Section 321 Data Pilot
| Published date | 23 July 2019 |
| Citation | 84 FR 35405 |
| Record Number | 2019-15625 |
| Section | Notices |
| Court | U.s. Customs And Border Protection |
Federal Register, Volume 84 Issue 141 (Tuesday, July 23, 2019)
[Federal Register Volume 84, Number 141 (Tuesday, July 23, 2019)]
[Notices]
[Pages 35405-35409]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2019-15625]
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DEPARTMENT OF HOMELAND SECURITY
U.S. Customs & Border Protection
Section 321 Data Pilot
AGENCY: U.S. Customs and Border Protection, DHS.
ACTION: General notice.
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SUMMARY: This document announces that U.S. Customs and Border
Protection (CBP) is conducting a voluntary test to collect certain
advance data related to shipments potentially eligible for release
under section 321 of the Tariff Act of 1930, as amended. Section 321
provides for an administrative exemption from duty and taxes for
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. Pursuant to this test, participants will electronically
transmit certain data elements pertaining to these shipments to CBP in
advance of arrival. CBP is conducting this test to determine the
feasibility of requiring advance data from different types of parties
and requiring additional data that is generally not required under
current regulations in order to effectively identify and target high-
risk shipments in the e-commerce environment. Participants may be non-
traditional CBP partners, such as online marketplaces. This notice
describes the purpose of the
[[Page 35406]]
test and test procedures, and sets forth the eligibility requirements
for participation. This test will be known as the Section 321 Data
Pilot.
DATES: The voluntary pilot will begin on August 22, 2019 and run for
approximately one year. CBP will accept applications from prospective
pilot participants at any time, including after the pilot commences,
until CBP has identified a sufficient number of eligible participants.
ADDRESSES: Prospective pilot participants should submit an email to [email protected]. In the subject line of your
email please indicate ``Application for Section 321 Data Pilot.'' For
information on what information to include in the email, see section
II.D (Application Process and Acceptance) of the SUPPLEMENTARY
INFORMATION heading below.
FOR FURTHER INFORMATION CONTACT: Laurie Dempsey, Director, IPR & E-
Commerce Division at [email protected] or 202-615-0514 and
Daniel Randall, Branch Chief, Manifest & Conveyance Security at 202-
344-3282.
SUPPLEMENTARY INFORMATION:
I. Background and Purpose of the Pilot
A. Current Requirements
CBP has broad authority to collect advance data and inspect cargo
crossing the border for health, safety, and other risks pursuant to
various statutory authorities. See, e.g., 6 U.S.C. 211(c) and (g); 19
U.S.C. 482, 1461, 1589a, 1595a; see also 19 CFR 162.6. Currently, CBP
requires the electronic transmission of certain information relating to
commercial cargo prior to its arrival in the United States. Section
343(a) of the Trade Act of 2002, as amended, authorizes CBP to
promulgate regulations, in accordance with certain parameters,
providing for the mandatory transmission of cargo information before
the cargo is brought into or departs the United States by any mode of
commercial transportation. Public Law 107-210, 116 Stat. 933 (Aug. 6,
2002) (codified at 19 U.S.C. 1415). The required cargo information is
that which is reasonably necessary to enable high-risk cargo to be
identified for purposes of ensuring cargo safety and security pursuant
to the laws enforced and administered by CBP. Accordingly, CBP
promulgated regulations in title 19 of the Code of Federal Regulations
(19 CFR) to require carriers or other eligible parties to submit
certain data for cargo in advance, regardless of the mode of
transportation. See 68 FR 68140 (Dec. 5, 2003); 19 CFR 4.7 (vessel),
122.48a (air), 123.91 (rail), and 123.92 (truck). Although the required
data elements differ depending on the mode of transportation and the
type of shipment, the carrier generally must transmit information such
as the shipper name and address, the consignee name and address, a
description of the cargo, including the cargo's quantity and weight,
and information regarding the cargo's trip, such as trip/flight number,
carrier code, point of arrival and point of origin.
The Air Cargo Advance Screening (ACAS) regulations, also issued
pursuant to the Trade Act of 2002, impose additional requirements for
cargo arriving by air. See 19 CFR 122.48b. The ACAS regulations require
carriers or other eligible parties to transmit a subset of the data
required by the Trade Act of 2002 earlier in the process (i.e., as soon
as practicable, but no later than prior to loading the cargo into an
aircraft). See 19 CFR 122.48b(b)(1). Pursuant to the ACAS regulations,
air carriers must transmit the following data elements prior to
loading: Shipper name and address, consignee name and address, cargo
description, total quantity, total weight, and air waybill number. 19
CFR 122.48b(d)(1).\1\
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\1\ The above-listed data elements are mandatory in all
circumstances. Carriers or other ACAS filers may also be required to
transmit an additional data element, depending on the circumstances,
and are encouraged to transmit additional data elements. 19 CFR
122.48b(d).
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The Security and Accountability for Every Port Act of 2006 (SAFE
Port Act) authorizes CBP to promulgate regulations to require the
electronic transmission of additional data elements for improved high-
risk targeting for cargo arriving by vessel. Public Law 109-347, 120
Stat. 1884 (Oct. 13, 2006) (codified at 6 U.S.C. 901 note). CBP
promulgated regulations to require importers and carriers to submit
additional data, in addition to the data required by the Trade Act
regulations, for cargo arriving by vessels before the cargo is brought
to the United States. See 19 CFR part 149 (the Importer Security Filing
or ISF regulations). The data required by the ISF regulations differs
depending on the type of shipment, but generally includes the name and
address of the seller, buyer, and manufacturer or supplier, the
consignee identifying number, the ship to party (the first deliver-to
party scheduled to receive the goods after the goods have been released
from customs custody), country of origin, Harmonized Tariff Schedule of
the United States (HTSUS) number, container stuffing location, and the
name and address of the consolidator. 19 CFR 149.3(a).
CBP uses the advance electronic data transmitted pursuant to these
authorities to identify and target high-risk shipments of commercial
cargo arriving in the United States.
B. Section 321 Shipments
Section 321(a)(2)(C) of the Tariff Act of 1930, as amended,
authorizes CBP to provide an administrative exemption to admit free
from duty and tax 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. 19 U.S.C. 1321(a)(2)(C). CBP regulations provide
that, subject to the conditions in 19 CFR 10.153, the port director
shall pass free of duty and tax any shipment of merchandise imported by
one person on one day having a fair retail value in the country of
shipment not exceeding $800, unless there is a reason to believe the
shipment is one of several lots covered by a single order or contract,
and was sent separately for the express purpose of securing free entry
or of avoiding compliance with any pertinent law or regulation. 19 CFR
10.151.
Prior to the enactment of the Trade Facilitation and Trade
Enforcement Act (TFTEA) (Pub. L. 114-125, 130 Stat. 223 (Feb. 24,
2016)), the Section 321 exemption applied only to shipments valued at
less than $200. Section 901(a) of TFTEA amended Section 321(a)(2)(C) of
the Tariff Act of 1930 to raise the de minimis threshold from $200 to
$800. See Public Law 114-125, 130 Stat. 223 (Feb. 24, 2016); 19 U.S.C.
1321(a)(2)(C). This has greatly increased the number of shipments
qualifying for the Section 321 exemption. Currently, approximately 1.8
million shipments a day are released pursuant to Section 321. The
majority of these Section 321 shipments are arriving by air and truck.
C. Purpose of the Section 321 Data Pilot
CBP faces significant challenges in targeting Section 321
shipments, while still maintaining the clearance speeds the private
sector has come to expect. This is because CBP does not receive
adequate advance information in order to effectively and efficiently
assess the security risk of the approximately 1.8 million Section 321
shipments that arrive each day.
In the e-commerce environment, traditionally regulated parties,
such as carriers, are unlikely to possess all of the information
relating to a shipment's supply chain. While CBP receives some advance
electronic data for Section 321
[[Page 35407]]
shipments from air, rail, and truck carriers (and certain other parties
in limited circumstances) as mandated by current regulations described
above in section I.A (Current Requirements), the transmitted data often
does not adequately identify the entity causing the shipment to cross
the border, the final recipient, or the contents of the package.
Consequently, CBP may not receive any advance information on the entity
actually causing the shipment to travel to the United States, such as
the seller or manufacturer. Some carriers may not have this information
because sellers on e-commerce platforms often contract with other
entities to act as the seller. Similarly, for the consignee's name and
address, a carrier might transmit information for the domestic
deconsolidator, which will not allow CBP to identify in advance of
arrival, the final recipient of the merchandise in the United States.
With the growth of e-commerce, shipments are increasingly subject to
these complex transactions, where information about the shipment is
limited. As a result, CBP is less able to effectively target or
identify high-risk shipments in the e-commerce environment and CBP
Officers must use additional time and resources to inspect Section 321
shipments upon arrival.
CBP anticipates that Section 321 shipments will continue to grow
exponentially. Accordingly, CBP is initiating this voluntary Section
321 Data Pilot to test the feasibility of obtaining advance information
from regulated and non-regulated entities, such as online marketplaces,
as well as requiring additional advance data elements. Online
marketplaces are internet-based entities that facilitate e-commerce by
(1) connecting third-party sellers with consumers and (2) receiving and
processing payment information from consumers, including receiving and
processing payments on behalf of the third-party sellers. Online
marketplaces generally have detailed information regarding Section 321
shipments, including information relating to the party causing the
product to travel to the United States, the final recipient in the
United States, and detailed descriptions and pictures of the contents
of the shipment. Online marketplaces may also assign sellers with
unique identifiers or develop their own known seller programs. This
test will enable CBP to assess the ability of online marketplaces to
transmit information to CBP that enables CBP to better utilize
resources used in inspecting and processing these shipments and better
understand the operation of online marketplaces.
Additionally, CBP is testing whether the transmission of additional
advance data, beyond the data elements currently required for shipments
arriving by air, truck, or rail under the authorities cited above in
section I.A (Current Requirements), will enable CBP to more accurately
and efficiently target Section 321 shipments. Pursuant to this test,
participants will provide information that identifies the entity
causing the shipment to cross the border, the ultimate recipient, and
the product in the shipment with greater specificity, in advance. CBP
will test the feasibility of using the additional data elements,
transmitted by multiple entities for a single shipment, to segment
risk. For example, CBP may compare a picture of the product
(transmitted by an online marketplace) to an x-ray image of the package
(transmitted by the carrier) to determine if the picture of the product
and x-ray image match. In sum, the pilot will enable CBP to determine
if requiring additional data and involving non-regulated entities will
enable CBP to address the threats and complexities resulting from the
vast increase in Section 321 shipments, while facilitating cross-border
e-commerce.
II. Description of the Section 321 Data Pilot
The Section 321 Data Pilot is a voluntary test that will enable
participants to electronically transmit to CBP certain information
regarding Section 321 shipments prior to the shipment's arrival in the
United States. CBP will use the advance information to improve CBP's
ability to effectively and efficiently identify and target high-risk
shipments, including for narcotics, counter-proliferation, and health
and safety risks. CBP will select pilot participants from eligible
applicants engaged in e-commerce, including carriers, brokers, and
freight forwarders, as well as online marketplaces. Further details
about the eligibility requirements and application process are provided
in section II.C (Eligibility Requirements) and section II.D
(Application Process and Acceptance) below.
Participants in the pilot will electronically transmit certain data
elements specified below in section II.A (Data Elements) in addition to
other data elements as available and at the participant's discretion.
CBP must receive the data elements prior to the shipment's arrival in
the United States. Participants may electronically transmit the
requested information through an existing point-to-point connection
with CBP. Alternatively, participants may authorize a carrier or broker
participating in the pilot and who has an existing point-to-point
connection with CBP to transmit the information on their behalf. For
additional information on technology requirements, see section II.C
(Eligibility Requirements) below. CBP will respond to the data
transmissions with a confirmation of receipt and will use the
transmitted information to conduct risk assessments. Risk assessment
for each shipment will be based on multiple transmissions, as each
transmission can be from different parties providing different data
elements at various stages in the supply chain. Messages will be
maintained in the Automated Targeting System (ATS).
The Section 321 Data Pilot will not affect any current requirements
and CBP is not waiving any regulations for purposes of the pilot,
including all the regulations pertaining to the provision of advance
data cited above, including the ACAS and ISF regulations. All of the
existing Trade Act of 2002 requirements and all manifest requirements
continue to apply. Additionally, CBP will not use the information
transmitted pursuant to the pilot for entry or release purposes, and
pilot participants cannot rely on information transmitted through the
pilot for entry or release purposes.
A. Data Elements
Participants in the Section 321 Data Pilot must transmit certain
information for any Section 321 shipments destined for the United
States for which the participant has information. (For additional
information on the types of shipments included in the pilot, see
section II.B (Duration and Scope of the Pilot)). The required data
elements differ slightly depending on what entity is transmitting the
data. In general, the required data relates to the entity initiating
the shipment (e.g., the entity causing the shipment to cross the
border, such as the seller, manufacturer, or shipper), the product in
the package, the listed marketplace price, and the final recipient
(e.g., the final entity to possess the shipment in the United States).
The data elements are as follows.
1. All participants. All participants, regardless of filer type,
must electronically transmit the following elements:
Originator Code of the Participant (assigned by CBP)
Participant Filer Type (e.g., carrier or online marketplace)
One or more of the following:
[cir] Shipment Tracking Number
[cir] House Bill Number
[cir] Master Bill Number
[[Page 35408]]
Mode of Transportation (e.g., air, truck, or rail)
2. Participating carriers. In addition to the data elements listed
above in paragraph 1, participating carriers must also electronically
transmit the following data elements:
Shipment Initiator Name and Address (e.g., the entity that
causes the movement of a shipment, which may be a seller, shipper, or
manufacturer, but not a foreign consolidator)
Final Deliver to Party Name and Address (e.g., the final
entity to receive the shipment once it arrives in the United States,
which may be a final purchaser or a warehouse, but not a domestic
deconsolidator)
Enhanced Product Description (e.g., a description of a product
shipped to the United States more detailed than the description on the
manifest, which should, if applicable, reflect the advertised retail
description of the product as listed on an online marketplace)
Shipment Security Scan (air carriers only) (e.g., verification
that a foreign security scan for the shipment has been completed such
as an x-ray image or other security screening report)
Known Carrier Customer Flag (e.g., an indicator that
identifies a shipper as a repeat customer that has consistently paid
all required fees and does not have any known trade violations)
3. Participating online marketplaces. In addition to the data
elements listed above in paragraph 1, participating online marketplaces
must electronically submit the following data elements:
Seller Name and Address (e.g., an international or domestic
company that sells products on marketplaces and other websites), and,
if applicable, Shipment Initiator Name and Address (as defined in
Section II.A.2)
Final Deliver to Party Name and Address (as defined in Section
II.A.2)
Known Marketplace Seller Flag (e.g., an indicator provided by
a marketplace that identifies a seller as an entity vetted by the
marketplace and has no known trade violations)
Marketplace Seller Account Number/Seller ID (e.g., the unique
identifier a marketplace assigns to sellers)
Buyer Name and Address, if applicable (e.g., the purchaser of
a good from an online marketplace. This entity is not always the same
as the final deliver to party.)
Product Picture (e.g., picture of the product presented on an
online marketplace), Link to Product Listing (e.g., an active and
direct link to the listing of a specific product on an online
marketplace), or Enhanced Product Description (as defined in Section
II.A.2)
Listed Price on Marketplace (e.g., the retail price of a
product that a seller lists while advertising on an online marketplace.
For auction marketplaces, this price is the price of final sale.)
Different entities may transmit different data elements for the
same shipment.
B. Duration and Scope of the Pilot
The pilot will begin on August 22, 2019 and operate for
approximately one year.
The pilot applies to each Section 321 shipment destined for the
United States, arriving by air, truck, or rail, for which the selected
participants have information. The pilot will operate in all ports of
entry utilized by the participants for Section 321 shipments. The pilot
does not apply to any mail shipments covered by 19 CFR part 145,
shipments arriving by ocean, or shipments destined for a Foreign Trade
Zone.
C. Eligibility Requirements
CBP is seeking participation from stakeholders in the e-commerce
environment, including carriers, brokers, freight forwarders, as well
as online marketplaces. There are no restrictions with regard to
organization size, location, or commodity type. Additionally, online
marketplaces do not need to offer delivery logistic services in order
to participate in the pilot. However, participation is limited to those
parties with sufficient information technology infrastructure and
support, as described below. Prospective pilot participants will need
to assess whether they can fulfill the following eligibility
requirements:
Technical capability to electronically submit data to CBP
and to receive messaging responses via an existing point-to-point
connection with CBP. Alternatively, participants may authorize a
carrier or broker participating in the pilot and who has an existing
point-to-point connection with CBP to transmit the information on their
behalf.
Participants who establish a new point-to-point connection
with CBP will need to sign an Interconnect Security Agreement (ISA) or
amend their existing ISA, if necessary, and adhere to security policies
defined in the DHS 4300a security guide.
D. Application Process and Acceptance
Those interested in participating in the pilot should submit an
email to [email protected], stating their
interest and their qualifications based on the above eligibility
requirements. Online marketplaces should indicate the extent to which
they have information related to the delivery logistics of the products
sold on their website. The email should also include a point of
contact. The email will serve as an electronic signature of intent. CBP
will accept applications from prospective pilot participants at any
time, including after the pilot commences, until CBP has identified a
sufficient number of eligible participants. Specifically, CBP is
looking for pilot participants to include one or more carriers and one
or more online marketplaces. Applications will be processed in the
order in which they are received. Once applications are processed,
those selected as participants will be notified by email. The pilot
will initially be limited to 9 participants but CBP may expand the
pilot to additional participants in the future.
E. Costs to Pilot Participants
The costs of pilot participation will vary depending on the pre-
existing infrastructures of the participants. Costs may include
communication requirements, such as transmission and receipt of data,
as well as cost associated with collecting the required information.
Participants are encouraged to keep track of the costs incurred by
their participation in the pilot.
F. Benefits to Pilot Participants
While the benefits of participation may vary, one benefit is that,
where appropriate, CBP may expedite clearances for low-risk Section 321
shipments when sufficient test data has been received prior to the
shipment's arrival.
G. Evaluation of the Pilot
After the end of the pilot, CBP will evaluate the results of the
pilot and determine whether to extend the duration of the pilot and/or
expand the pilot to include additional participants. Additionally, CBP
will evaluate the results of the pilot to determine whether additional
mandatory advance reporting requirements are necessary in the e-
commerce environment.
III. Authority
This pilot is conducted pursuant to 19 CFR 101.9(a), which
authorizes the Commissioner to impose requirements different from those
specified in the
[[Page 35409]]
CBP regulations for the 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.
IV. Privacy
CBP will ensure that all Privacy Act requirements and applicable
policies are adhered to during the implementation of this pilot.
V. Paperwork Reduction Act
The Paperwork Reduction Act (PRA) of 1995 (44 U.S.C. 3507(d))
requires that CBP consider the impact of paperwork and other
information collection burdens imposed on the public. The PRA applies
to collections of information imposed on ``ten or more persons.'' This
pilot will initially include fewer than ten participants and as such
will not require an OMB control number. If CBP expands the pilot to
include ten or more persons, CBP will adhere to the requirements of the
PRA.
VI. Misconduct Under the Pilot
A pilot participant may be subject to civil and criminal penalties,
administrative sanctions, liquidated damages, or discontinuance from
participation in the Section 321 Data Pilot for any of the following:
(1) Failure to follow the rules, terms, and conditions of this
pilot;
(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.
If the Director, Intellectual Property Rights and E-Commerce
Division, Office of Trade, finds that there is a basis for
discontinuance of pilot participation privileges, the pilot participant
will be provided a written notice proposing the discontinuance with a
description of the facts or conduct warranting the action. The pilot
participant will be offered the opportunity to appeal the decision in
writing within 10 calendar days of receipt of the written notice. The
appeal of this determination must be submitted to the Executive
Director, Trade Policy and Programs, Office of Trade, by emailing [email protected].
The Executive Director, Trade Policy and Programs, Office of Trade,
will issue a decision in writing on the proposed action within 30
working days after receiving a timely filed appeal from the pilot
participant. If no timely appeal is received, the proposed notice
becomes the final decision of the Agency as of the date that the appeal
period expires. A proposed discontinuance of a pilot participant's
privileges will not take effect unless the appeal process under this
paragraph has been concluded with a written decision adverse to the
pilot participant.
In cases of willfulness or those in which public health, interest,
or safety so requires, the Director, Intellectual Property Rights and
E-Commerce Division, Office of Trade, may immediately discontinue the
pilot participant's privileges upon written notice to the pilot
participant. The notice will contain a description of the facts or
conduct warranting the immediate action. The pilot participant will be
offered the opportunity to appeal the decision within 10 calendar days
of receipt of the written notice providing for immediate
discontinuance. The appeal of this determination must be submitted to
the Executive Director, Trade Policy and Programs, Office of Trade, by
emailing [email protected].
The immediate discontinuance will remain in effect during the
appeal period. The Executive Director, Trade Policy and Programs,
Office of Trade, will issue a decision in writing on the discontinuance
within 15 working days after receiving a timely filed appeal from the
pilot participant. If no timely appeal is received, the notice becomes
the final decision of the Agency as of the date that the appeal period
expires.
Date: July 18, 2019.
Robert E. Perez,
Deputy Commissioner, U.S. Customs and Border Protection.
[FR Doc. 2019-15625 Filed 7-22-19; 8:45 am]
BILLING CODE 9111-14-P
