CBP Withdraws Proposed Rule to "Expand" Weekly Entry Procedure for Foreign Trade Zones
U.S. Customs and Border Protection (CBP) has issued a notice announcing that it is withdrawing a proposed rule issued on July 25, 2002 by its predecessor, the Customs Service. Customs had proposed amending 19 CFR 146.63(c) to delineate certain practices, procedures, and filer obligations under an expanded weekly entry procedure for foreign trade zones (FTZs) that was enacted by Section 410 of the Trade and Development Act of 2000 (2000 Act).
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Certain Aspects of FTZ Expanded Weekly Entry Procedure Were Implemented by the 2000 Act, No Need for Regulations
According to the notice and CBP sources, certain aspects of the expanded FTZ weekly entry procedure were implemented by the 2000 Act, without the need for regulations. Specifically, Section 410 expanded the weekly entry system beyond its previous coverage (assembly-line type production operations) to allow all merchandise (except prohibited merchandise or quota class merchandise, etc.) withdrawn from an FTZ during any 7-day period to be the subject of a single estimated entry or release.
Section 410 also provided that merchandise falling within this expanded procedure is eligible for treatment as a single estimated entry or release of merchandise for purposes of the merchandise processing fee (MPF).
However, CBP sources state that other aspects of the expanded FTZ weekly entry procedure were not implemented by the 2000 Act and therefore implementing regulations are required. Specifically, Section 410 authorized the Secretary of the Treasury to require that FTZ operators or users employ a CBP-approved electronic data interchange (EDI) system to file entries and pay applicable duties, fees, and taxes with respect to the entries.
Proposed Rule Would Have Applied to Consumption Entries Only, Would Have Required ABI Entry/ABI Summary/ACH Payment, Etc.
According to the July 2002 proposed rule, the expanded weekly entry procedure would have been limited to merchandise removed from an FTZ for consumption. In addition, CBP had proposed, among other things, that all weekly entries covering estimated removals of merchandise from an FTZ for any consecutive 7-day period, and the associated entry summaries, would have to be filed exclusively through the Automated Broker Interface (ABI) with duties, fees and taxes scheduled for payment through the Automated Clearinghouse (ACH).
Comments Alleged that Rulemaking Was Not Needed, Etc.
CBP states that most commenters objected to the iproposed rule because, in their view, the legislation was self-implementing and no regulations were necessary to give the law effect. The commenters were also uniformly critical of the proposed rule's limitation to consumption entries, and expressed the view that the 2000 Act was intended to permit the use of weekly entry procedures for other types of entries (i.e., zone-to-zone transfers, transfer for transportation and transportation for exportation).
CBP to Continue to Assess Feasibility of a More Comprehensive Regulatory Scheme for FTZ Removals
In view of the comments received, and following further consideration of the matter, CBP states that it has determined to withdraw the July 2002 proposed rule. According to CBP, it will continue to assess the feasibility of a more comprehensive regulatory scheme for zone removals in cooperation with interested members of the public.
(In September 2000, Customs issued a memorandum containing revised guidelines on the implementation of the 2000 Act's expanded weekly entry procedure for FTZs. See ITT's Online Archives or 11/08/00 news, 00110728, for BP summary of Customs' September 2000 memorandum. A faxed copy of the 2000 memorandum is available by emailing a request to documents@brokerpower.com.)
(See ITT's Online Archives or 08/05/02 news, 02080500, for BP summary of Customs' July 2002 proposed rule.)
CBP contact - William Rosoff (202) 572-8807
CBP withdrawal of proposed rule (FR Pub 06/07/05) available at http://a257.g.akamaitech.net/7/257/2422/01jan20051800/edocket.access.gpo.gov/2005/pdf/05-11261.pdf