[Federal Register: August 23, 2006 (Volume 71, Number 163)]
[Proposed Rules]
[Page 49391-49393]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr23au06-26]
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DEPARTMENT OF HOMELAND SECURITY
DEPARTMENT OF THE TREASURY
Bureau of Customs and Border Protection
19 CFR Parts 103, 178, and 181
[USCBP-2006-0090]
RIN 1505-AB58
NAFTA: Merchandise Processing Fee Exemption and Technical
Corrections
AGENCY: Customs and Border Protection, Department of Homeland Security;
Department of the Treasury.
ACTION: Notice of proposed rulemaking.
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SUMMARY: The current regulations in title 19 of the Code of Federal
Regulations allow CBP to collect a merchandise processing fee (MPF) on
imported shipments to recoup administrative expenses. However,
``originating merchandise'' that qualifies to be marked as goods of
Canada or of Mexico under the NAFTA are exempted from this fee. CBP is
proposing to amend the regulations to clarify that an importer is
subject to the same declaration requirement that is established for
claiming NAFTA duty preference in order to claim the exemption of the
MPF for goods that meet a NAFTA rule of origin even when the goods are
unconditionally free.
In addition, CBP is proposing to make several technical
corrections. CBP is proposing to amend the regulations to clarify that
a Certificate of Origin is not required for a commercial importation
for which the total value of originating goods does not exceed $2,500.
CBP is also proposing to remedy two incorrect addresses and an
incorrect Code of Federal Regulations citation.
DATES: Comments must be received on or before October 23, 2006.
ADDRESSES: You may submit comments, identified by docket number, by one
of the following methods:
Federal eRulemaking Portal: http://www.regulations.gov.
Follow the instructions for submitting comments via docket number
USCBP-2006-0090.
Mail: Trade and Commercial Regulations Branch, Office of
Regulations and Rulings, Bureau of Customs and Border Protection, 1300
Pennsylvania Avenue, NW., (Mint Annex), Washington, DC 20229.
Instructions: All submissions received must include the agency name
and docket number for this rulemaking. All comments received will be
posted without change to http://www.regulations.gov, 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 http://www.regulations.gov. Submitted comments
may also be inspected during regular business days between the hours of
9 a.m. and 4:30 p.m. at the Office of Regulations and Rulings, Bureau
of Customs and Border Protection, 799 9th Street, NW., 5th Floor,
Washington, DC. Arrangements to inspect submitted comments should be
made in advance by calling Joseph Clark at (202) 572-8768.
FOR FURTHER INFORMATION CONTACT: Seth Mazze, Trade Agreements Branch,
Office of Field Operations, (202) 344-2634.
SUPPLEMENTARY INFORMATION:
Public Participation
Interested persons are invited to participate in this rulemaking by
submitting written data, views, or arguments on all aspects of the
proposed rule. CBP also invites comments that relate to the economic,
environmental, or federalism effects that might result from this
proposed rule. Comments that will provide the most assistance to CBP in
developing these procedures will reference a specific portion of the
proposed rule, explain the reason for any recommended change, and
include data, information, or authority that support such recommended
change.
Background
On December 17, 1992, the United States, Canada, and Mexico entered
into the North American Free Trade Agreement (NAFTA). Among the stated
objectives of the NAFTA is the elimination of barriers to trade in, and
the facilitation of the cross-border movement of, goods and services
between the territories of the countries. The provisions of the NAFTA
were adopted by the United States with the enactment of the North
American Free Trade Agreement Implementation Act (``the Act,'' 19
U.S.C. 3301-3473). On September 6, 1995, Customs published Treasury
Decision (T.D.) 95-68 (North American Free Trade Agreement) in the
Federal Register (60 FR 46334), adopting amendments to the regulations
in title 19 of the Code of Federal Regulations (CFR) to implement
Customs-related aspects of the NAFTA. The final rule went into effect
on October 1, 1995. Sections 403(1) and 411 of the Homeland Security
Act of 2002 (Pub. L. 107-296) transferred the United States Customs
Service and certain of its functions from the Department of the
Treasury to the Department of Homeland Security; pursuant to section
1502 of the Act, the President renamed the ``Customs Service'' as the
``Bureau of Customs and Border Protection,'' also referred to as the
``CBP.''
Merchandise Processing Fee (MPF) Exemption
As a means of recouping administrative expenses for the processing
of imported shipments, CBP charges a merchandise processing fee (MPF),
as provided for in 19 U.S.C. 58c. However, under 19 U.S.C.
58c(b)(10)(B), for goods qualifying under the rules of origin set out
in 19 U.S.C. 3332, the fee may not be charged with respect to goods
that qualify to be marked as goods of Canada or of Mexico (pursuant to
Annex 311 of the NAFTA). In order to claim a NAFTA duty preference, an
importer must make a declaration. The same declaration is used to claim
the MPF exemption. That is, the importer must place the appropriate
special program indicator (e.g., ``CA'' for goods of Canada and ``MX''
for goods of Mexico) opposite the good on the entry form. The proposal
in this document addresses the situation in which an importer of an
originating good has no duty preference incentive to make the required
NAFTA declarations on the entry because the Normal Trade Relations rate
of duty on the good is free (i.e., the good is unconditionally duty
free). Accordingly, CBP is proposing to
[[Page 49392]]
amend 19 CFR 181.21(a) to clarify, consistent with existing law and CBP
practice, that in order to claim the MPF exemption for unconditionally
free goods from a NAFTA country, an importer of an originating good
must place the appropriate special program indicator opposite the good
on the entry form even though the importer is not claiming a NAFTA duty
preference.
Technical Corrections
Exemption From Providing Certificate of Origin
Section 181.22(b) of title 19, CFR (19 CFR 181.22(b)), requires an
importer who claims preferential tariff treatment on a good under 19
CFR 181.21 to provide, at the request of the port director, a copy of
each Certificate of Origin pertaining to the good which is in the
possession of the importer. Certain importations are exempted from this
requirement under 19 CFR 181.22(d). One of these exemptions, set forth
in section 181.22(d)(1)(iii) is for a commercial importation of a good
whose value does not exceed $2,500 if a signed statement is attached to
the invoice or other documents accompanying the shipment.
CBP has determined that 19 CFR 181.22(d)(1)(iii) should be amended
to clarify that the $2,500 value refers to the total value of a
shipment and not to the value of the individual goods in a shipment.
Accordingly, CBP is proposing to amend 19 CFR 181.22(d)(1)(iii) to
clarify that a Certificate of Origin is not required for a commercial
importation consisting of originating goods, the total value of which
does not exceed $2,500, if the required statement is attached.
Other Technical Corrections
CBP is also proposing to make several other technical corrections
to the regulations. In CBP Dec. 05-32, an Interim Rule published in the
Federal Register (70 FR 58009) on October 5, 2005, CBP redesignated 19
CFR 12.132 as 102.25. However, there is a reference to Sec. 12.132 in
Sec. 181.21(a). Accordingly, CBP is proposing to make a minor
conforming amendment to update this reference. In addition, because CBP
Dec. 05-32 removed the declaration requirement referenced in Sec. Sec.
12.130(c) and 12.132, CBP is proposing to remove the entries for these
sections in the list of OMB control numbers in Sec. 178.2. CBP is also
proposing to amend an incorrect citation to 19 CFR 181.72(a)(2)(iii) in
19 CFR 181.74(a). The correct citation is to Sec. 181.72(a)(3)(iii).
In addition, CBP is proposing to amend the address in 19 CFR 181.74(e)
for providing notification when the Canadian or Mexican customs
administration intends to conduct a NAFTA verification visit in the
U.S. in order to determine whether a good imported into the U.S.
qualifies as an originating good. The correct address is: ``Bureau of
Customs and Border Protection, Office of Field Operations, Special
Enforcement Division, 1300 Pennsylvania Ave., NW., Washington, DC
20229.'' CBP is also proposing to amend the National Commodity
Specialist Division (NCSD) address in 19 CFR 181.93(a) for the
submission of advance ruling requests under the NAFTA. The correct NCSD
address is: ``National Commodity Specialist Division, Bureau of Customs
and Border Protection, One Penn Plaza, 10th Floor, New York, NY
10119.'' This address is also corrected in the list of public reading
rooms in 19 CFR 103.1.
Signing Authority
The signing authority for this document falls under 19 CFR
0.1(a)(1).
Paperwork Reduction Act
Because those changes with possible paperwork implications proposed
in this document are merely clarifications of existing requirements,
there is no need to amend the paperwork burden for the number
previously approved by OMB for part 181 of title 19, CFR. The clearance
number for part 181 is 1651-0098.
Regulatory Flexibility Act and Executive Order 12866
Pursuant to the provisions of the Regulatory Flexibility Act (6
U.S.C. 601 et seq.), it is certified that the proposed amendments will
not have a significant economic impact on a substantial number of small
entities. CBP is proposing to merely clarify, consistent with existing
law and CBP practice, that an importer is subject to the same
declaration requirement that is established for claiming NAFTA duty
preference in order to claim the exemption of the MPF for goods that
meet a NAFTA rule of origin even when the goods are unconditionally
free. CBP is also proposing to merely clarify, consistent with current
CBP practice, that a Certificate of Origin is not required for a
commercial importation consisting of originating goods, the total value
of which does not exceed $2,500, if the required statement is attached.
Lastly, CBP is proposing to make other technical corrections to correct
two incorrect addresses and an incorrect Code of Federal Regulations
citation. For the same reasons, this document does not meet the
criteria for a significant regulatory action under Executive Order
12866.
List of Subjects
19 CFR Part 103
Administrative practice and procedure, Freedom of information.
19 CFR Part 178
Collections of information, Paperwork requirements, Reporting and
recordkeeping requirements.
19 CFR Part 181
Canada, Customs duties and inspection, Imports, Mexico, Trade
agreements (North American Free Trade Agreement).
Proposed Amendments to the Regulations
It is proposed to amend 19 CFR parts 103, 178, and 181 as set forth
below.
PART 103--AVAILABILITY OF INFORMATION
1. The authority citation for part 103 continues to read as
follows:
Authority: 5 U.S.C. 301, 552, 552a; 19 U.S.C. 66, 1624; 31
U.S.C. 9701.
2. Amend Sec. 103.1 by removing the address citation ``New York, 6
World Trade Center, New York, New York 10048'' and adding in its place
the address citation ``New York, One Penn Plaza, 10th Floor, New York,
NY 10119''.
PART 178--APPROVAL OF INFORMATION COLLECTION REQUIREMENTS
3. The authority citation for part 178 continues to read as
follows:
Authority: 5 U.S.C. 301; 19 U.S.C. 1624; 44 U.S.C. 3501 et seq.
4. Amend Sec. 178.2 by removing the entries for 12.130(c) and
12.132.
PART 181--NORTH AMERICAN FREE TRADE AGREEMENT
5. The authority citation for part 181 continues to read as
follows:
Authority: 19 U.S.C. 66, 1202 (General Note 3(i), Harmonized
Tariff Schedule of the United States), 1624, 3314.
6. Revise Sec. 181.21(a) to read as follows:
Sec. 181.21 Filing of claim for preferential tariff treatment upon
importation.
(a) Declaration. In connection with a claim for preferential tariff
treatment, or for the exemption from the merchandise processing fee,
for a good under the NAFTA, the U.S. importer shall make a written
declaration that the good
[[Page 49393]]
qualifies for such treatment. The written declaration may be made by
including on the entry summary, or equivalent documentation, the symbol
``CA'' for a good of Canada, or the symbol ``MX'' for a good of Mexico,
as a prefix to the subheading of the HTSUS under which each qualifying
good is classified. Except as otherwise provided in 19 CFR 181.22 and
except in the case of a good to which Appendix 6.B to Annex 300-B of
the NAFTA applies (see also 19 CFR 102.25), the declaration shall be
based on a complete and properly executed original Certificate of
Origin, or copy thereof, which is in the possession of the importer and
which covers the good being imported.
* * * * *
7. Amend Sec. 181.22(d)(1)(iii) by removing the phrase ``of a good
whose value'', and adding in its place the phrase ``for which the total
value of originating goods''.
8. Amend Sec. 181.74 by:
a. In paragraph (a), removing the citation ``181.72(a)(2)(iii)''
and adding in its place the citation ``181.72(a)(3)(iii)''; and
b. In paragraph (e), removing the address citation ``Project North
Star Coordination Center, P.O. Box 400, Buffalo, New York 14225-0400''
and adding in its place the address citation ``Bureau of Customs and
Border Protection, Office of Field Operations, Special Enforcement
Division, 1300 Pennsylvania Ave., NW., Washington, DC 20229''.
9. Amend Sec. 181.93(a) by removing the address citation
``National Commodity Specialist Division, United States Customs
Service, 6 World Trade Center, New York, NY 10048'' and adding in its
place the address citation ``National Commodity Specialist Division,
Bureau of Customs and Border Protection, One Penn Plaza, 10th Floor,
New York, NY 10119''.
Dated: August 17, 2006.
Deborah J. Spero,
Acting Commissioner, Customs and Border Protection.
Timothy E. Skud,
Deputy Assistant Secretary of the Treasury.
[FR Doc. E6-13947 Filed 8-22-06; 8:45 am]
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