[Federal Register Volume 63, Number 79 (Friday, April 24, 1998)] [Notices] [Pages 20442-20444] From the Federal Register Online via the Government Publishing Office [www.gpo.gov] [FR Doc No: 98-10886] ======================================================================= ----------------------------------------------------------------------- DEPARTMENT OF THE TREASURY Customs Service Announcement of Program Test: Importer Compliance Monitoring Program AGENCY: Customs Service, Treasury. ACTION: General notice. ----------------------------------------------------------------------- SUMMARY: This notice announces Customs plan to conduct a test regarding the Importer Compliance Monitoring Program (formerly known as the Importer Self-Governance Program) with limited participation. The program is intended to promote compliance with Customs laws and regulations regarding cargo processing and will afford mutual benefits to both Customs and the import community. Public comments concerning any aspect of this planned test are solicited. EFFECTIVE DATES: The program test will commence no earlier than July 1, 1998, and will continue through June 30, 1999. Written requests to participate in, and comments on, the program test must be received by June 1, 1998. ADDRESSES: Written requests to participate in the program test, and written comments regarding any aspect of the planned test, should be addressed to William F. Inch, Regulatory Audit Division, U.S. Customs Service, 1300 Pennsylvania Ave., N.W., Room 6.3A, Washington, D.C. 20229. FOR FURTHER INFORMATION CONTACT: William F. Inch, (202) 927-1100; Joseph C. Palmer, (312) 353-1213, Ext. 106; or Richard A. Fuller, (281) 985-6781. SUPPLEMENTARY INFORMATION: Background Since passage of the Customs Modernization provisions (107 Stat. 2170) contained in the North American Free Trade Agreement Implementation Act (Pub. L. 103-182, 107 Stat. 2057, December 8, 1993), the primary goal of the trade compliance process has been to maximize importer compliance with U.S. trade laws, while facilitating the importation and entry of admissible merchandise. To meet these challenges, Customs has undertaken a comprehensive effort to review, improve, and redesign the trade compliance process using established business practices, re-engineered tools, and new methodologies that improve customer service without compromising the enforcement aspect of the Customs mission. One of the new methodologies developed is the compliance assessment procedure. This procedure allows Customs to determine the level of [[Page 20443]] compliance based on an overall assessment of a company's import operations. While the compliance assessment procedure provides both Customs and the company with an accurate benchmark concerning the adequacy of systems/internal controls and the degree of importer compliance, it focuses primarily on the company's last business year prior to the time the compliance assessment was conducted. Over time, however, events can occur within a company (e.g., mergers, system changes, loss of key personnel) that may potentially have an effect on its compliance. Accordingly, the Importer Compliance Monitoring Program (ICMP; formerly known as the Importer Self- Governance Program) was developed to allow interested importers to assess their own compliance with Customs laws and regulations. Over the past several months and after public consultations, Customs has identified necessary policies and procedures as bases to test this new program, pursuant to Sec. 101.9(a) of the Customs Regulations (19 CFR 101.9(a)), which permits the implementation of a test program or procedure designed to evaluate the effectiveness of new technology or operational procedures regarding the processing of passengers, vessels, or merchandise. The purpose of this document is to describe the proposed operation of the ICMP and to invite comments on, and requests to participate in, the planned ICMP test. Proposed Importer Compliance Monitoring Program In general, the ICMP is designed to enhance the cargo processing of participating importers. The ICMP is voluntary and does not require a company to have undergone or be scheduled for a Customs compliance assessment. Once notified of acceptance into the program, a consultation process will begin with Customs. This is necessary to ensure that all parties have a mutual understanding of the importer's business practices and the importer's corresponding relationship to the program. Similar to a compliance assessment performed by Customs, the ICMP is a systemic overview of a company's import operations and includes both process and transactional reviews of those operations. Ideally, a group independent of the company's importing function should conduct these reviews; use of outside professionals for this purpose is not required but may be done at the discretion of the importer. Process reviews include an annual preparation or updating of the flowchart and narrative of the company's import process. In addition, a macro test of value information is conducted to ensure that the company's import transactions and those recorded in Customs systems are in general agreement. Transactional reviews utilize statistical sampling methodologies that are fully coordinated with Customs during the consultation process. Sampling errors will be evaluated based on the number of errors and their materiality and, where applicable, a compliance improvement plan will be prepared and submitted to Customs outlining actions taken or proposed to correct the cited deficiencies. Reports of sampling errors may be treated as prior disclosures under Part 162 of the Customs Regulations. Test participants are expected to retain all applicable documentation pertaining to these reviews. As necessary, Customs will validate the importer's ICMP process and transactional reviews. Draft Program Manual For those companies interested in participating in this test, as well as those companies wishing only to provide comments to Customs, a draft ICMP manual will be available on Customs Internet Website. The Universal Resource Locator (URL) or address for the Customs Internet Website is http://www.customs.ustreas.gov. The manual provides detailed ICMP policies and procedures, including additional information regarding anticipated program benefits accruing to both participants and Customs. Customs welcomes any and all comments regarding this document and its contents. Selection of Test Participants The test will continue for a period of one year. No more than 50 companies will be allowed to participate in the ICMP test, and Customs will select the participants in accordance with the criteria set forth below. There are three primary selection criteria that will be applied in the following order: (1) Companies residing within the Top 250 importers ranked by entered value in descending order within a Primary Focus Industry (PFI) that have a Customs assigned Account Manager; (2) Companies residing within the Top 250 importers ranked by entered value in descending order within a PFI that do not have a Customs assigned Account Manager; and (3) Companies not ranked within the Top 250 importers of any of the PFI's will be selected on the basis of the highest total entered value. Under criteria (1) and (2), if companies have the same numerical ranking in different PFI's, then the company with the highest total entered value will be selected. Customs will notify each company in writing of its acceptance or nonselection to participate in this test no later than June 15, 1998; companies not selected will be informed of the general reason(s) for non-selection. If an applicant is denied participation, the applicant may appeal in writing to Director, Regulatory Audit Division, Office of Strategic Trade, U.S. Customs Service, 1300 Pennsylvania Avenue, N.W., Washington, D.C. 20229, within 10 days of notification by Customs. To assure the best results possible for evaluation purposes, it is anticipated that those companies selected to participate in the ICMP test will complete all related requirements during the one-year test period. However, because of the voluntary nature of this program, a company may discontinue its participation in the test at any time. Removal From Test Participation During the one-year test period, the appropriate field director of Regulatory Audit may remove a company from participation in the test for misconduct involving the following: (1) Failure by the company to comply with ICMP requirements; or (2) The presence of documented or alleged fraud, other investigative activity, or failing to follow applicable Customs laws and regulations. Any decision proposing to remove a company from participation in the test may be appealed in writing to the Director, Regulatory Audit Division, Office of Strategic Trade, U.S. Customs Service, 1300 Pennsylvania Avenue, N.W., Washington, D.C. 20229 within 30 days of such action. The notice of proposed removal will apprise the company of the facts or conduct warranting removal. Should the company appeal the notice of proposed removal, it should address the facts or conduct charges contained in the notice and state how it does or will achieve compliance. However, in the case of willfulness or where public health interests or safety are concerned, the removal may be effective immediately. Program Consultation One of the cornerstones of the ICMP is consultation afforded the importer by Customs. Prior to beginning the test, Customs will meet with each selected participant to discuss the company's [[Page 20444]] import operations. At this meeting, the nature and frequency of work to be accomplished during the test period will be identified, thus, assuring effective planning and assignment of company and Customs resources and timely completion of the test. Comments and Evaluation of Test Customs will review all public comments received concerning any aspect of the proposed program test and finalize requirements and procedures in light of those comments before commencing the test. Approximately 90 days after conclusion of the test, evaluations of the test will be conducted and final results will be made available to the public upon request. Dated: April 20, 1998. William F. Inch, Director, Regulatory Audit Division. [FR Doc. 98-10886 Filed 4-23-98; 8:45 am] BILLING CODE 4820-02-P