[Federal Register Volume 63, Number 102 (Thursday, May 28, 1998)]
[Rules and Regulations]
[Pages 29122-29126]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 98-14166]
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DEPARTMENT OF THE TREASURY
Customs Service
19 CFR Part 24
[T.D. 98-51]
RIN 1515-AC26
Automated Clearinghouse Credit
AGENCY: U.S. Customs Service, Department of the Treasury.
ACTION: Interim rule; solicitation of comments.
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SUMMARY: This document amends the Customs Regulations on an interim
basis to provide for payments of funds to Customs by Automated
Clearinghouse (ACH) credit. Under ACH credit, a payer
[[Page 29123]]
will be able to transmit daily statement, deferred tax, and bill
payments electronically through a financial institution directly to a
Customs account maintained by the Department of the Treasury. ACH
credit allows the payer to exercise more control over the payment
process, does not require the disclosure of bank account information to
Customs, and expands the types of payments that may be made through
ACH.
DATES: This interim rule is effective June 29, 1998. Comments must be
received before July 27, 1998.
ADDRESSES: Written comments (preferably in triplicate) may be addressed
to the Regulations Branch, Office of Regulations and Rulings, U.S.
Customs Service, 1300 Pennsylvania Avenue, N.W., Washington, D.C.
20229. Comments submitted may be inspected at the Regulations Branch,
Office of Regulations and Rulings, U.S. Customs Service, 1300
Pennsylvania Avenue, N.W., 3rd Floor, Washington, D.C.
FOR FURTHER INFORMATION CONTACT: Ben Robbin, Financial Systems
Division, Financial Management Services Center, Office of Finance, U.S.
Customs Service (317-298-1520, ext. 1428).
SUPPLEMENTARY INFORMATION:
Background
Part 206 of the Financial Management Service (FMS) Regulations (31
CFR Part 206) concerns, among other things, the management of Federal
agency receipts and disbursements and applies to all Government
departments and agencies within the Executive Branch. Section 206.4(a)
of the FMS Regulations (31 CFR 206.4(a)) sets forth the general rule
that all funds are to be collected and disbursed by electronic funds
transfer (EFT) when cost-effective, practicable, and consistent with
current statutory authority. Section 206.2 of the FMS Regulations (31
CFR 206.2) defines EFT as follows:
Electronic funds transfer (EFT) means any transfer of funds,
other than a transaction originated by cash, check or similar paper
instrument, that is initiated through an electronic terminal,
telephone, computer, or magnetic tape, for the purpose of ordering,
instructing, or authorizing a financial institution to debit or
credit an account. The term includes, but is not limited to, Fed
Wire transfers, Automated Clearing House (ACH) transfers, transfers
made at automatic teller machines (ATM) and Point-of-Sale (POS)
terminals (to include use of the Government small purchase card),
and other means of credit card transactions.
Section 24.25 of the Customs Regulations (19 CFR 24.25) concerns
``statement processing'' and ``automated clearinghouse (ACH)'' and
thus, by virtue of the latter, in part implements the policy reflected
in the FMS Regulations referred to above. Paragraph (a) of Sec. 24.25
describes statement processing as a voluntary automated program which
allows participants in the Automated Broker Interface (ABI) to group
entry/entry summaries and entry summaries on a daily basis and to pay
the related duties, taxes and fees with a single payment. Paragraph (a)
of Sec. 24.25 further provides that the preferred method for such
single payment is by ACH, except where the importer of record has
provided (normally, to a customs broker who files the entry on behalf
of the importer) a separate check payable to Customs for the Customs
charges.
The ACH payment process currently set forth in Sec. 24.25 is a
debit payment method (hereinafter referred to as ``ACH debit'') whereby
ABI filers provide Customs with the bank routing and account number
from which ACH payments are to be electronically debited by a Treasury-
designated ACH processor bank upon receipt of an electronic message
sent by Customs. However, following implementation of statement
processing and ACH debit on January 1, 1990, Customs found that the ACH
debit procedure did not achieve all of the intended results because
some daily statement payers have remained reluctant to provide the U.S.
Government with their bank account information and, therefore, such
parties still make their daily statement payments by check. Moreover,
the current ACH debit process is limited to daily statement payments
and thus does not cover bill payments under Sec. 24.3 of the Customs
Regulations (19 CFR 24.3) and deferred tax payments under Sec. 24.4 of
the Customs Regulations (19 CFR 24.4), which are accepted primarily
through check (through a Customs lockbox) and Fed Wire respectively,
and for which Customs believes some payers would prefer to use the ACH
environment.
The FMS and Riggs National Bank of Washington, D.C. have developed
another ACH payment procedure for the Federal Government, referred to
herein as ``ACH credit''. This process allows the Federal Government to
receive ACH payments initiated directly by the private sector payer.
This process benefits payers by allowing them to effect payment without
having to disclose bank account information to the Government and by
allowing them to maintain more control over the origination and timing
of their payments. The ACH credit process benefits the Government in
that transit routing and bank account authorization does not have to be
obtained from the remitter and the Government does not have to do
anything to effect an individual payment.
Customs has received authorization from the FMS to receive ACH
credit payments, and appropriate modifications have been made to the
Automated Commercial System (ACS) to accept the transfer of payment and
remittance information from Riggs Bank and to apply those payments to
the appropriate receivables. Since the ACH credit procedure represents
a significant enhancement of the electronic entry and payment process
and provides important benefits to both Customs and the trade
community, Customs believes that it should be made available to the
public, for use on a voluntary basis, at the earliest practicable date
and that it should encompass not only daily statement payments but also
bill payments and deferred tax payments.
The purpose of this document is to provide an appropriate
regulatory context for the ACH credit procedure. The ACH credit
procedure and the regulatory changes reflected in this document are
discussed in more detail below.
How ACH Credit Works
Companies and other payers interested in enrolling in the ACH
credit program must indicate such interest by providing the following
information to Customs: Payer name and address; payer contact name(s);
payer telephone number(s) and facsimile number; payer identification
number (importer number, Social Security number, or Customs assigned
number); and 3-digit filer code. This information should be sent to the
Financial Management Services Center, U.S. Customs Service, 6026
Lakeside Boulevard, Indianapolis, Indiana 46278, by mail or facsimile
transmission (317-298-1013). Pre-printed enrollment forms for this
purpose, together with detailed information regarding the ACH credit
program, are available from the Financial Management Services Center
contact person identified earlier in this document.
The payer and its financial institution are responsible for
determining the methodology used for originating the ACH credit payment
(telephone or computer generated instructions, diskettes, etc.) and the
methodology used for notifying the payer that its account has been
charged. The financial institution that the payer uses must be capable
of structuring ACH credit transactions according to the payment and
addendum conventions prescribed by the National Automated
[[Page 29124]]
Clearinghouse Association, that is, the financial institution must use
either the CCD+ or the CTX payment formats and must use the TXP data
segment for the payment-related information within the addendum record
for each daily statement or deferred tax or bill payment. Payments
transmitted by ACH credit must be formatted as described in the format
instructions provided by the Financial Management Services Center.
Following receipt of the enrollment information, the Financial
Management Services Center provides the payer with specific ACH credit
routing and format instructions and advises the payer that the
following information must be provided to its financial institution
when originating its payments: Company name; company contact person
name and telephone number; company identification number (coded
Internal Revenue Service employer identification number or DUNS number
or Customs assigned number); company payment description; effective
date; receiving company name (i.e. U.S. Customs); transaction code;
Customs transit routing number and Customs account number (provided to
the payer by Customs); payment amount; payer identifier (importer
number or Social Security number or Customs assigned number or filer
code if the payer is a broker who is the importer of record); document
number (daily statement number, entry or warehouse withdrawal number
for a deferred tax payment, or bill number); payment type code (which
identifies the payment as a daily statement payment or deferred tax
payment or bill payment); settlement date (no later than the payment
due date); and document payment amount.
Before effecting any payments of funds through the ACH credit
process, the payer is instructed by Customs to follow a trial run
``prenotification'' procedure, involving a non-funds message
transmission through its financial institution to the Customs account,
in order to validate the routing instructions. Once the routing
instructions are validated, the Financial Management Services Center
notifies the payer that the prenotification transaction has been
accepted and that payments may be originated on or after the tenth
calendar day following the prenotification acceptance date.
The payer obtains the source data (the document number and amount)
for the ACH credit payment transaction from the daily statement or from
the entry or warehouse withdrawal documentation in the case of a
deferred tax or from the Customs bill. The payer, through its financial
institution, originates payment information to the Customs account no
later than one business day prior to the payment due date (daily
statement payments are due no later than ten working days after release
or withdrawal of the merchandise; deferred tax payments are due on the
14th day or 29th day of the month, with special rules if the due date
falls on a weekend or Federal holiday; bills must be paid no later than
the late payment date appearing on the bill). The next day (the
settlement date), the payer's account is charged by its financial
institution and the payment is credited by Customs and applied to the
appropriate daily statement or entry or warehouse withdrawal or bill as
of that settlement date.
If daily statement payments are involved, a statement filer who is
not the importer of record (and thus will not be making or authorizing
the payment) must still obtain the preliminary statement through ABI
and must still present the preliminary statement and the corresponding
entry summaries (when paper is required) to the Customs location, as
provided in Sec. 24.25(c). However, the process differs in the case of
payments to be made by ACH credit in that such a filer will provide the
payer with the statement number and the statement amount at least one
business day prior to the due date.
The payer is responsible for following the routing and format
instructions provided by the Financial Management Services Center, and
for ensuring the accuracy of the information provided to its financial
institution, when originating its payment. Erroneous information
provided by the payer (for example, non-standard formatting, incorrect
document number, payment amount different from the amount due) will
delay the prompt posting of the payment to the receivable. If a payer
repeatedly provides erroneous information when originating payments,
the payer may be advised in writing to refrain from using ACH credit
and to submit its payments by bank draft or check pursuant to Sec. 24.1
or by the ACH debit payment method under Sec. 24.25.
Regulatory Implementation
In view of the fact that ACH credit is a voluntary program intended
to provide flexibility, efficiency and related benefits to the trade
community and to Customs, it appears appropriate to implement the ACH
program as an interim rule, subject to public comment procedures before
adoption of a final rule. Moreover, since present Sec. 24.25 concerns
only statement processing and describes ACH debit procedures whereas
ACH credit will also apply to deferred tax and bill payments, Customs
believes that it is preferable (1) to deal with ACH credit in a
separate new Sec. 24.26 and (2) to make conforming changes to present
Sec. 24.25 to reflect the adoption of the new section, including, where
appropriate, the addition of the word ``debit'' to clarify the meaning
of the references to ACH in that section.
Comments
Before adopting this interim regulation as a final rule,
consideration will be given to any written comments timely submitted to
Customs. Comments submitted will be available for public inspection in
accordance with the Freedom of Information Act (5 U.S.C. 552),
Sec. 1.4, Treasury Department Regulations (31 CFR 1.4), and
Sec. 103.11(b), Customs Regulations (19 CFR 103.11(b)), on normal
business days between the hours of 9 a.m. and 4:30 p.m. at the
Regulations Branch, Office of Regulations and Rulings, U.S. Customs
Service, 1300 Pennsylvania Avenue, N.W., 3rd Floor, Washington, D.C.
Inapplicability of Prior Public Notice and Comment Procedures
Pursuant to the provisions of 5 U.S.C. 553(b)(B), Customs has
determined that prior public notice and comment procedures on this
regulation are unnecessary and contrary to the public interest. The ACH
credit process implemented by this regulation is an entirely voluntary
payment procedure that provides benefits to the public in that it
facilitates the electronic entry and payment process, addresses some
concerns of the public regarding existing electronic payments
procedures, and has the overall effect of reducing the regulatory
burden on the public.
Executive Order 12866
This document does not meet the criteria for a ``significant
regulatory action'' as specified in Executive Order 12866.
Regulatory Flexibility Act
Because no notice of proposed rulemaking is required for interim
regulations, the provisions of the Regulatory Flexibility Act (5 U.S.C.
601 et seq.) do not apply.
Paperwork Reduction Act
This regulation is being issued without prior notice and public
procedure pursuant to the Administrative Procedure Act (5 U.S.C. 553).
For this reason, the collection of information contained in this
regulation has been reviewed and, pending receipt and evaluation of
public comments,
[[Page 29125]]
approved by the Office of Management and Budget in accordance with the
requirements of the Paperwork Reduction Act (44 U.S.C. 3507) under
control number 1515-0218.
An agency may not conduct or sponsor, and a person is not required
to respond to, a collection of information unless the collection of
information displays a valid control number.
The collection of information in these regulations is in
Sec. 24.26. This information is required in connection with an election
to use the ACH credit procedure for making electronic payments of funds
to Customs. The information will be used by the U.S. Customs Service to
ensure that payments to Customs are properly transmitted, received, and
credited. The likely respondents are business organizations including
importers, exporters and manufacturers.
Estimated total annual reporting and/or recordkeeping burden: 17
hours.
Estimated average annual burden per respondent/ recordkeeper: .083
hours.
Estimated number of respondents and/or recordkeepers: 200.
Estimated annual number of responses: 200.
Comments are invited on: (a) whether the collection of information
is necessary for the proper performance of the functions of the agency,
including whether the information shall have practical utility; (b) the
accuracy of the agency's estimate of the burden of the collection of
information; (c) ways to enhance the quality, utility, and clarity of
the information to be collected; (d) ways to minimize the burden of the
collection of information on respondents, including through the use of
automated collection techniques or other forms of information
technology; and (e) estimates of capital or start up costs and costs of
operations, maintenance, and purchase of services to provide
information. Comments should be directed to the Office of Management
and Budget, Attention: Desk Officer for the Department of the Treasury,
Office of Information and Regulatory Affairs, Washington, D.C. 20503. A
copy should also be sent to the Regulations Branch, Office of
Regulations and Rulings, U.S. Customs Service, 1300 Pennsylvania
Avenue, N.W., Washington, D.C. 20229.
List of Subjects in 19 CFR Part 24
Accounting, Claims, Customs duties and inspection, Imports, Taxes.
Amendments to the Regulations
For the reasons set forth above, Part 24, Customs Regulations (19
CFR Part 24), is amended as set forth below.
PART 24--CUSTOMS FINANCIAL AND ACCOUNTING PROCEDURES
1. The authority citation for part 24 continues to read in part as
follows:
Authority: 5 U.S.C. 301; 19 U.S.C. 58a-58c, 66, 1202 (General
Note 20, Harmonized Tariff Schedule of the United States), 1450,
1624; 31 U.S.C. 9701.
* * * * *
Sec. 24.25 [Amended]
2. In Sec. 24.25:
a. The third sentence of paragraph (a) is amended by adding after
``(ACH)'' the words ``debit or ACH credit'';
b. The sixth sentence of paragraph (a) is amended by adding the
words ``debit (see paragraph (b)(2) of this section)'' after ``ACH''
the first time it appears and adding at the end of the sentence before
the period the words ``; ACH credit is described in Sec. 24.26'';
c. The heading of paragraph (b)(2) is amended by adding after
``Clearinghouse'' the word ``debit'';
d. The first sentence of paragraph (b)(2) is amended by adding
after ``through ACH'' the word ``debit''; and
e. The first sentence of paragraph (c)(4) is amended by removing
the words ``ACH payment authorization'' and adding, in their place, the
words ``ACH debit payment authorization or ACH credit payment''.
3. Section 24.26 is added to read as follows:
Sec. 24.26 Automated Clearinghouse Credit.
(a) Description. Automated Clearinghouse (ACH) credit is an
optional payment method that allows a payer to transmit statement
processing payments (see Sec. 24.25) or deferred tax payments (see
Sec. 24.4) or bill payments (see Sec. 24.3) electronically, through its
financial institution, directly to the Customs account maintained by
the Department of the Treasury.
(b) Enrollment procedure. A payer interested in enrolling in the
ACH credit program must indicate such interest by providing the
following information to the Financial Management Services Center, U.S.
Customs Service, 6026 Lakeside Boulevard, Indianapolis, Indiana 46278:
Payer name and address; payer contact name(s); payer telephone
number(s) and facsimile number; payer identification number (importer
number or Social Security number or Customs assigned number); and 3-
digit filer code.
(c) Routing and format instructions. Following receipt of the
enrollment information, the Financial Management Services Center will
provide the payer with specific ACH credit routing and format
instructions and will advise the payer that the following information
must be provided to its financial institution when originating its
payments: Company name; company contact person name and telephone
number; company identification number (coded Internal Revenue Service
employer identification number or DUNS number or Customs assigned
number); company payment description; effective date; receiving company
name; transaction code; Customs transit routing number and Customs
account number; payment amount; payer identifier (importer number or
Social Security number or Customs assigned number or filer code if the
payer is a broker who is the importer of record); document number
(daily statement number, entry or warehouse withdrawal number for a
deferred tax payment, or bill number); payment type code; settlement
date; and document payment amount.
(d) Prenotification procedure. Before effecting any payments of
funds through the ACH credit process, the payer must follow a
prenotification procedure, involving a non-funds message transmission
through its financial institution to the Customs account, in order to
validate the routing instructions. When the routing instructions are
validated, the Financial Management Services Center will notify the
payer that the prenotification transaction has been accepted and that
payments may be originated on or after the tenth calendar day following
the prenotification acceptance date.
(e) Payment origination procedures. (1) General. Once the payer has
received authorization to begin originating ACH credit payments under
paragraph (d) of this section, the payer, through its financial
institution, must originate each payment transaction to the Customs
account no later than one business day prior to the payment due date.
The payer's account will be charged by the financial institution on the
settlement date identified in the transaction. The payer is responsible
for following the routing and format instructions provided by Customs
and for ensuring the accuracy of the information when originating each
payment. Improperly formatted or erroneous information provided by the
payer will delay the prompt posting of the payment to the receivable.
(2) Procedures for daily statement filers. The procedures set forth
in Sec. 24.25(c) for ABI filers using statement processing remain
applicable when payment is effected through ACH credit. However, when
the ABI filer is a customs broker who is not the importer of record and
thus is not responsible for the payment, the ABI filer must provide
[[Page 29126]]
the statement number and statement amount to the importer of record at
least one business day prior to the due date so that the importer of
record can originate the payment.
(f) Date of collection. The date that the ACH credit payment
transaction is received by Customs shall be the collection date which
equates to the settlement date. The appropriate daily statement or
entry or warehouse withdrawal or bill shall be identified as paid as of
that collection date.
(g) Removal from the ACH credit program. If a payer repeatedly
provides improperly formatted or erroneous information when originating
ACH credit payments, the Financial Management Services Center may
advise the payer in writing to refrain from using ACH credit and to
submit its payments by bank draft or check pursuant to Sec. 24.1 or, in
the case of daily statement payments, to use the ACH debit payment
method under Sec. 24.25.
Samuel H. Banks,
Acting Commissioner of Customs.
Approved: May 5, 1998.
John P. Simpson,
Deputy Assistant Secretary of the Treasury.
[FR Doc. 98-14166 Filed 5-27-98; 8:45 am]
BILLING CODE 4820-02-P