[Federal Register Volume 63, Number 170 (Wednesday, September 2, 1998)]
[Proposed Rules]
[Pages 46719-46728]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 98-23559]
[[Page 46719]]
=======================================================================
-----------------------------------------------------------------------
POSTAL SERVICE
39 CFR Parts 111 and 502
Manufacture, Distribution, and Use of Postal Security Devices and
Information-Based Indicia
AGENCY: Postal Service.
ACTION: Proposed rule.
-----------------------------------------------------------------------
SUMMARY: This proposal would add new sections to the Domestic Mail
Manual (DMM) and title 39, Code of Federal Regulations (CFR), to
reflect policies and regulations pertaining to the Information-Based
Indicia Program (IBIP). The proposed policies and regulations were
originally published for public review and comment in the March 28,
1997, Federal Register (62 FR 14833). As a result of comments received
on that original proposal, the regulations have been revised to reflect
two significant changes. The first is that the proposed regulations
only address ``open'' systems. It is the intent of the Postal Service
to address ``closed'' systems at a future date. The second is a
clarification on refund procedures. In addition, the March 3, 1998,
Federal Register (63 FR 10419) provided information regarding potential
alternative approaches to the physical nature and location of a
security device. The proposed regulations have been amended to reflect
these alternatives. These proposed IBIP policies and regulations are
interim and may be revised after experience has been gained with the
testing and implementation of the first of the Information-Based
Indicia (IBI) systems.
DATES: Comments must be received on or before November 2, 1998.
ADDRESSES: Written comments should be mailed or delivered to the
Manager, Metering Technology Management, 475 L'Enfant Plaza SW, Room
8430, Washington DC 20260-2444. Copies of all written comments will be
available at the above address for inspection and photocopying between
9 a.m. and 4 p.m., Monday through Friday.
FOR FURTHER INFORMATION CONTACT: Nicholas S. Stankosky, (202) 268-5311.
SUPPLEMENTARY INFORMATION: The Information-Based Indicia Program (IBIP)
involves the development of new technology to produce forms of postage
evidencing through the use of two-dimensional barcodes, human-readable
information, and cryptographic services to produce postage evidence
from personal computers. This technology will support Postal Service
efforts to reduce fraud, provide a convenient access to postage, and
provide an opportunity for customer defined ``value added'' services.
There are five primary elements to an IBI. The indicia includes:
Town circle information.
Postage amount applied.
Device identifier.
Two-dimensional barcode.
Optional advertising art.
The Postal Service has classified potential IBIP PC Postage
products into four major categories:
1. Stand-alone system products.
2. Local Area Network (LAN) system products.
3. Wide Area Network (WAN) system products, and
4. Hybrid system products.
The proposed regulations pertain to current IBI stand-alone system
performance criteria and will also be applied to the other potential
categories as Providers present their systems for evaluation and
approval.
Core security functions, such as digital signature generation and
verification and the management of registers, are performed on a stand-
alone system by a physical Postal Security Device (PSD). On all other
systems these functions are performed remotely through another form of
logical security element. Some customer and Provider requirements may
differ according to each alternative system. The host system controls
the customer infrastructure in system authorization, system audits,
postage resetting and production of the indicia.
The IBIP key management component employs a public-key certificate-
based digital signature that features a data integrity service and
provides the means to validate the indicia. Finally, the product/
service Provider infrastructure provides support for all IBIP functions
including licensing, PSD production, maintenance of other logical
security elements, and life cycle support, and provides an interface
with both the customer and the Postal Service infrastructure. The
Postal Service interface involves the issuance of licenses, updating
licensee information, product/device inventory and tracking, resetting
support and account reconciliation, lost and stolen/irregularity
monitoring, and the assignment of digital certificates.
The following is a summary of the Postal Service's position on the
general interest IBIP policy issues. In this document, the USPS will
only address ``open'' systems. ``Closed'' systems will be addressed
separately at a future date.
Any proposed open system product or device must be
submitted for approval under proposed ``Metering Technology Management
Metering Product Submission Procedures'' (September 1, 1998 Federal
Register). These procedures include specifics on letters of intent,
nondisclosure agreements, the Provider's concept of operations and
infrastructure, documentation requirements, product submissions, and
most testing activities.
In an attempt to use the existing Postal Service
infrastructure as much as possible, customer licensing and product/
device tracking will be included in the Centralized Meter Licensing
System (CMLS). A license must be obtained prior to the use of a device.
A customer already licensed to use postage meters will not have to
apply again for an additional license. The Postal Service will simply
update the customer's file.
All IBIP-specific system components must be leased.
Until the Postal Service has captured historical data on
reliability and security, the total amount of postage in a descending
register will be limited to a maximum of $500. Ascending registers must
show all postage printed over time.
Authorized Providers must keep records of the
distribution, control, and maintenance of all IBIP systems throughout
the complete lifecycle of the product. This includes tracking of all
PSDs, including newly manufactured PSDs, active leased PSDs and
inactive unleased PSDs, as well as lost and stolen PSDs.
Indicia produced from the IBIP system may be used to
indicate postage for single-piece rate First-Class Mail (including
Priority Mail), Express Mail, and Standard Mail classes. Mail bearing
the indicia is entitled to all privileges and subject to all conditions
applying to these classes of mail.
Providers are responsible for audit functions. The Postal
Service will not take over this function but may at times participate
in or review the audit process. PSDs and other logical security
elements must be audited at least once every 3 months.
Providers must perform an analysis of each submitted
customer mailpiece as part of the Provider's Mailpiece Quality
Assurance program to ensure the quality and readability of the indicia.
The Provider must notify the customer and the Postal Service of any
deficiencies.
All postage downloads or settings will be made under the
provisions of the Computerized Remote Meter Resetting System (CMRS).
The Postal Service will conduct periodic audits of a Provider's
resetting system to ensure that the system is operating correctly and
that postal revenues are protected.
[[Page 46720]]
Physical inspections of PSDs will be made at the time of
submission for approval and if there is a subsequent suspicion of a
security problem.
The Postal Service will provide refunds for unused
postage, for any balance remaining on a PSD or other logical security
element, and for any balance remaining in the licensee's CMRS account.
All approved systems must have the capability to update
postage rates efficiently when such changes are announced.
There are provisions in the IBIP regulations for the
correction of postage and dates. These are similar to those used for
metered postage. For date correction, the facing identification mark
(FIM) and barcode will be suppressed; for postage correction, the FIM
will be suppressed.
Cautionary labels such as those affixed to postage meters
will not be affixed to PSDs. However, Providers must make their
customers aware of this information through their supplied software,
and documentation.
Although exempt from the notice and comment requirements of the
Administrative Procedure Act (5 U.S.C. 553(b), (c)) regarding proposed
rule-making by 39 U.S.C. 410(a), the Postal Service invites public
comments on the following proposed amendments to the Domestic Mail
Manual, incorporated by reference in the Code of Federal Regulations.
See 39 CFR part 111.
List of Subjects in 39 CFR Parts 111 and Part 502
Administrative practice and procedure, Postal Service.
Accordingly, Parts 111 and 502 of title 39, CFR are amended as
follows:
PART 111--[AMENDED]
1. The authority citation for 39 CFR part 111 continues to read as
follows:
Authority: 5 U.S.C. 552(a); 39 U.S.C. 101, 401, 403, 404, 3001-
3011, 3403-3406, 3621, 3626, 5001.
2. Add the following sections to the Domestic Mail Manual as set
forth below:
P050 Information-Based Indicia
1.0 BASIC INFORMATION
1.1 Description of IBI
The IBI system prints an authorized USPS Information-Based Indicia
that shows evidence of postage. The indicia consists of a USPS-approved
two-dimensional barcode and certain human-readable information such as
city and state, 5-digit ZIP Code of licensing post office, device ID
number, date, and amount of postage. The IBI system includes as a
primary component a physical Postal Security Device (PSD), or another
form (e.g., remote) of logical security element depending on the
installed IBI system version, that provides critical functionality for
accounting for postage with a computer-based host system. The security
device and host system interact to generate the indicia. The security
device is remotely set and requires the customer to have funds on
deposit with the USPS before initial setting or resetting.
1.2 Provider Responsibilities
The IBI system is available only through a lease agreement from a
USPS-authorized Provider. The USPS holds Providers responsible for the
life cycle, control, operation, maintenance, and replacement of their
IBIP products and devices.
1.3 Possession
A customer must have a USPS-issued license and a valid lease
agreement to use the IBI system.
1.4 Classes of Mail
Indicia produced from the IBI system may be used to indicate
postage for single-piece rate First-Class Mail (including Priority
Mail), Express Mail, and Standard Mail classes.
1.5 Amount of Postage
The value of the IBIP indicia affixed to each mailpiece must equal
or exceed the exact amount due for the piece when mailed.
1.6 Additional Postage
An indicia showing additional postage may be placed on a shortpaid
mailpiece under 4.9, Postage Correction.
2.0 LICENSE
2.1 Procedures
The application and the license are processed through the
Centralized Meter Licensing System (CMLS). An applicant must provide
all applicable data for Form 3601-A, Application for a License to Lease
and Use Postage Meters, to the Provider. The application must state the
post office where the applicant intends to deposit mail produced using
their IBI system. The Provider electronically transmits the information
requested on Form 3601-A to CMLS in the USPS-specified format. When a
Provider transmits the application on behalf of the applicant, the USPS
notifies the Provider when a license is issued. A single license covers
all IBI systems to the same applicant by the same post office, but a
separate application must be submitted for each post office where the
applicant wants to deposit IBI mail. There is no fee for the
application and license. After approving an application, the USPS
issues a Postage Meter License (Form 3601-B). A customer will not have
to apply for a license to use an IBI system if the customer already
possesses a valid postage meter license.
2.2 Refusal to Issue License
The USPS may refuse to issue a license for the following reasons:
the applicant submitted false or fictitious information on the license
application; the applicant violated any standard for the care or use of
an IBI or product/device that resulted in the revocation of that
applicant's license within 5 years preceding submission of the
application; or there is sufficient reason to believe that the product/
device is to be used in violation of the applicable standards. The USPS
sends the licensee written notice when an application for a license is
refused. The USPS notifies the Provider if the license is refused. Any
applicant refused a license may appeal the decision under 2.4.
2.3 Revocation of License
A license is subject to revocation for any of the following
reasons:
a. An IBI product/device is used for any illegal scheme or
enterprise or there is probable cause to believe that the product/
device is to be used in violation of the applicable standards.
b. The IBI product/device is not reset or audited within a 3-month
period.
c. Sufficient control of an IBI product/device is not exercised or
the standards for its care or use are not followed.
d. The IBI product/device is kept or used outside the boundaries of
the United States or those U.S. territories and possessions without
USPS approval.
e. IBI mail is deposited at other than the licensing post office
(except as permitted by 5.0 or D072).
f. Failure to forward mailpieces to the Provider for quality
assurance as required by 2.5h.
The USPS sends written notice to the licensee and the licensee's
Provider of any revocation.
2.4 Appeals
An applicant who is refused a license, or a licensee whose license
is revoked, may file a written appeal with the Manager of Metering
Technology Management (MTM), USPS Headquarters, within 10 calendar days
of receipt of the decision.
[[Page 46721]]
2.5 Licensee Responsibilities
The licensee's responsibilities for the care and use of an IBI
product/device include the following:
a. After a PSD supporting a stand-alone system is delivered to a
licensee, it must remain in the licensee's custody until it is returned
to the authorized Provider.
b. The licensee must, upon request, make the PSD in the licensee's
custody and corresponding records on transactions immediately available
for review and audit to the Provider or the USPS.
c. The licensee must remote-set security devices at least once
every 3 months.
d. The licensee must immediately notify the Provider of any change
in the licensee's name, address, telephone number, the location of the
product/device, or any other information on the Form 3601-A.
e. The USPS issues a revised license based on the transmission of
updated information from the Provider. The licensee must verify and
update license information on a periodic basis. If a licensee changes
the post office where IBI mail is to be deposited, the PSD or other
logical security element must be checked out of service by the
authorized Provider. The customer must be relicensed at the new post
office before the Provider can issue and reset a replacement PSD or
other logical security element.
f. The licensee must report a misregistering or otherwise defective
IBI product/device to the Provider under 2.7 and must ensure that the
defective IBI product/device is not used.
g. The licensee must maintain address quality by updating the USPS
AMS CD-ROM disk at least once every 6 months.
h. The licensee must forward a mailpiece produced by the IBI
product/device to the Provider at least once every 6 months after
initialization for quality assurance.
i. The customer must enter into a signed lease agreement with the
Provider that includes a financial agreement for resetting the IBI
product/device with postage.
2.6 Custody of Suspect PSDs
The Postal Service may conduct unannounced, on-site examinations of
IBI product/devices reasonably suspected of being manipulated or
otherwise defective. An inspector may also immediately withdraw a
suspect IBI product/device from service for physical and/or laboratory
examination. The inspector issues the licensee a receipt for the IBI
product/device, forwards a copy to the Provider, and, if necessary,
assists in obtaining a replacement IBI product/device. Where possible,
the Inspection Service gives advance notice that an IBI product/device
is to be inspected. Unless there is reason to believe that the IBI
product/device is fraudulently set with postage, existing postage in
the IBI product/device to be examined is transferred to the replacement
PSD.
2.7 Defective PSD or Other Logical Security Element
The licensee must immediately report any defective PSD or other
logical security element to the Provider. The Provider must retrieve
any defective PSD within 3 business days of notification by the
licensee and notify the USPS. A faulty PSD or other logical security
element may not be used under any circumstance. Faulty PSDs must be
returned to the Provider. The Provider will supply the licensee with a
replacement PSD or will correct the logical security element, as
applicable.
2.8 Missing PSD
The licensee must immediately report to the Provider and licensing
post office the loss or theft of any PSD or the recovery of any missing
PSD. Reports must include the PSD identification number and/or serial
number; the date, location, and details of the loss, theft, or
recovery; and a copy of any police report. The Provider must report all
details of the incident to the Manager, MTM.
2.9 Returning a PSD
After a PSD is delivered to a licensee, the PSD must be kept in the
licensee's custody until returned to the authorized Provider. A
licensee with a faulty or misregistering PSD or who no longer wants to
keep a PSD must return the PSD to the Provider to be checked out of
service. PSDs must be shipped by Priority Mail Returned Receipt for
Merchandise unless the Manager, MTM, USPS Headquarters, gives written
permission to ship at another rate or special service.
3.0 SETTING
3.1 Initial Setting of PSD or Other Logical Security Element
Before the licensee is issued a PSD or is granted access to another
form of logical security element, the device must be initialized and
authorized by the Provider. The customer must enter into a lease
agreement with the Provider that includes a financial agreement for
resetting the device with postage. Settings are made according to the
provisions of the USPS Computerized Remote Postage Meter Resetting
System (CMRS).
3.2 Payment for Postage
Payment must be made for postage before the IBI product/device is
set. The customer is permitted to make payment in accordance with
Treasury Handbook, F-3, section 2-11.
3.3 Postage Transfers and Refunds
Postage losses due to malfunctions are the responsibility of the
Provider. The Postal Service will provide refunds for unused postage,
for any balance remaining on a PSD or other logical security element,
and for any balance remaining in the licensee's CMRS account.
For unused postage, refunds will only be granted for
mailpieces that are 30 days old or less. The mailpieces and a completed
PS Form 3533, Application and Voucher for Refund of Postage and Fees,
must be forwarded to the Provider for indicia verification and
processing. Refunds will be credited to the licensee's CMRS account.
Upon the return of a PSD, the Provider will verify the
remaining balance. The refund will be credited to the licensee's CMRS
account.
Refunds from other logical security elements will be
verified by the Provider and credited to the licensee's CMRS account.
Licensees must notify the Provider in writing to request
the closing of a CMRS account. After the request has been processed the
licensee will receive a check for the balance.
3.4 Periodic Examinations
PSDs or other logical security elements must be reset at least once
every 3 months. The Provider's update of the watchdog timer/device
audit satisfies this requirement. The USPS reserves the right to
examine security devices by remote access or otherwise.
3.5 Resetting
In addition to the conditions in Part B, Postal Security Device, of
the ``Performance Criteria for Information-Based Indicia and Security
Architecture for IBI Postage Metering Systems (PCIBISAIBIPMS),'' the
following conditions must be met to reset a PSD or other logical
security element:
a. The licensee's account must have sufficient funds to cover the
desired postage increment, or the Provider must agree to advance funds
to the USPS on behalf of the licensee. The USPS encourages the
Providers to recommend the use of the following payment forms by order
of preference:
1. ACH Debit
[[Page 46722]]
2. ACH Credit
3. Wire Transfer
4. Debit Card Optional
5. Credit Card Optional
6. Check
b. As part of the resetting procedure, the licensee must provide
identification information according to the Provider's resetting
specifications.
c. After a PSD or other logical security element is reset, the
Provider supplies the licensee with documentation of the transaction
and the balance remaining in the licensee's account, unless the
Provider gives a monthly statement to the licensees documenting all
transactions for the period and the balance after each transaction.
3.6 Amount of Postage
The descending register of the PSD or other logical security
element is programmed not to exceed $500 for a given user at any time.
4.0 INDICIA
4.1 Design
The indicia designs (types, sizes, and styles) must be those the
Provider specified when the IBI product/device was approved by the USPS
for manufacture and distribution.
4.2 Legibility
The indicia must be legible. An illegible indicia is not acceptable
when determining postage paid. Minimal standards for acceptable
reflectance measurements of the indicia and the background material are
in the Uniform Symbology Specifications PDF417 and DMM Section C840.5.
The facing identification mark (FIM) must meet the dimensions and print
quality specified in DMM C810. The address and POSTNET barcode must
meet the specifications listed in the DMM C840.
4.3 On an Adhesive Label
The USPS-approved label must be used when IBI indicia are to be
printed on a label. Labels are subject to corresponding standards in
DMM C810 and must be approved by the Manager, MTM.
4.4 Position
The indicia must be printed or applied in the upper right corner of
the envelope, address label, or tag. The indicia must be at least \1/4\
inch from the right edge of the mailpiece and \1/4\ inch from the top
edge of the mailpiece. The indicia barcode must be horizontally
oriented. The indicia must not infringe on the areas reserved for the
FIM, POSTNET barcode, or optical character reader (OCR) clear zone.
These apply to pieces meeting the dimensions specified in DMM C800.
4.5 Content
In usage, the indicia must consist of human-readable information
and two-dimensional barcoded information unless specified otherwise.
The human-readable information must show, as a minimum, the city,
state, and 5-digit ZIP Code of the licensing post office, the device
ID, date of mailing, rate category, and the amount of postage. On
approval of the licensing post office, the indicia may contain the name
and state designation of its local classified branch. This
authorization does not apply to classified stations or to contract
stations or branches. Alternatively, the indicia may show the ZIP Code
rather than the city and state designation. In this case, the words
``Mailed From ZIP Code'' and the mailer's delivery address ZIP Code
must appear in place of the city and state, respectively. When it is
necessary to print multidenomination IBI product/device indicia on more
than one tape, the human-readable information showing the post office
must be on each adhesive label.
4.6 Complete Date
The month, day, and year must be shown in the indicia on all First-
Class Mail. On Standard Mail the day may be omitted. Mailpieces bearing
an indicia with only the month and year may be accepted during the
month shown. They may also be accepted through the third day of the
following month if the postmaster finds that the mailing was
unavoidably delayed before deposit with the USPS.
4.7 Date Accuracy
The date shown in the indicia must be the actual date of deposit.
Mail deposited after the day's last scheduled collection may bear the
date of the next scheduled collection.
4.8 Date Correction
If date correction is required, an indicia showing actual date of
mail and the word ``REDATE'' instead of the postage amount may be used.
The indicia must be placed on the nonaddress side at least 20mm from
the bottom edge of the mailpiece. The indicia impression must not bear
the FIM or the two-dimensional barcode.
4.9 Postage Correction
An indicia for additional postage may be placed on a shortpaid
mailpiece to correct postage. The corrected indicia must be printed on
the nonaddress side at least 20mm from the bottom edge of the piece and
not on an envelope flap. The impression on the nonaddress side must
contain all the indicia elements except for the FIM. To meet two-
dimensional barcode readability requirements, an indicia may be printed
on a USPS-approved tape/label.
4.10 Other Matter Printed
Advertising matter, slogans, return addresses, and the postal
markings specified in 4.11 may be printed with the indicia within space
limitations. A licensee must obtain the content for printing this
matter from the authorized Provider. Advertising art messages must
include the mailer's name or words such as ``Mailer's Message.'' The
advertising art must not be obscene, defamatory of any person or group,
or deceptive and it must not advocate any unlawful action. The Provider
must obtain prior approval for all advertising matter.
4.11 Postal Markings
Postal markings related to the class or category of mail are
required. If placed in the advertising art area, only the postal
marking may be printed, and it must fill the advertising art area as
much as possible. All words must be in bold capital letters at least
\1/4\ inch high (18-point type) and legible at 2 feet. Exceptions are
not made for small advertising art that cannot accommodate a
permissible marking.
4.12 FIM
The mailpiece generated by IBI product/device must bear a USPS-
approved FIM D unless the envelope is courtesy reply with a FIM A or
the piece is not a letter or a flat. The location of the FIM applies to
pieces meeting the dimensions specified in DMM C800.
5.0 MAILINGS
5.1 Preparation of IBI
Mail is subject to the preparation standards that apply to the
class of mail and rate claimed.
5.2 Combination
IBI mail may be combined in the same mailing with mail paid with
other methods only if authorized by the USPS.
5.3 Where to Deposit
Single-piece rate First-Class Mail may be deposited in any street
collection box or such other place where mail is accepted and that is
served by the licensing post office. Limited quantities (i.e., a
handful) of single-piece rate First-Class Mail may be deposited at
offices other than the licensing post office to expedite dispatch.
[[Page 46723]]
6.0 AUTHORIZATION TO MANUFACTURE AND DISTRIBUTE IBI SYSTEMS
Title 39, Code of Federal Regulations, part 502, contains
information about the authorization to manufacture and distribute IBI
product/devices; the suspension and revocation of such authorization;
performance standards, test plans, testing, and approval; required
manufacturing security measures; and standards for distribution and
maintenance. Further information may be obtained from MTM, USPS
Headquarters.
3. Part 502 is added to read as follows:
PART 502--AUTHORITY TO MANUFACTURE AND DISTRIBUTE INFORMATION BASED
INDICIA SYSTEMS
Sec.
502.1 Provider qualifications.
502.2 Provider authorization.
502.3 Changes in ownership or control.
502.4 Burden of proof standard.
502.5 Suspension and revocation of authorization.
502.6 Description of the IBIP.
502.7 Product/device Provider.
502.8 IBIP performance criteria.
502.9 Test plans.
502.10 Security testing.
502.11 IBI system approval.
502.12 Conditions for approval.
502.13 Suspension and revocation of approval.
502.14 Reporting.
502.15 Administrative sanction on reporting.
502.16 Materials and workmanship.
502.17 Destruction of product/device indicia.
502.18 Inspection of new IBI systems.
502.19 Distribution facilities.
502.20 Distribution controls.
502.21 Administrative sanction.
502.22 IBI system replacement.
502.23 Inspection of PSDs or other logical security elements in
use.
502.24 PSDs not located.
502.25 Computerized remote resetting.
502.26 Indicia quality assurance.
502.27 IBI system refunds.
502.28 Key management requirements.
502.29 Provider infrastructure.
Authority: 5 U.S.C. 552(a); 39 U.S.C. 101, 401, 403, 404, 410,
2601, 2605; Inspector General Act of 1978, as amended (Pub. L. 95-
452, as amended), 5 U.S.C. App 3.
Sec. 502.1 Provider qualifications.
A potential Provider wanting authorization to lease or otherwise
distribute an Information-Based Indicia (IBI) system, as approved by
the Postal Service, for use by licensees under Domestic Mail Manual
P050.1.2 must:
(a) Satisfy the Postal Service of its integrity and financial
responsibility;
(b) Obtain approval of at least one prototype incorporating all the
features and safeguards specified in Sec. 502.9;
(c) Have, or establish, and keep under its supervision and control
adequate manufacturing facilities suitable to carry out the provisions
of Secs. 502.18 through 502.21 to the satisfaction of the Postal
Service (such facilities must be subject to unannounced inspection by
representatives of the Postal Service); and
(d) Have, or establish, and retain adequate facilities for the
control, distribution, and maintenance of IBI systems and their
replacement when necessary.
Sec. 502.2 Provider authorization.
Upon qualification and approval, the applicant is authorized in
writing to manufacture IBI products/devices and to lease them to
persons licensed by the Postal Service.
Sec. 502.3 Changes in ownership or control.
Any person or concern wanting to acquire ownership or control of an
authorized Provider must provide the Postal Service with satisfactory
evidence of that person's or concern's integrity and financial
responsibility.
Sec. 502.4 Burden of proof standard.
The burden of proof is on the Postal Service in the adjudication of
suspensions and revocations under Secs. 502.5 and 502.14 and
administrative sanctions under Secs. 502.16 and 502.22. Except as
otherwise indicated in those sections, the standard of proof shall be
the preponderance of evidence standard.
Sec. 502.5 Suspension and revocation of authorization.
(a) The Postal Service may suspend and/or revoke authorization to
provide and/or distribute any or all of a Provider's IBI systems if the
Provider engages in any unlawful scheme or enterprise, fails to comply
with any provision in this part 502, or fails to implement instructions
issued in accordance with any final decision issued by the Postal
Service within its authority over the IBI product/device programs.
(b) The decision to suspend or revoke a Provider's authorization
shall be based on the nature and circumstances of the violation (e.g.,
whether the violation was willful, whether the Provider voluntarily
admitted to the violation, whether the Provider cooperated with the
Postal Service, whether the Provider implemented successful remedial
measures) and on the Provider's performance history. Before determining
whether a Provider's authorization to manufacture and/or distribute IBI
systems should be revoked, the procedures in paragraph (c) of this
section shall be followed.
(c) Suspension in all cases shall be as follows:
(1) Upon determination by the Postal Service that a Provider is in
violation of the provisions in this part 502, the Postal Service shall
issue a written notice of proposed suspension citing deficiencies for
which suspension or authorization to provide IBI systems may be imposed
under paragraph (c) (2) of this section. Except in cases of willful
violation, the Provider shall be given an opportunity to correct
deficiencies and achieve compliance with all requirements within a time
limit corresponding to the potential risk to postal revenue.
(2) In cases of willful violation, or if the Postal Service
determines that the Provider has failed to correct cited deficiencies
within the specified time limit, the Postal Service shall issue a
written notice setting forth the facts and reasons for the decision to
suspend and the effective date if a written defense is not presented as
provided in paragraph (d) of this section.
(3) If, upon consideration of the defense as provided in paragraph
(e) of this section, the Postal Service deems that the suspension is
warranted, the suspension shall remain in effect for up to 90 days
unless withdrawn by the Postal Service, as provided in paragraph
(c)(4)(iii) of this section.
(4) At the end of the 90-day suspension, the Postal Service may:
(i) Extend the suspension in order to allow more time for
investigation or to allow the Provider to correct the problem;
(ii) Make a determination to revoke authorization to provide and/or
distribute the Provider's products/devices in part or in whole; or
(iii) Withdraw the suspension based on identification and
implementation of a satisfactory solution to the problem. Provider
suspensions may be withdrawn before the end of the 90-day period if the
Postal Service determines that the Provider's solution and
implementation are satisfactory.
(d) The Provider may present the Postal Service with a written
determination within 30 calendar days of receiving the written notice
(unless a shorter period is deemed necessary). The defense must include
all supporting evidence and specify the reasons for which the order
should not be imposed.
(e) After receipt and consideration of the defense, the Postal
Service shall advise the Provider of the decision and the facts and
reasons for it. The decision
[[Page 46724]]
shall be effective on receipt unless it provides otherwise. The
decision shall also advise the Provider that it may appeal that
determination within 30 calendar days of receiving written notice
(unless a shorter period is deemed necessary), as specified therein.
The appeal must include all supporting evidence and specify the reasons
the Provider believes that the decision is erroneous.
(f) An order or final decision under this section does not preclude
any other criminal or civil statutory, common law, or administrative
remedy that is available by law to the Postal Service, the United
States, or any other person or concern.
Sec. 502.6 Description of the IBIP.
The IBI product/device prints an authorized USPS Information-Based
Indicia that shows evidence of postage. The indicia consists of a USPS-
approved two-dimensional barcode and certain human-readable information
such as city and state, 5-digit ZIP Code of licensing post office,
Device ID number, date, and amount of postage. The IBI product/device
includes as a primary component a physical Postal Security Device
(PSD), or a remote logical security element depending on the installed
IBI system version, that provides critical functionality for accounting
postage with a computer-based host system. The security device and host
system interact to generate the indicia. The PSD or other logical
security element is remotely set with postage value and requires the
licensee to have funds on deposit with the Postal Service prior to
initial setting or resetting. IBIP PC Postage products are classified
into four major categories.
1. Stand-alone system products.
2. Local Area Network (LAN) system products.
3. Wide Area Network (WAN) system products, and
4. Hybrid system products.
Core security functions such as digital signature generation and
verification and the management of registers are performed on a stand-
alone system by a physical PSD. On all other systems these functions
are performed remotely through another form of logical security
element. Customer and Provider requirements may differ according to
each alternative system.
Sec. 502.7 Product/device Provider.
The IBI system is available to licensees only through a lease
agreement from a USPS authorized Provider. The host is envisioned to
operate on personal computers.
Sec. 502.8 IBIP performance criteria.
The IBIP performance criteria describe system elements that include
Postal Service infrastructure, Provider infrastructure, and customer
infrastructure. The existing Postal Service infrastructure supports
customer authorization, product audit, postage resetting reporting,
total population management, key management support, financial
reconciliation, product lifecycle tracking, and lost and stolen/
irregularity management functions. The Provider infrastructure will
support all IBIP functions. The customer infrastructure will consist of
the applicable security device and host system. The Postal Service will
evaluate and test IBIP systems for compliance with this infrastructure.
(a) The indicia data content is described in Part A, Indicium, of
the ``Performance Criteria for Information-Based Indicia and Security
Architecture for IBI Postage Metering Systems (PCIBISAIBIPMS).''
Contact the Manager, MTM, USPS, 475 L'Enfant Plaza SW, Room 8430,
Washington DC 20260-2444 for these requirements.
(b) The PSD implements digital signature technology for the
creation and verification of digital signatures. Postal Security Device
performance criteria are described in Part B, Postal Security Devices,
of the PCIBISAIBIPMS. Contact the Manager, MTM, USPS, 475 L'Enfant
Plaza SW, Room 8430, Washington DC 20260-2444 for these requirements.
(c) Indicia design must comply with the requirements in Domestic
Mail Manual (DMM) P050.
(d) Host System Functional Requirements are contained Part C, Host
System, of the PCIBISAIBIPMS. Contact the Manager, MTM, USPS, 475
L'Enfant Plaza SW, Room 8430, Washington DC 20260-2444 for these
requirements.
(e) Key Management functional requirements are contained in Part D,
Key Management Plan, of the PCIBISAIBIPMS. Contact the Manager, MTM,
USPS, 475 L'Enfant Plaza SW, Room 8430, Washington DC 20260-2444 for
these requirements.
Sec. 502.9 Test plans.
Each IBI system that is submitted for USPS approval should be
submitted in accordance with the provisions contained in the ``Metering
Technology Management Metering Product Submission Procedures.'' Contact
the Manager, MTM, USPS, 475 L'Enfant Plaza SW, Room 8430, Washington DC
20260-2444 for these requirements.
Sec. 502.10 Security testing.
The Postal Service reserves the right to require or conduct
additional examination and testing at any time, without cause, of any
IBI system submitted to the Postal Service for approval or previously
approved by the Postal Service.
Sec. 502.11 IBI system approval.
As provided in Sec. 502.14, the Provider has a duty to report
security weaknesses to the Postal Service to ensure that each IBI
system protects the Postal Service against loss of revenue at all
times. An approval of a system does not constitute an irrevocable
determination that the Postal Service is satisfied with its revenue-
protection capabilities. After approval is granted to an IBI system, no
change affecting the features or safeguards may be made except as
authorized or ordered by the Postal Service in writing.
Sec. 502.12 Conditions for approval.
(a) The Postal Service may require at any time that approved
production systems of IBI products/devices, as well as the design, user
manuals, and specifications applicable to such IBI systems and any
revisions thereof, be submitted to the Manager, MTM, USPS, 475 L'Enfant
Plaza SW, Room 8430, Washington DC 20260-2444.
(b) Upon request by the Postal Service, additional IBI systems must
be submitted to the Postal Service for testing, at the expense of the
Provider.
(c) All product/device submissions should adhere to the
requirements contained in the ``Metering Technology Management Metering
Product Submission Procedures.'' Particular attention should be given
to the requirement to simultaneously submit an identical IBI system to
a laboratory accredited under the National Voluntary Laboratory
Accreditation Program (NVLAP) for FIPS 140-1 certification.
Sec. 502.13 Suspension and revocation of approval.
(a) The Postal Service may suspend an IBI system if the Postal
Service believes that an IBI system poses an unreasonable risk to
postal revenue.
(b) Suspension procedures:
(1) Upon determination by the Postal Service that an IBI system
poses an unreasonable risk to postal revenue, the Postal Service shall
issue a written notice of proposed suspension citing deficiencies for
which suspension may be imposed under paragraph (b)(2) of this section.
The Provider shall be given an opportunity to correct deficiencies and
achieve compliance with all requirements within a time limit
[[Page 46725]]
corresponding to the potential risk to postal revenue.
(2) If the Postal Service determines that the Provider has failed
to correct cited deficiencies within the specified time limit, the
Postal Service shall issue a written notice setting forth the facts and
reasons for the decision to suspend and the effective date if a written
defense is not presented as provided in paragraph (c) of this section.
(3) If, upon consideration of the defense as provided in paragraph
(d) of this section, the Postal Service deems that the suspension is
warranted, the suspension shall remain in effect for up to 90 days
unless withdrawn by the Postal Service, as provided in paragraph
(b)(4)(iii) of this section.
(4) At the end of the 90-day suspension, the Postal Service may:
(i) Extend the suspension in order to allow more time for
investigation or to allow the Provider to correct the problem;
(ii) Make a determination to revoke the approval of the Provider's
IBI system or class and/or version, or
(iii) Withdraw the suspension based on identification and
implementation of a satisfactory solution to the problem. Provider
suspensions may be withdrawn before the end of the 90-day period if the
Postal Service determines that the Provider's solution and
implementation are satisfactory.
(c) The Provider may present the Postal Service with a written
defense to any suspension or revocation determination within 30
calendar days of receiving the written notice (unless a shorter period
is deemed necessary). The defense must include all supporting evidence
and specify the reasons for which the order should not be imposed.
(d) After receipt and consideration of the written defense, the
Postal Service shall advise the Provider of the decision and the facts
and reasons for it. The decision shall be effective on receipt unless
it states otherwise. The decision shall also advise the Provider that
it may appeal that determination within 30 calendar days of receiving
written notice (unless a shorter period is deemed necessary), as
specified therein. The appeal must include all supporting evidence and
the reasons that the Provider believes that the decision is erroneous.
(e) An order or final decision under this section does not preclude
any other criminal or civil statutory, common law, or administrative
remedy that is available by law to the Postal Service, the United
States, or any other person or concern.
Sec. 502.14 Reporting.
(a) For purposes of this section, ``Provider'' refers to authorized
Provider in Sec. 502.1 and its foreign or domestic affiliates,
subsidiaries, assigns, dealers, independent dealers, employees, and
parent corporations.
(b) Each authorized Provider in Sec. 502.1 must submit a
preliminary report to notify the Postal Service promptly (in no event
more than 21 calendar days of discovery) of the following:
(1) All findings or results of any testing known to the Provider
concerning the security or revenue protection features, capabilities,
or failings of any IBI system distributed by the Provider that has been
approved for distribution by the Postal Service or any foreign postal
administration; or have been submitted for approval by the Provider to
the Postal Service or a foreign postal administration.
(2) All potential security weaknesses or methods of IBI system
tampering that the Provider distributes of which the Provider knows or
should know, and the IBI system or model subject to each method. All
potential security weaknesses include but are not limited to suspected
equipment defects, suspected abuse by an IBI licensee or Provider
employee, suspected security breaches of the Computerized Remote
Postage Meter Resetting System, cryptographic key compromises,
occurrences outside normal performance, or any repeatable deviation
from normal IBI system performance (within the same model family and/or
by the same licensee).
(c) Within 45 days of the preliminary notification to the Postal
Service under Sec. 502.15(b), the Provider must submit a written report
to the Postal Service. The report must include the circumstances,
proposed investigative procedure, and the anticipated completion date
of the investigation. The Provider must also provide periodic status
reports to the Postal Service during subsequent investigation and, on
completion, must submit a summary of the investigative findings.
(d) The Provider must establish and adhere to timely and efficient
procedures for internal reporting of potential security weaknesses. The
Provider is required to submit a copy of internal reporting procedures
and instructions to the Postal Service for review.
Sec. 502.15 Administrative sanction on reporting.
(a) Notwithstanding any act, admission, or omission by the Postal
Service, an authorized Provider may be subject to an administrative
sanction for failing to comply with Sec. 502.14.
(b) The Postal Service shall determine all costs and revenue losses
measured from the date that the Provider knew, or should have known, of
a potential security weakness, including, but not limited to,
administrative and investigative costs and documented revenue losses
that result from any IBI System for which the Provider failed to comply
with any provision in Sec. 502.14. The Postal Service may recover from
the Provider any and all such costs and losses (net of any amount
collected by the Postal Service from the licensees or users) with
interest by issuing a written notice to the Provider setting forth the
facts and reasons on which the determination to impose the sanction is
based. The notice shall advise the Provider of the date that the action
takes effect if a written defense is not presented within 30 calendar
days of receipt of the notice.
(c) The Provider may present the Postal Service with a written
defense to the proposed action within 30 calendar days of receipt. The
defense must include all supporting evidence and specify the reasons
for which the sanction should not be imposed.
(d) After receipt and consideration of the defense, the Postal
Service shall advise the Provider of the decision and the facts and
reasons for it; the decision shall be effective on receipt unless it
states otherwise. The decision shall also advise the Provider that it
may, within 30 calendar days of receiving written notice, appeal that
determination as specified therein.
(e) The Provider may submit a written appeal to the Postal Service
within 30 calendar days of receipt of the decision. The appeal must
include all supporting evidence and specify the reasons that the
Provider believes that the administrative sanction was erroneously
imposed. The submission of an appeal stays the effectiveness of the
sanction.
(f) The imposition of an administrative sanction under this section
does not preclude any other criminal or civil statutory, common law, or
administrative remedy that is available by law to the Postal Service,
the United States, or any other person or concern.
Sec. 502.16 Materials and workmanship.
All IBI systems must adhere to the quality in materials and
workmanship of the approved prototype.
Sec. 502.17 Destruction of product/device indicia.
All IBIP indicia created in the process of testing the IBI system
by the Provider,
[[Page 46726]]
or its agent, must be collected and destroyed daily.
Sec. 502.18 Inspection of new IBI systems.
All new IBI systems must be inspected carefully prior to
distribution.
Sec. 502.19 Distribution facilities.
An authorized Provider must keep adequate facilities for and
records of the distribution, control, and maintenance of IBI systems.
All such facilities and records are subject to inspection by Postal
Service representatives.
Sec. 502.20 Distribution controls.
Each authorized Provider must do the following:
(a) Hold title permanently to all leased systems except those
purchased by the Postal Service.
(b) On behalf of applicants, electronically transmit copies of
completed PS Forms 3601-A, Application for a License to Lease and Use
Postage Meters, to the designated Postal Service central processing
facility.
(c) Lease systems only to parties that have valid licenses issued
by the Postal Service.
(d) Supply the host system with slogan or advertising art that
meets the Postal Service requirements for suitable quality and content.
The Provider must obtain prior approval for all advertising matter for
IBI systems.
(e) Unless otherwise authorized by the Postal Service, the Provider
must immediately obtain and check out of service PSDs, if the licensee
no longer wants the PSD or if the PSD is to be removed from service for
any other reason. If a logical security element resides in the
Provider's server, it must be immediately disabled. If it resides at
the Licensee's site, all resetting requests must be denied. The
Provider must keep in its possession for at least 1 year the licensee's
PS Form 3601-C, Postage Meter Activity Report.
(f) Retrieve any misregistering, faulty, or defective PSD to be
checked out of service within 3 business days of being notified by the
licensee of the defect. After examining the PSD withdrawn for apparent
faulty operation affecting registration, the Provider must compile a
report explaining the malfunction to MTM, USPS Headquarters.
(g) Report promptly the loss or theft of any IBI system or
component. The Provider must provide notification to the Postal Service
by completing a standardized lost and stolen incident report and filing
it with the Postal Service within 30 days of the Provider's
determination of a loss, theft, or recovery. The Provider must complete
all preliminary location activities specified in Sec. 502.24 before
submitting this report to the Postal Service.
(h) Cancel a lease agreement with any lessee whose license is
revoked by the Postal Service, remove the PSD within 15 calendar days,
and have the PSD checked out of service.
(i) Promptly remove from service any PSD or other logical security
element that the Postal Service indicates should be removed from
service. When a license is canceled, all PSDs or other logical security
elements in use by the licensee must be removed from service.
(j) Examine each IBI system withdrawn from service for failure to
record its operations correctly and accurately, and report to the
Postal Service the failure or fault that caused the failure.
(k) Provide MTM monthly with a compatible computer file of lost or
stolen PSDs. The file is due on the first of each month (for the
preceding month's activity).
(l) Take reasonable precautions in the transportation and storage
of PSDs to prevent use by unauthorized individuals. Providers must ship
all PSDs by Postal Service Registered Mail unless given written
permission by the Postal Service to use another carrier. The Provider
must demonstrate that the alternative delivery carrier employs security
procedures equivalent to those for Registered mail.
(m) Submit a daily financial transaction for each postage value
download or postage refill according to established CMRS procedures.
Sec. 502.21 Administrative sanction.
The Postal Service holds Providers responsible for the life cycle,
control, operation, maintenance, and replacement of their products/
devices.
(a) For purposes of this section, an IBI system is defined as a
system that is manufactured by an authorized Provider under Sec. 502.1
that is not owned or leased by the Postal Service.
(b) An authorized Provider that, without just cause, fails to
conduct or perform adequately any of the controls in Sec. 502.20, to
follow standardized lost and stolen incident reporting in Sec. 502.24,
or to conduct any of the inspections required by Sec. 502.23 in a
timely fashion is subject to an administrative sanction based on the
investigative and administrative costs and documented revenue losses
(net of any amount collected by the Postal Service from the licensee or
user). Interest per occurrence measured from the date on which the cost
and/or loss occurred, as determined by the Postal Service. Sanctions
shall be based on the costs and revenue losses that result from the
Provider's failure to comply with these requirements.
(c) The Postal Service may impose an administrative sanction under
this section by issuing a written notice to the Provider setting forth
the facts and reasons on which the determination to impose the sanction
is based. The Postal Service shall determine all costs and losses. The
notice shall advise the Provider of the date that the action shall take
effect if a written defense is not presented within 30 calendar days of
receipt of the notice.
(d) The Provider may present to the Postal Service a written
defense to the proposed action within 30 calendar days of receipt of
the notice. The defense must include all supporting evidence and
specify the reasons for which the sanction should not be imposed.
(e) After receipt and consideration of the written defense, the
Postal Service shall advise the Provider of the decision and the facts
and reasons for it. The decision shall be effective on receipt unless
it states otherwise.
(f) The Provider may submit a written appeal of the decision with
30 calendar days of receiving the decision, addressed to the Manager of
MTM, Postal Service Headquarters. The appeal must include all
supporting evidence and specify the reasons that the Provider believes
that the administrative sanction was erroneously imposed. The
submission of an appeal stays the effectiveness of the sanction.
(g) The imposition of an administrative sanction under this section
does not preclude any other criminal or civil statutory, common law, or
administrative remedy that is available by law to the Postal Service,
the United States, or any other person or concern.
Sec. 502.22 IBI system replacement.
(a) The Provider must keep its IBI systems in proper operating
condition for licensees by replacing them when necessary or desirable
to prevent electronic failure, malfunction, clock/timer/battery life
expiration, or mechanical breakdown.
(b) The Provider must provide the licensees with modifications
reflecting rate changes.
Sec. 502.23 Inspection of PSDs or other logical security elements in
use.
The Provider must conduct audits of PSDs or other logical security
elements at least once every 3 months in conjunction with the postage
value resetting requirements in Sec. 502.26. In general, the primary
role of the PSD in
[[Page 46727]]
the device audit function is to create device audit messages and pass
those messages to the host system for transmission to the Postal
Service.
Sec. 502.24 PSDs not located.
Upon learning that one or more of its PSDs in service cannot be
located, the Provider must undertake reasonable efforts to locate the
PSD by following a series of Postal Service-specified actions designed
to locate the PSDs. If these efforts are unsuccessful and a PSD is
determined to be lost or stolen, the Provider must notify the Postal
Service within 30 days by submitting a Lost and Stolen PSD Incident
Report.
(a) If a licensee cannot be located, the Provider must, at a
minimum, complete the following actions:
(1) Call directory assistance for the licensee's new telephone
number.
(2) Contact the licensee's local post office for current change of
address information.
(3) Contact the CMLS site and the local MATS coordinator to verify
the location of the PSD or licensee currently maintained in those
Postal Service records.
(4) Contact the rental agency responsible for the property where
the licensee was located, if applicable.
(5) Visit the licensee's last known address to see whether the
building superintendent or a neighbor knows the licensee's new address.
(6) Mail a certified letter with return receipt to the licensee at
the last known address with the endorsement ``Forwarding and Address
Correction Requested.''
(7) If new address information is obtained during these steps, any
scheduled PSD inspection must be completed promptly.
(b) If a PSD is reported to be lost or stolen by the licensee, the
Provider must, at a minimum, complete the following actions:
(1) Ensure that the licensee has filed a police report and that
copies have been provided to the appropriate Inspection Service
Contraband Postage Identification Program (CPIP) specialist.
(2) Withhold issuance of a replacement PSD until the missing PSD
has been properly reported to the police and to the appropriate
Inspection Service CPIP specialist.
(c) If the Provider later learns that the PSD has been located and/
or recovered, the Provider must update lost and stolen PSD activity
records, inspect the PSD promptly, initiate a postage adjustment or
transfer, if appropriate, and check the PSD out of service if a
replacement PSD has been supplied to the licensee.
(d) If a PSD reported to the Postal Service as lost or stolen is
later located, the Provider is responsible for submitting a new Lost
and Stolen PSD Incident Report that references the initial report and
outlines the details of how the PSD was recovered. This report must be
submitted to the Postal Service within 30 days of recovery of the PSD.
The Provider is also responsible for purging lost and stolen PSD
reports that are provided on a periodic basis to the Postal Service for
those PSDs that have been recovered.
(e) Any authorized Provider that fails to comply with standardized
lost and stolen reporting procedures and instructions is subject to an
administrative sanction under Sec. 502.21, as determined by the Postal
Service.
Sec. 502.25 Computerized remote resetting.
(a) Description. The Computerized Remote Meter Resetting System
(CMRS) permits postal licensees to reset PSDs or other logical security
elements at their places of business and/or homes via modem and/or
network interface. To reset a PSD, the licensee must connect to the
Provider and provide identifying data and device audit data. Before
proceeding with the setting transaction, the Provider must verify all
the data (including conducting the product audit) and ascertain from
its own files whether the licensee has sufficient funds on deposit with
the Postal Service. If the funds are available and the product audit
was successful, the Provider may complete the setting transaction.
(b) Revenue protection. The Postal Service shall conduct periodic
assessments of the revenue protection safeguards of each Provider
system and shall reserve the right to revoke a Provider's authorization
if the CMRS system does not meet all requirements set forth by the
Postal Service. The Provider must make its facilities that handle the
operation of the computerized resetting system and all records about
the operation of the system available for inspection by representatives
of the Postal Service at all reasonable times.
(c) Deposits with the Postal Service. (1) A CMRS licensee is
required to have funds available on deposit with the Postal Service
before resetting a PSD or the Provider may opt to provide a funds
advance in accordance with The Cash Management Operating Specifications
for the Computerized Remote Postage Meter Resetting System. Contact the
Treasurer's Office of the United States Postal Service, 475 L'Enfant
Plaza SW, Washington DC 20260-5130 for this document. The details of
this deposit requirement are covered within the Acknowledgment of
Deposit Requirement document. By signing this document, the licensee
agrees to transfer funds to the Postal Service through a lockbox bank,
as specified by the Provider, for the purpose of prepayment of postage.
The Provider representative must provide all new CMRS licensees with
this document when a new account is established. The document must be
completed and signed by the licensee and sent to the Minneapolis
Accounting Service Center by the Provider.
(2) The licensee is required to incorporate the following language
into its IBI rental agreements:
Acknowledgement of Deposit Requirement
See the Cash Management Operating Specifications for the
Computerized Remote Postage Meter Resetting System. Contact the
Treasurer's Office of the United States Postal Service, 475 L'Enfant
Plaza SW, Washington DC 20260-5130 for this document.
Sec. 502.26 Indicia quality assurance.
The licensee is required to forward a mailpiece to the Provider at
least once every 6 months for evaluation. If the licensee fails to
comply with this requirement, the Provider must notify the licensee
that, all future postage value resettings will be denied. The Provider
must notify the Postal Service of all noncomplying licensees, so that
license revocations can be initiated. The Provider is required to
provide guidance to the licensee to correct any deficiencies that are
discovered.
Sec. 502.27 IBI system refunds.
Postage losses due to malfunctions are the responsibility of the
Provider. The Postal Service will provide refunds for unused postage,
for any balance remaining on a PSD or other logical security element,
and for any balance remaining in the licensee's CMRS account. The
following procedures must be followed, depending on the type of refund
requested:
(a) Unused Postage
(1) Postage refunds will be granted only for pieces that are 30
days old or less. The licensee will complete a PS Form 3533,
Application and Voucher for Refund of Postage and Fees. This form may
be supplied electronically to the licensee by the Provider. The
licensee must supply refund details in Part IV of the form which shows
the number of pieces grouped by postage value, the total postage value
for each group, and the total postage for all listed groups.
(2) The unused mailpieces and the completed Form 3533 will be sent
to the Provider for indicia verification and refund processing.
[[Page 46728]]
(3) The Provider will scan the indicia to ensure that they are
valid. Part IV of the Form 3533 must be annotated to show corrections
for nonqualifying pieces.
(4) An individual authorized by the Provider must certify the
amount of the refund by signing Part IV below where the details of the
mailpieces are shown.
(5) The Provider will send the Form 3533 to the MATS coordinator at
the appropriate Postal Service District office for further refund
processing.
(6) The District MATS coordinator will arrange for the amount of
refunded postage to be credited to the licensee's CMRS account.
(7) The unused envelopes must be retained by the Provider for 45
days after the Form 3533 has been sent to the District. During this
period the Postal Service reserves the right to audit the pieces and
the Providers processing of the refund request.
(b) PSD or Other Logical Security Element Balance
(1) The Provider must verify the remaining balance in a returned
PSD or other logical security element. This balance must be reconciled
with the descending balance as noted by the Provider when the licensee
notified the Provider that the PSD or other logical security element
was to be taken out of service.
(2) The validated refund amount must be noted in section F of the
completed Form 3601-C and the Providers representative must sign
Section G.
(3) The completed Form 3601-C will be sent to the appropriate
District MATS coordinator.
(4) The District MATS coordinator will arrange for the amount of
refunded postage to be credited to the licensee's CMRS account.
(c) CMRS Account
(1) The licensee must notify the Provider in writing that the
licensee's CMRS account is to be closed.
(2) The Provider will notify the Minneapolis Accounting Service
Center of the closing of the account, according to CMRS procedures as
administered by USPS Treasury Management.
(3) The Minneapolis Accounting Service Center will notify the
lockbox bank to issue a refund check to the licensee.
Sec. 502.28 Key management requirements.
These requirements are contained in Part D, Key Management Plan, of
the PCIBISAIBIPMS. Contact the Manager, MTM, USPS, 475 L'Enfant Plaza
SW, Room 8430, Washington, DC 20260-2444 for these requirements.
Sec. 502.29 Provider infrastructure.
The Provider must establish and maintain an interface to USPS
systems as specified in CMRS and CMLS documentation. CMRS documentation
may be obtained from Corporate Treasury, USPS HQ, 475 L'Enfant Plaza
SW, Room 8118, Washington, DC 20260-5130. CMLS documentation may be
obtain from the Manager, MTM, USPS, 475 L'Enfant Plaza SW, Room 8430,
Washington, DC 20260-2444.
Neva R. Watson,
Acting Chief Counsel, Legislative.
[FR Doc. 98-23559 Filed 8-28-98; 3:59 pm]
BILLING CODE 7710-12-P