Notice2024-00698
Test Concerning Entry of Section 321 Low-Value Shipments Through the Automated Commercial Environment (ACE) (Also Known as Entry Type 86); Republication With Modifications
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
January 16, 2024
Effective
February 15, 2024
Issuing agencies
Homeland Security DepartmentU.S. Customs and Border Protection
Abstract
This document republishes with modifications and supersedes a U.S. Customs and Border Protection (CBP) notice published in the Federal Register on August 13, 2019, announcing a test to allow certain low-value shipments, including those shipments subject to Partner Government Agency (PGA) data requirements, to be entered by filing a new type of informal entry electronically in the Automated Commercial Environment (ACE). The test is known as the ACE Entry Type 86 Test. This document modifies the ACE Entry Type 86 Test to clarify the waiver of certain regulations and consequences of misconduct by test participants. In addition, this document makes minor technical changes to the original notice.
Full Text
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<title>Federal Register, Volume 89 Issue 10 (Tuesday, January 16, 2024)</title>
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[Federal Register Volume 89, Number 10 (Tuesday, January 16, 2024)]
[Notices]
[Pages 2630-2634]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2024-00698]
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DEPARTMENT OF HOMELAND SECURITY
U.S. Customs and Border Protection
Test Concerning Entry of Section 321 Low-Value Shipments Through
the Automated Commercial Environment (ACE) (Also Known as Entry Type
86); Republication With Modifications
AGENCY: U.S. Customs and Border Protection, Department of Homeland
Security.
ACTION: General notice.
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SUMMARY: This document republishes with modifications and supersedes a
U.S. Customs and Border Protection (CBP) notice published in the
Federal Register on August 13, 2019, announcing a test to allow certain
low-value shipments, including those shipments subject to Partner
Government Agency (PGA) data requirements, to be entered by filing a
new type of informal entry electronically in the Automated Commercial
Environment (ACE). The test is known as the ACE Entry Type 86 Test.
This document modifies the ACE Entry Type 86 Test to clarify the waiver
of certain regulations and consequences of misconduct by test
participants. In addition, this document makes minor technical changes
to the original notice.
DATES: The ACE Entry Type 86 Test commenced September 28, 2019, and
[[Page 2631]]
will continue until concluded by an announcement published in the
Federal Register. Comments will be accepted throughout the duration of
the test. The changes set forth in this modification will go into
effect on February 15, 2024.
ADDRESSES: Comments concerning this notice and any aspect of this test
may be submitted at any time during the test via email to
<a href="/cdn-cgi/l/email-protection#a1c4c2ceccccc4d3c2c4e1c2c3d18fc5c9d28fc6ced7"><span class="__cf_email__" data-cfemail="274244484a4a425544426744455709434f5409404851">[email protected]</span></a>. In the subject line of your email, please
indicate, ``Comment on the ACE Entry Type 86 Test.''
FOR FURTHER INFORMATION CONTACT: Christopher Mabelitini, Director,
Intellectual Property Rights & E-Commerce Division, Trade Policy &
Programs, Office of Trade, U.S. Customs and Border Protection, 202-325-
6915, <a href="/cdn-cgi/l/email-protection#5c393f333131392e3f391c3f3e2c7238342f723b332a"><span class="__cf_email__" data-cfemail="274244484a4a425544426744455709434f5409404851">[email protected]</span></a>.
SUPPLEMENTARY INFORMATION: On August 13, 2019, U.S. Customs and Border
Protection (CBP) published a notice (the August 13 Notice) in the
Federal Register (84 FR 40079) announcing a test allowing low-value
shipments meeting the requirements for admission under the
administrative exemption in 19 U.S.C. 1321(a)(2)(C) (Section 321) \1\
and the implementing regulation in 19 CFR 10.151, including those
shipments subject to Partner Government Agency (PGA) data requirements,
to be entered by filing a new type of informal entry electronically in
the Automated Commercial Environment (ACE). The test is known as the
ACE Entry Type 86 Test. The ACE Entry Type 86 Test allows CBP to
address the growing volume of Section 321 low-value shipments resulting
from the global shift in trade to an e-commerce platform, test the new
functionality in ACE, facilitate cross-border e-commerce, and allow
Section 321 low-value shipments subject to PGA data requirements to
utilize a Section 321 low-value shipment entry process for the first
time. Further background on entry type 86 and the entry type 86 process
can be found in Sections I and II below.
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\1\ For purposes of this test, all references to ``Section 321''
refer to the administrative exemption in 19 U.S.C. 1321(a)(2)(C),
and do not refer to any other exemption in 19 U.S.C. 1321.
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This document republishes and supersedes the August 13 Notice, with
the modifications described below. These changes are being made in
response to enforcement challenges surrounding low-value shipments
entered via the ACE Entry Type 86 Test. Such challenges include, but
are not limited to, CBP's efforts to prevent the importation of illicit
substances like fentanyl and other narcotics, counterfeits and other
intellectual property rights violations, and goods made with forced
labor. CBP's enforcement efforts for merchandise entered using entry
type 86 have brought to light violations such as entry by parties
without the right to make entry, incorrect manifesting of cargo,
misclassification, misdelivery (e.g., delivery of goods prior to
release from CBP custody), undervaluation, and incorrectly executed
powers of attorney.
To address these problems, CBP is making the following amendments
to the ACE Entry Type 86 Test. This notice modifies the deadline to
file entry type 86 from ``within 15 days'' of the arrival of the cargo
to ``upon or prior to arrival'' (see Section IV). The traditional entry
timeframe, allowing filing up to 15 days after arrival of the cargo,
has proven to be inconsistent with the expedited process envisioned for
the ACE Entry Type 86 Test. As a result, CBP is amending the test to
require that the entry type 86 must be filed prior to or upon arrival
of the cargo.
In addition, this notice clarifies that only those regulations
specified in this notice are waived by the test (see Sections IV and
V). All other regulations, including those allowing CBP to require
formal entry, remain in force. This notice also clarifies the
consequences of misconduct by participants in the ACE Entry Type 86
Test (see Section VIII). Lastly, this notice makes stylistic and
structural changes, standardizing the terminology used, restructuring,
and renumbering the sections of the August 13 Notice, and adding
additional section headings to guide the reader.
For ease of reference, the August 13 Notice is republished below,
with the amendments and clarifications described above.
I. Background
A. Exemption for Section 321 Low-Value Shipments
Section 321(a)(2)(C) of the Tariff Act of 1930 (19 U.S.C.
1321(a)(2)(C)), as amended by the Trade Facilitation and Trade
Enforcement Act of 2015 (TFTEA), Section 901, Public Law 114-125, 130
Stat. 122 (19 U.S.C. 4301 note), authorizes CBP to provide an
administrative exemption to admit free from duty and any tax imposed on
or by reason of importation, shipments of merchandise (other than bona-
fide gifts and certain personal and household goods) imported by one
person on one day having an aggregate fair retail value in the country
of shipment of not more than $800. The regulations issued under the
authority of section 321(a)(2)(C) are set forth in sections 10.151 and
10.153 of title 19 of the Code of Federal Regulations (19 CFR 10.151
and 10.153).
A shipment of merchandise valued at $800 or less, which qualifies
for informal entry under 19 U.S.C. 1498 and meets the requirements in
19 U.S.C. 1321(a)(2)(C), and 19 CFR 10.151, is referred to in this
document as a ``Section 321 low-value shipment.'' Unless a CBP official
has reason to believe that a Section 321 low-value shipment fails to
comply with any pertinent law or regulation, section 10.153 sets forth
the guidance to be applied by a CBP officer in determining whether an
article or parcel shall be exempted from duty and tax under section
10.151 and qualify as a Section 321 low-value shipment. Accordingly,
consolidated shipments addressed to one consignee shall be treated as
one importation; alcoholic beverages and cigars (including cheroots and
cigarillos) and cigarettes containing tobacco, cigarette tubes,
cigarette papers, smoking tobacco (including water pipe tobacco, pipe
tobacco, and roll-your-own tobacco), snuff, or chewing tobacco are not
exempt; any merchandise subject to antidumping and countervailing
duties is not exempt; any merchandise of a class or kind provided for
in any absolute or tariff-rate quota, whether the quota is open or
closed, is not exempt; and, there is no exemption from any tax imposed
under the Internal Revenue Code that is collected by other agencies on
imported goods.
B. ``Release From Manifest'' Process for Section 321 Low-Value
Shipments
Pursuant to 19 CFR 10.151, merchandise subject to the Section
321(a)(2)(C) administrative exemption shall be entered under informal
entry procedures. If formal entry is deemed necessary pursuant to 19
CFR 143.22, a shipment otherwise qualifying for the exemption may not
be entered pursuant to 19 CFR 10.151. The relevant informal entry
procedures for Section 321 low-value shipments are set forth in 19 CFR
128.24 and 19 CFR part 143, subpart C. Pursuant to the CBP regulations,
a Section 321 low-value shipment may be entered, using reasonable care,
by the owner, purchaser, or consignee of the shipment, or, when
appropriately designated by one of these persons, a customs broker
licensed under 19 U.S.C. 1641. See 19 CFR 143.26(b).
Section 321 low-value shipments may be entered by presenting the
bill of lading or a manifest listing each bill of lading. See 19 CFR
143.23(j)(3). This type of informal entry is termed the ``release from
manifest'' process. Generally, such shipments are released
[[Page 2632]]
from CBP custody based on the information provided on the manifest or
bill of lading. Such information may be provided by express consignment
operators, carriers, or brokers. The following information must be
provided as part of the ``release from manifest'' process: the country
of origin of the merchandise; shipper name, address and country;
ultimate consignee name and address; specific description of the
merchandise; quantity; shipping weight; and value. See 19 CFR 128.21(a)
and 19 CFR 143.23(k). No Harmonized Tariff Schedule of the United
States (HTSUS) subheading or entry summary is required on an advance
manifest for Section 321 low-value shipments. See 19 CFR 143.23(k) and
19 CFR 128.24(e).
A Section 321 low-value shipment is not exempt from PGA
requirements. Many agencies do not have de minimis exemptions for their
PGA reporting requirements, and require strict accountability of
imported goods for national security, health and safety reasons, and to
identify specific shipments of potentially violative products for
reporting or enforcement targeting purposes. Low-value shipments may
also require the payment of applicable PGA duties, fees or applicable
excise taxes collected by other agencies. Shipments that have PGA data
reporting requirements, or require the payment of any duties, fees, or
taxes may not benefit from the use of a less complex Section 321 entry
process like the ``release from manifest'' process, and must be entered
using the appropriate informal or formal entry process to ensure that
the PGA requirements are met. All shipments subject to PGA requirements
are currently ineligible for entry under the ``release from manifest''
process.
II. Establishment of an Electronic Entry Process for Section 321 Low-
Value Shipments Through ACE
On August 13, 2019, CBP published the August 13 Notice announcing
the ACE Entry Type 86 Test to allow Section 321 low-value shipments,
including those shipments subject to PGA data requirements, to be
entered by filing a new type of informal entry electronically in ACE.
Prior to the development of entry type 86, Section 321 low-value
shipments subject to PGA requirements were required to be entered using
the more complex informal entry type ``11'' or formal entry. The ACE
Entry Type 86 Test provides a less complex entry and release process
for Section 321 low-value shipments, including those subject to PGA
data requirements, and expedites the clearance of compliant Section 321
low-value shipments into the United States through the use of ACE.
Merchandise imported by mail is excluded from the ACE Entry Type 86
Test and may not be entered under the entry type 86.
In developing the ACE Entry Type 86 Test, CBP coordinated with the
Commercial Customs Operations Advisory Committee (COAC), trade industry
representatives, and PGAs, and considered the public comments received
from the ``Administrative Exemption on Value Increased for Certain
Articles'' interim final rule (Administrative Exemption IFR). On August
26, 2016, CBP published the Administrative Exemption IFR in the Federal
Register (81 FR 58831), which amended the CBP regulations to implement
section 901 of TFTEA by raising the value of the Section 321
administrative exemption from $200 to $800, and solicited comments
regarding the collection of data on behalf of PGAs for shipments valued
at $800 or less. CBP received eight public comments. A more detailed
analysis of the comments received and CBP's responses to the public
comments will be addressed at a later date. In summary, of the eight
public comments, seven addressed the collection of data for Section 321
low-value shipments. Among these seven comments, five commenters
encouraged the automated clearance of Section 321 low-value shipments
using ACE and the collection of PGA data using a Section 321 de minimis
entry process.
Five of the commenters encouraged CBP to automate Section 321
clearance using ACE. These commenters pointed out that automating
Section 321 clearance through ACE will increase CBP's ability to
provide risk-based targeting of inbound shipments, assure supply chain
security, enforce trade laws, and protect intellectual property rights.
Various ACE clearance processes were suggested by the commenters,
including using the Automated Broker Interface (ABI) to allow the
owner, purchaser, consignee, or designated customs broker to file the
necessary information.
Most commenters also asserted that any ACE Section 321 clearance
process should allow for the submission of PGA data. One commenter
pointed out that unless Section 321 low-value shipments subject to PGA
requirements could be cleared under a Section 321 de minimis entry
process, the de minimis exemption would be of little use to the greater
public because a large percentage of these imported shipments are
regulated by PGAs. Commenters also noted that the primary purpose of
increasing the Section 321 administrative exemption was to benefit e-
commerce micro and small businesses engaging in global trade and the
vast majority of these businesses lack the capacity to comply with
complex trade rules.
CBP believes that the development of the new entry type 86
effectively addresses the public comments; facilitates legitimate trade
while also allowing CBP to enhance its targeting capabilities; ensures
that PGAs can identify potentially violative products for reporting or
enforcement targeting purposes while allowing filers to utilize a less
complex entry process; and decreases the challenges faced by CBP in
targeting, locating and examining Section 321 low-value shipments by
collecting necessary data. Processing Section 321 low-value shipments
in ACE utilizes the ``single window'' system, thereby granting all
government agencies involved with the importation of goods into the
United States access to data concerning the shipments and gives the
trade a single mechanism to enter data.
III. Authorization for the Test
The test described in this notice is authorized pursuant to 19 CFR
101.9(a), which grants the Commissioner of CBP the authority to impose
requirements different from those specified in the CBP regulations for
purposes of conducting a test program or procedure designed to evaluate
the effectiveness of new technology or operational procedures regarding
the processing of passengers, vessels, or merchandise, to the extent
that such different requirements do not affect the collection of the
revenue, public health, safety, or law enforcement.
The ACE Entry Type 86 Test allows CBP to test ACE functionality,
and to test the new operational procedures involved with the new entry
type, including any challenges that may result and any coordination
that is necessary with PGAs. Additionally, the test allows CBP to
determine if entry type 86 effectively addresses the threats and
complexities resulting from the global shift in trade to an e-commerce
platform and the vast increase in Section 321 low-value shipments, and
facilitates cross-border e-commerce.
IV. ACE Entry Type 86 Test Requirements
A Section 321 low-value shipment may be entered by the owner,
purchaser, or consignee of the shipment, or, when appropriately
designated by one of these persons, a customs broker licensed under 19
U.S.C. 1641. See 19 CFR 143.26(b). For purposes of the ACE
[[Page 2633]]
Entry Type 86 Test, CBP is deviating from this regulation and requiring
that consignees intending to file an entry type 86 appoint a customs
broker to act as the importer of record (IOR) for the shipment. All
customs brokers designated to enter a qualifying entry type 86 shipment
must be appointed through a valid power of attorney, and must comply
with all other applicable broker statutory and regulatory requirements.
See 19 CFR 141.46; see, e.g., 19 U.S.C. 1641; 19 U.S.C. 1484; 19 CFR
part 111; 19 CFR part 141. The filing of entry type 86 is considered
``customs business'' under 19 U.S.C. 1641.\2\
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\2\ Pursuant to 19 U.S.C. 1641, ``customs business'' is defined
as those activities involving transactions with CBP concerning the
entry and admissibility of merchandise, its classification and
valuation, the payment of duties, taxes, or other charges assessed
or collected by CBP on merchandise by reason of its importation, or
the refund, rebate, or drawback of those duties, taxes, or other
charges. ``Customs business'' also includes the preparation of
documents or forms in any format and the electronic transmission of
documents, invoices, bills, or parts thereof, intended to be filed
with CBP in furtherance of such activities, whether or not signed or
filed by the preparer, or activities relating to such preparation,
but does not include the mere electronic transmission of data
received for transmission to CBP.
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To participate in this test, an owner, purchaser, or customs broker
appointed by an owner, purchaser, or consignee will file an informal
entry type 86 in ACE through ABI. ABI allows participants to
electronically file all required import data with CBP, and transfers
that data into ACE. To participate in ABI, a filer must meet the
requirements and procedures set forth in 19 CFR part 143, subpart A,
and must meet the technical requirements set forth in the Customs and
Trade Automated Interface Requirements (CATAIR).\3\
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\3\ See General Notice of August 26, 2008 (73 FR 50337) for a
complete discussion on the procedures for obtaining an ACE Portal
Account.
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The test is open to all owners, purchasers, consignees, and
designated customs brokers of Section 321 low-value shipments,
including those subject to PGA requirements, imported by all modes of
cargo transportation, except mail. CBP encourages all eligible parties
to participate in this test to test the functionality of the new entry
type. Importers of Section 321 low-value shipments that do not contain
any PGA data requirements may continue to utilize the ``release from
manifest'' process or may utilize the ACE Entry Type 86 Test.
When filing an entry type 86, a bond and entry summary
documentation are not required. Under entry type 86, the importing
party is exempt from payment of the harbor maintenance tax and
merchandise processing fee for merchandise released as a Section 321
low-value shipment. See 19 CFR 24.23(c)(1)(v) and 24.24(d)(3). However,
any merchandise that is not exempt from the payment of any applicable
PGA duties, fees, or taxes imposed under applicable statute or
regulation by other agencies on imported goods does not qualify for
entry as a Section 321 low-value shipment. An entry type 86 filing that
is determined to owe any duties, fees, or taxes will be rejected by CBP
and must be refiled using the appropriate informal or formal entry
process. Additionally, CBP may require formal entry for any merchandise
if it is deemed necessary for import admissibility enforcement
purposes, revenue protection, or the efficient conduct of customs
business. See 19 CFR 143.22. Further clarification pertaining to CBP's
authority under 19 CFR 143.22 and the waiver of certain regulations
under the ACE Entry Type 86 Test can be found below in Section V.
An entry type 86 requires the owner, purchaser, or customs broker
appointed by the owner, purchaser, or consignee to file the following
data elements with CBP at any time prior to or upon arrival of, the
cargo:
(1) The bill of lading or the air waybill number;
(2) Entry number;
(3) Planned port of entry;
(4) Shipper name, address, and country;
(5) Consignee name and address;
(6) Country of origin;
(7) Quantity;
(8) Fair retail value in the country of shipment;
(9) 10-digit HTSUS number;
(10) IOR number of the owner, purchaser, or broker when designated
by a consignee (conditional).
The IOR number is a conditional ACE Entry Type 86 Test data element
and is required when the shipment is subject to PGA data reporting
requirements. The IOR number provided must be that of the shipment's
owner, purchaser, or broker when designated by a consignee.
Upon receipt of the data in an entry type 86 filing, CBP will
determine whether the shipment is subject to PGA data reporting
requirements. Any PGA data reporting requirements would be satisfied by
the PGA Message Set and the filing of any supporting documentation via
the Document Image System (DIS). The PGA Message Set enables the trade
community to electronically submit all data required by the PGAs only
once to CBP, eliminating the necessity for the submission and
subsequent manual processing of paper documents, and makes the required
data available to the relevant PGAs for import and transportation-
related decision making. See the December 13, 2013 Federal Register
notice (78 FR 75931) for a further discussion of the PGA Message Set
and the October 15, 2015 Federal Register notice (80 FR 62082) for a
further discussion of DIS.
A ``CBP release'' message indicates that CBP has determined that
the Section 321 low-value goods may be released from CBP custody. All
merchandise released by CBP is released conditionally and remains
subject to recall through the issuance of a Notice of Redelivery.
Merchandise that is regulated by one or more PGAs may not proceed into
commerce until CBP releases the merchandise and all PGAs that regulate
the merchandise have issued a ``may proceed'' message.
The definitions of the ACE data elements, the technical
requirements for submission, and information describing how filers
receive transmissions are set forth in the CATAIR guidelines for ACE,
which may be found at <a href="https://www.cbp.gov/trade/ace/catair">https://www.cbp.gov/trade/ace/catair</a>.
V. Waiver of Regulations Under the Test
For purposes of this test, 19 CFR 10.151 will be waived for test
participants only insofar as the informal entry procedures for
``release from manifest'' are inconsistent with the requirements in
this notice. Additionally, 19 CFR 128.21(a), 128.24(e), 143.23(j) and
(k), and 143.26(b) will be waived for test participants to the extent
such procedures are inconsistent with the requirements of this notice.
In addition, 19 CFR 141.5 is waived to the extent that it conflicts
with the requirement in this notice that entry type 86 be filed prior
to arrival, or upon arrival of the cargo. Regulations not specifically
waived by the ACE Entry Type 86 Test remain in full force, including
CBP's authority under 19 CFR 143.22 to require that any shipment, even
a low-value shipment that would otherwise be eligible for entry using
entry type 86, be formally entered instead. As noted below, if CBP
requires that a shipment be formally entered, the filer will have up to
15 days after arrival to file formal entry, consistent with 19 CFR
141.5 and 142.2(a).
Pursuant to 19 CFR 143.22, CBP has the authority to require that
any shipment, including a shipment for which an entry type 86 has been
filed, be formally entered instead. In particular, CBP may require
formal
[[Page 2634]]
entry for a shipment that would otherwise be eligible for informal
entry, including an entry type 86, if formal entry is ``deemed
necessary for import admissibility enforcement purposes; revenue
protection; or the efficient conduct of customs business.'' Id.
This notice clarifies that when CBP exercises its authority under
19 CFR 143.22 to require formal entry for a shipment, the entry type 86
filer will be notified that the entry type 86 filing will not be
accepted for purposes of making entry. In such circumstances, the
requirement to file entry within 15 days of the date of arrival for the
merchandise is not waived and will not be satisfied by the rejected
entry type 86 filing. 19 CFR 141.5; 19 CFR 142.2(a). In order to comply
with CBP's determination to require formal entry for a shipment, a
party with the right to make entry must file an entry and entry summary
in accordance with 19 CFR parts 141 and 142, which include the
associated filing timeframes and the requirement to obtain a bond. 19
CFR 142.4(a). Failure to timely file the requisite entry summary will
result in an immediate demand for liquidated damages in the entire
amount of the bond in the case of a single entry bond, or an equivalent
amount if a continuous bond was filed. 19 CFR 142.15.
VI. Comments
All interested parties are invited to comment on any aspect of this
test at any time. CBP requests comments and feedback on all aspects of
this test, including the design, conduct and implementation of the
test, in order to determine whether to modify, alter, expand, limit,
continue, end, or fully implement this new entry process.
VII. Paperwork Reduction Act
In accordance with the Paperwork Reduction Act of 1995 (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 the Office of
Management and Budget (OMB). The collections of information for the ACE
Entry Type 86 Test are included in an existing collection for CBP Form
3461 (OMB control number 1651-0024).
VIII. Misconduct Under This Test
A test participant may be subject to civil and criminal penalties,
administrative sanctions, or liquidated damages, as provided by law,
for any of the following:
(1) Failure to follow the rules, requirements, terms, and
conditions of this test;
(2) Failure to exercise reasonable care in the execution of
participant obligations; or
(3) Failure to abide by applicable laws and regulations that have
not been waived.
These penalties, administrative sanctions, and liquidated damages
may be imposed under any statutory authority or under any CBP
regulations that have not been waived by the test. CBP may suspend or
remove a filer from further participation in the ACE Entry Type 86 Test
based on a determination that that filer's participation in the test
poses an unacceptable compliance risk.
Dated: January 10, 2024.
AnnMarie R. Highsmith,
Executive Assistant Commissioner, Office of Trade.
[FR Doc. 2024-00698 Filed 1-12-24; 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.