's certification document in connection with an 
entry covering articles for which duty-free treatment is sought. See 19 
CFR 10.121(a).
    This document proposes to amend the CBP regulation regarding the 
time period in which a party seeking duty-free treatment under 
subheading 9817.00.40 of the HTSUS must provide certification from the 
Department of State. If the required documentation has not been filed 
with CBP at the time of entry for merchandise entered under subheading 
9817.00.40, HTSUS, section 10.121(b) of the CBP regulations permits 
liquidation to be suspended for 90 days after entry to allow an 
applicant time to obtain the certifying Department of State document. 
This proposed amendment would permit more time for the importer to 
provide the necessary certification documentation to CBP.
    This document proposes to amend 19 CFR 10.121(b) by removing the 
language which provides for the suspension of liquidation of an entry 
for 90 days and to provide, instead, that the required documentation 
may be filed with CBP any time prior to liquidation. This 90-day 
suspension provision was promulgated in 1966 and section 10.121(b) does 
not reflect the subsequent amendments to 19 U.S.C. 1504 or changes to 
CBP policy regarding liquidation. Under current law, CBP has up to one 
year to liquidate an entry before it is deemed liquidated by operation 
of law. See 19 U.S.C. 1504. Historically, the majority of entries were 
liquidated within 90 days in the ordinary course of business; however, 
this policy was changed by the agency when the volume of trade 
increased by extending the liquidation cycle from 90 days after entry 
to 314 days after entry. See 314-Day Liquidation Cycle-Trade Notice, 
CSMS 97-000727 (Aug. 3, 1997). It is noted that there is no 
statutory provision preventing CBP from liquidating an entry at any 
time during the one-year period after entry of the merchandise and 
prior to the conclusion of the 314-day liquidation cycle if all the 
required documentation has been filed.
    Section 10.112 of title 19 CFR (19 CFR 10.112) permits the filing 
of documentation related to free entry of merchandise under Chapter 98, 
HTSUS, at any time prior to liquidation of an entry or, if liquidated, 
before the liquidation becomes final. Section 10.121(b) is proposed to 
be amended to be consistent with 19 CFR 10.112 and the change in CBP's 
current liquidation practice. Therefore, the suspension of liquidation 
of an entry for a period of 90 days from the date of entry to allow an 
applicant to file the required documentation in order to qualify for an 
exemption from duty under subheading 9817.00.40, HTSUS, would be 
replaced with a suspension of liquidation of an entry for a period of 
314 days from the date of entry.
    Lastly, we note that this proposed change to 19 CFR 10.121(b) is 
also consistent with other CBP regulations that govern the duty free 
treatment of merchandise under Chapter 98, HTSUS. For instance, the 
regulations implementing the Florence Agreement on scientific 
instruments and apparatus were amended to merely required that the 
Department of Commerce's certifying documentation be submitted to CBP 
prior to liquidation. See 19 CFR 10.112 and 15 CFR 301.8 (74 FR 30462, 
June 26, 2009).

Other Changes

    This document also proposes to make a non-substantive change to a 
listing in the Appendix to part 163--Interim (a)(1)(A) List. The 
listing ``Sec.  10.121 Certificate from USIA for visual/auditory 
materials'' currently references USIA (United States Information 
Agency). Since USIA was abolished in 1999 by the Foreign Affairs Reform 
and Restructuring Act of 1998, and its functions were transferred to 
the U.S. Department of State, this listing is outdated. This document 
will amend the listing in the Appendix to Part 163 to reflect the State 
Department rather than USIA.

Regulatory Flexibility Act

    Under the Regulatory Flexibility Act (5 U.S.C. 601 et seq.), we 
have considered whether this proposed rule would have a significant 
impact on a substantial number of small entities. 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).
    As this proposed amendment would provide more time for an importer 
to obtain the State Department certificate, CBP certifies under 5 
U.S.C. 605(b) that the proposed amendments, if adopted, will not have a 
significant economic impact on a substantial number of small entities. 
CBP welcomes any comments regarding this finding.

Executive Order 12866

    This proposed rule is not a ``significant regulatory action'' as 
defined by Executive Order 12866.

Paperwork Reduction Act

    In accordance with the Paperwork Reduction Act of 1995 (44 U.S.C. 
3507), an agency may not conduct, 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 Office of 
Management and Budget (OMB). The information collected under 19 CFR 
10.121 is included under OMB control number 1651-0067. There are no new 
collections of information proposed in this document.

Signing Authority

    This regulation 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 pertaining to certain customs 
revenue functions.

List of Subjects

19 CFR Part 10

    Customs duties and inspection, Entry, Imports, Preference programs, 
Reporting and recordkeeping requirements, Trade agreements.

19 CFR Part 163

    Administrative practice and procedure, Customs duties and 
inspection, Exports, Imports, Reporting and recordkeeping requirements, 
Trade agreements.

[[Page 51916]]

Proposed Amendments to the CBP Regulations

    For the reasons set forth above, it is proposed to amend parts 10 
and 163 of title 19 of the Code of Federal Regulations as set forth 
below.

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

    1. The general authority citation for part 10 continues to read and 
a specific authority is added for Sec.  10.121 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.

* * * * *
    Section 10.121 also issued under 19 U.S.C. 2501;
* * * * *

    2. Section 10.121(b) is revised to read as follows:

Sec.  10.121  Visual or auditory materials of an educational, 
scientific, or cultural character.

* * * * *
    (b) Articles entered under subheading 9817.00.40, HTSUS, will be 
released from CBP custody prior to submission of the document required 
in paragraph (a) of this section only upon the deposit of estimated 
duties with the port director. Liquidation of an entry which has been 
released under this procedure will be suspended for a period of 314 
days from the date of entry or until the required document is 
submitted, whichever comes first. In the event that documentation is 
not submitted before liquidation, the merchandise will be classified 
and liquidated in the ordinary course, without regard to subheading 
9817.00.40, HTSUS.

PART 163--RECORDKEEPING

    3. The authority citation for part 163 continues to read as 
follows:

    Authority: 5 U.S.C. 301; 19 U.S.C. 66, 1484, 1508, 1509, 1510, 
1624.
* * * * *

Appendix to Part 163--[Amended]

    4. Section IV is amended by removing the listing ``Sec.  10.121 
Certificate from USIA for visual/auditory materials'' and adding in its 
place the listing ``Sec.  10.121 Certificate from the U.S. Department 
of State for visual/auditory materials''.

Alan D. Bersin,
Commissioner, U.S. Customs and Border Protection.
    Approved: August 16, 2011.

Timothy E. Skud,
Deputy Assistant Secretary of the Treasury.
[FR Doc. 2011-21275 Filed 8-18-11; 8:45 am]
BILLING CODE 9111-14-P
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