29122 Federal Register / Vol. 63, No. 102 /Thursday, May 28, 1998 /Rules and Regulations

procedure thereon are unnecessary and

pursuant to 5 U.S.C. 553(d)(3), a delayed

effective date is not required. Since this

document is not subject to the notice

and public procedure requirements of 5

U.S.C. 553, it is not subject to the

provisions of the Regulatory Flexibility

Act (5 U.S.C. 601 et seq.). Nor do these

amendments meet the criteria for a

‘‘significant regulatory action’’ under

E.O. 12866.

List of Subjects in 19 CFR Part 12

Customs duties and inspection, Entry

of merchandise, Imports, Prohibited

merchandise, Restricted merchandise,

Reporting and recordkeeping

requirements, Vehicles.

Amendments to the Regulations

Part 12, Customs Regulations (19 CFR

part 12), is amended as set forth below.

PART 12—SPECIAL CLASSES OF

MERCHANDISE

1. The general authority citation for

part 12, and the specific authority

citation for § 12.74, continue to read as

follows:

Authority: 5 U.S.C. 301; 19 U.S.C. 66, 1202

(General Note 20, Harmonized Tariff

Schedule of the United States (HTSUS)),

1624;

* * * * *

Sections 12.73 and 12.74 also issued under

19 U.S.C. 1484, 42 U.S.C. 7522, 7601;

* * * * *

2. Section 12.74 is revised to read as

follows:

§ 12.74 Nonroad engine compliance with

Federal antipollution emission

requirements.

(a) Applicability of EPA regulations.

The requirements governing the

importation of nonroad engines subject

to conformance with applicable

emissions standards of the U.S.

Environmental Protection Agency (EPA)

are contained in EPA regulations, issued

under the Clean Air Act, as amended

(42 U.S.C. 7401 et seq.). These EPA

regulations should be consulted for

detailed information as to the admission

requirements for subject nonroad

engines, as follows:

(1) For nonroad compression-ignition

engines at or above 37 kilowatts, see 40

CFR part 89, subpart G;

(2) For nonroad spark-ignition engines

at or below 19 kilowatts, see 40 CFR

part 90, subpart G; and

(3) For marine spark-ignition engines,

see 40 CFR part 91, subpart H.

(b) Admission of nonconforming

nonroad engines. (1) EPA declaration

required. EPA Form 3520–21,

‘‘Importation of Nonroad Engines and

Nonroad Engines Incorporated Into

Nonroad Equipment or Vehicles,

Subject to Federal Air Pollution

Regulations’’, must be completed by the

importer and retained on file by him

before making a customs entry for such

nonroad engines/equipment/vehicles.

(2) Retention and submission of

records to Customs. Documents

supporting the information required in

the EPA declaration must be retained by

the importer for a period of at least 5

years in accordance with § 162.1c of this

chapter and shall be provided to

Customs upon request.

(c) Release under bond. (1)

Conditional admission. If the EPA

declaration states that the entry for a

nonconforming nonroad engine is being

filed under one of the exemptions

described in paragraphs (c)(3)(i) through

(c)(3)(iv) of this section, under which

the engine must be conditionally

admitted under bond, the entry for such

engine shall be accepted only if a bond

is given on Customs Form 301

containing the conditions set forth in

§ 113.62 of this chapter for the

presentation of an EPA statement that

the engine has been brought into

conformity with Federal emissions

requirements.

(2) Final admission. Should final

admission be sought and granted

pursuant to EPA regulations for an

engine conditionally admitted initially

under one of the exemptions described

in paragraphs (c)(3)(i) through (c)(3)(iv)

of this section, the importer or

consignee shall deliver to the port

director the prescribed statement. The

statement shall be delivered within the

period authorized by EPA for the

specific exemption, or such additional

period as the port director of Customs

may allow for good cause shown.

Otherwise, the importer or consignee

shall deliver or cause to be delivered to

the port director the subject engine,

either for export or other disposition

under applicable Customs laws and

regulations (see paragraph (e) of this

section). If such engine is not

redelivered within 5 days following the

allotted period, liquidated damages

shall be assessed in the full amount of

the bond, if a single entry bond, or if a

continuous bond, the amount that

would have been taken under a single

entry bond (see 40 CFR 89.612–96(d),

90.613(c) & (d), 91.705(c) & (d)).

(3) Exemptions. The specific

exemptions under which a

nonconforming nonroad engine may be

conditionally admitted, and for which a

Customs bond is required, are as

follows:

(i) Repairs or alterations (see 40 CFR

89.611–96(b)(1), 90.612(b)(1),

91.704(b)(1));

(ii) Testing (see 40 CFR 89.611–

96(b)(2), 90.612(b)(2), 91.704(b)(2));

(iii) Precertification (see 40 CFR

89.611–96(b)(3), 89.906); and

(iv) Display (see 40 CFR 89.611–

96(b)(4), 90.612(b)(3), 91.704(b)(3)).

(d) Notice of inadmissibility or

detention. If an engine is found to be

inadmissible either before or after

release from Customs custody, the

importer or consignee shall be notified

in writing of the inadmissibility

determination and/or redelivery

requirement. However, an engine which

cannot be released merely due to a

failure to furnish with the entry any

documentary information as required by

EPA shall be held in detention by the

port director for a period not to exceed

30 days after filing of the entry at the

risk and expense of the importer

pending submission of the missing

information. An additional 30-day

extension may be granted by the port

director upon application for good cause

shown. If at the expiration of a period

not over 60 days the required

documentation has not been filed, a

notice of inadmissibility will be issued.

(e) Disposal of engines not entitled to

admission; prohibited importations. A

nonroad engine denied admission under

EPA regulations shall be disposed of

consistent with such EPA regulations

and in accordance with applicable

Customs laws and regulations. The

importation of nonroad engines

otherwise than as prescribed under EPA

regulations is prohibited.

Douglas M. Browning,

Acting Commissioner of Customs.

Approved: May 6, 1998.

John P. Simpson,

Deputy Assistant Secretary of the Treasury.

[FR Doc. 98–14164 Filed 5–27–98; 8:45 am]

BILLING CODE 4820–02–P

DEPARTMENT OF THE TREASURY

Customs Service

19 CFR Part 24

[T.D. 98–51]

RIN 1515–AC26

Automated Clearinghouse Credit

AGENCY: U.S. Customs Service,

Department of the Treasury.

ACTION: Interim rule; solicitation of

comments.

SUMMARY: This document amends the

Customs Regulations on an interim basis

to provide for payments of funds to

Customs by Automated Clearinghouse

(ACH) credit. Under ACH credit, a payer
Federal Register / Vol. 63, No. 102 /Thursday, May 28, 1998 /Rules and Regulations 29123

will be able to transmit daily statement,

deferred tax, and bill payments

electronically through a financial

institution directly to a Customs

account maintained by the Department

of the Treasury. ACH credit allows the

payer to exercise more control over the

payment process, does not require the

disclosure of bank account information

to Customs, and expands the types of

payments that may be made through

ACH.

DATES: This interim rule is effective

June 29, 1998. Comments must be

received before July 27, 1998.

ADDRESSES: Written comments

(preferably in triplicate) may be

addressed to the Regulations Branch,

Office of Regulations and Rulings, U.S.

Customs Service, 1300 Pennsylvania

Avenue, N.W., Washington, D.C. 20229.

Comments submitted may be inspected

at the Regulations Branch, Office of

Regulations and Rulings, U.S. Customs

Service, 1300 Pennsylvania Avenue,

N.W., 3rd Floor, Washington, D.C.

FOR FURTHER INFORMATION CONTACT: Ben

Robbin, Financial Systems Division,

Financial Management Services Center,

Office of Finance, U.S. Customs Service

(317–298–1520, ext. 1428).

SUPPLEMENTARY INFORMATION:

Background

Part 206 of the Financial Management

Service (FMS) Regulations (31 CFR Part

206) concerns, among other things, the

management of Federal agency receipts

and disbursements and applies to all

Government departments and agencies

within the Executive Branch. Section

206.4(a) of the FMS Regulations (31 CFR

206.4(a)) sets forth the general rule that

all funds are to be collected and

disbursed by electronic funds transfer

(EFT) when cost-effective, practicable,

and consistent with current statutory

authority. Section 206.2 of the FMS

Regulations (31 CFR 206.2) defines EFT

as follows:

Electronic funds transfer (EFT) means any

transfer of funds, other than a transaction

originated by cash, check or similar paper

instrument, that is initiated through an

electronic terminal, telephone, computer, or

magnetic tape, for the purpose of ordering,

instructing, or authorizing a financial

institution to debit or credit an account. The

term includes, but is not limited to, Fed Wire

transfers, Automated Clearing House (ACH)

transfers, transfers made at automatic teller

machines (ATM) and Point-of-Sale (POS)

terminals (to include use of the Government

small purchase card), and other means of

credit card transactions.

Section 24.25 of the Customs

Regulations (19 CFR 24.25) concerns

‘‘statement processing’’ and ‘‘automated

clearinghouse (ACH)’’ and thus, by

virtue of the latter, in part implements

the policy reflected in the FMS

Regulations referred to above. Paragraph

(a) of § 24.25 describes statement

processing as a voluntary automated

program which allows participants in

the Automated Broker Interface (ABI) to

group entry/entry summaries and entry

summaries on a daily basis and to pay

the related duties, taxes and fees with a

single payment. Paragraph (a) of § 24.25

further provides that the preferred

method for such single payment is by

ACH, except where the importer of

record has provided (normally, to a

customs broker who files the entry on

behalf of the importer) a separate check

payable to Customs for the Customs

charges.

The ACH payment process currently

set forth in § 24.25 is a debit payment

method (hereinafter referred to as ‘‘ACH

debit’’) whereby ABI filers provide

Customs with the bank routing and

account number from which ACH

payments are to be electronically

debited by a Treasury-designated ACH

processor bank upon receipt of an

electronic message sent by Customs.

However, following implementation of

statement processing and ACH debit on

January 1, 1990, Customs found that the

ACH debit procedure did not achieve all

of the intended results because some

daily statement payers have remained

reluctant to provide the U.S.

Government with their bank account

information and, therefore, such parties

still make their daily statement

payments by check. Moreover, the

current ACH debit process is limited to

daily statement payments and thus does

not cover bill payments under § 24.3 of

the Customs Regulations (19 CFR 24.3)

and deferred tax payments under § 24.4

of the Customs Regulations (19 CFR

24.4), which are accepted primarily

through check (through a Customs

lockbox) and Fed Wire respectively, and

for which Customs believes some payers

would prefer to use the ACH

environment.

The FMS and Riggs National Bank of

Washington, D.C. have developed

another ACH payment procedure for the

Federal Government, referred to herein

as ‘‘ACH credit’’. This process allows

the Federal Government to receive ACH

payments initiated directly by the

private sector payer. This process

benefits payers by allowing them to

effect payment without having to

disclose bank account information to

the Government and by allowing them

to maintain more control over the

origination and timing of their

payments. The ACH credit process

benefits the Government in that transit

routing and bank account authorization

does not have to be obtained from the

remitter and the Government does not

have to do anything to effect an

individual payment.

Customs has received authorization

from the FMS to receive ACH credit

payments, and appropriate

modifications have been made to the

Automated Commercial System (ACS)

to accept the transfer of payment and

remittance information from Riggs Bank

and to apply those payments to the

appropriate receivables. Since the ACH

credit procedure represents a significant

enhancement of the electronic entry and

payment process and provides

important benefits to both Customs and

the trade community, Customs believes

that it should be made available to the

public, for use on a voluntary basis, at

the earliest practicable date and that it

should encompass not only daily

statement payments but also bill

payments and deferred tax payments.

The purpose of this document is to

provide an appropriate regulatory

context for the ACH credit procedure.

The ACH credit procedure and the

regulatory changes reflected in this

document are discussed in more detail

below.

How ACH Credit Works

Companies and other payers

interested in enrolling in the ACH credit

program must indicate such interest by

providing the following information to

Customs: Payer name and address;

payer contact name(s); payer telephone

number(s) and facsimile number; payer

identification number (importer

number, Social Security number, or

Customs assigned number); and 3-digit

filer code. This information should be

sent to the Financial Management

Services Center, U.S. Customs Service,

6026 Lakeside Boulevard, Indianapolis,

Indiana 46278, by mail or facsimile

transmission (317–298–1013). Preprinted enrollment forms for this

purpose, together with detailed

information regarding the ACH credit

program, are available from the

Financial Management Services Center

contact person identified earlier in this

document.

The payer and its financial institution

are responsible for determining the

methodology used for originating the

ACH credit payment (telephone or

computer generated instructions,

diskettes, etc.) and the methodology

used for notifying the payer that its

account has been charged. The financial

institution that the payer uses must be

capable of structuring ACH credit

transactions according to the payment

and addendum conventions prescribed

by the National Automated
29124 Federal Register / Vol. 63, No. 102 /Thursday, May 28, 1998 /Rules and Regulations

Clearinghouse Association, that is, the

financial institution must use either the

CCD+ or the CTX payment formats and

must use the TXP data segment for the

payment-related information within the

addendum record for each daily

statement or deferred tax or bill

payment. Payments transmitted by ACH

credit must be formatted as described in

the format instructions provided by the

Financial Management Services Center.

Following receipt of the enrollment

information, the Financial Management

Services Center provides the payer with

specific ACH credit routing and format

instructions and advises the payer that

the following information must be

provided to its financial institution

when originating its payments:

Company name; company contact

person name and telephone number;

company identification number (coded

Internal Revenue Service employer

identification number or DUNS number

or Customs assigned number); company

payment description; effective date;

receiving company name (i.e. U.S.

Customs); transaction code; Customs

transit routing number and Customs

account number (provided to the payer

by Customs); payment amount; payer

identifier (importer number or Social

Security number or Customs assigned

number or filer code if the payer is a

broker who is the importer of record);

document number (daily statement

number, entry or warehouse withdrawal

number for a deferred tax payment, or

bill number); payment type code (which

identifies the payment as a daily

statement payment or deferred tax

payment or bill payment); settlement

date (no later than the payment due

date); and document payment amount.

Before effecting any payments of

funds through the ACH credit process,

the payer is instructed by Customs to

follow a trial run ‘‘prenotification’’

procedure, involving a non-funds

message transmission through its

financial institution to the Customs

account, in order to validate the routing

instructions. Once the routing

instructions are validated, the Financial

Management Services Center notifies

the payer that the prenotification

transaction has been accepted and that

payments may be originated on or after

the tenth calendar day following the

prenotification acceptance date.

The payer obtains the source data (the

document number and amount) for the

ACH credit payment transaction from

the daily statement or from the entry or

warehouse withdrawal documentation

in the case of a deferred tax or from the

Customs bill. The payer, through its

financial institution, originates payment

information to the Customs account no

later than one business day prior to the

payment due date (daily statement

payments are due no later than ten

working days after release or

withdrawal of the merchandise;

deferred tax payments are due on the

14th day or 29th day of the month, with

special rules if the due date falls on a

weekend or Federal holiday; bills must

be paid no later than the late payment

date appearing on the bill). The next day

(the settlement date), the payer’s

account is charged by its financial

institution and the payment is credited

by Customs and applied to the

appropriate daily statement or entry or

warehouse withdrawal or bill as of that

settlement date.

If daily statement payments are

involved, a statement filer who is not

the importer of record (and thus will not

be making or authorizing the payment)

must still obtain the preliminary

statement through ABI and must still

present the preliminary statement and

the corresponding entry summaries

(when paper is required) to the Customs

location, as provided in § 24.25(c).

However, the process differs in the case

of payments to be made by ACH credit

in that such a filer will provide the

payer with the statement number and

the statement amount at least one

business day prior to the due date.

The payer is responsible for following

the routing and format instructions

provided by the Financial Management

Services Center, and for ensuring the

accuracy of the information provided to

its financial institution, when

originating its payment. Erroneous

information provided by the payer (for

example, non-standard formatting,

incorrect document number, payment

amount different from the amount due)

will delay the prompt posting of the

payment to the receivable. If a payer

repeatedly provides erroneous

information when originating payments,

the payer may be advised in writing to

refrain from using ACH credit and to

submit its payments by bank draft or

check pursuant to § 24.1 or by the ACH

debit payment method under § 24.25.

Regulatory Implementation

In view of the fact that ACH credit is

a voluntary program intended to

provide flexibility, efficiency and

related benefits to the trade community

and to Customs, it appears appropriate

to implement the ACH program as an

interim rule, subject to public comment

procedures before adoption of a final

rule. Moreover, since present § 24.25

concerns only statement processing and

describes ACH debit procedures

whereas ACH credit will also apply to

deferred tax and bill payments, Customs

believes that it is preferable (1) to deal

with ACH credit in a separate new

§ 24.26 and (2) to make conforming

changes to present § 24.25 to reflect the

adoption of the new section, including,

where appropriate, the addition of the

word ‘‘debit’’ to clarify the meaning of

the references to ACH in that section.

Comments

Before adopting this interim

regulation as a final rule, consideration

will be given to any written comments

timely submitted to Customs. Comments

submitted will be available for public

inspection in accordance with the

Freedom of Information Act (5 U.S.C.

552), § 1.4, Treasury Department

Regulations (31 CFR 1.4), and

§ 103.11(b), Customs Regulations (19

CFR 103.11(b)), on normal business

days between the hours of 9 a.m. and

4:30 p.m. at the Regulations Branch,

Office of Regulations and Rulings, U.S.

Customs Service, 1300 Pennsylvania

Avenue, N.W., 3rd Floor, Washington,

D.C.

Inapplicability of Prior Public Notice

and Comment Procedures

Pursuant to the provisions of 5 U.S.C.

553(b)(B), Customs has determined that

prior public notice and comment

procedures on this regulation are

unnecessary and contrary to the public

interest. The ACH credit process

implemented by this regulation is an

entirely voluntary payment procedure

that provides benefits to the public in

that it facilitates the electronic entry and

payment process, addresses some

concerns of the public regarding

existing electronic payments

procedures, and has the overall effect of

reducing the regulatory burden on the

public.

Executive Order 12866

This document does not meet the

criteria for a ‘‘significant regulatory

action’’ as specified in Executive Order

12866.

Regulatory Flexibility Act

Because no notice of proposed

rulemaking is required for interim

regulations, the provisions of the

Regulatory Flexibility Act (5 U.S.C. 601

et seq.) do not apply.

Paperwork Reduction Act

This regulation is being issued

without prior notice and public

procedure pursuant to the

Administrative Procedure Act (5 U.S.C.

553). For this reason, the collection of

information contained in this regulation

has been reviewed and, pending receipt

and evaluation of public comments,
Federal Register / Vol. 63, No. 102 /Thursday, May 28, 1998 /Rules and Regulations 29125

approved by the Office of Management

and Budget in accordance with the

requirements of the Paperwork

Reduction Act (44 U.S.C. 3507) under

control number 1515–0218.

An agency may not conduct or

sponsor, and a person is not required to

respond to, a collection of information

unless the collection of information

displays a valid control number.

The collection of information in these

regulations is in § 24.26. This

information is required in connection

with an election to use the ACH credit

procedure for making electronic

payments of funds to Customs. The

information will be used by the U.S.

Customs Service to ensure that

payments to Customs are properly

transmitted, received, and credited. The

likely respondents are business

organizations including importers,

exporters and manufacturers.

Estimated total annual reporting and/

or recordkeeping burden: 17 hours.

Estimated average annual burden per

respondent/ recordkeeper: .083 hours.

Estimated number of respondents

and/or recordkeepers: 200.

Estimated annual number of

responses: 200.

Comments are invited on: (a) whether

the collection of information is

necessary for the proper performance of

the functions of the agency, including

whether the information shall have

practical utility; (b) the accuracy of the

agency’s estimate of the burden of the

collection of information; (c) ways to

enhance the quality, utility, and clarity

of the information to be collected; (d)

ways to minimize the burden of the

collection of information on

respondents, including through the use

of automated collection techniques or

other forms of information technology;

and (e) estimates of capital or start up

costs and costs of operations,

maintenance, and purchase of services

to provide information. Comments

should be directed to the Office of

Management and Budget, Attention:

Desk Officer for the Department of the

Treasury, Office of Information and

Regulatory Affairs, Washington, D.C.

20503. A copy should also be sent to the

Regulations Branch, Office of

Regulations and Rulings, U.S. Customs

Service, 1300 Pennsylvania Avenue,

N.W., Washington, D.C. 20229.

List of Subjects in 19 CFR Part 24

Accounting, Claims, Customs duties

and inspection, Imports, Taxes.

Amendments to the Regulations

For the reasons set forth above, Part

24, Customs Regulations (19 CFR Part

24), is amended as set forth below.

PART 24—CUSTOMS FINANCIAL AND

ACCOUNTING PROCEDURES

1. The authority citation for part 24

continues to read in part as follows:

Authority: 5 U.S.C. 301; 19 U.S.C. 58a–58c,

66, 1202 (General Note 20, Harmonized Tariff

Schedule of the United States), 1450, 1624;

31 U.S.C. 9701.

* * * * *

§ 24.25 [Amended]

2. In § 24.25:

a. The third sentence of paragraph (a)

is amended by adding after ‘‘(ACH)’’ the

words ‘‘debit or ACH credit’’;

b. The sixth sentence of paragraph (a)

is amended by adding the words ‘‘debit

(see paragraph (b)(2) of this section)’’

after ‘‘ACH’’ the first time it appears and

adding at the end of the sentence before

the period the words ‘‘; ACH credit is

described in § 24.26’’;

c. The heading of paragraph (b)(2) is

amended by adding after

‘‘Clearinghouse’’ the word ‘‘debit’’;

d. The first sentence of paragraph

(b)(2) is amended by adding after

‘‘through ACH’’ the word ‘‘debit’’; and

e. The first sentence of paragraph

(c)(4) is amended by removing the

words ‘‘ACH payment authorization’’

and adding, in their place, the words

‘‘ACH debit payment authorization or

ACH credit payment’’.

3. Section 24.26 is added to read as

follows:

§ 24.26 Automated Clearinghouse Credit.

(a) Description. Automated

Clearinghouse (ACH) credit is an

optional payment method that allows a

payer to transmit statement processing

payments (see § 24.25) or deferred tax

payments (see § 24.4) or bill payments

(see § 24.3) electronically, through its

financial institution, directly to the

Customs account maintained by the

Department of the Treasury.

(b) Enrollment procedure. A payer

interested in enrolling in the ACH credit

program must indicate such interest by

providing the following information to

the Financial Management Services

Center, U.S. Customs Service, 6026

Lakeside Boulevard, Indianapolis,

Indiana 46278: Payer name and address;

payer contact name(s); payer telephone

number(s) and facsimile number; payer

identification number (importer number

or Social Security number or Customs

assigned number); and 3-digit filer code.

(c) Routing and format instructions.

Following receipt of the enrollment

information, the Financial Management

Services Center will provide the payer

with specific ACH credit routing and

format instructions and will advise the

payer that the following information

must be provided to its financial

institution when originating its

payments: Company name; company

contact person name and telephone

number; company identification number

(coded Internal Revenue Service

employer identification number or

DUNS number or Customs assigned

number); company payment

description; effective date; receiving

company name; transaction code;

Customs transit routing number and

Customs account number; payment

amount; payer identifier (importer

number or Social Security number or

Customs assigned number or filer code

if the payer is a broker who is the

importer of record); document number

(daily statement number, entry or

warehouse withdrawal number for a

deferred tax payment, or bill number);

payment type code; settlement date; and

document payment amount.

(d) Prenotification procedure. Before

effecting any payments of funds through

the ACH credit process, the payer must

follow a prenotification procedure,

involving a non-funds message

transmission through its financial

institution to the Customs account, in

order to validate the routing

instructions. When the routing

instructions are validated, the Financial

Management Services Center will notify

the payer that the prenotification

transaction has been accepted and that

payments may be originated on or after

the tenth calendar day following the

prenotification acceptance date.

(e) Payment origination procedures.

(1) General. Once the payer has received

authorization to begin originating ACH

credit payments under paragraph (d) of

this section, the payer, through its

financial institution, must originate

each payment transaction to the

Customs account no later than one

business day prior to the payment due

date. The payer’s account will be

charged by the financial institution on

the settlement date identified in the

transaction. The payer is responsible for

following the routing and format

instructions provided by Customs and

for ensuring the accuracy of the

information when originating each

payment. Improperly formatted or

erroneous information provided by the

payer will delay the prompt posting of

the payment to the receivable.

(2) Procedures for daily statement

filers. The procedures set forth in

§ 24.25(c) for ABI filers using statement

processing remain applicable when

payment is effected through ACH credit.

However, when the ABI filer is a

customs broker who is not the importer

of record and thus is not responsible for

the payment, the ABI filer must provide
29126 Federal Register / Vol. 63, No. 102 /Thursday, May 28, 1998 /Rules and Regulations

the statement number and statement

amount to the importer of record at least

one business day prior to the due date

so that the importer of record can

originate the payment.

(f) Date of collection. The date that the

ACH credit payment transaction is

received by Customs shall be the

collection date which equates to the

settlement date. The appropriate daily

statement or entry or warehouse

withdrawal or bill shall be identified as

paid as of that collection date.

(g) Removal from the ACH credit

program. If a payer repeatedly provides

improperly formatted or erroneous

information when originating ACH

credit payments, the Financial

Management Services Center may

advise the payer in writing to refrain

from using ACH credit and to submit its

payments by bank draft or check

pursuant to § 24.1 or, in the case of daily

statement payments, to use the ACH

debit payment method under § 24.25.

Samuel H. Banks,

Acting Commissioner of Customs.

Approved: May 5, 1998.

John P. Simpson,

Deputy Assistant Secretary of the Treasury.

[FR Doc. 98–14166 Filed 5–27–98; 8:45 am]

BILLING CODE 4820–02–P

DEPARTMENT OF THE TREASURY

Customs Service

19 CFR Parts 162 and 178

[T.D. 98–49]

RIN 1515–AB98

Prior Disclosure

AGENCY: U.S. Customs Service,

Department of the Treasury.

ACTION: Final rule.

SUMMARY: This document amends the

Customs Regulations governing ‘‘prior

disclosure’’, including implementation

of the Customs modernization

provisions of the North American Free

Trade Implementation Act (Mod Act)

concerning prior disclosure by a person

of a violation of law committed by that

person involving the filing or attempted

filing of a drawback claim, or an entry

or introduction, or attempted entry or

introduction of merchandise into the

United States by fraud, gross negligence,

or negligence. Pursuant to the ‘‘prior

disclosure’’ provision of 19 U.S.C.

1592(c)(4) as amended by the Mod Act,

and 19 U.S.C. 1593a(c)(3), if a person

commits a violation of 19 U.S.C. 1592 or

19 U.S.C. 1593a and discloses the

circumstances of the violation before, or

without knowledge of, the

commencement of a formal

investigation of such violation,

merchandise shall not be seized and any

monetary penalty to be assessed shall be

limited. ‘‘Commencement of a formal

investigation’’ for purposes of 19 U.S.C.

1592 and 1593a is defined in these

regulations. The document also amends

the regulations to give Fines, Penalties

and Forfeitures Officers discretion to

defer Customs disclosure verification

proceedings until the disclosing party

has an opportunity to explain all the

circumstances underlying the disclosed

violation.

EFFECTIVE DATE: June 29, 1998.

FOR FURTHER INFORMATION CONTACT:

Robert Pisani, Penalties Branch (202)

927–2344.

SUPPLEMENTARY INFORMATION:

Background

On December 8, 1993, the President

signed the North American Free Trade

Agreement Implementation Act (Pub. L.

103–182). The Customs modernization

portion of this Act (Title VI), popularly

known as the Customs Modernization

Act, or ‘‘the Mod Act’’ became effective

when it was signed. Section 621 of Title

VI amended section 592 of the Tariff Act

of 1930 (19 U.S.C. 1592) (hereinafter

referred to as section 592), and section

622 of Title VI added new section 593a.

On September 26, 1996, Customs

published in the Federal Register (61

FR 50459) a notice of proposed

rulemaking to amend the Customs

Regulations governing prior disclosure

as it relates to sections 592 and 593a.

Pursuant to the ‘‘prior disclosure’’

provision of 19 U.S.C. 1592(c)(4) as

amended by the Mod Act, and 19 U.S.C.

1593a(c)(3), if a person commits a

violation of 19 U.S.C. 1592 or 19 U.S.C.

1593a and discloses the circumstances

of the violation before, or without

knowledge of, the commencement of a

formal investigation of such violation,

merchandise shall not be seized and any

monetary penalty to be assessed shall be

limited.

It is noted that it is the policy of the

Customs Service to encourage the

submission of prior disclosures.

The notice of proposed rulemaking

invited public comments on the

proposals, which would be considered

before adoption of a final rule. The

public comment period closed on

November 25, 1996.

Analysis of Comments

A total of thirty-seven commenters

responded to the solicitation of

comments during the public comment

period. Many commenters applauded

Customs efforts to re-organize and

simplify the regulations involving prior

disclosure. Ten of the commenters set

forth specific recommendations to

change the proposed amendments on a

‘‘section by section’’ basis. Five of these

ten commenters made general

comments which were not directly

related to a specific section of the

proposal. The remaining twenty-seven

commenters set forth the single

recommendation to amend the proposal

to include a regulatory prohibition that

would specify that a valid prior

disclosure precludes the assessment of a

liquidated damage claim for the

disclosed violation.

The specific ‘‘section by section’’

recommendations and/or suggestions,

general recommendations and/or

suggestions, and the Customs responses

thereto, are set forth below.

Proposed § 162.74(a)

Comment: One commenter suggests

that § 162.74(a)(2) be amended to

preclude ‘‘oral’’ prior disclosures. If

adopted, the commenter recommends

deleting all other references to oral prior

disclosures in the proposal. No reason is

articulated for suggesting this change.

Customs Response: We can find no

valid reason for precluding a party from

making an oral prior disclosure. Of

course, as with a party making a written

prior disclosure, a party who elects to

make an oral disclosure must meet the

regulatory criteria governing ‘‘disclosure

of the circumstances of the violation’’

before, or without knowledge of the

commencement of a formal

investigation of such violation, in order

to obtain prior disclosure benefits.

Comment: One commenter suggests

that Customs change proposed

§ 162.74(a)(2) to reflect that the

‘‘appropriate Customs officer,’’ rather

than the Fines, Penalties and Forfeitures

Officer, be the deciding official

regarding whether the party had

included substantially the information

set forth in paragraph (b) of proposed

§ 162.74. The commenter is of the

opinion that the decision-making

authority should be vested in a Customs

officer not connected to a potential

penalty action. For similar reasons,

another commenter suggests that the

port director should be the deciding

official instead of the Fines, Penalties

and Forfeitures Officer.

Customs Response: We disagree.

Inasmuch as the evaluation of

information regarding the potential

assessment of penalties under 19 U.S.C.

1592 or 19 U.S.C. 1593a is within the

province of the Fines, Penalties and

Forfeitures Officer, we are of the

opinion that the Fines, Penalties and