[Federal Register Volume 62, Number 59 (Thursday, March 27, 1997)]
[Notices]
[Pages 14731-14736]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 97-7733]


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DEPARTMENT OF THE TREASURY

Customs Service


Announcement of National Customs Automation Program Test of 
Account-Based Declaration Prototype

AGENCY: U.S. Customs Service, Department of the Treasury.

ACTION: General notice.

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SUMMARY: This notice announces Customs' plan to conduct an account-
based declaration prototype (NCAP/P) under the National Customs 
Automation Program (NCAP), and invites eligible importers to 
participate. The NCAP/P will be initially applicable to merchandise 
imported by truck through the ports of Laredo, Texas (Colombia Bridge 
only), and Detroit and Port Huron, Michigan. This notice provides a 
description of the test, outlines the development and evaluation 
methodology to be used in the test, sets forth the eligibility 
requirements for participation in the test and invites public comment 
on any aspect of the planned test.

DATES: The account-based declaration prototype (NCAP/P) will commence 
no earlier than August, 1997 and will run for approximately eighteen 
months, with evaluations of the prototype occurring periodically. All 
applications to participate in the test must be received on or before 
April 25, 1997. Public comments on any aspect of the planned test must 
be received on or before April 25, 1997.

ADDRESSES: Applications should be addressed to Ms. Margaret Fearon at 
U.S. Customs Service, 1301 Constitution Avenue, NW, Room 4139, 
Washington, DC 20229.

FOR FURTHER INFORMATION CONTACT: For inquiries regarding eligibility of 
specific importers: Margaret Fearon, Process Analysis and Requirements 
Team, at (202)927-1413. For questions on reconciliation: Shari McCann, 
Process Analysis and Requirements Team, at (202)927-1106. For questions 
on other aspects of the Account-Based Declaration Prototype: Daniel 
Buchanan, Process Analysis and Requirements Team, at (617)565-6236.

SUPPLEMENTARY INFORMATION:

Background

    Title VI of the North American Free Trade Agreement Implementation 
Act (the Act), Public Law 103-182, 107 Stat. 2057 (December 8, 1993), 
contains provisions pertaining to Customs Modernization (the Mod Act). 
Subtitle B of title VI establishes the National Customs Automation 
Program (NCAP)--an automated and electronic system for the processing 
of commercial importations. Section 631 in Subtitle B of the Act 
creates sections 411 through 414 of the Tariff Act of 1930 (19 U.S.C. 
1411-1414), which define and list the existing and planned components 
of the NCAP (section 411), promulgate program goals (section 412), 
provide for the implementation and evaluation of the program (section 
413), and provide for remote location filing (section 414). Section 
101.9(b) of the Customs Regulations (19 CFR 101.9(b)), concerns the 
testing of NCAP components. See, T.D. 95-21 (60 FR 14211, March 16, 
1995).
    A key element of Customs efforts to re-engineer its Trade 
Compliance process is a shift in emphasis from the traditional 
transaction-based approach of ensuring compliance with import laws and 
regulations to an account-based approach, which addresses an importer's 
overall compliance through account management, process reviews, and 
audits. One feature of this approach is a new account-based declaration 
process. Customs is also developing a new commercial processing system, 
the Automated Commercial Environment (ACE), which will be designed to 
support the new Trade Compliance processes. An account-based 
declaration prototype (NCAP/P) is being developed to provide the first 
operational demonstration of ACE capabilities for processing imports, 
integrating the new account-based import declaration process with other 
aspects of the Trade Compliance process and with selected features of 
NCAP elements of the Mod Act.

I. Development Methodology

    NCAP/P will be monitored by a Joint Prototype Team consisting of 
trade participants, the Customs Offices of Field Operations and 
Strategic Trade, the ACE Development Team, and other interested 
government agencies. This team will meet regularly throughout the 
prototype period in Detroit, Laredo and Washington, DC, to set 
development milestones, monitor progress, resolve issues and evaluate 
program effectiveness. The development effort will be coordinated with 
other on-going NCAP prototype programs such as Remote Location Filing 
and Reconciliation, and will be as consistent as possible with the 
overall direction of ACE development.
    Potential participants should recognize that this is a prototype 
test of new processes. Data definitions and values and formats for 
electronic transmission of manifest, entry and commercial data will 
differ from those currently used in the Automated Commercial System 
(ACS). It is also important to note that development efforts undertaken 
for NCAP/P may not meet the eventual requirements for programs as they 
are finally implemented in ACE.
    The public is invited to comment on any aspect of the NCAP/P test 
as described by this notice.

II. Eligibility Requirements

    In order to be eligible for participation in the NCAP/P, an 
importer must:
    1. Be designated as one of the top 350 U.S. importers in terms of 
entered value, while importing no less than 50% of their merchandise 
specified as Customs' Primary Focus Industries, which are as follows:

(a) Advanced Displays
(b) Agriculture
(c) Auto/Truck Parts
(d) Automobiles
(e) Bearings
(f) Circuit Boards
(g) Fasteners
(h) Footwear
(i) Manufacturing Equipment
(j) Steel Products
(k) Telecommunications
(l) Textiles and Flatgoods
(m) Wearing Apparel


[[Page 14732]]


    Importers who are originally selected to participate will be 
eligible to continue to participate throughout the prototype period, 
regardless of their subsequent eligibility in regard to this 
requirement.
    2. Be scheduled for, participating in, or, in the application, 
agree to undergo and cooperate fully with a Customs Compliance 
Assessment;
    3. For Southern border NCAP/P shipments, use carriers who 
participate in the Land Border Carrier Initiative Program (LBCIP). No 
importer may enter Southern border cargo transported by non-participant 
carriers;
    4. Agree in the application to file or maintain a continuous bond 
which will be obligated upon release of each NCAP/P shipment;
    5. Be capable and/or agree to arrange for timely and accurate 
electronic transmission to Customs of all data required in the NCAP/P 
declaration process, including manifest and pre-release shipment data, 
additional data required to support physical examinations of cargo, 
entry summary data, detailed commercial data when requested, and 
reconciliation data. If an importer does not transmit electronic data 
for a particular shipment, Customs may exclude that shipment from NCAP/
P processing. Participants who are unable to reliably provide timely 
transmission of required data may be suspended from further 
participation in this prototype; and
    6. Be capable and/or agree to arrange for electronic payment of 
duties, taxes and fees. Participants who are unable to reliably provide 
timely transmission of required payments may be suspended from further 
participation in this prototype.
    For NCAP/P, the following restrictions will be placed upon 
importers:
    1. Importers must enter merchandise identified in the application 
as being from their typical commodities in their established lines of 
business and coming from pre-identified sellers and shippers;
    2. Importers must enter only the merchandise identified in the 
application as being within a range of pre-identified commodities 
(classified at the 6-digit HTS level);
    3. Importers must enter merchandise conveyed on trucks operated by 
carriers pre-identified by participants in the application; and
    4. Importers must enter merchandise for release into the commerce 
under a consumption entry at the port of arrival.
    5. Importers must enter merchandise at the port of Laredo, Texas 
(Colombia Bridge only), or at Detroit or Port Huron, Michigan;
    Importers may not enter merchandise in the NCAP/P if it is subject 
to antidumping or countervailing duty, quota, trade preference level or 
visa requirements, or pre-release reporting requirements imposed by 
other federal agencies. No prohibited or embargoed merchandise will be 
permitted in prototype shipments. In addition, importers may not enter 
NCAP/P merchandise into a warehouse or Foreign Trade Zone, or as an in-
bond entry.
    Importers are responsible for ensuring that ineligible merchandise 
is not included in NCAP/P shipments, and that all shipments aboard a 
conveyance are eligible for NCAP/P processing. Customs will exclude 
ineligible shipments from NCAP/P processing. Customs will monitor 
participating importers' compliance with these restrictions; 
participants who are unable to maintain a high level of compliance may 
be suspended from further NCAP/P participation.

III. Application

    Importers who wish to participate in NCAP/P must submit a written 
application including the following information:
    1. Importer name;
    2. Names and addresses of all their shippers for NCAP/P;
    3. Names and addresses of all their seller/vendors for NCAP/P, and, 
for each seller/vendor identified, a listing of all the 6-digit HTS 
numbers in which the commodities to be imported are classified;
    4. The issuer and number of the continuous surety bond which will 
cover all cargo processed under NCAP/P procedures;
    5. Names and addresses of truck carriers who will be transporting 
NCAP/P shipments across the international borders;
    6. Names and addresses of any customs brokers who will be filing 
declaration data;
    7. The approximate total number of entries per month expected to be 
processed at each of the following locations: Colombia Bridge, Laredo; 
Ambassador Bridge, Detroit; Windsor Tunnel, Detroit; Blue Water Bridge, 
Port Huron;
    8. Description of anticipated issues (from the eligible issues 
listed in Section VI of this Notice) and commodities for which the 
participant anticipates electing reconciliation;
    9. For applicants not already scheduled for or participating in a 
Customs Compliance Assessment, a statement in which the applicant 
indicates agreement to undergo and cooperate fully with a Customs 
Compliance Assessment.
    Customs will make admissibility determinations on NCAP/P shipments 
based on any cargo examinations and the information supplied with the 
application, which shall serve as a pre-filed entry for NCAP/P 
purposes.
    Any importers who have applied to become NCAP/P participants will 
be notified in writing of their acceptance or rejection. If an 
importer's application for NCAP/P participation is accepted, Customs 
will assign the importer an NCAP/P Authorization Code. If an applicant 
is denied participation based on deficiencies in the application, the 
notification letter will include the reasons for that denial. Eligible 
importers whose initial applications are rejected may re-apply after 
correcting any deficiencies in the initial application.
    Customs expects to initially limit NCAP/P participation to ten (10) 
importers. Preference will be given to applicants who indicate that 
they plan to maintain an average of at least 25 entries per month 
throughout the prototype period. Eligible importers whose initial 
applications are rejected may re-apply if Customs subsequently opens 
participation to additional participants. Customs will publish a notice 
in the Federal Register if an expansion of participation is planned.

IV. Maintenance of Account Information

    Following approval by Customs of an importer's application, each 
participating entry filer must provide Customs with a range of entry 
numbers to be reserved for assignment by Customs to NCAP/P shipments. 
Entry filers may not assign these numbers to other transactions, either 
for NCAP/P or for non-prototype entries.
    Throughout the prototype period, participating importers must 
provide Customs with advance notification of any changes in the 
information provided in the application. This notification will be 
considered an amendment to the application. By notification of the 
participating importer, Customs may require that the participant not 
use a particular carrier, shipper, or seller, and not enter particular 
merchandise under this prototype.

V. Remote Location Filing

    Some aspects of remote location filing will be supported in NCAP/P. 
Under the remote location filing component, importers will be able to 
electronically

[[Page 14733]]

file data with Customs from any place in the United States regardless 
of where the merchandise arrives. To qualify for remote location 
filing, a filer must be able to electronically transmit information on 
a shipment by shipment basis, including entry summary, invoice 
information (when required by Customs), and payment of duties, fees, 
and taxes. Use of the remote location filing component of the prototype 
is voluntary, but the same electronic data transmission requirements 
will apply for all prototype participants.
    The designation of alternative locations for cargo examination will 
not be supported in NCAP/P. All cargo examinations will be conducted at 
the port where the cargo first arrives in the United States.

VI. Reconciliation

    Currently there are two reconciliation prototypes in operation or 
being implemented, in addition to the NCAP/P. The reconciliation test 
of Antidumping and Countervailing duties was published on May 10, 1996 
(61 FR 21534). The ``manual'' reconciliation test, which covers 
reconciliation of certain value issues, was published on February 6, 
1997 (62 FR 5673). (In 1995 a notice was published in the Federal 
Register concerning a reconciliation prototype for related party 
importers making upward adjustments to the price of imported 
merchandise, pursuant to 26 U.S.C. 482. This prototype did not become 
operational.)
    Importers are reminded that reasonable care is required for all 
phases of reconciliation, including, but not limited to, submitting 
information on the underlying entries, flagging the underlying entries 
for reconciliation, grouping the outstanding issue(s) from the range of 
entries onto the Reconciliation and providing the final information on 
the Reconciliation.
    Reconciliation permits those elements of an entry, other than those 
related to admissibility, which are undetermined at the time of entry 
summary filing, to be provided at a subsequent time. For merchandise 
processed in the NCAP/P, reconciliation will allow participating 
importers to identify the following issues for which complete 
information is unavailable at the time of entry summary filing:

1. NAFTA
2. Value
3. 9802
4. Classification

    Classification issues will be eligible for reconciliation only when 
such issues have been formally established as the subject of an 
administrative ruling, protest, petition, or Court action. 
Reconciliations of classification issues may result in a tariff shift 
which falls within the pre-identified range of 6-digit HTS provisions. 
Generally, the exercise of reasonable care should ensure that 
reconciliations do not result in a tariff shift outside the pre-
identified range of 6-digit HTS provisions; however, if special 
circumstances justify a tariff shift outside the pre-identified range 
of 6-digit HTS numbers contained in the application, a participant must 
submit an amended application requesting permission to continue to 
enter such merchandise in this prototype.
    Reconciliations of NAFTA issues must be electronically filed within 
one year of the date of importation of the oldest entry which is 
flagged for the Reconciliation. Reconciliation is a vehicle which an 
importer can use to file post-importation refund claims under 19 U.S.C. 
1520(d). Consequently, a failure to file a NAFTA reconciliation within 
one year of the date of importation will preclude the granting of NAFTA 
tariff treatment. As such, NAFTA reconciliations are subject to the 
obligations under 19 CFR part 181, subpart D. NAFTA reconciliations 
must be supported by importer possession of the documents required 
under 19 U.S.C. 1520(d) and 19 CFR 181.32(b). Presentation of the NAFTA 
Certificate of Origin to Customs is waived for the purposes of this 
prototype test, and the filer must retain these documents, which shall 
be provided to Customs upon request. Filers are reminded that interest 
shall accrue from the date on which the claim for NAFTA eligibility is 
made (the date of the Reconciliation) to the date of liquidation or 
reliquidation of the Reconciliation.
    Reconciliations of classification, 9802 and/or value issues must be 
electronically filed within 15 months of the date of entry summary 
filing for the oldest entry flagged for the Reconciliation. In order to 
gain as much experience as possible from this prototype, Customs will 
work with the participants to determine whether an earlier time frame 
for filing of the Reconciliation is possible.
    Entry summaries may be flagged for reconciliation until the close 
of the test period. It is important to note that, although the test 
period has concluded, Reconciliations may be filed and liquidated after 
the closing date of the test.
    Only consumption entries may be filed in the NCAP/P system. Entries 
subject to reconciliation will be flagged at the header level with an 
electronic indicator specifying the issue(s) to be reconciled.
    The flagging of an entry for reconciliation will serve as the 
Notice of Intent to File a Reconciliation (``Notice of Intent''), and 
will permit the liquidation of an entry as to all issues other than 
those which are flagged for reconciliation. By filing a Notice of 
Intent, the importer voluntarily requests and accepts that each issue 
flagged for reconciliation, and the liability for each issue, is 
separated from the entry, remains open and is transferred to the 
Reconciliation. The Notice of Intent opens an obligation for the 
importer to file the Reconciliation. This obligation also applies to 
NAFTA reconciliations even if the participant finally concludes it 
cannot file a valid 520(d) claim, in which instance, the NAFTA 
reconciliation would be filed as no change.
    Importers who choose to participate in this prototype will 
recognize that the liquidation of the underlying entries pertains only 
to those issues not identified by the importer on the Notice of Intent. 
Upon liquidation of the entry, any decision by Customs entering into 
that liquidation, e.g., classification, may be protested pursuant to 19 
U.S.C. 1514. When the outstanding information, e.g., value as 
determined by the actual costs, is later furnished on the 
Reconciliation, the Reconciliation will be liquidated upon review by 
Customs. The liquidation of the Reconciliation may be protested but the 
protest may only pertain to issues contained in the liquidated 
Reconciliation, i.e., the protest may not re-visit issues previously 
liquidated in the entry. Separate Bulletin Notices of Liquidation will 
be posted for the liquidation of the underlying entries and for the 
liquidation of the Reconciliation.
    Under the statutory mandate of 19 U.S.C. 1484, the importer is 
responsible for using reasonable care in declaring at entry the proper 
value, classification and rate of duty applicable to imported 
merchandise. Inherent in the concept of reconciliation is the fact 
that, because certain issues are kept open pending filing of the 
Reconciliation, the information regarding these issues and the 
resulting liability for the duties, taxes and fees previously asserted 
by the importer may change when the Reconciliation is filed. Therefore, 
should any drawback claim or Certificate of Delivery for drawback be 
filed on import entries which are flagged for reconciliation, Customs 
will pay accelerated drawback only after the Reconciliation is filed. 
Upon filing of the Reconciliation, the importer is responsible for 
indicating whether any underlying entry could be subject to drawback. 
In the case of a drawback

[[Page 14734]]

claim and a reconciliation refund against the same underlying entries, 
the importer is responsible for ensuring that refunds in excess of the 
duties paid are not filed with Customs and for substantiating how the 
separate refund requests apply to different merchandise.
    A Reconciliation may cover any combination of value, 9802 and 
classification. Should the issues of value, 9802 and classification be 
flagged for reconciliation on one entry, one Reconciliation covering 
all three issues will be filed. NAFTA Reconciliations will not be 
combined with other issues, because of NAFTA's unique nature, different 
due dates, and so that Customs may expedite the processing of such 
refunds. Issues will always be reconciled in their entirety, as opposed 
to partial Reconciliations. Each Reconciliation should cover no fewer 
than ten entries. Reconciliation is to be used to group entries 
together for a common, outstanding issue.
    A Reconciliation is treated as a legal entry for purposes of 
liquidation, reliquidation and protest. For purposes of this prototype, 
each Reconciliation must be covered by one surety, i.e., two sureties 
cannot cover the same Reconciliation. The continuous bond obligated on 
the underlying entries will be used to cover the Reconciliation.
    Payments due from the participant as a result of the Reconciliation 
will be reflected on the participant's monthly statement. Should the 
Reconciliation result in a refund due the participant, the refund will 
also appear on the monthly statement and will be used to offset 
existing or future payment obligations of the participant. Customs will 
calculate interest upon liquidation of the Reconciliation, and reflect 
such interest on the monthly statement.
    The Reconciliation header will contain the Reconciliation number, 
the date of Reconciliation filing, the issue(s) being reconciled and 
the comments. In the comment field, the filer may provide pertinent 
information, to explain, for example, that the specific value issue 
within this Reconciliation is an assist declaration.
    Following this summary information, there will be two parts of the 
Reconciliation. The first part will include a list of underlying entry 
numbers, entry summary dates, and the total duty, taxes and fees 
(reported by class code) which should have been paid for each of the 
underlying entries had the complete information been available to the 
importer at the time of filing of the entry summary. This part of the 
Reconciliation will also have a field to indicate entries being closed 
out on the Reconciliation which did not change.
    Part two of the Reconciliation will list all of the lines on the 
flagged entries which changed as a result of the reconciliation. Data 
elements for each line include entry number, SPI if applicable, HTS, 
country of origin, quantity if applicable, total value and the total 
duties, taxes and fees (reported by class code). The ``total'' figures 
will represent that which was reported on the underlying entry plus the 
change pursuant to the Reconciliation. In coordination with the Census 
Bureau, Customs is analyzing the assignment of a parameter, below which 
the reporting of reconciled lines (Part 2) would not be required.
    The reporting of line items is an interim step being taken for the 
purposes of gaining experience in the short term. While the 
Reconciliation will capture line item details for this prototype, 
Customs is working toward capturing the reconciled information at an 
aggregate level for future prototypes, which will incorporate 
compensating controls as a means to ensure that financial safeguards 
are in place.
    The following will serve as an example of the probable structure 
for the Reconciliation:

Reconciliation #557, Date: 2/1/97, Issue: NAFTA
Part 1:

----------------------------------------------------------------------------------------------------------------
                                                                                              Total             
                         Entry                             Summary      Total      Total       fees    No change
                                                             date       duties     taxes      [499]             
----------------------------------------------------------------------------------------------------------------
123....................................................     10/11/96        $25  .........      $2.89  .........
234....................................................     11/11/96  .........  .........  .........          X
345....................................................     12/11/96       $200  .........      $6.10  .........
----------------------------------------------------------------------------------------------------------------

Part 2:

----------------------------------------------------------------------------------------------------------------
                                                                                                          Total 
               Entry                     SPI/HTS         Country of     Qty    Total    Total    Total     fees 
                                                           origin              value     duty    taxes    [499] 
----------------------------------------------------------------------------------------------------------------
123...............................  2222............  MX.............      0       $0       $0  .......       $0
123...............................  MX2222..........  MX.............    700    $1000       $0  .......    $1.90
123...............................  3333............  MX.............    500     $250      $25  .......    $0.52
123...............................  MX3333..........  MX.............    500     $250       $0  .......    $0.47
345...............................  2222............  MX.............    750    $1500     $150  .......    $3.15
345...............................  MX2222..........  MX.............    250     $500       $0  .......    $0.95
345...............................  3333............  MX.............    200     $500      $50  .......    $1.05
345...............................  MX3333..........  MX.............    200     $500       $0  .......    $0.95
----------------------------------------------------------------------------------------------------------------

VII. Account-Based Import Declaration Process

    The account-based declaration process is a fully electronic process 
that will, for NCAP/P participant importers, who must file consumption 
entries under NCAP/P:
    1. Base cargo examination decisions primarily on pre-established 
account/entry information, minimizing the transaction data that needs 
to be transmitted to Customs prior to release of cargo. Cargo 
examinations will also be performed on the basis of selectivity 
criteria and for random compliance measurement sampling;
    2. Permit reporting of detailed entry summary data on a monthly 
cycle, and
    3. Provide for payment of duties, taxes and fees on a monthly 
statement cycle employing semi-monthly estimated payments.
    While various automatic notifications and back-up procedures will 
also be supported, the basic declaration flow for NCAP/P will be as 
follows:

[[Page 14735]]

    1. The application will serve as a pre-filed entry for NCAP/P 
purposes.
    2. Prior to arrival of cargo at the border, the carrier issuing the 
manifest or an authorized agent will electronically transmit to Customs 
basic manifest data: coded identification of the carrier; trip details; 
identification of drivers, the conveyance and other equipment; and an 
identifying number and the laden quantity for each shipment on the 
conveyance.
    3. Also prior to arrival of the cargo at the border, data 
pertaining to each individual shipment must be electronically 
transmitted to Customs. This shipment data will include information 
generally found on freight bills, plus the NCAP/P Authorization Code 
assigned to the participating importer by Customs, and identification 
of the entry filer and the seller and buyer of the merchandise. This 
shipment data may be transmitted by the carrier issuing the manifest, 
an authorized agent acting on behalf of the carrier issuing the 
manifest, or the entry filer (i.e., either the importer of record or 
the importer of record's customs broker.)
    4. Customs will assign an entry number to each shipment from the 
range of entry numbers provided in advance by each participating entry 
filer for that purpose. When a truck arrives at the border, shipments 
for which no physical examination of cargo is required will be released 
without additional data or documentation. For any shipment aboard that 
truck selected by Customs for physical examination of cargo, Customs 
will issue to the entry filer designated in the shipment data an 
electronic request for additional information. This request may be 
satisfied by transmission of either partial or complete entry summary 
and commercial data, as defined by Customs, plus packing data. The 
commercial data required for cargo examination, whether partial or 
complete, will be at the detailed item level. Cargo will not be 
examined until this data is received by Customs.
    5. The date of entry will be the date on which merchandise is 
released by Customs. The release will obligate the continuous bond 
identified in the prototype application of the importer whose NCAP/P 
Authorization Code is present in the shipment data.
    6. For each shipment released during a calendar month, the entry 
filer must electronically transmit complete entry summary data to 
Customs on or before the filing deadline for that month. The filing 
deadline for each month will be the 10th calendar day of the following 
month, or, if the 10th falls on a weekend or holiday, the next business 
day. Entry summary data transmitted prior to this deadline will be 
considered provisional and may be replaced by the entry filer anytime 
before the deadline. All summaries filed on or before the deadline will 
be considered as filed on the deadline date. Any issues that may be the 
subject of a future reconciliation must be identified in the entry 
summary data.
    7. For any entry summary selected by Customs for data review, 
unless complete commercial data was previously transmitted to support a 
cargo examination, Customs will issue to the entry filer an electronic 
request for complete commercial data. This request must be satisfied by 
electronic transmission of a complete set of commercial data, as 
defined by Customs, plus packing data if specifically requested.
    8. By virtue of 19 CFR 101.9, the Customs Service may impose 
requirements different than those specified in the Customs Regulations; 
but only to the extent that such different requirements do not affect 
the collection of revenue. Consequently, in order to permit a different 
procedure to test the periodic deposit of estimated duties without 
adversely affecting the collection of revenue, the participant must 
agree to and abide by the following procedures. Each participating 
importer account will make semi-monthly preliminary estimated payments 
through an electronic medium. Preliminary estimated payments will be 
initiated electronically using ACH credit on the 15th and the last day 
of the month. If the 15th or the last day of the month falls on a 
weekend or holiday, the payment must be initiated the next business 
day. Under the prototype, special electronic payment procedures will be 
utilized. The preliminary estimated payments will be based upon the 
following percentages: (a) The payment initiated on the 15th will be 
75% of the estimated amount due on all releases for the 1-15th of the 
month, (b) the payment initiated on the last day of the month will be 
57% of the estimated amount due on all releases from the 16th to the 
last day of the month. These percentages will be reviewed and may have 
to be adjusted to maintain revenue neutrality. Payment for the 
remaining balance will be initiated electronically on the 15th of the 
following month, and it is this date which Customs and the participants 
agree will serve as the date of actual deposit of estimated duties and 
fees for purposes of assessing interest under 19 U.S.C. 1505. Customs 
will issue two statements each month, one before and one after the 
monthly filing deadline. Each statement will list each importer 
account's NCAP/P activity at all locations for the reporting month, and 
will indicate whether entry summary data has been filed and, if it has, 
amounts due.
    9. Within the period of time prescribed for each issue, the entry 
filer must transmit an electronic Reconciliation to resolve each issue 
identified for reconciliation in entry summary data. In general, one 
Reconciliation will resolve multiple issues for each of the underlying 
entries.
    Cargo will be released and duties, taxes and fees assessed on the 
basis of data transmitted to the NCAP/P system. For shipments processed 
in NCAP/P, participants will not be required to provide parallel filing 
of ACS data or paper documents.

VIII. Suspension From Prototype

    If a participant attempts to enter or submit data relating to 
prohibited merchandise, merchandise subject to quota or antidumping or 
countervailing duties, or other non-eligible merchandise; or if a 
participant files non-consumption entries; files erroneous or untimely 
data; fails to provide requested invoice data or sufficient supporting 
documentation for Reconciliations; makes late or inadequate payments; 
fails to exercise reasonable care in the execution of participant 
obligations; or otherwise fails to follow the procedures outlined 
herein, and applicable laws and regulations, then the participant may 
be suspended from the prototype, and/or be subject to penalties.
    Any decision suspending participation may be appealed to the Trade 
Compliance Process Owner, within 15 days of the decision date.

IX. Regulatory Provisions Suspended

    Certain provisions of parts 24, 111, 141, 142, 143 and 159 of the 
Customs Regulations (19 CFR parts 24, 111, 141, 142, 143 and 159) will 
be suspended during this prototype test to allow for monthly filing of 
entry summary data, periodic payment of duties, taxes and fees, 
reconciliation for NAFTA, classification, value and 9802 issues, 
liquidation, billing and remote filing by Customs brokers in ports 
where they currently do not hold permits.
    Absent any specified alternate procedure, the current regulations 
apply.

X. Prototype Evaluation

    Once the importers are selected for NCAP/P, the Joint Prototype 
Team will, during the initial six months of the test period, evaluate 
the effectiveness of the

[[Page 14736]]

automation involved. Subsequent reviews will additionally consist of 
evaluating the data received from the importers, along with the 
internal and external process operations of the NCAP/P.
    Additional importers may become eligible during the prototype 
period, using the eligibility requirements cited above, thereby 
increasing the number of companies involved in the NCAP/P. The 
evaluation of the prototype as it pertains to these importers may occur 
separately from that which is done on the original participants. 
Regardless, the intention of the evaluations is to enhance operational 
procedures and to develop the detailed data requirements that are 
needed for NCAP.
    Note that the fact of participation in the NCAP/P is not 
confidential information. Lists of participants will be made available 
to the public by means of the Customs Electronic Bulletin Board and the 
Customs Administrative Message System, and upon written request. We 
stress that all interested parties are invited to comment on the 
design, conduct, and evaluation of NCAP/P at any time during prototype.
    Upon conclusion of the prototype the final results will be 
published in the Federal Register and the Customs Bulletin as required 
by Sec. 101.9(b), Customs Regulations and reported to Congress.

    Dated: March 21, 1997.
Audrey Adams,
Acting Assistant Commissioner, Office of Field Operations.
[FR Doc. 97-7733 Filed 3-26-97; 8:45 am]
BILLING CODE 4820-02-P