[Federal Register Volume 65, Number 122 (Friday, June 23, 2000)]
[Notices]
[Pages 39224-39227]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 00-15875]


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DEPARTMENT OF THE TREASURY

Customs Service


Implementation of Electronic Filing and Status of Protests

AGENCY: United States Customs Service, Department of the Treasury.

ACTION: General notice.

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SUMMARY: This document advises the public that following completion of 
test procedures under the National Customs Automation Program, the 
electronic filing and status of protests is now

[[Page 39225]]

operational in all service ports of Customs. The document also sets 
forth the results of the concluded test, describes the current 
operation of the electronic protest program, and invites the public to 
provide comments on an ongoing basis regarding the program.

FOR FURTHER INFORMATION CONTACT:
    For operational or policy issues: Millie Gleason, Office of Field 
Operations (202-927-0625).
    For protest system or automation issues: Steve Linnemann, Office of 
Information and Technology (202-927-0436.

SUPPLEMENTARY INFORMATION:

Background

Statutory and Regulatory Test Procedures

    The National Customs Automation Program (NCAP) is contained in 
sections 411-414 of the Tariff Act of 1930, as amended (19 U.S.C. 1411-
1414). The NCAP is described in section 411(a) as an automated and 
electronic system for processing commercial importations that includes, 
as one of its planned components, the electronic filing and status of 
protests. The NCAP in section 413(b) requires the development of an 
implementation plan for each planned component, the testing of each 
planned component to assess its viability, the evaluation of each 
planned component to assess its contribution to the goals of the NCAP, 
and the transmission of the implementation plan, the testing results, 
and an evaluation report to the House Committee on Ways and Means and 
the Senate Committee on Finance. Section 413(b) further provides that a 
planned NCAP component may be implemented on a permanent basis if at 
least 30 days have passed after transmission of the implementation 
plan, testing results and evaluation report to the two Congressional 
committees.
    Regulatory standards regarding NCAP testing are set forth in 
Sec. 101.9(b) of the Customs Regulations (19 CFR 101.9(b)) and include 
a requirement of publication of notices in the Federal Register and in 
the Customs Bulletin both prior to implementation of a test (for 
purposes of inviting public comments on any aspect of the test and 
informing the public of the eligibility criteria for voluntary 
participation in the test and the basis for selecting participants) and 
after completion of a test (to describe the results of the test).
    On January 30, 1996, Customs published in the Federal Register (61 
FR 3086) a notice announcing a plan to conduct a test regarding the 
electronic filing of protests, involving the use of transaction sets 
within the Automated Broker Interface (ABI) portion of the Customs 
Automated Commercial System (ACS). The test would allow the electronic 
filing of, and the electronic tracking of the status of, the following:
    <bullet> Protests against decisions of Customs under 19 U.S.C. 
1514;
    <bullet> Petitions or claims for refunds of customs duties or 
corrections of errors requiring reliquidation pursuant to 19 U.S.C. 
1520(c) and (d); and
    <bullet> Interventions in an importer's protest by an exporter or 
producer of merchandise from a country that is a party to the North 
American Free Trade Agreement under Sec. 181.115 of the Customs 
Regulations.
    That January 30, 1996, notice stated that the test would be 
implemented at selected ports, outlined the eligibility criteria for 
voluntary participation in the test, including test participation 
application procedures and the basis for participation selection, and 
stated that the final results of the test would be published as 
provided in Sec. 101.9(b) of the Customs Regulations. The notice 
further provided that the test would run for approximately six months 
commencing no earlier than May 1, 1996, and prescribed a deadline of 
February 29, 1996, for the submission of public comments concerning any 
aspect of the test and for contacting Customs for the purpose of 
participating in the test.
    On December 31, 1996, Customs published in the Federal Register (61 
FR 69133) a notice announcing an extension of the electronic protest 
filing test through April 1997. This notice stated that the test was 
currently operational with regard to 6 of the 17 entities (importers, 
customs brokers, legal firms and sureties) that volunteered to 
participate in the test and that 8 ports were originally selected for 
the test. The notice further stated that while the test would not be 
opened to new participants at that time, Customs was considering 
expanding the test to include up to 7 additional ports. The notice also 
invited comments from the public concerning any aspect of the test.
    On September 24, 1997, Customs published in the Federal Register 
(62 FR 50053) a notice announcing both an extension of the electronic 
protest filing test through December 1997 and an expansion of the test 
to encourage new participants. This notice stated that Customs 
anticipated that this NCAP component would be available to all 
interested parties by January 1998. The notice also solicited public 
comments concerning any aspect of the test.

Test Results

    Following conclusion of the test, Customs on December 17, 1999, 
submitted an evaluation report, entitled ``Electronic Filing and Query 
of Protest Test,'' to the House Committee on Ways and Means and the 
Senate Committee on Finance as required by 19 U.S.C. 1413(b). The test 
results reflected in that report are described below.
    As of February 12, 1999, a total of 3,861 filings were made during 
the test, involving 15,277 associated entries. Of those 3,861 filings, 
860 involved protests under 19 U.S.C. 1514, 103 involved petitions 
under 19 U.S.C. 1520(c), and 2,898 involved claims under 19 U.S.C. 
1520(d). Again, as of February 12, 1999, among the 3,861 filings, 478 
had been approved, 614 had been denied in full, 29 had been denied in 
part, 230 had been denied as untimely, 2,156 remained open, 235 were in 
suspended status pending the outcome of requests for internal advice or 
applications for further review or court action, and 119 had been 
withdrawn.
    For purposes of satisfying the test evaluation requirement of 19 
U.S.C. 1413(b), a user satisfaction survey was conducted. To this end, 
the external group of trade community users participated in a 
Structured Group Interview (SGI) and the internal group of Customs 
users participated in a questionnaire.
A. External Group
    On October 1,1997, the Protest Team (which consisted of personnel 
from various Customs offices and a representative of the National 
Customs Brokers and Forwarders Association of America) conducted the 
SGI with the test participants in Washington, DC. A representative of 
the Office of Planning and Evaluation, experienced in the SGI 
technique, acted as moderator/facilitator. The group compiled random 
lists of positive and negative factors and then, by polling, eliminated 
some and prioritized those remaining:
    1. Positives:
    <bullet> No need to physically deliver paper; more efficient.
    <bullet> Easier to get status of protest.
    <bullet> Easier to file when time is short.
    <bullet> Better standardization of filing:

  --Fewer errors, and
  --Edits provide check of information submitted.

    2. Negatives:
    <bullet> Recap status query report is non-informational.
    <bullet> Cannot file 520(a) electronically.
    <bullet> Attorneys have no electronic access to liquidation 
information.

[[Page 39226]]

    <bullet> Electronic format does not include a filer's contact 
person.
    <bullet> Filer has to retype narrative when multiple protests are 
filed on the same issue.
    3. Resolution:

    It was decided that the recap query could not be made more 
informational without causing it to take on the character of the full 
file query.
    The Protest Team has recommended that the Office of Field 
Operations and the Office of Information and Technology review the ABI 
query capabilities now available to other filers to determine which 
might be made available to law firms. It has also informed the Office 
of Field Operations that interest was expressed in filing other actions 
electronically.
    Those filers who deem it desirable to identify a contact will 
include the contact person's name and telephone number within the 
narrative portion of the electronic filing.
    The narrative portion, containing the statement of the nature and 
justification for the objection to the protested Customs decision, is a 
required element of a protest (see 19 CFR 174.13, contents of protest) 
and therefore cannot be waived. However, the task of duplicating it for 
use in multiple protests or petitions can be accomplished efficiently 
by using word processing software, such as Word Perfect or MS Word, to 
compose and edit it and then cut and paste it into the protest for 
transmission to Customs.
B. Internal Group
    During the month of December 1998, the Protest Team conducted a 
survey of Customs users. A representative of the Office of Planning and 
Evaluation acted as consultant on development of the survey. Prior to 
issuing the survey to all users, it was administered to a group of 
twelve import and entry specialists at six of the test ports as an 
assessment group. Results from the assessment group were used to make 
the final version of the survey. Administration of the survey was 
facilitated by electronic protest coordinators at the service ports. 
Completed surveys were returned to the Protest Team for evaluation.
    Two hundred and seven persons, or about 77 percent of the survey 
recipients, responded. Of those, 63 percent participated in processing 
19 U.S.C. 1514 protests, 22 percent took part in 19 U.S.C. 1520(c) 
petitions, and 12 percent took part in 19 U.S.C. 1520(d) claims.
    Prior to the electronic protest procedure, Customs entry 
specialists were the primary users of, and had the most knowledge of, 
the ACS protest system. That system was merely a tracking device for 
paper protests and letters of petition. Import specialist involvement 
amounted to no more than changing team assignments. The electronic 
protest system is both a tracking system and an electronic equivalent 
of the protest form (Customs Form 19) and of letters of petition or 
claim. Implementation took entry and import specialists to a new level 
of use and involvement. Fifty percent of those surveyed indicated that 
electronic protest had some impact on their job. While electronic 
protest requires them to perform new tasks using ACS functions, 62 
percent of those responding indicated that those new tasks were no more 
difficult than those performed using other ACS systems, and 10.6 
percent indicated that the tasks were actually easier.
    Concomitant to the development of electronic filing and query of 
protests, the Office of Field Operations included in its requirements a 
number of new elements to be used in processing both paper and 
electronic protests, petitions, claims, and interventions. Therefore, 
several survey questions asked about specific new system data fields 
and new regulatory procedures. For example, it was asked whether or not 
the user knew that a record could be flagged as NAFTA-related, that it 
could be indicated whether or not samples and hardcopy materials were 
associated with the filing, and that test summons and internal advice 
case numbers could be cited. Further, it was asked whether or not the 
user knew about three other related procedures whereby the protestant 
can challenge a denial of an application for further review and request 
that a denial of a protest be voided and whereby an exporter or 
producer from a country which is a signatory of NAFTA can intervene in 
an importer's 19 U.S.C. 1514 protest. A majority of entry and import 
specialists responded affirmatively, indicating that a good working 
knowledge of the system is shared across all disciplines. The concept 
least familiar to them was that of the foreign exporter or producer of 
goods from Canada or Mexico intervening in the importer's protest under 
19 CFR 181.115.
    Some survey questions compared and contrasted electronic protests 
to non-electronic protests and elicited responses regarding possible 
benefits of the electronic protest system. Forty-one percent of those 
responding judged the content and quality of the narrative submitted 
via electronic protest or petition or claim to be as good as those 
received on a Customs Form 19, and an additional 6.8 percent indicated 
that the narrative is actually better than in the case of non-
electronic protests. Twenty-five percent indicated that the narrative 
was worse and another 25 percent were uncertain.
    A combined total of 48.8 percent of those surveyed either merely 
agreed or strongly agreed with the statement that Customs saves staff-
hours at the front end of protest processing because it is not 
necessary to date and time-stamp the Customs Form 19 and return a copy 
to the protestant or his agent, and because all of the required 
information normally entered into ACS by the entry specialist is input 
by the protestant or his agent electronically via ABI. A combined total 
of 70 percent either merely agreed or strongly agreed with the 
statement that Customs saves additional staff-hours and money at the 
back end of protest processing because it is not necessary to complete 
and mail the final copy of the Customs Form 19 for the 19 U.S.C. 1514 
protest, or the final letter of approval or denial of the 19 U.S.C. 
1520 petition or claim, to the protestant or his agent.
    To support the implementation of this NCAP component, the Office of 
Information and Technology developed, and made available to Customs 
personnel, a computer-based training course. Various other means of 
training made available to users included classroom/computer lab 
training (either by local port officers or Headquarters personnel), 
local one-on-one training, and a revised ACS handbook. Ninety-two 
percent of the users surveyed had experience with one or more of these 
types of training. Additionally, each port was asked to name an 
electronic protest coordinator. In response to the question, ``When you 
encounter a problem with the ACS electronic protest system * * * [whom 
do you contact?],'' 57.9 percent said they check with local port 
personnel, 17 percent said they call ACS User Assistance, 9 percent 
said they call the Headquarters ACS officer, and 4 percent said they 
call the Office of Field Operations. No comments were received 
expressing an inability to receive assistance with questions or 
problems regarding the electronic protest system.

Current Status of the Electronic Protest Program

    The electronic filing of protests is now operational in all service 
ports of Customs, and participation is open to any party in interest 
who qualifies under the program requirements. Accordingly, using the 
ABI system to send records to ACS, any qualified party at interest now 
can file the following electronically:

[[Page 39227]]

    <bullet> Protests against decisions of the Customs Service under 19 
U.S.C. 1514;
    <bullet> Petitions for refunds of Customs duties or corrections of 
errors requiring reliquidation pursuant to 19 U.S.C. 1520(c);
    <bullet> Claims for refunds of Customs duties when duty-free 
treatment was not claimed at the time of entry under NAFTA pursuant to 
19 U.S.C. 1520(d); and
    <bullet> Interventions in an importer's protest by an exporter or 
producer of merchandise from a country that is a party to the North 
American Free Trade Agreement under Sec. 181.115 of the Customs 
Regulations.
    In addition, the system allows amendments and addenda after the 
initial filing to:
    <bullet> Apply for further review of a protest (if not requested at 
time of initial filing);
    <bullet> Assert additional claims or challenge an additional 
decision;
    <bullet> Submit alternative claims and additional grounds or 
arguments;
    <bullet> Request review of denial of further review of a protest;
    <bullet> Request accelerated disposition of a protest;
    <bullet> Request that the denial of a protest be voided; and
    <bullet> Withdraw the protest or petition or claim or intervention.
    All of the above actions may be transmitted to Customs from a 
remote location anywhere in the United States. Filers receive 
notification of all review events, including the final decision, 
electronically. Additionally, filers may query their submissions at any 
time and share access to those records with designated third parties. 
The query function provides the filer the option of receiving either an 
abbreviated status report (recap) on the protest, petition, claim or 
intervention, or a complete copy (full file) of the protest, petition, 
claim or intervention record. The shared access feature allows third 
parties to query protest records and to submit amendments and addenda.
    The Client Representative Branch of the Office of Information and 
Technology will continue to market electronic protest to all interested 
parties. The Commercial Systems Branch of the Office of Information and 
Technology will continue to work with vendors and filers in 
development, test and implementation of their software for electronic 
protest. The Commercial Compliance Division of the Office of Field 
Operations will continue to respond to operational and procedural 
questions and issues. Customs remains open to comments and suggestions 
from the international trade community regarding the design, conduct, 
and procedures of the electronic protest program.

    Dated: June 19, 2000.
John H. Heinrich,
 Acting Assistant Commissioner, Office of Field Operations.
[FR Doc. 00-15875 Filed 6-22-00; 8:45 am]
BILLING CODE 4820-02-P