Details of CBP Final Rule on Remote Location Filing, Discontinuation of PAIRED

U.S. Customs and Border Protection has issued a final rule which amends 19 CFR Parts 111, 113, 141, 142, and 143, effective January 29, 2010, in order to make Remote Location Filing (RLF) permanent, instead of a prototype test¹ as it is currently.

Making RLF a regulatory program will clarify and harmonize RLF requirements and provide the operational groundwork for the Automated Commercial Environment.²

This final rule also amends 19 CFR Part 141, effective January 29, 2010, to discontinue the "PAIRED" (Port of Arrival Immediate Release and Enforcement Determination) entry program.

(RLF is currently limited to types 01 and 11 consumption entries. It is a voluntary program that allows customs brokers with national permits to electronically file those consumption entries and related information that CBP can process in a completely electronic data interchange system, from a location other than where the goods will arrive in the U.S.)

Highlights of Comments

Fourteen commenters responded to CBP's request for comments on its RLF proposed rule. Highlights of CBP's responses to those comments include the following (partial list):

More Entry Types in Future

CBP anticipates that upon the total integration of the major cargo and entry summary functionalities into ACE, the expansion of RLF will be fully realized and will incorporate most entry types (and not be limited to entry types 01 and 11).

Adding RLF-Operational Locations

CBP states that prospective ports that are chosen to be added to RLF must at a minimum have appropriate electronic entry processing capabilities. CBP may also take into consideration factors such as trade interest and whether CBP personnel have been trained in RLF procedures at a particular location. Filers are encouraged to contact the CBP RLF Program Manager at remote.filing@dhs.gov to suggest possible port additions.

Need for Uniform Processing

CBP is in the process of updating internal RLF standard operating procedures and training materials which will help achieve a higher level of proficiency and uniformity in RLF processing skills at RLF-operational ports.

RLF Eligibility Criteria Expanded to Include Importers

In a change from the proposed rule, the automation criteria in 19 CFR 143.43 for RLF eligibility now includes licensed customs brokers and importers of record.

"Customs Business"

CBP corrected the proposed rule's text for 19 CFR 141.61(a) to indicate that the certification of the entry and entry summary is "customs business" and can be done only by the importer of record or the duly authorized customs broker. CBP also modified the proposed rule's text to indicate that the importer of record, customs broker, or a duly authorized agent must be resident in the U.S. for purposes of receiving service of process. (CBP noted that this rulemaking did not address the issue of whether entries can be filed from outside the U.S.)

Problem of Duplicate Entries at ECCFs

Regarding the problem of duplicate entries resulting from situations where importers retain an outside broker instead of using the Express Consignment Carrier/Courier Hub Facility (ECCF) designated "in-house" broker, CBP stated that this issue cannot be addressed in this rulemaking.

CBP noted, however, that as importers are obligated to use reasonable care in making an entry, the U.S. purchaser and the foreign shipper are obligated to coordinate with each other as to which of them will be responsible for entering the foreign merchandise covered by their transaction. Brokers are obligated to exercise reasonable supervision over the customs business they perform and are obligated to ask whether an entry is being made on behalf of the foreign shipper or the U.S. purchaser. If the parties to the transaction meet these legal obligations, the issue of duplicate entries being made on the same merchandise should not occur. However, where duplicate entries are filed, filers may remedy this through CBP's established entry cancellation procedures.

Discontinuation of PAIRED

The PAIRED program was implemented in 1987 for merchandise entered at other than the port of arrival, in order to reduce the costs associated with maintaining the transportation in-bond system. In 1993, Congress directed that PAIRED be discontinued upon the implementation of RLF. CBP adds that the continuation of PAIRED is not conducive to its homeland security objectives or modernization initiatives.

(According to a commenter, AD/CV entries, quota entries, single bond entries, and paper filing entries required by certain Other Government Agencies (OGAs) are permitted under PAIRED, but not under RLF. However, CBP anticipates that ACE will deliver major release and entry summary processing soon, which will provide some of the benefits that those participating in PAIRED will lose. See ITT's Online Archives or 12/30/09 news, 09123015, for BP summary of CBP's notice on ACE test of ESAR III (AD/CV entries and case management.)

Highlights of Final Rule

The final rule includes the following new or amended regulatory provisions (partial list):

RLF Applicability

1. CFR 143.41 states that new Subpart E (143.41-143.45) sets forth the general requirements and procedures for RLF. In addition, RLF entries are subject to the documentation, document retention, and document retrieval requirements of 19 CFR, as well as the general entry requirements in 19 CFR Parts 141, 142, and 143. Participation in the RLF system is voluntary and at the option of the filer.

Definitions for RLF and RLF Location, Etc.

1. CFR 143.42 sets forth the following two definitions for purposes of Subpart E and provides that the definitions set forth in 19 CFR 143.32 (Electronic Entry Filing) also apply to Subpart E:

Remote Location Filing is defined as an elective method of making entry by which a customs broker with a national permit electronically transmits all data information associated with an entry that CBP can process in a completely electronic data interchange system to a RLF-operational CBP location from a remote location other than where the goods are being entered. (Importers filing on their own behalf may file electronically in any port, subject to Automated Broker Interface (ABI) filing requirements.)

RLF-operational CBP location means a CBP location within the customs territory of the U.S. that is staffed with CBP personnel who have been trained in RLF procedures and who have operational experience with the Electronic Invoice Program (EIP). A list of all RLF-operational locations is available for viewing at www.cbp.gov/xp/cgov/trade/trade_programs/remote_location_filing/.

RLF Eligibility Requirements

1. CFR 143.43 sets forth the eligibility criteria for participation in RLF. To be eligible for RLF:

a licensed customs broker or importer of record must be operational on: (1) the Automated Broker Interface (ABI), (2) the EIP prior to applying for RLF, and (3) the Automated Clearinghouse (ACH) (or any other CBP-approved method of electronic payment), for purposes of directing the electronic payment of duties, taxes and fees, 30 days before transmitting a RLF entry;

a licensed customs broker must hold a valid national permit; and

a RLF entry must be secured with a continuous bond.

RLF Transaction Procedures

1. CFR 143.44 sets forth the procedures for RLF that are required to be followed for RLF transactions:

EIP. The customs broker or importer of record must transmit electronically, using EIP, any invoice data required by CBP;

Electronic payment. The customs broker or importer of record must direct the electronic payment of duties, taxes and fees through the ACH or any other method of electronic payment authorized by CBP;

EDI system. Only those entries and entry summaries that CBP processes completely in an electronic data interchange system will be accepted for RLF.

Combined entry/entry summary. For RLF transactions using a combined entry and entry summary, a customs broker must submit to CBP, through ABI or any other electronic interface authorized by CBP, a complete and error-free electronic data transmission constituting the entry summary that serves as both the entry and entry summary;

No line release or ID procedures. Under RLF, no line release or immediate delivery procedures may be combined with RLF transactions.

Data acceptance and release of goods. Data that are complete and error free will be accepted by CBP. If electronic invoice or additional electronic documentation is required, CBP will notify the RLF filer. If no documentation is required to be filed, CBP will notify the RLF filer. If CBP accepts the RLF entry (including invoice data) under 19 CFR 143.34-143.36, the RLF entry will be deemed to satisfy all filing requirements under Part 142 and the merchandise may be released.

Liquidation. The entry summary will be scheduled for liquidation once payment is made under statement processing.

Filing of Additional Entry Information

1. CFR 143.45 states that when filing from a remote location:

A RLF filer must electronically file all additional information required by CBP to be presented with the entry and entry summary information (including facsimile transmissions) that CBP can accept electronically. If CBP cannot accept additional information electronically, the RLF filer must file the additional information in a paper format at the CBP port of entry where the goods arrived.

Certification of Entry and Entry Summary Information

1. CFR 141.61(a)(2) on electronic entry and entry summary documentation is revised to state (all text is revised):

Entry and entry summary documentation that is filed electronically pursuant to Part 143 must contain the information required by Part 141 and must be certified by the importer of record or his duly authorized customs broker as required by Parts 143.35 and 143.44 as being true and correct to the best of his knowledge. The importer of record, customs broker, or a duly authorized agent must be resident in the U.S. for purposes of receiving service of process. A certified electronic transmission is binding in the same manner and to the same extent as a signed document.

Entry by Nonresident Corporation

CBP is also amending 19 CFR 141.18(a) (entry by nonresident corporation) to read as follows (additional text is denoted by ):

A nonresident corporation (i.e., one which is not incorporated within the Customs territory of the U.S. or in the Virgin Islands of the U.S.) shall not enter merchandise for consumption unless it:

a) has a resident agent in the State where the port of entry is located who is authorized to accept service of process against such corporation or, in the case of an entry filed from a remote location pursuant to subpart E of 19 CFR 143, has a resident agent authorized to accept service of process against that corporation either in the State where the port of entry is located or in the State from which the remote location filing originates; and

Elimination of PAIRED Entry Program

The final rule discontinues the PAIRED program by removing 19 CFR 141.63(c) from the regulations (deleted text is struck):

141.63(c). For merchandise entered other than at port of arrival. If merchandise is to arrive or has arrived at one port and the importer wishes to file his entry documentation at another port to which the merchandise is destined, he may do so upon approval of the port director at the port of destination. The director of the destination port may then authorize release of the merchandise after its importation at the port of arrival, or postpone its release if he believes it is necessary for examination or other purposes.

¹a National Customs Automation Program (NCAP) prototype test

²ACE will not replace RLF; rather, ACE will be the means necessary to expand RLF.

(See ITT's Online Archives or 12/30/09 news, 09123020, for BP summary announcing the publication of this final rule.

See ITT's Online Archives or 03/30/07 and 04/02/07 news, 07033005 and 07040205, for BP summaries of proposed rule.)

CBP final rule (CBP Dec. 09-47, D/N USCBP-2006-0001, FR Pub 12/30/09) available at http://edocket.access.gpo.gov/2009/pdf/E9-30736.pdf

BP Note

Although the preamble to the final rule states "the RLF prototype will terminate upon the effective date of this final rule. RLF prototype participants may continue to participate in this test until this date," CBP sources confirm that those participating in RLF under the prototype may continue to use RLF once it is a regulatory program, without the need for any action on their part.