CSMS Message: 94-000482

TO : ALL ABI BROKERS.

FROM : JUDY SCHOENY

SUBJECT : MOD ACT PROPOSALS

DATE : 05/16/94

SUBJECT: MOD ACT PROPOSALS - IASS
RECONCILIATION

THE FOLLOWING DRAFT PROPOSALS REGARDING THE IMPORTER ACTIVITY
SUMMARY STATEMENT (IASS) AND RECONCILIATION FEATURES OF THE MOD
ACT HAVE BEEN DEVELOPED AND DISCUSSED WITH VARIOUS TRADE GROUPS.
IF YOU HAVE ANY COMMENTS REGARDING THEM, YOU ARE INVITED TO
SUBMIT THEM VIA FAX AT 202-482-6990.

THANK YOU,

JOHN DURANT
DIRECTOR,
MOD ACT TASK FORCE

RECONCILIATION CONCEPT PAPER

RECONCILIATION REQUIREMENTS

DRAFT - 5-9-94

THIS IS A CONCEPT PAPER, NOT A FINAL DESIGN DOCUMENT.
PROGRAMMING EFFORTS SHOULD NOT BE UNDERTAKEN BASED ON THIS PAPER.
MORE MEETINGS WILL BE HELD WITH THE TRADE AND REGULATIONS WILL BE
PUBLISHED BEFORE CUSTOMS BEGINS PROGRAMMING FOR RECONCILIATION.

RECONCILIATION IS DEFINED HERE AS THE PROCESS UNDER THE CUSTOMS
MODERNIZATION ACT BY WHICH AN IMPORTER PROVIDES CUSTOMS WITH
ADDITIONAL INFORMATION UNAVAILABLE AT THE TIME OF ENTRY SUMMARY
FILING WHICH IS NECESSARY TO ASCERTAIN THE FINAL CLASSIFICATION
AND APPRAISEMENT OF IMPORTED MERCHANDISE (SEC. 637, PUBLIC LAW
103-182). FOR PURPOSES OF THIS PAPER, THE RECONCILIATION
STATEMENT WILL BE REFERRED TO AS THE RECONCILIATION SUMMARY.

1. EACH RECONCILIATION MUST PERTAIN TO A SINGLE ISSUE ONLY (E.G.
ANTIDUMPING DUTY, COUNTERVAILING DUTY, VALUE, ETC.). MULTIPLE
ISSUES (E.G. MULTIPLE AD CVD CASES ON A SINGLE ENTRY) WILL
REQUIRE MULTIPLE RECONCILIATION SUMMARIES. (NOTE: THIS ISSUE IS
STILL OPEN TO DISCUSSION. CUSTOMS IS CONSIDERING ALLOWING
MULTIPLE ISSUES (WITH THE EXCEPTION OF AD CVD CASES) ON A SINGLE
RECONCILIATION SUMMARY.

2. CUSTOMS WILL IDENTIFY THE RECONCILIATION SUMMARY WITH A NEW
ENTRY TYPE.

3. THE INTENT TO FILE A RECONCILIATION SUMMARY MAY BE INDICATED
AT THREE SEPARATE TIMES: PRIOR TO FILING THE ENTRY SUMMARY; WHEN
THE ENTRY SUMMARY IS FILED; AND AFTER THE ENTRY SUMMARY IS FILED.

A. IF IT IS KNOWN PRIOR TO FILING ANY ENTRY SUMMARIES THAT
A RECONCILIATION SUMMARY WILL BE FILED, PARTICIPANTS WILL
TRANSMIT THE FOLLOWING:

(1). THE RECONCILIATION SUMMARY NUMBER;

(2). A CODE(S) THAT WILL INFORM CUSTOMS OF THE REASON A
RECONCILIATION SUMMARY IS TO BE FILED. THIS LIST OF CODES WILL
BE PUBLISHED IN THE CUSTOMS BULLETIN. NEW CODES MAY BE ADDED TO
THIS LIST FROM TIME TO TIME IF THE NEED SHOULD ARISE. ANY SUCH
ADDITIONS WILL BECOME EFFECTIVE UPON THEIR PUBLICATION IN THE
CUSTOMS BULLETIN. (CUSTOMS WILL CONSIDER ALLOWING PARTICIPANTS
TO TRANSMIT LIMITED TEXT, IF NEEDED TO EXPLAIN THE REASON FOR THE
RECONCILIATION SUMMARY.)

SUMMARIES FILED SUBSEQUENT TO THE TRANSMISSION OF THE
RECONCILIATION SUMMARY NUMBER WILL IDENTIFY THAT NUMBER. THE
RECONCILIATION SUMMARY WILL NOT BE DUE UNTIL 15 MONTHS FROM THE
DATE OF FILING OF THE FIRST ENTRY SUMMARY ASSOCIATED WITH THE
RECONCILIATION SUMMARY.

B. IF IT IS NOT KNOWN THAT A RECONCILIATION SUMMARY WILL BE
FILED UNTIL THE ENTRY SUMMARY IS FILED, AT THE TIME OF ENTRY
SUMMARY TRANSMITTAL, PARTICIPANTS MAY TRANSMIT THE FOLLOWING:

(1). AN INDICATOR THAT A RECONCILIATION SUMMARY IS TO BE
FILED;

(2) THE NUMBER OF THE RECONCILIATION SUMMARY WHICH IS
DUE 15 MONTHS FOLLOWING THE FILING OF THE ENTRY SUMMARY, OR FOR
AD CVD, WITHIN 90 DAYS FROM THE DATE CUSTOMS ADVISES THE IMPORTER
THAT A PERIOD OF REVIEW FOR AD CVD HAS BEEN COMPLETED.

(3) A CODE(S) THAT WILL INFORM CUSTOMS OF THE REASON A
RECONCILIATION SUMMARY WILL BE FILED. SEE A(2) ABOVE FOR
DESCRIPTION OF THE CODE(S).

ISSUES THAT DO NOT INVOLVE THE ENTIRE SUMMARY (E.G. AD CVD ON
ONE LINE OF A MULTIPLE LINE SUMMARY) REQUIRE THE ABOVE
INFORMATION FOR EACH LINE ON THE SUMMARY FOR WHICH A
RECONCILIATION SUMMARY WILL BE FILED. WHERE THE ENTIRE SUMMARY
IS INVOLVED (E.G. VALUE ISSUES), WE WILL PROVIDE A MEANS TO
DESIGNATE THE ENTIRE SUMMARY AT THE HEADER LEVEL.

C. IF AT ANY TIME PRIOR TO LIQUIDATION, A FILER DETERMINES
THAT A RECONCILIATION WILL BE FILED, HE MAY USE A "MINI
TRANSACTION" TO GIVE CUSTOMS A RECONCILIATION NUMBER AND
RECONCILIATION REASON CODE. THE RECONCILIATION SUMMARY WOULD BE
REQUIRED TO BE FILED NO LATER THAN 15 MONTHS FROM THE FILING OF
THE ENTRY SUMMARY OR IASS. (THIS WILL REQUIRE A "TECHNICAL
CORRECTION" TO THE LANGUAGE IN THE ORIGINAL BILL.)

4. WITH THE EXCEPTION OF AD CVD ISSUES WITH A DEPOSIT RATE
GREATER THAN FIVE PERCENT, ENTRY SUMMARIES WITH SINGLE ENTRY
BONDS ARE NOT ELIGIBLE FOR RECONCILIATION. ENTRY SUMMARIES FOR
WHICH A RECONCILIATION WILL BE FILED MUST BE COVERED BY A
CONTINUOUS BOND. THIS PROVISION MAY CHANGE DEPENDING ON INTERNAL
DISCUSSIONS, SURETY REACTION AND THE TRANSITION TO PAPERLESS
BONDS.

5. WE WILL ALLOW ONLY ONE SURETY PER RECONCILIATION. IF A
PARTICIPANT CHANGES SURETIES DURING THE RECONCILIATION PERIOD, A
NEW RECONCILIATION NUMBER MUST BE TRANSMITTED AND FILED. THE
ORIGINAL RECONCILIATION WILL BE DUE 15 MONTHS FROM THE DATE OF
FILING OF THE FIRST ENTRY SUMMARY.

6. THE LIQUIDATION OF THE RECONCILIATION SUMMARY MAY BE
PROTESTED.

7. IN ORDER TO PROVIDE SUFFICIENT INFORMATION FOR CUSTOMS TO FIX
THE FINAL CLASSIFICATION AND APPRAISEMENT, MAINTAIN THE INTEGRITY
OF IMPORT STATISTICS, AND CALCULATE INTEREST, A SIGNIFICANT LEVEL
OF DETAIL WILL BE REQUIRED ON THE RECONCILIATION SUMMARY.
REQUIRED INFORMATION, BROKEN DOWN BY ORIGINAL SUMMARY LINE, MAY
INCLUDE THE FOLLOWING:

A. ORIGINAL SUMMARY NUMBER;

B. ORIGINAL LINE NUMBER;

C. ORIGINAL TARIFF CLASSIFICATION;

D. NEW TARIFF CLASSIFICATION, IF APPLICABLE (ALSO
APPROPRIATE UNIT(S) OF QUANTITY, IF DIFFERENT;

E. ORIGINAL VALUE(S);

F. NEW VALUE, IF APPLICABLE;

G. ORIGINAL COUNTRY OF ORIGIN;

H. NEW COUNTRY OF ORIGIN, IF APPLICABLE;

I. CORRECTED DUTY, TAXES, FEES, AND INTEREST (DEPENDING ON
PROGRAMMING LIMITATIONS, WE MAY ALLOW THE FILER TO GIVE US A
PAYMENT DATE
AND WE WOULD PROVIDE THE INTEREST AMOUNT.).

8. ADDITIONAL DUTIES, TAXES, AND FEES, INCLUDING INTEREST, IS
DUE AT THE TIME THE RECONCILIATION SUMMARY IS FILED. PAYMENT
WILL BE ELECTRONICALLY VIA ACH.

9. EXCEPT FOR AD CVD SUMMARIES, DEPENDING ON WHETHER THE
RECONCILIATION ISSUE IS LINE RELATED OR SUMMARY RELATED, INTEREST
WILL BE CALCULATED FROM THE DATE THE SUMMARY AND OR LINE WAS
ORIGINALLY PAID OR SHOULD HAVE BEEN PAID UNTIL THE DATE THE
RECONCILIATION SUMMARY IS PAID. AT THE TIME OF LIQUIDATION, IF
CUSTOMS MAKES A CHANGE TO THE AMOUNTS OWED ON THE RECONCILIATION
SUMMARY, INTEREST ON THE DIFFERENCE FROM THE DATE OF
RECONCILIATION SUMMARY PAYMENT WILL EITHER BE PAID TO THE
IMPORTER OR WILL BE BILLED.

10. A RECONCILIATION SUMMARY MAY ONLY BE FILED FOR SUMMARIES
THAT WERE ORIGINALLY PROCESSED THROUGH ABI.

11. ALTHOUGH THIS PAPER ATTEMPTS TO INCLUDE AD CVD SUMMARIES IN
THE PROCESS, PROCEDURES TO ACTUALLY ADAPT THE RECONCILIATION
PROCESS FOR USE IN THE COLLECTION OF ANTIDUMPING AND
COUNTERVAILING DUTIES WILL BE PRESCRIBED IN CONSULTATION WITH THE
SECRETARY OF COMMERCE.

12. A RECONCILIATION SUMMARY MAY BE REVIEWED BY AN IMPORT
SPECIALIST WHO MAY REJECT THE REASON GIVEN FOR RECONCILIATION IF
IT IS DEFICIENT.

13. FILERS WHO ELECT NOT TO USE THE IASS PROCESS ARE NOT
PRECLUDED FROM USING THE RECONCILIATION PROCESS.

14. DURING PHASE I OF RECONCILIATION IMPLEMENTATION,
RECONCILIATION SUMMARIES WILL BE RESTRICTED TO THOSE ENTRY
SUMMARIES FILED IN A SINGLE DISTRICT.

15. CUSTOMS IS IN THE PROCESS OF FORMULATING POLICY REGARDING
"CERTIFICATION," "PARTIAL CERTIFICATION," AND "NO CERTIFICATION"
OF ENTRY SUMMARIES.

CONCEPT PAPER

IMPORT ACTIVITY SUMMARY STATEMENT (IASS) REQUIREMENTS

DRAFT 5-9-94

THIS IS A CONCEPT PAPER, NOT A FINAL DESIGN DOCUMENT.
PROGRAMMING EFFORTS SHOULD NOT BE UNDERTAKEN BASED ON THIS PAPER.
MORE MEETINGS WILL BE HELD WITH THE TRADE AND REGULATIONS WILL BE
PUBLISHED BEFORE CUSTOMS BEGINS PROGRAMMING FOR IASS.

FOR THE PURPOSE OF THIS PAPER, IASS IS DEFINED AS THE PROCESS
UNDER THE CUSTOMS MODERNIZATION ACT FOR THE MONTHLY PAYMENT OF
SUMMARIES (SEC. 637, PUBLIC LAW 103-182).

1. INITIALLY, THE IASS WOULD BE LIMITED TO A DISTRICT STATEMENT.
WE ANTICIPATE THAT WE WILL IMPLEMENT THIS INITIATIVE IN PHASES.
PHASE I WILL BE A DISTRICT STATEMENT AND PHASE II WILL PROVIDE
FOR A NATIONAL STATEMENT.

2. DURING PHASE I, THE IASS WILL BE LIMITED TO ONE IMPORTER PER
IASS. (IT IS OKAY TO INCLUDE ONE IMPORTER OF RECORD NUMBER WITH
DIFFERENT SUFFIXES ON ONE IASS.) WE WILL EVALUATE THIS POLICY
AFTER SIX MONTHS.

3. ONCE THE IMPORTER IS APPROVED FOR IASS (SEE ITEM 11 FOR
APPROVAL REQUIREMENTS), ALL TRANSACTIONS (ENTRY SUMMARIES) FOR
THE MONTH MUST BE IASS. THIS REQUIREMENT IS WAIVED FOR THOSE
TRANSACTIONS THAT ACS CANNOT HANDLE THROUGH ABI (E.G. CERTAIN
TARIFF NUMBERS).

4. FOR PHASE I, ENTRY SUMMARIES WITH DEFERRED INTERNAL REVENUE
TAXES MAY NOT BE INCLUDED ON THE IASS (E.G. TOBACCO AND ALCOHOL
IMPORTATIONS).

5. AS ACS IS CURRENTLY PROGRAMMED, THE PAYMENT OF THE ENTRY
"TRIGGERS" VARIOUS ACTIONS IN THE SYSTEM. IF ALL THOSE ITEMS
HAVE TO BE REPROGRAMMED, IT WILL SIGNIFICANTLY INCREASE THE
DEVELOPMENT TIME FOR THE IASS. ADDITIONALLY, THE DEPARTMENT OF
THE CENSUS HAS INFORMED US THAT THEY CURRENTLY NEED THE ENTRY
SUMMARY STATISTICAL DATA NO LATER THAN THE 15TH OF THE MONTH.
NOTING THESE CONCERNS, CUSTOMS PROPOSES THAT THE PHASE I IASS
REQUIREMENTS BE AS FOLLOWS:
AT THE TIME OF ENTRY SUMMARY TRANSMITTAL, IMPORTERS FILERS WILL
TRANSMIT AN IASS INDICATOR AND A SCHEDULED PAYMENT DATE.
SUMMARIES FOR AN IMPORTER APPROVED FOR IASS THAT ARE TRANSMITTED
WITHOUT THE ABOVE INDICATORS WILL BE REJECTED. ALL SUMMARIES
MUST BE TRANSMITTED BY THE 14TH AND PAID NOT LATER THAN THE 15TH
DAY OF THE MONTH FOLLOWING RELEASE. SUMMARIES NOT TRANSMITTED BY
THE 14TH WILL BE CONSIDERED LATE FILES, AND SUMMARIES NOT PAID BY
THE 15TH WILL BE CONSIDERED LATE PAYS.

WE ULTIMATELY PLAN TO PROVIDE FOR PAYMENT ON THE 20TH OF THE
MONTH FOLLOWING RELEASE. CONSIDERATIONS TO EFFECT THIS INCLUDE
POSSIBLE DAILY EXTRACTION OF IMPORT STATISTICS AS WELL AS
SEPARATING PAYMENT FROM ENTRY SUMMARY ACCEPTANCE.

6. SUMMARIES ON AN IASS MUST BE TRANSMITTED THROUGH ABI AND PAID
THROUGH ACH.

7. NOTE THAT CUSTOMS HAS CONCERNS AS TO WHETHER PARTIAL PAYMENTS
CAN BE PERMITTED ON THE IASS AND STILL MAINTAIN THE "REVENUE
NEUTRALITY" THAT IS ESSENTIAL IN ORDER TO IMPLEMENT THE
PROCEDURE. IF PARTIAL PAYMENTS ARE ULTIMATELY APPROVED, THEY
WOULD BE HANDLED AS FOLLOWS:

TO MAKE PARTIAL PAYMENTS FOR SUMMARIES PRIOR TO THE SCHEDULED
PAYMENT DATE, PARTICIPANTS MUST TRANSMIT A NEW SCHEDULED PAYMENT
DATE FOR EACH SUMMARY TO BE PAID. THE TRANSMISSION MUST BE AT
LEAST ONE DAY PRIOR TO DESIRED PAYMENT DATE. PARTIAL PAYMENTS
MUST BE FOR SPECIFIC SUMMARIES AND MUST MATCH ESTIMATED AMOUNTS.

8. FOR SUFFICIENT CAUSE, PARTICIPANTS MAY DELETE A SUMMARY FROM
AN IASS AND MAKE IT A SINGLE PAYMENT. THIS SHOULD NOT BE DONE ON
A ROUTINE BASIS, AND ABUSE OF THIS PRIVILEGE WILL BE GROUNDS FOR
REMOVAL FROM PARTICIPATION. PRESENT PROCEDURES DISALLOWING
DELETION OF QUOTA ENTRIES WILL CONTINUE TO APPLY. WE WILL LOOK
AT THIS PROVISION FROM BOTH A LEGAL AS WELL AS A PROGRAMMING
PERSPECTIVE, AND WILL PUBLISH GUIDELINES FOR ADMINISTRATION.
THERE WAS A DISCUSSION ABOUT MOVING THE DELETED SUMMARY TO THE
NEXT MONTH'S IASS, BUT DURING PHASE I THIS WILL NOT BE POSSIBLE
BECAUSE OF EXTRACTION OF STATISTICAL DATA.

9. PARTICIPANTS MAY CORRECT A SUMMARY FOR ANY REASON, INCLUDING
A CHANGE IN CERTIFICATION, AT ANY TIME PRIOR TO THE DAY BEFORE
THE SCHEDULED PAYMENT DATE. (FROM A PROGRAMMING POINT OF VIEW,
CERTIFICATION IS DEFINED AS THE FILER'S ASSERTION THAT FULL AND
FINAL INFORMATION NECESSARY TO ASCERTAIN THE FINAL CLASSIFICATION
AND VALUE HAS BEEN PROVIDED. WE ARE CURRENTLY EVALUATING DATA
PROCESSING APPROACHES TO ACCOMPLISH THIS.)

10. ONLY ONE FILER CODE WILL BE ALLOWED PER IASS. (THIS WILL
NOT PRECLUDE HAVING MORE THAN ONE IASS PER DISTRICT PORT AND
FILER CODE.)

11. REQUIREMENTS TO PARTICIPATE IN IASS WILL BE DEVELOPED AND
PUBLISHED. AT A MINIMUM, AN IMPORTER WISHING TO PARTICIPATE IN
IASS WILL SEND A WRITTEN REQUEST TO CUSTOMS. THE REQUEST WILL
SPECIFY A TIME PERIOD. (MINIMUM TIME PERIOD IS ONE MONTH.) IF
CUSTOMS APPROVES THE REQUEST, A COPY OF THE SIGNED REQUEST WILL
BE RETURNED TO THE IMPORTER. IF THE IMPORTER WISHES TO STOP IASS
TRANSACTIONS, A WRITTEN REQUEST MUST BE FILED WITH CUSTOMS. IN A
ONE-YEAR PERIOD, THERE WILL BE A LIMIT OF TWO REQUESTS TO
PARTICIPATE AND TWO REQUESTS TO STOP IASS.

THE APPROVAL PROCESS WILL INVOLVE A REVIEW OF ACH PAYMENTS AND
ANY SANCTIONS ASSESSED FOR NON-PAYMENT. IT WAS AGREED THAT WE
WILL NOT REQUIRE PIRP OR PRE-CLASSIFICATION AS A QUALIFICATION
FOR IASS PARTICIPATION.

12. INTEREST WILL BE ASSESSED ON ALL UNPAID SUMMARIES AT THE
CURRENT TREASURY RATE BEGINNING ON THE FIRST OF THE MONTH
FOLLOWING ENTRY. (REGULATIONS WILL BE DEVELOPED TO HANDLE
MERCHANDISE RELEASED UNDER THE ID PROCEDURES)