Notice2023-24907
Announcement of the National Customs Automation Program Test Concerning the Electronic Issuance of Demands on Surety
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
November 13, 2023
Issuing agencies
Homeland Security DepartmentU.S. Customs and Border Protection
Abstract
This document announces that U.S. Customs and Border Protection (CBP) will conduct a National Customs Automation Program test regarding the electronic issuance of demands on surety for certain kinds of claims, the "Electronic Issuance of Demands on Surety" (EIDS) test. Test participation is limited to sureties that receive the "Notice of Penalty or Liquidated Damages Incurred and Demand for Payment" (CBP Form 5955A) for claims for liquidated damages or penalties. The EIDS test will not include any other purpose or type of claim for which the CBP Form 5955A is used, such as a demand for duties, taxes, fees, or charges other than liquidated damages or penalties.
Full Text
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<title>Federal Register, Volume 88 Issue 217 (Monday, November 13, 2023)</title>
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[Federal Register Volume 88, Number 217 (Monday, November 13, 2023)]
[Notices]
[Pages 77598-77600]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2023-24907]
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DEPARTMENT OF HOMELAND SECURITY
U.S. Customs and Border Protection
Announcement of the National Customs Automation Program Test
Concerning the Electronic Issuance of Demands on Surety
AGENCY: U.S. Customs and Border Protection, Department of Homeland
Security.
ACTION: General notice.
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SUMMARY: This document announces that U.S. Customs and Border
Protection (CBP) will conduct a National Customs Automation Program
test regarding the electronic issuance of demands on surety for certain
kinds of claims, the ``Electronic Issuance of Demands on Surety''
(EIDS) test. Test participation is limited to sureties that receive the
``Notice of Penalty or Liquidated Damages Incurred and Demand for
Payment'' (CBP Form 5955A) for claims for liquidated damages or
penalties. The EIDS test will not include any other purpose or type of
claim for which the CBP Form 5955A is used, such as a demand for
duties, taxes, fees, or charges other than liquidated damages or
penalties.
DATES: The EIDS test will commence on December 13, 2023, and will
continue indefinitely subject to any extension, modification, or
termination as announced in the Federal Register. CBP will begin to
accept requests from sureties to participate in the test on December
13, 2023, and CBP will continue to accept such requests until the EIDS
test concludes. Public comments on the test are invited and may be
submitted to the address set forth below at any time during the test
period.
ADDRESSES: Comments and questions concerning this notice, or any aspect
of the test, may be submitted at any time before or during the test
period via email to Trade Remedy Law Enforcement Directorate, U.S.
Customs and Border Protection, at <a href="/cdn-cgi/l/email-protection#1f5a565b4c5f7c7d6f317b776c31787069"><span class="__cf_email__" data-cfemail="63262a2730230001134d070b104d040c15">[email protected]</span></a>, with the subject
line reading ``Comments/Questions on EIDS Test.''
FOR FURTHER INFORMATION CONTACT: For policy-related questions, contact
Sandra Barbosa, Supervisory International Trade Analyst, Civil
Penalties Branch, Civil Enforcement Division, Trade Remedy Law
Enforcement Directorate, Office of Trade, U.S. Customs and Border
Protection, at (202) 853-6026 or via email at <a href="/cdn-cgi/l/email-protection#7c3935382f3c1f1e0c5218140f521b130a"><span class="__cf_email__" data-cfemail="d4919d908794b7b6a4fab0bca7fab3bba2">[email protected]</span></a>, with a
subject line reading ``Electronic Issuance of Demands on Surety Test.''
For technical questions related to SEACATS, please contact Daniel P.
Travi, SEACATS Program Manager, Border Enforcement Management Systems,
Office of Information Technology, U.S. Customs and Border Protection,
at (571) 375-5707. For all other questions related to SEACATS, please
contact Stephen Haigler, Chief, SEACATS/Training Branch, Office of
Field Operations, U.S. Customs and Border Protection, at (202) 316-3898
or via email at <a href="/cdn-cgi/l/email-protection#3075797463705352401e5458431e575f46"><span class="__cf_email__" data-cfemail="ca8f838e998aa9a8bae4aea2b9e4ada5bc">[email protected]</span></a>.
SUPPLEMENTARY INFORMATION:
I. Background
A. The National Customs Automation Program
The National Customs Automation Program (NCAP) was established by
Subtitle B of Title VI--Customs Modernization in the North American
Free Trade Agreement Implementation Act (Customs Modernization Act)
(Pub. L. 103-182, 107 Stat. 2057, 2170, December 8, 1993) (19 U.S.C.
1411-1414). As a result of the implementation of NCAP, the thrust of
customs modernization was focused on informed trade compliance and the
development of the Automated Commercial Environment (ACE), an automated
and electronic system for commercial trade processing, intended to
streamline business processes, facilitate growth in trade, ensure cargo
security, and foster participation in global commerce, while
facilitating compliance with U.S. laws and regulations and reducing
costs for U.S. Customs and Border Protection (CBP) and all of its
communities of interest. The ability to meet these objectives depends
on successfully modernizing CBP's business functions and the
information technology that supports those functions, including
modernization of the administrative enforcement process (which includes
the assessment of penalties, liquidated damages, and seizures). CBP's
modernization efforts are accomplished through phased releases of ACE
component functionality, which update the system and add new
functionality.
Sections 411 through 414 of the Tariff Act of 1930 (19 U.S.C. 1411-
1414), as amended, 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
411(a)(2)(E) provides for an electronic penalty process as a planned
component of the NCAP. Section 411(d)(2)(A) provides for the periodic
review of data elements collected in order to update the standard set
of data elements, as necessary. CBP has begun development of an
electronic liquidated damages and penalty process, and this notice
announces the first test of a feature of the new process. The
electronic liquidated damages and penalty process is intended to
enhance, but not necessarily replace, the current paper process.
B. Authorization for the Test
The Customs Modernization Act provides the Commissioner of CBP with
the authority to conduct test programs or procedures designed to
evaluate planned components of the NCAP. The test described in this
notice is authorized pursuant to the Customs Modernization Act and
section 101.9(b) of title 19 of the Code of Federal Regulations (19 CFR
101.9(b)), which provides for the testing of NCAP programs or
procedures. As provided in 19 CFR 101.9(b), for purposes of conducting
an NCAP test, the Commissioner of CBP may impose requirements different
from those specified in the CBP regulations.
C. Current Penalty/Liquidated Damages Claim Issuance Procedures
Consistent with 19 CFR 162.31(a), CBP must provide written notice
of any fine or penalty incurred to each party that the facts of record
indicate has an interest in the claim. Pursuant to 19 CFR 172.1(a),
when there is a failure to meet the conditions of any bond posted with
CBP or when a violation occurs which results in assessment of a penalty
that is secured by a CBP bond, CBP must notify the principal, in
writing, of any liability for that penalty or liquidated damages
incurred and make a demand for payment. CBP also must notify the surety
on the bond of any such liability, in writing, concurrent with notice
to the principal. Claims for liquidated damages and penalties,
including penalties secured by bonds, are issued by the Fines,
Penalties and Forfeitures (FPF) Office in the port having jurisdiction
over the claim on the CBP Form 5955A.
If the principal on the bond fails to file a petition for relief,
or fails to comply in the time prescribed with a decision to mitigate a
penalty or to cancel a claim for liquidated damages issued with respect
to a petition for relief, the FPF Office having jurisdiction over the
claim will mail a demand for payment to the surety. The surety will
have 60 days from the date of the demand to file a petition for relief.
See 19 CFR 172.4.
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CBP created and maintains an electronic system entitled SEACATS \1\
which is internal to the federal government, and functions as a case
management system, capturing the relevant information for processing
and adjudication of the legal outcomes of all fines, penalties, and
claims for liquidated damages, among other things. The system allows
CBP officers, import specialists, entry specialists, and other
designated employees to input pertinent penalty and liquidated damages
claim violation data (violator name, address, legal citations, facts
pertinent to the violation, etc.) for the purpose of producing a
completed CBP Form 5955A for mailing. The System of Records Notice
(SORN) for SEACATS was published in the Federal Register on December
19, 2008 (73 FR 77764). The SORN established SEACATS as the system of
records for persons found violating laws and regulations enforced by
the Department of Homeland Security (DHS)/CBP.
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\1\ The Seized Asset and Case Tracking System (SEACATS) is the
system CBP uses to track seized and forfeited property, from case
initiation to final resolution. CBP has retired the full name usage,
and now the acronym ``SEACATS'' is a standalone term for the system.
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II. Description of the Electronic Issuance of Demands on Surety Test
As part of its ongoing efforts to modernize the liquidated damages
and penalty process, CBP engaged in regular outreach with internal and
external stakeholders, including, but not limited to, FPF Officers,
sureties, and trade associations. Through this outreach, CBP determined
that the issuance of the CBP Form 5955A is time consuming and may not
result in timely action on liquidated damages or penalties claims by
sureties. As a result of these discussions, CBP developed the
Electronic Issuance of Demands on Surety (EIDS) test, which will enable
CBP to test the transmission of the CBP Form 5955A to the surety
electronically by email, at the time the document is mailed to the
principal on the bond, for claims for liquidated damages or penalties.
Participating sureties will continue to receive a paper copy of the CBP
Form 5955A by mail. The EIDS test will not include any other purpose or
type of claim for which the CBP Form 5955A is used, such as a demand
for duties, taxes, fees, or charges other than liquidated damages or
penalties.
The EIDS test is voluntary, and sureties who wish to participate
must comply with all the conditions set forth below. Test participants
must provide an email address to which CBP will send CBP Form 5955A
notices. The email address provided will be maintained and stored in
SEACATS. Participating sureties must inform CBP immediately of any
changes to the email address used to receive the notices.
Participating sureties will receive a daily email from CBP. The
email will contain a zip file listing up to 50 electronic notices of
claims for liquidated damages or penalties secured by the receiving
surety's bonds. Each zip file will be password protected, with the
password being sent as a separate email, in tandem with the daily email
containing the zip file. A surety could receive multiple emails in a
day if the number of demands against its bonds for that day exceeds 50.
Each email will indicate the total number of demands issued to the
surety that day, which, if more than 50 demands are issued to a surety
on a single day, could exceed the number of demands attached to an
individual email. The relevant FPF Office will be copied on each email
that includes notices that fall within its jurisdiction. Participating
sureties will also receive paper copies of the Form 5955A. For
participating sureties, the date the email with zip file and password
is sent will be the date of demand for purposes of establishing the
petition response period of 60 days as required by 19 CFR 172.4.
Participation in the test will provide test participants with the
opportunity to test and give feedback to CBP on the EIDS test design
and scope. Participation may also enable test participants to determine
whether receiving the CBP Form 5955A electronically allows them to
better track and reference demands on their bonds, to communicate more
effectively with their clients and CBP, and to better understand when
their bonds become obligated. Consequently, participation may allow
sureties to better manage and validate their bond issuance and bond
obligation processes.
III. Eligibility Requirements, Application Process, and Acceptance Into
the Test
CBP is opening this test to sureties that receive the CBP Form
5955A. Participating sureties must have the ability to receive zip
files at the email address provided and to open zip files and PDF
documents. Every surety must have a 3-digit surety code to be eligible
to participate in the test.\2\
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\2\ Inquiries regarding the 3-digit surety code should be
directed to the CBP Office of Finance, Revenue Division at
<a href="/cdn-cgi/l/email-protection#70321f1e142105150304191f1e03301312005e1418035e171f06"><span class="__cf_email__" data-cfemail="c280adaca693b7a7b1b6abadacb182a1a0b2eca6aab1eca5adb4">[email protected]</span></a>.
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Sureties interested in participating in the EIDS test should submit
an email to the Civil Enforcement Division at <a href="/cdn-cgi/l/email-protection#c4818d809784a7a6b4eaa0acb7eaa3abb2"><span class="__cf_email__" data-cfemail="57121e13041734352779333f2479303821">[email protected]</span></a> stating
their interest and ability to meet the eligibility criteria described
in this notice. The email will serve as an electronic signature of
intent to participate and must also include the email address to which
the electronic notices will be sent, a point of contact name, and
telephone number.
CBP may, in its discretion, decline to permit an interested surety
from participating in the EIDS test, to include, for example, if CBP
determines that a surety has neglected or refused to pay a valid demand
made on the surety company's bond or otherwise has failed to honor an
obligation on that bond or if CBP determines that any other
unacceptable compliance risk exists. If CBP declines an interested
surety's request to participate in the EIDS test, CBP will provide
notice and an opportunity to respond, which will follow the procedures
detailed below for proposed suspensions from test participation.
CBP will notify applicants by email if they are selected to
participate in the test. Applicants will also be notified once CBP has
verified their ability to receive email notifications that they are
permitted to participate fully in the test. Test participants will
receive technical, operational, and policy guidance through all stages
of test participation.
IV. Misconduct Under the Test
Misconduct under the test may include failure to abide by the rules
and procedures established under this test, failure to exercise
reasonable care in the execution of participant obligations, or the
failure to comply with any applicable laws or regulations that have not
been waived. If a test participant fails to abide by the rules,
procedures, or terms and conditions of the EIDS test as provided in
this notice, and all other applicable Federal Register notices, or
fails to comply with any applicable laws and regulations, then the
participant may be suspended from participating in this test.
Additionally, and in accordance with the procedures below, CBP may
suspend a test participant based on a determination that an
unacceptable compliance risk exists.
If the Director, Civil Enforcement Division (CED), Trade Remedy Law
Enforcement Directorate, Office of Trade, finds that there is a basis
to suspend a participant from participating in the test, then CBP will
provide a written notice, via email, proposing the suspension with a
description of the facts or conduct supporting the proposal. The test
participant will have the opportunity to reply to the Director's email
within ten (10) business days of the date of the written notice. When
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responding to a proposed suspension from the test, the participant
should address the facts or conduct charges contained in the notice and
state how compliance has been or will be achieved.
If no timely response is received, the proposed suspension becomes
the final decision of CBP as of the date that the response period
expires. If a timely response is received, the Director, CED, will
issue a final decision in writing, by email, on the proposed suspension
within thirty (30) business days after receiving the response from the
test participant, unless such time is extended for good cause.
Suspension of a test participant's privileges will take place either
when the proposal becomes final, if the participant fails to timely
respond to the proposed suspension, or upon the final adverse decision
issued by the Director after the participant has responded. The
decision to suspend a surety from participation in the test may be
appealed to the Executive Assistant Commissioner, Office of Trade,
within fifteen (15) days of the date of CBP's final adverse decision,
by submitting an email entitled, ``Appeal--EIDS Suspension'', to the
Executive Assistant Commissioner, CBP, at <a href="/cdn-cgi/l/email-protection#cc8985889f8cafaebce2a8a4bfe2aba3ba"><span class="__cf_email__" data-cfemail="42070b0611022120326c262a316c252d34">[email protected]</span></a>, and
attaching a copy of the decision being appealed. The surety filing the
appeal must set forth its reasons for appealing the Director, CED's
final decision. The Executive Assistant Commissioner's decision is not
subject to further review.
V. Test Evaluation Criteria
All interested parties are invited to comment on any aspect of this
test at any time. To ensure adequate feedback, participants are
required to take part in evaluation of the test. CBP needs comments and
feedback on all aspects of this test, including the design, conduct and
implementation of the test, to determine whether to modify, alter,
expand, limit, continue, end, or implement this program. Comments
should be submitted via email to <a href="/cdn-cgi/l/email-protection#7c3935382f3c1f1e0c5218140f521b130a"><span class="__cf_email__" data-cfemail="72373b3621321110025c161a015c151d04">[email protected]</span></a>, with the subject
line reading ``Comments/Questions on EIDS Test.''
The EIDS test is intended to evaluate the feasibility of sending
via email the CBP Form 5955A to sureties. CBP will evaluate whether the
test: (1) improves CBP's ability to quickly, safely and securely
transmit the CBP Form 5955A to the surety; (2) enables sureties to
better track claims posted against their bonds; (3) enables sureties to
timely respond to claims; (4) obtains buy-in from stakeholders
(including FPF Officers, sureties, and trade associations); and, (5)
facilitates legal compliance with the laws, regulations, policies, and
instructions enforced by CBP. At the conclusion of the test, an
evaluation will be conducted to assess the efficacy of the information
received throughout the course of the test. The final results of the
evaluation will be published in the Federal Register and the Customs
Bulletin as required by section 101.9(b)(2) of the CBP regulations (19
CFR 101.9(b)(2)).
Should the EIDS test be successful and ultimately be codified under
the CBP regulations, CBP anticipates that this data would greatly
enhance CBP's penalty and liquidated damages notification process,
reduce risk, and improve compliance operations. CBP would also
anticipate greater visibility into bond claims, which will support
better decision-making during and after the case resolution process.
VI. Confidentiality
Data submitted and entered into SEACATS may include confidential
commercial or financial information which may be protected under the
Trade Secrets Act (18 U.S.C. 1905), the Freedom of Information Act (5
U.S.C. 552), and the Privacy Act (5 U.S.C. 552a). The electronic notice
of demand on surety will only contain that information that is
currently provided on the paper CBP Form 5955A. However, as stated in
previous test notices, participation in this test or any of the
previous NCAP tests is not confidential and, therefore, upon receipt of
a written Freedom of Information Act request, the name(s) of an
approved participant(s) will be disclosed by CBP in accordance with 5
U.S.C. 552.
John P. Leonard,
Acting Executive Assistant Commissioner, Office of Trade.
[FR Doc. 2023-24907 Filed 11-9-23; 8:45 am]
BILLING CODE 9111-14-P
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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.