CBP to Conduct a Voluntary Test Program For the Submission of Electronic FTZ Applications

Test will permit the electronic submission of the CBP Form 214 information. CBP states that its Electronic FTZ Admission Application test program permits a participant to submit an electronic version of the CBP Form 214 (FTZ Admission and/or Status Designation) to CBP via the Automated Broker Interface (ABI) of the Automated Commercial System (ACS).

CBP states that participants in the test must provide CBP with 40 specified data elements. CPB further states that test participants are responsible for the accuracy and completeness of all data transmitted under the prototype.

CBP states that any person not participating in the prototype will be required to submit a

paper CBP Form 214 pursuant to existing FTZ admission procedures.

Test is currently limited to air, sea, and rail. According to CBP, the test program is limited to electronic FTZ admission applications for merchandise reported to CBP via air, sea, and rail manifest.

CBP notes that it intends to implement a future phase of this test that will allow electronic FTZ admission applications for merchandise reported to CBP via truck manifest as soon as a CBP-approved electronic data interchange system exists for such transmissions.

Test to begin no earlier than Sept 30, 2005. CBP states that the test program will commence no earlier than September 30, 2005, and will run for a 6-month period with a final evaluation to take place at the end of the test period. CBP states that it may extend the prototype and any extension of the test will be announced in the Federal Register.

Eligible parties. CBP states that eligible participants in the Electronic FTZ Admissions Application test program include FTZ operators, FTZ admission applicants, and agents of FTZ admission applicants. CBP notes that participation in the test is voluntary and there are no application procedures.

Test procedures. CBP states that test participants must request permission to admit merchandise into a FTZ by electronically transmitting the CBP Form 214 data elements to CBP via ABI. (The data transmission may cover a single shipment of merchandise or be a consolidated transmission that covers multiple shipments to a single zone.)

CBP states that it must receive the CBP Form 214 before the merchandise can be released for admission into the FTZ, except for test participants who are authorized to use the FTZ direct delivery procedures (see below).

The test program will also incorporate transmissions of data on merchandise that is transported to a FTZ or from a FTZ if the data transmission is made via the CBP Form 7512 in-bond transaction or its electronic equivalent.

Upon approval of an electronic FTZ admission application, CBP will transmit electronic notice to the FTZ operator authorizing admission of the merchandise into the FTZ. As noted, this approval process does not apply to merchandise admitted to a FTZ under direct delivery procedures.

After CBP receives notice of the FTZ operator's decision to grant or deny admission, CBP will electronically transmit approval/denial to transfer the merchandise into the FTZ electronically to the test applicant or the applicant's agent, and to the carrier of the merchandise. CBP will also provide electronic notice to these parties as to whether the merchandise is subject to CBP examination. In addition, test program participants and carriers will be able to receive electronic notification concerning the status of an admission request.

A test participant whose FTZ admission application is rejected by CBP will be provided with an opportunity to correct the reported error. A complete re-transmission of the entire admission application through ABI is required by CBP.

Available actions for FTZ operators. Under the test program, CBP states that a FTZ operator will be able to accept or reject the merchandise, assume custodial responsibility for the accepted merchandise and report discrepancies between the documents covering the merchandise and the merchandise itself, admit zone status merchandise transferred from another zone, change zone status, admit domestic status merchandise, and transmit post admission inventory adjustment transactions via ABI.

FDA prior notice for food. CBP states that test participants, including those approved to participate under direct delivery procedures, must comply with the prior notice (PN) reporting requirements with respect to foods that are imported or offered for import into the U.S., as stipulated in Title III of the Public Health Security and Bioterrorism Preparedness and Responsive Act of 2002 (Bioterrorism Act).

Direct delivery procedures. CBP states that as a general rule, a test participant who is also authorized to use the direct delivery procedures prescribed in 19 CFR 146.39 to admit merchandise into a FTZ may transmit the required data to CBP on an electronic CBP Form 214 no later than the close of business on the business day following receipt of the merchandise into the FTZ inventory control and recordkeeping system.

With regard to direct delivery procedures under the test program, CBP states that two exceptions to the above rule are noted:

1. Direct delivery participants are subject to any applicable PN reporting requirements set forth in the Bioterrorism Act; and
2. In the absence of a CBP Form 7512 in-bond transaction authorizing direct delivery to the FTZ, or its electronic equivalent, a permit to transfer request must be electronically transmitted to CBP before the merchandise can be released for admission.

Statistical data to Census. CBP states that after permission to transfer merchandise into a FTZ is granted, CBP will transmit statistical data to the Bureau of the Census through an automated link.

Certain regulatory provisions suspended. CBP notes that Subpart C to 19 CFR part 146 (19 CFR 146.31- 146.40) prescribes the conditions applicable to admission of merchandise into a foreign trade zone. To the extent that certain provisions within subpart C to part 146 may be incompatible with the terms of this test program, the affected regulatory provisions will be suspended for the duration of the prototype test.

Penalties, sanctions, etc. for misconduct. CBP states that a test participant may be subject to civil and criminal penalties, administrative sanctions, liquidated damages, and/or suspension from this test for any of the following:

• Failure to abide by the terms and conditions of this test, and any applicable laws and regulations.
• Failure to exercise reasonable care in the execution of participant obligations.
• Misuse of the automated CBP Form 214 (i.e., engaging in unauthorized disclosure or any activity which interferes with the successful evaluation of the new technology).

Evaluation of test. CBP states that to ensure adequate feedback, participants are required to participate in an evaluation of this test. CBP also invites all interested parties to comment on the design, conduct and implementation of the test at any time during the test period.

CBP will publish the final results in the Federal Register and the CBP Bulletin as required by section 19 CFR 101.9 (b).

CBP states that the Electronic FTZ Admissions Application prototype is being tested in accordance with the regulations that provide for the testing of National Customs Automation Program (NCAP) planned components (19 CFR 101.9(b)).

CBP contact - Gary Rosenthal (gary.rosentahl@dhs.gov)

CBP general notice (FR Pub 08/19/05) available at

http://a257.g.akamaitech.net/7/257/2422/01jan20051800/edocket.access.gpo.gov/2005/pdf/05-16427.pdf.