Rule2023-23305
Elimination of Debit Voucher Interest Accruing Before the Issuance of a Bill
Primary source
Metadata and text below are from the Federal Register, a public-domain U.S. government work. Always verify the official published version before relying on it for any legal matter.
Published
October 23, 2023
Effective
November 4, 2023
Issuing agencies
Homeland Security DepartmentU.S. Customs and Border ProtectionTreasury Department
Abstract
This document amends the U.S. Customs and Border Protection (CBP) regulations to reflect the elimination of CBP's collection of interest specific to debit vouchers in order to enable CBP to efficiently include debit voucher bills in CBP's automated billing process in the Automated Commercial Environment. As a result of this change, CBP will automatically issue debit voucher bills, inclusive of all applicable interest accruing on such bills and dishonored payment fees. Interest on the debited amount will accrue from the date of the issuance of a debit voucher bill, and no longer from the date of the debit voucher.
Full Text
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[Federal Register Volume 88, Number 203 (Monday, October 23, 2023)]
[Rules and Regulations]
[Pages 72675-72680]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2023-23305]
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Rules and Regulations
Federal Register
________________________________________________________________________
This section of the FEDERAL REGISTER contains regulatory documents
having general applicability and legal effect, most of which are keyed
to and codified in the Code of Federal Regulations, which is published
under 50 titles pursuant to 44 U.S.C. 1510.
The Code of Federal Regulations is sold by the Superintendent of Documents.
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Federal Register / Vol. 88, No. 203 / Monday, October 23, 2023 /
Rules and Regulations
[[Page 72675]]
DEPARTMENT OF HOMELAND SECURITY
U.S. Customs and Border Protection
DEPARTMENT OF THE TREASURY
19 CFR Part 24
[USCBP-2023-0025; CBP Dec. 23-13]
RIN 1515-AE81
Elimination of Debit Voucher Interest Accruing Before the
Issuance of a Bill
AGENCY: U.S. Customs and Border Protection, Department of Homeland
Security, Department of the Treasury.
ACTION: Interim final rule; solicitation of comments.
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SUMMARY: This document amends the U.S. Customs and Border Protection
(CBP) regulations to reflect the elimination of CBP's collection of
interest specific to debit vouchers in order to enable CBP to
efficiently include debit voucher bills in CBP's automated billing
process in the Automated Commercial Environment. As a result of this
change, CBP will automatically issue debit voucher bills, inclusive of
all applicable interest accruing on such bills and dishonored payment
fees. Interest on the debited amount will accrue from the date of the
issuance of a debit voucher bill, and no longer from the date of the
debit voucher.
DATES: This interim final rule is effective as of November 4, 2023;
comments must be received by December 22, 2023.
ADDRESSES: Please submit comments, identified by docket number, by the
following method:
Federal eRulemaking Portal: <a href="https://www.regulations.gov">https://www.regulations.gov</a>. Follow the
instructions for submitting comments via docket number USCBP-2023-0025.
Instructions: All submissions received must include the agency name
and docket number for this rulemaking. All comments received will be
posted without change to <a href="https://www.regulations.gov">https://www.regulations.gov</a>, 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 <a href="https://www.regulations.gov">https://www.regulations.gov</a>.
FOR FURTHER INFORMATION CONTACT: Steven J. Grayson, Program Manager,
Investment Analysis Office, Office of Finance, U.S. Customs and Border
Protection, (202) 579-4400, or <a href="/cdn-cgi/l/email-protection#dc9d9f999fb3b0b0b9bfa8b5b3b2af9cbfbeacf2b8b4aff2bbb3aa"><span class="__cf_email__" data-cfemail="32737177715d5e5e5751465b5d5c41725150421c565a411c555d44">[email protected]</span></a>.
SUPPLEMENTARY INFORMATION:
I. Public Participation
Interested persons are invited to participate in this rulemaking by
submitting written data, views, or arguments on all aspects of this
interim final rule. See ADDRESSES above for information on how to
submit comments. CBP also invites comments that relate to the economic,
environmental, or federalism effects that might result from this
regulatory change. Comments that will provide the most assistance to
CBP will reference a specific portion of the rule, explain the reason
for any recommended change, and include data, information or authority
that supports such recommended change.
II. Background
A. Ongoing Modernization of the Collections System at U.S. Customs and
Border Protection
U.S. Customs and Border Protection (CBP) is modernizing its
collections system, allowing CBP to eventually retire the Automated
Commercial System (ACS) and transfer all collections processes into the
Automated Commercial Environment (ACE). This modernization effort,
known as ACE Collections, includes the consolidation of the entire
collections system into the ACE framework, which will enable CBP to
utilize trade data from ACE modules, benefitting both the trade
community and CBP with more streamlined and better automated payment
processes. The new collections system in ACE will reduce costs for CBP,
create a common framework that aligns with other initiatives to reduce
manual collection processes, and provide additional flexibility to
allow for future technological enhancements. ACE Collections will also
provide the public with more streamlined and better automated payment
processes with CBP, including better visibility into data regarding
specific transactions.
ACE Collections supports the goals of the Customs Modernization Act
(Pub. L. 103-182, 107 Stat. 2057, 2170, December 8, 1993, Title VI of
the North American Free Trade Agreement Implementation Act), of
modernizing the business processes that are essential to securing U.S.
borders, speeding up the flow of legitimate shipments, and targeting
illicit goods that require scrutiny. ACE Collections also fulfills the
objectives of Executive Order 13659 (79 FR 10655, February 25, 2014),
to provide the trade community with an integrated CBP trade system that
facilitates trade, from entry of goods to receipt of duties, taxes, and
fees.
CBP is implementing ACE Collections through phased releases in ACE.
Release 1 was deployed on September 7, 2019, and dealt with statements
integration, the collections information repository (CIR) framework,
and automated clearinghouse (ACH) processing. See 84 FR 46749 and 84 FR
46678 (September 5, 2019), with a minor correction on September 23,
2019 (84 FR 49650).
Release 2 was deployed on February 5, 2021, and focused on non-ACH
electronic receivables and collections, for Fedwire and <a href="http://Pay.gov">Pay.gov</a>, that
included user fees, and Harbor Maintenance Fee (HMF) and Seized Assets
and Case Tracking System (SEACATS) payments. All the changes in Release
2 were internal to CBP and did not affect the trade community; as such,
no notice was published.
Release 3 was deployed on May 1, 2021, and primarily implemented
technical changes to the liquidation process, and deferred tax bills,
which were internal to CBP. See 86 FR 22696 (April 29, 2021). Release 3
also harmonized the determination of the due date for deferred tax
payments with the entry summary date, streamlined the collections
system, and provided importers of record with more flexibility and
access to data when making deferred payments of internal revenue taxes
owed on distilled spirits, wines,
[[Page 72676]]
and beer imported into the United States.
Release 4 was deployed on October 18, 2021, and primarily
implemented technical changes to the production and management of the
internal CBP processes for supplemental bills, certain reimbursable
bills, and non-reimbursable/miscellaneous bills issued by CBP to the
public. See 86 FR 56968 (October 13, 2021). Release 4 also made
available to importers of record, licensed customs brokers, and other
ACE account users, an option to electronically view certain, unpaid,
open bill details as reports in ACE Reports and adopted a new, enhanced
format for the CBP Bill Form.
Release 5 was deployed on March 21, 2022, and implemented internal
technical changes to the production, tracking, and management of
overdue bills and delinquent accounts and the bonds associated with
them, including enhancements to the unpaid, open bill details reports
in ACE Reports. See 87 FR 14899 (March 16, 2022). Release 5 also
included a May 1, 2022 delayed deployment of minor modifications to the
mailed Formal Demand on Surety for Payment of Delinquent Amounts Due
(also informally referred to as the 612 Report) and the ability to
electronically view 612 Reports in ACE Reports.
Most recently, Release 6 was deployed on August 29, 2022. Release 6
focused on the management of refunds, and included mainly internal,
technical changes to the ability to search, create, and review/certify
those refunds. See 87 FR 49600 (August 11, 2022). Release 6 also
included enhancements that improve transparency and access to
information through ACE for ACE account users who have sought refunds
from CBP to view certain information regarding the ACE account user's
own refunds.
As explained more fully below, Release 7 will be deployed on
November 4, 2023. Release 7 will enhance CBP's budget clearing account
(BCA) \1\ management, reducing processing times for clearing
collections off the BCA and allowing for improved reconciliation of
open receivables. This release will further integrate the port
collections process into ACE Collections to allow for the full entry
lifecycle to be contained in one system. The remaining ACS
functionalities, including Point of Sale (POS), Treasury and port
reconciliations, Deposits in Transit (DIT), debit voucher \2\
processing, collections in transit, serial numbered forms (SNF) and
system transfers, will also be moved to ACE. Specifically for debit
vouchers, Release 7 will streamline the tracking and notification
process for debit vouchers within ACE by transitioning the entire debit
voucher process (from bill creation to payment application) from a
manual to an automated process. This transition is accomplished by
including debit vouchers in CBP's general billing process and making
several regulatory changes to the debit voucher interest accrual
provision. All changes, except the change to debit voucher processing,
are internal to CBP and will not affect the trade community. The
completion of this release will enable CBP to retire the ACS mainframe
and move all ACS functionality to ACE. CBP will announce the retirement
of ACS by notice in the Federal Register once ready to do so.
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\1\ A budget clearing account records unidentifiable
transactions and credits pending transfer to the applicable receipt
or expenditure account. See 31 U.S.C. 3513.
\2\ A bank issues a debit voucher on Form SF 5515 notifying CBP
that a CBP account is being debited due to a dishonored payment.
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B. Overview of CBP's Debit Voucher Process
CBP is authorized to collect duties, taxes, and fees arising from
customs activities from individuals or entities. See generally 19
U.S.C. 58a, 58b, 58b-1, 58c, 1505, and 26 U.S.C. 4461. The regulations
found in part 24 of title 19 of the Code of Federal Regulations (CFR)
address the financial and accounting procedures for when CBP collects
these duties, taxes, fees, interest, and other applicable charges. See
generally 19 CFR 24.1-24.36. CBP collects and manages numerous types of
bills and uses several systems and processes to manage them. CBP
separates the bills it collects into broad categories, which include
accrual bills, supplemental bills, reimbursable bills, non-
reimbursable/miscellaneous bills, debit vouchers, and fines, penalties,
and forfeiture bills. See generally Sec. 24.3a. Supplemental bills
constitute the majority of bills that CBP generates for collection
purposes. These bills arise from liquidation or reliquidation processes
and are generated because of the nonpayment or underpayment of duties,
taxes, and fees at the time of entry for imported merchandise. In most
cases, debit voucher bills (covered by Sec. Sec. 24.3(e) and
24.3a(b)(2)(i)(C)) resulting from dishonored payments \3\ such as
dishonored checks or dishonored ACH \4\ transactions, function
similarly to supplemental bills in their purpose, i.e., nonpayment or
underpayment of duties, taxes, and fees. Thus, debit voucher bills are
included in the provisions regarding bill payment, due date and
interest accrual for supplemental bills, although the due date and
interest assessment for debit vouchers differ from supplemental bills.
See Sec. Sec. 24.3(e) and 24.3a(b)(2)(ii).
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\3\ Even though Sec. Sec. 24.3(e) and 24.3a(b)(2)(i)(C) mention
only checks and ACH transactions, every payment type may result in a
debit voucher, with dishonored checks and dishonored ACH
transactions being the majority of dishonored payments that CBP
processes.
\4\ For additional information on the ACH debit and ACH credit
processes, please see 19 CFR 24.25 and 24.26.
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Section 24.3a contains detailed provisions regarding CBP bills for
supplemental duties, taxes, and fees, vessel repair duties with
interest, reimbursable services, and miscellaneous amounts.
Specifically, Sec. 24.3a(a) discusses the due date for these CBP bills
and refers to the due date calculation set forth in Sec. 24.3(e).
Section 24.3(e) states that bills resulting from dishonored checks or
dishonored ACH transactions are due and payable within 15 days of the
date of the issuance of the bill, whereas all other bills are due and
payable within 30 days of the date of the issuance of the bill.
CBP assesses interest on the nonpayment or underpayment of
estimated duties, taxes, and fees, or interest, owed by an individual
or entity, as set forth in Sec. 24.3a(b). See also 19 U.S.C. 1505(c).
Section 24.3a(b)(1) concerns interest charges due to the late payment
of bills for vessel repair duties, reimbursable services and
miscellaneous amounts, whereas paragraph (b)(2) describes the
procedures for charging interest due to the underpayment of
supplemental duties, taxes, fees, and interest. Section 24.3a(b)(2) is
divided into paragraph (i) dealing with interest on initial
underpayments, and paragraph (ii) involving interest on overdue bills.
Paragraph (b)(2)(i) is further broken out into paragraphs (A) through
(C) covering factual situations that arise under current CBP
transactions and produce variations in the interest computation period
under the basic statutory rule of 19 U.S.C. 1505(d). Paragraph (A)
concerns excessive refunds by CBP prior to liquidation or
reliquidation, paragraph (B) describes three scenarios involving
additional deposits made by an individual or entity prior to
liquidation or reliquidation, and paragraph (C) concerns situations
where CBP receives a debit voucher indicating that a payment to CBP was
not made because of a dishonored check or dishonored ACH transaction.
[[Page 72677]]
According to Sec. 24.3a(b)(2)(i)(C), if a depository bank notifies
CBP by a debit voucher that a CBP account is being debited due to a
dishonored check or dishonored ACH transaction, interest will accrue on
the debited amount from the date of the debit voucher to either the
date of the payment of the debt represented by the debit voucher or the
date of the issuance of a bill for payment, whichever date is earlier.
Thus, interest begins to accrue on a debit voucher from the date of the
debit voucher. If the debit voucher is paid before CBP generates a
bill, interest accrues from the date of the debit voucher to the date
of payment. If the debit voucher is not paid before CBP generates a
bill, interest accrues on the amount of the debit voucher until the
date the bill is generated. CBP charges this debit voucher interest in
addition to any interest accrued on the underlying underpayment of
duties, taxes, and fees as prescribed by 19 U.S.C. 1505(c) or 1677g.
Section 24.3a(b)(2)(ii) involves interest on overdue bills, and
states that if duties, taxes, fees, and interest are not paid in full
within the applicable period specified in Sec. 24.3(e), any unpaid
balance will be considered delinquent and will bear interest until the
full balance is paid. As noted above, Sec. 24.3(e) provides that,
generally, a debtor has 30 days after the bill date (also known as the
date of issuance of the bill) to make payment. On the 31st day after
the bill date, the bill is considered delinquent, and interest will
accrue in 30-day periods. In the case of debit vouchers, Sec. 24.3(e)
provides that a debtor has 15 days after the bill date to make payment,
and on the 16th day after the bill date, the bill is considered
delinquent. Initial interest accrues on the debit voucher bill within
the 15-day period, and in 30-day periods thereafter. See generally 19
U.S.C. 1505(d); 19 CFR 24.3a.
For CBP, the current debit voucher process is very labor-intensive.
Because the interest calculation for debit vouchers differs from that
for other CBP bills, debit voucher bills cannot be automated along with
other CBP bills. Therefore, CBP accounting technicians are tasked with
manually creating draft debit voucher bills for only the amount of the
debit voucher in ACS, manually calculating interest outside of the
system for each debit voucher, and manually creating and mailing to the
individual or entity a letter notifying of the debit voucher interest
and any amount owed on the debit voucher. This bill, in the form of a
letter, is mailed to notify the debtor of the amount owed on a
particular debt.\5\ Payments that are made on debit voucher bills are
posted to the BCA until payment and bill are manually matched up and
payment is applied to the bill. If payment is not made, subsequent
letters with any remaining amount owed, plus additional accrued
interest, must be manually created and mailed every 30 days, consistent
with Sec. 24.3(e) and Sec. 24.3a(c)(3).
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\5\ It is common practice for CBP accounting technicians to
create draft debit voucher bills without interest as soon as CBP is
notified of the debit voucher to keep the accruing debit voucher
interest low; the debit voucher interest is frequently calculated at
a later time and mailed subsequently in a dunning letter.
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The banking industry practice regarding debit vouchers has changed
significantly since CBP first implemented debit voucher interest
through regulatory amendments in 1999.\6\ Debit vouchers were
historically mailed to payees (resulting in a delay of days or weeks
before a bill could be issued) but are now transmitted electronically
such that CBP receives near-immediate electronic notice when a payment
is dishonored. Consequently, debit vouchers are paid and resolved or
billed by CBP within a day or two of receiving electronic notice of the
dishonored payment. Thus, the accrued interest on debit vouchers in
this short time frame is minimal, in contrast to the significant time
and resources CBP must spend manually processing debit vouchers and
issuing bills for their payment. In addition, the individual or entity
may receive a dunning letter despite having already made payment in
full because CBP has not processed the payment yet, i.e., matched up
and applied the payment to the bill, before mailing the letter, thus
resulting in inaccurate billing.
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\6\ CBP published an interim final rule in the Federal Register
on October 20, 1999 (64 FR 56433) amending regulations regarding
interest on underpayments and overpayments of customs duties, taxes,
fees, and interest.
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III. Discussion of Changes to 19 CFR 24.3 and 24.3a
As described above, the current regulatory requirement in Sec.
24.3a(b)(2)(i)(C) to assess debit voucher interest prior to the
creation of the debit voucher bill inhibits CBP's ability to automate
the debit voucher billing process and align it with the billing process
for the majority of bills issued by CBP. In order to address the
problems posed by the manual debit voucher process, CBP is amending its
regulations to eliminate the requirement in Sec. 24.3a(b)(2)(i)(C) to
assess interest on debit vouchers for the period between the date of
the debit voucher and the date of the creation of the debit voucher
bill. Instead, interest will only accrue on the amount of the debit
voucher from the date of issuance of the debit voucher bill, resulting
in the same starting point for the interest calculation for debit
voucher bills as all other bills.
As part of Release 7, debit voucher bills will be processed
automatically like other bills, inclusive of all applicable interest
accruing on such bills and dishonored payment fees. The system (ACE)
will generate an initial debit voucher bill due 15 days from the date
of issuance of the bill, and subsequent bills every 30 days from the
due date. To enable this automation of the debit voucher process, CBP
is reorganizing Sec. 24.3a(b) by moving the debit voucher provision in
paragraph (b)(2)(i)(C) to a new paragraph (b)(3) titled, ``Interest
accrual on debit vouchers.'' As debit voucher bills will be included in
CBP's automated billing process, the debit voucher provision under
paragraph (b)(2)(i)(C) is no longer considered an exception to the
general rule in Sec. 24.3a(b)(2)(i). Moreover, the debit voucher
provision deals with a specific scenario of dishonored payments on any
type of debt owed to CBP, whereas paragraph (b)(2) in general describes
situations arising in the context of liquidation or reliquidation,
thus, the placement of the debit voucher provision in a separate
paragraph will fit better within the structure of CBP's billing
regulations.
The new paragraph (b)(3) will set forth the rules for interest
accrual on debit vouchers and will state that if a depository bank
notifies CBP by a debit voucher that a CBP account is being debited due
to a dishonored payment (e.g., check or ACH transaction), interest will
accrue on the debited amount from the date of the bill. Further, if
payment is not received by CBP on or before the late payment date
appearing on the bill, interest charges will be assessed on the debited
amount. The initial late payment date is the date 15 days after the
interest computation date. The interest computation date is the date
from which interest is calculated and is initially the bill date. New
paragraph (b)(3) will further state that no interest charge will be
assessed if the individual or entity timely pays the debt at the
location designated on the bill within the initial 15-day period
(consistent with Sec. 24.3a(c)(3), which similarly provides that no
interest will be assessed for the initial 30-day period in which timely
payment is made on a CBP bill). Finally, after the initial 15-day
period, interest will be assessed in 30-day periods pursuant to
paragraph Sec. 24.3a(c)(3).
[[Page 72678]]
To account for the removal of paragraph (b)(2)(i)(C) in Sec.
24.3a(b)(2)(i), CBP is also removing the reference to paragraph
(b)(2)(i)(C) from the introductory text of Sec. 24.3a(b)(2)(i),
leaving only paragraphs (b)(2)(i)(A) and (b)(2)(i)(B) as the exceptions
to the general interest accrual rule in paragraph (b)(2)(i). In
addition, CBP is modifying Sec. 24.3(e) to clarify that a debit
voucher may be generated for different types of dishonored payments,
including checks and ACH transactions as examples of two payment types.
The revision includes a more general reference to dishonored payments
followed by a parenthetical reading, ``(e.g., check or Automated
Clearinghouse (ACH) transaction).'' Lastly, in the second sentence of
Sec. 24.3(e), CBP is adding ``and payable'' after the word ``due'' to
be consistent with the same phrase used in the preceding sentence.
Despite forgoing a small amount of interest that accrues between
the debit voucher date and the issuance of a bill or the payment of the
debit voucher (whichever is earlier), eliminating this interest
assessment in Sec. 24.3a(b)(2)(i)(C) will bring about major efficiency
gains for CBP, significantly decreasing manual processing of debit
vouchers, and thereby improving revenue-collecting operations and
better utilizing resources currently spent on manual processing. The
trade community will also benefit from improved visibility into
specific debit voucher debts as CBP will no longer mail multiple bills
(in the form of a letter) for the amount of the debit voucher and
interest to the individual or entity on the debts owed, and payment by
the individual or entity on a debit voucher will be reflected
automatically on the bill record in ACE. In addition, the trade
community will receive periodic reminders in the form of subsequent
bills following the initial bill until the debt is paid.
As a result of these changes, most debit voucher bills will be
created and mailed automatically, decreasing the volume of manual
processing significantly. Some manual processing will still occur to
finalize debit voucher bills for dishonored ACH credit and check
payments. Payments through ACH debit represent the majority of
dishonored transactions, and for debit vouchers received on these
debts, the system will automatically create a full debit voucher record
and create and mail the bill(s) with the information populated from the
original dishonored payment. For dishonored ACH credit and check
payments, the system will prepare a draft bill, as not all information
that is needed to create a final bill is available in ACE, e.g., what
debt is being paid and who is responsible for the debt. CBP accounting
technicians will fill in the missing information to complete the record
using outside research. Once a full debit voucher record is created, a
bill will be automatically generated, with interest automatically
calculated by the system, and mailed. The trade community will receive
notification of the total amount owed, due within 15 days, on an
initial bill, with automatic subsequent notifications following in 30-
day periods. Most payments on debit vouchers will be posted directly to
the bill, and no longer to the BCA, as system limitations that exist in
ACS will be eliminated with Release 7.
IV. Statutory and Regulatory Requirements
A. Executive Orders 13563 and 12866 Analysis
Executive Orders 13563 and 12866 direct agencies to assess the
costs and benefits of available regulatory alternatives and, if
regulation is necessary, to select regulatory approaches that maximize
net benefits (including potential economic, environmental, public
health and safety effects, distributive impacts, and equity). Executive
Order 13563 emphasizes the importance of quantifying both costs and
benefits, of reducing costs, of harmonizing rules, and of promoting
flexibility. This interim final rule has not been designated as a
``significant regulatory action'' under Executive Order 12866.
Accordingly, the Office of Management and Budget (OMB) has not reviewed
this regulation.
This interim final rule is part of ACE Collections Release 7. CBP
is amending its regulations in 19 CFR 24.3a to reflect the elimination
of debit voucher interest that CBP currently charges to align debit
voucher processing with CBP's automated billing process. CBP has
prepared the following analysis to help inform stakeholders of the
impacts of this interim final rule.
1. Purpose of Rule
This interim final rule will eliminate a requirement in current
regulations relating to the accrual of interest on dishonored payments.
When a payment to CBP, whether paper or electronic, is dishonored for
lack of funds, the bank issues a debit voucher and notifies CBP.
Regulation currently requires CBP to assess interest on the dishonored
payment amount between the date of a debit voucher to either the date
of the payment or the date of the issuance of the bill. This interim
final rule will eliminate this initial period in which interest
accrues. Under this interim final rule, interest will instead accrue
from the date of the bill, initially for 15 days, and then in 30-day
periods until the bill is paid, in alignment with CBP practices for
other payments.
2. Background
In the course of doing business, CBP bills individuals and entities
for duties, taxes, fees, interest, or other charges. When an
individual's or entity's payment is dishonored, CBP may charge
additional interest. Current 19 CFR 24.3(b)(2)(i)(C) states:
If a depository bank notifies CBP by a debit voucher that a CBP
account is being debited due to a dishonored check or dishonored
Automated Clearinghouse (ACH) transaction, interest will accrue on
the debited amount from the date of the debit voucher to either the
date of payment of the debt represented by the debit voucher or the
date of issuance of a bill for payment, whichever date is earlier.
Before electronic banking was widely available, notification of a
dishonored payment could take days to weeks, as the affected bank had
to notify CBP via a paper debit voucher. After receipt of notice, CBP
would calculate the interest owed on the dishonored amount based on the
date of the debit voucher, create a bill with just the amount of the
debit voucher in ACS, place a hold on that bill, and mail a letter
containing the amount of the debit voucher and interest to the
individual or entity. With the advent of electronic payments and
messaging, the time between a debit voucher's creation and the bank's
notification to CBP is significantly reduced, usually taking no more
than three days. Often, the individual or entity has become aware of
the problem and made the payment before CBP receives notification or
calculates the interest and issues a bill, or the individual or entity
makes the payment after the bill is generated but before it is
received, causing confusion. As CBP's debit voucher process has not yet
been automated, CBP accounting technicians must continue to process
debit vouchers manually by checking for a (late) payment, calculating
interest, and generating a bill. If the individual or entity continues
to fail to pay after the initial bill, CBP may mail subsequent letters
as interest accrues in further 30-day periods, but because the process
is handled manually, subsequent letters are rarely mailed.
CBP seeks to automate the debit voucher process as a part of ACE
Collections Release 7 to better serve the trade community, promote
efficiency,
[[Page 72679]]
and improve collections. However, because of the structure of CBP's
electronic systems, processing of debit vouchers can only be automated
if CBP eliminates the requirement to assess interest between the date
of the debit voucher to either the date of the payment or the date of
the issuance of the bill. Under an automated system made possible
through this interim final rule, CBP will systemically mail the CBP
bill inclusive of all applicable interest accruing on the bill and
dishonored payment fees. Thus, payments for a debit voucher will
automatically be posted to the individual's or entity's bill record in
CBP systems instead of requiring manual processing by an accounting
technician to adjust remaining interest and the bill record after
payment has been made. The debit voucher process will be completely
electronic, with both initial and subsequent bills mailed automatically
if payment is not made.
3. Costs of the Rule
CBP does not anticipate any costs resulting from this interim final
rule. Although CBP has invested resources into automating the debit
voucher process, those costs were borne regardless of this interim
final rule as CBP modernizes its financial systems and moves most
business activities to ACE. CBP's ACE Collections effort is large and
ongoing, and the debit voucher process represents a minor part. The
trade community will see no costs from this interim final rule and will
likely save time in the payment and billing process as electronic
payment and automatic account updates make settling accounts quicker
and easier.
4. Benefits of the Rule
CBP considers this interim final rule to be beneficial to both CBP
and the trade community. Automating debit voucher processing will bring
clarity and efficiency to the interest accrual and collection
environment, making it clear to the individuals and entities involved
how much they owe and when, and allowing them to make payments quickly.
Individuals and entities will no longer receive bills for payments they
may have already made and CBP's accounting technicians will no longer
need to spend time calculating interest and generating bills for every
debit voucher received by CBP. Automation will also allow for better
collection of interest accrued after the initial bill. Under current
manual practice, subsequent bills are rarely generated and mailed.
Under this interim final rule, that process will be automated, enabling
CBP to pursue payment.\7\
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\7\ Note that some individuals and entities that owe CBP
interest on their longer-term dishonored payments will, in practice,
pay more interest since subsequent bills with updated accruing
interest amounts will be mailed with better regularity. CBP does not
consider this a cost of this interim final rule as it is a cost of
compliance with current regulations.
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5. Transfers
CBP will likely see a small reduction in the amount of interest
charged to and collected from individuals and entities because, as part
of Release 7, interest will start accruing at a later date--at the time
the debit voucher bill is issued rather than at the time of the debit
voucher itself. This reduction is not counted as a cost of this interim
final rule but as a transfer, as the reduction in CBP's income will be
equal to the corresponding increase in funds retained by the individual
or entity paying the debit voucher bill. As the total resources
available to society will not change, this is a transfer and not a
cost.
B. Regulatory Flexibility Act
The Regulatory Flexibility Act (5 U.S.C. 601 et seq.), as amended
by the Small Business Regulatory Enforcement and Fairness Act of 1996,
requires agencies to assess the impact of regulations on 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 concern per the Small Business Act);
a small organization (defined as any not-for-profit enterprise which is
independently owned and operated and is not dominant in its field); or
a small governmental jurisdiction (defined as a locality with fewer
than 50,000 people). Since a general notice of proposed rulemaking is
not necessary for this rule, CBP is not required to prepare a
regulatory flexibility analysis for this interim final rule.
C. Paperwork Reduction Act
In accordance with the Paperwork Reduction Act of 1995 (Pub. L.
104-13, 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
OMB. There are no information collections associated with this rule.
D. Inapplicability of Notice and Comment Requirement and Delayed
Effective Date
The Administrative Procedure Act (APA) requirements in 5 U.S.C. 553
govern agency rulemaking procedures. Section 553(b) of the APA
generally requires notice and public comment before issuance of a final
rule. In addition, section 553(d) of the APA requires that a final rule
have a 30-day delayed effective date. The APA, however, provides
exceptions from the prior notice and public comment requirement and the
delayed effective date requirement, when an agency for good cause finds
that such procedures are impracticable, unnecessary, or contrary to the
public interest. See 5 U.S.C. 553(b)(B) and (d)(3).
Pursuant to 5 U.S.C. 553(b)(B), CBP has determined for good cause
that prior notice and comment are unnecessary because the interim final
rule mainly changes CBP's internal accounting procedures and does not
negatively affect the substantive rights of the members of the trade
community. As explained in more detail above, the elimination of the
debit voucher interest and the automation of the debit voucher billing
process will bring clarity as to the debts owed and efficiency as to
the debit voucher process itself, benefitting both the trade community
and CBP. For the same reasons, CBP finds that good cause exists
pursuant to section 553(d)(3) of the APA to issue this interim final
rule effective upon publication.
Signing Authority
This document is being issued in accordance with 19 CFR 0.1(a)(1)
pertaining to the authority of the Secretary of the Treasury (or her/
his delegate) to approve regulations related to certain customs revenue
functions.
Troy A. Miller, Senior Official Performing the Duties of the
Commissioner, having reviewed and approved this document, has delegated
the authority to electronically sign this document to the Director (or
Acting Director, if applicable) of the Regulations and Disclosure Law
Division of CBP, for purposes of publication in the Federal Register.
List of Subjects in 19 CFR Part 24
Accounting, Claims, Exports, Freight, Harbors, Reporting and
recordkeeping requirements, Taxes.
Amendments to the Regulations
For the reasons stated above, part 24 of title 19 of the Code of
Federal Regulations (19 CFR part 24) is amended as set forth below:
[[Page 72680]]
PART 24--CUSTOMS FINANCIAL AND ACCOUNTING PROCEDURE
0
1. The general authority citation for part 24 continues to read as
follows:
Authority: 5 U.S.C. 301; 19 U.S.C. 58a-58c, 66, 1202 (General
Note 3(i), Harmonized Tariff Schedule of the United States), 1505,
1520, 1624; 26 U.S.C. 4461, 4462; 31 U.S.C. 3717, 9701; Pub. L. 107-
296, 116 Stat. 2135 (6 U.S.C. 1 et seq.).
* * * * *
0
2. Revise Sec. 24.3(e) to read as follows:
Sec. 24.3 Bills and accounts; receipts.
* * * * *
(e) Except for bills resulting from dishonored payments (e.g., a
check or Automated Clearinghouse (ACH) transaction), all other bills
for duties, taxes, fees, interest, or other charges are due and payable
within 30 days of the date of the issuance of the bill. Bills resulting
from dishonored payments are due and payable within 15 days of the date
of the issuance of the bill.
0
3. In Sec. 24.3a:
0
a. Revise the first sentence of the introductory text of paragraph
(b)(2)(i);
0
b. Remove paragraph (b)(2)(i)(C); and
0
c. Add a new paragraph (b)(3).
The revision and addition read as follows:
Sec. 24.3a CBP bills; interest assessment on bills; delinquency;
notice to principal and surety.
* * * * *
(b) * * *
(2) * * *
(i) Initial interest accrual. Except as otherwise provided in
paragraphs (b)(2)(i)(A) and (b)(2)(i)(B) of this section, interest
assessed due to an underpayment of duties, taxes, fees, or interest
will accrue from the date the importer of record is required to deposit
estimated duties, taxes, fees, and interest to the date of liquidation
or reliquidation of the applicable entry or reconciliation. * * *
* * * * *
(3) Interest accrual on debit vouchers. If a depository bank
notifies CBP by a debit voucher that a CBP account is being debited due
to a dishonored payment (e.g., a check or Automated Clearinghouse (ACH)
transaction), interest will accrue on the debited amount from the date
of the bill resulting from the dishonored payment. If payment is not
received by CBP on or before the late payment date appearing on the
bill, interest charges will be assessed on the debited amount. The
initial late payment date is the date 15 days after the interest
computation date. The interest computation date is the date from which
interest is calculated and is initially the bill date. No interest
charge will be assessed where the payment is actually received at the
``Send Payment To'' location designated on the bill within the initial
15-day period. After the initial 15-day period, interest will be
assessed in 30-day periods pursuant to paragraph (c) of this section.
* * * * *
Robert F. Altneu,
Director, Regulations & Disclosure Law Division, Regulations & Rulings,
Office of Trade, U.S. Customs and Border Protection.
Thomas C. West, Jr.,
Deputy Assistant Secretary of the Treasury for Tax Policy.
[FR Doc. 2023-23305 Filed 10-20-23; 8:45 am]
BILLING CODE 9111-14-P
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</html>Indexed from Federal Register on October 23, 2023.
This is legal information, not legal advice. Laws vary by jurisdiction and change frequently. Always verify current law with official sources and consult a licensed attorney in your jurisdiction for advice on your specific situation.