CSMS Message: 98-000541

TO: ALL ACH PARTICIPANTS (BROKERS, IMPORTERS, AND OTHER INTERESTED
PARTIES)

ACH DEBIT PROCESS RECAP

DURING THE MOST RECENT FEDERAL HOLIDAY, MEMORIAL DAY, MAY 25, 1998
ACH PAYER'S ACCOUNTS WERE DEBITED AFTER ONE BUSINESS DAY INSTEAD
OF TWO, THE STANDARD TIME FOR ACH DEBITS. THIS EARLY DEBIT WAS THE
RESULT OF NEW SOFTWARE INSTALLED AT MELLON BANK WHICH ALLOWED FOR ACH
PAYMENTS TO BE PROCESSED ON THE HOLIDAY. CURRENTLY, ADJUSTMENTS HAVE
BEEN MADE IN MELLON'S SOFTWARE TO RESTORE THE NORMAL PROCESSING MODE
WHERE ACH PAYMENTS ARE NOT PROCESSED BY MELLON BANK ON THE HOLIDAY,
ALLOWING ACH PAYER'S THE STANDARD TWO BUSINESS DAYS BEFORE THEIR
ACCOUNTS ARE DEBITED.

THUS, REGARDING THE UPCOMING JULY 3RD FEDERAL HOLIDAY, ACH PAYMENT
AUTHORIZATIONS TRANSMITTED TO ABI AND ACCEPTED ON THURSDAY, JULY 2, SHOULD
DEBIT THE PAYER'S ACCOUNT ON TUESDAY, JULY 7.

BELOW IS A MODIFIED REISSUANCE OF ADMINISTRATIVE MESSAGE NUMBER 94-0054,
DATED JANUARY 14, 1994, ADDRESSING THE ACH DEBIT PROCESS.

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ACH DEBIT OF ACH TRANSACTIONS

MANY QUESTIONS HAVE BEEN ASKED REGARDING WHEN AN ACH PAYER'S ACCOUNT
WILL BE DEBITED. THIS IS OF SPECIAL CONCERN WHEN A HOLIDAY IS INVOLVED.
THE FOLLOWING INFORMATION WILL PROVIDE A GUIDELINE WHICH MAY BE USED IN
DETERMINING WHEN AN ACH PAYER'S ACCOUNT WILL BE DEBITED.

ACH TRANSACTIONS WILL NORMALLY BE DEBITED FROM A PAYER'S ACCOUNT BY
THE PAYER'S FINANCIAL INSTITUTION TWO BUSINESS DAYS FROM THE DATE THAT THE
ACH TRANSACTION (ABI APPLICATION QN) WAS ACCEPTED ERROR-FREE BY CUSTOMS.
THIS DOES NOT INCLUDE SATURDAYS, SUNDAYS, OR FEDERAL HOLIDAYS (SEE LIST
BELOW). FOR EXAMPLE:

* ACH PAYMENT AUTHORIZATIONS SENT AND ACCEPTED BY ABI ON MONDAY SHOULD
BE DEBITED ON WEDNESDAY (THE SECOND BUSINESS DAY).
ACH PAYMENT AUTHORIZATIONS SENT AND ACCEPTED BY ABI ON THURSDAY SHOULD
BE DEBITED ON MONDAY (THE SECOND BUSINESS DAY).
* ACH PAYMENT AUTHORIZATIONS SENT AND ACCEPTED BY ABI ON FRIDAY SHOULD
BE DEBITED ON TUESDAY (THE SECOND BUSINESS DAY).

ACH PAYMENT AUTHORIZATIONS SENT AND ACCEPTED BY ABI ON SATURDAY WILL
NORMALLY BE INCLUDED IN CUSTOMS END-OF-DAY PROCESSING OF FRIDAY'S
TRANSACTIONS AND THOSE SENT AND ACCEPTED BY ABI ON SUNDAY WILL NORMALLY
BE INCLUDED IN CUSTOMS END-OF-DAY PROCESSING OF MONDAY'S TRANSACTIONS.

CUSTOMS END-OF-DAY PROCESSING

CUSTOMS END-OF-DAY PROCESSING IS NORMALLY COMPLETED BETWEEN THE HOURS OF
12:00AM (MIDNIGHT) AND 5:00AM. IT IS DURING THIS PROCESS THAT ACH PAYMENT
AUTHORIZATIONS TRANSMITTED TO ABI SINCE THE LAST CUSTOMS END-OF-DAY
PROCESS OCCURRED ARE BATCHED FOR TRANSMISSION TO THE CLEARINGHOUSE BANK
(MELLON BANK). ANY ACH PAYMENT AUTHORIZATIONS RECEIVED AND ACCEPTED BY
ABI PRIOR TO COMPLETION OF CUSTOMS END-OF-DAY PROCESSING ARE INCLUDED
IN THIS BATCH REGARDLESS OF THE DATE OF THE TRANSMISSION TO ABI. FOR
EXAMPLE, IF AN ACH PAYMENT AUTHORIZATION IS RECEIVED AND ACCEPTED BY
ABI ON TUESDAY MORNING AT 12:05AM (5 MINUTES AFTER MIDNIGHT) AND
CUSTOMS END-OF-DAY PROCESSING FOR MONDAY HAS NOT COMPLETED, THIS ACH
PAYMENT AUTHORIZATION WILL BE INCLUDED IN MONDAY'S BATCH. CUSTOMS
RECOMMENDS THAT ALL ACH PAYMENT AUTHORIZATIONS BE TRANSMITTED TO ABI
BETWEEN THE HOURS OF 6:00AM AND MIDNIGHT, EASTERN STANDARD TIME.

THE SCENARIO FOR THE ACH PAYMENT PROCESS IS AS FOLLOWS:

DAY 1 THE ABI FILER TRANSMITS AN ACH PAYMENT AUTHORIZATION TO CUSTOMS
ABI. IF THE TRANSACTION IS ACCEPTED BY ABI, A MESSAGE STATING
"PAYMENT ACCEPTED" IS SENT BACK TO THE FILER VIA ABI.

DAY 2 CUSTOMS END-OF-DAY PROCESSING OCCURS (MIDNIGHT TO 5:00AM) AND ALL
ACH PAYMENT AUTHORIZATIONS RECEIVED WITHIN THE PREVIOUS DAY'S
PROCESSING PERIOD ARE BATCHED AND ELECTRONICALLY TRANSMITTED BY
CUSTOMS TO MELLON BANK. IF THIS TRANSMISSION TO MELLON BANK
OCCURS ON A BUSINESS DAY (NOT A WEEKEND OR ONE OF THE HOLIDAYS
LISTED BELOW) MELLON BANK PROCESSES THE TRANSACTION FROM CUSTOMS
AND ELECTRONICALLY SENDS THE DEBIT TO THE PAYER'S BANK THROUGH THE
FEDERAL RESERVE. IF THIS TRANSMISSION TO MELLON OCCURS ON A
WEEKEND OR HOLIDAY, MELLON BANK HOLDS THE TRANSACTION AND
PROCESSES IT THE FOLLOWING BUSINESS DAY.

DAY 3 THE PAYER'S BANK RECEIVES THE ACH TRANSACTION. IF THIS RECEIPT
OCCURS ON A BUSINESS DAY FOR THE PAYER'S BANK, THE PAYER'S ACCOUNT
MAY BE DEBITED REGARDLESS OF WHETHER OR NOT THAT DAY IS A FEDERAL
HOLIDAY FOR U.S. CUSTOMS OR MELLON BANK.

PAYERS SHOULD DETERMINE WHETHER HOLIDAYS OBSERVED BY U.S. CUSTOMS
DIFFER FROM THOSE OBSERVED BY THEIR OWN BANK. FOR EXAMPLE, THE UPCOMING
HOLIDAY, JULY 3, 1998, (INDEPENDENCE DAY OBSERVED) IS A FEDERAL HOLIDAY.
HOWEVER, MANY BANKS ARE OPEN ON THAT DAY AND WILL PROCESS ACH TRANSACTIONS
THAT HAVE BEEN RECEIVED. THEREFORE, ACH PAYMENT AUTHORIZATIONS WHICH ARE
SENT TO ABI ON WEDNESDAY, JULY 1, 1998 MAY OR MAY NOT BE DEBITED AGAINST
AGAINST THE PAYER'S ACCOUNT ON FRIDAY, JULY 3, 1998, DEPENDING ON
WHETHER THE PAYER'S BANK IS OPEN FOR BUSINESS.

IT IS THE RESPONSIBILITY OF THE PAYER TO ENSURE THAT FUNDS ARE DEPOSITED
TIMELY. FUNDS SHOULD BE AVAILABLE AT THE TIME THE PAYER AUTHORIZES THE
ACH TRANSACTION. THE PAYER WILL BE HELD RESPONSIBLE FOR RETURN ITEMS
RESULTING FROM INSUFFICIENT FUNDS AVAILABLE AT THE TIME OF DEBIT.

THE REMAINING 1998 FEDERAL HOLIDAYS ARE:

INDEPENDENCE DAY OBSERVED FRIDAY JULY 3
LABOR DAY MONDAY SEPTEMBER 7
COLUMBUS DAY MONDAY OCTOBER 12
VETERAN'S DAY WEDNESDAY NOVEMBER 11
THANKSGIVING DAY THURSDAY NOVEMBER 26
CHRISTMAS DAY FRIDAY DECEMBER 25

QUESTIONS MAY BE DIRECTED TO YOUR CLIENT REPRESENTATIVE.