Re: List of PGA Status/Issues in ACE for Foreign-Trade Zones. Dear Mr. Scopa:

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1 February 21, 2018 William R. Scopa Branch Chief U.S. Customs and Border Protection Office of Trade 1400 L Street, NW, Room 1215 Washington, DC Re: List of PGA Status/Issues in ACE for Foreign-Trade Zones Dear Mr. Scopa: Our trade associations represent many companies using the U.S. Foreign-Trade Zone (FTZ) program, for which the integration of Partner Government Agencies (PGA) data sets into the Automated Commercial Environment (ACE) presents many challenges due to the unique characteristics of FTZ admission and entry transactions. The following constitutes a list we have compiled to inform U.S. Customs and Border Protection (CBP) and the Border Interagency Executive Council (BIEC) of current status and remaining PGA issues in ACE for FTZ stakeholders. PGA Specific 1) Animal and Plant Health Inspection Service (APHIS) Core a. Confirmed in writing it will attach its message set to the e214 when available in ACE. b. In the interim, the message set is attached to the Type 06 cargo release transaction in ACE for both Regular c. Providing APHIS Core data at the time of cargo release from an FTZ is too late. d. To date, APHIS Core has not made filing of its message set on the Type 06 cargo release mandatory. 2) Animal and Plant Health Inspection Service (APHIS) Lacey a. Confirmed in writing it will attach its message set to the e214 when available in ACE. b. In the interim, FTZ filers have the following options:

2 i. Submit the message set on the Type 06 cargo release transaction for Regular Type 06 entries. NAFTZ believes few, if any FTZ filers use Regular Type 06 entries to withdraw APHIS Lacey-regulated merchandise from FTZs (which CBP and APHIS could confirm). ii. Submit the message set on the Type 06 weekly entry summary transaction for Weekly Type 06 entries. In this scenario, APHIS Lacey confirmed in writing that product information cannot be reported using UIN/FIFO principles. iii. File the Lacey Declaration information in LAWGS including the FTZ admission number reported to admit the merchandise into the FTZ. iv. FTZ filers may also file a paper Lacey Declaration, which NAFTZ does not believe is a prevalent practice. 3) Environmental Protection Agency Toxic Substances Control Act (EPA TSCA) a. EPA TSCA s message set is currently attached to the Type 06 cargo release transaction for both Regular Type 06 i. NAFTZ has asked EPA to accept TSCA certification at the time of weekly entry summary for Weekly Type 06 FTZ filers instead of at the time of weekly estimate cargo release filing, mirrored after the agency s acceptance of V&E information at the time of entry summary for Weekly Type 06 FTZ filers instead of at the time of weekly estimate cargo release filing. b. EPA has verbally indicated that TSCA certification for FTZ filers should be only on products that are subject to TSCA in their condition upon withdrawal from the FTZ based on Harmonized Tariff Schedule (HTS) flagging and an importer s regulatory determination that said product is subject to TSCA. c. In a letter, NAFTZ requested the following commitments from EPA: i. The TSCA 13 import certification at the time of entry/cargo release is required only on products subject to TSCA in their condition at the time of withdrawal from the FTZ. Products not subject to TSCA in their condition at the time of withdrawal are exempt even though they may have been produced with/contain imported inputs regulated by TSCA at the time of admission into the FTZ. Regardless of whether or when EPA requires TSCA 13 import certifications for products entering and exiting U.S. FTZs, we recognize that other sections of TSCA separately apply to the importation of any TSCAregulated chemical substance into any State of the United States, the District of Columbia, or the Commonwealth of Puerto Rico. ii. Allow TSCA certification via ACE ITDS under the Dual Option, i.e., allowing weekly entry filers to submit at the time of entry summary as opposed to entry/cargo release. iii. Clarify whether it is possible and compliant to file a positive and negative certification on the same entry line. iv. There are no additional export notification requirements in ACE. For any chemical substance subject to specific TSCA proposed rules, final rules, orders, or actions under section 4, 5, 6, or 7 of TSCA, TSCA 12(b) requires an exporter to notify EPA by mail on a per country basis about any exports of the substance at or above a concentration of one percent ( 1.0%) by weight and volume (0.1% for a known or potential human carcinogen). Whether the exporter owes

3 the section 12(b) export notice to EPA only once per country of destination, for the very first export of the regulated substance to the country, or once per country of destination per year, for the first export of the regulated substance to the country during each calendar year, depends on the proposed rule, final rule, order, or action that applies to the exported chemical substance under TSCA. 1 Currently, the only implemented ACE export reporting requirements are for Hazardous Waste shipments. 4) Environmental Protection Agency Federal Insecticide, Fungicide and Rodenticide Act Notice of Arrival (EPA FIFRA-NOA) a. EPA FIFRA s message set is currently attached to the Type 06 cargo release transaction for both Regular Type 06 i. NAFTZ has asked EPA to attach the NOA message set to the e214 when available in ACE. b. In a letter, NAFTZ requested the following commitments from EPA: i. 1) For FTZ filers who submit and receive approval of a paper NoA in advance of shipment arrival in the United States, using Disclaim Code C at the time of Type 06 entry in ACE is appropriate, and 2) Once admission/e-214 filing capabilities have been transitioned into ACE with PGA message sets attached, EPA will allow FTZ filers to submit NoAs electronically via the PGA message set at the time of admission in lieu of submitting paper NoAs or NoAs at the time of Type 06 entry. ii. There are no additional export notification requirements in ACE. EPA FIFRA export requirements for unregistered pesticides requires obtaining and submitting to EPA, prior to export, a Foreign Purchaser Acknowledgement Statement (FPAS) that the purchaser is aware the product is not registered in the U.S. and cannot be sold for use in the U.S. The FPAS is sent to the EPA in Washington, DC and EPA sends these statements to the government of the importing country. 5) Environmental Protection Agency Vehicles & Engines (EPA V&E) a. EPA V&E currently attaches its message set to 1) the cargo release transaction for Regular Type 06 entry filers and 2) the weekly entry summary transaction for Weekly Type 06 entry filers. b. In a letter dated Sept. 9, 2016, NAFTZ filed the following comments to EPA: i. Regulations under 19 CFR , govern entry of motor vehicles, engines, and equipment containing engines subject to the Clean Air Act. Section 12.74(c) specifically requires importers of non-road or stationary engines, including engines incorporated into vehicles and equipment, to submit EPA declaration Form to CBP at the time of entry/cargo release, or when filing a weekly entry from an FTZ at the time of entry summary. In response to the EPA Federal Register Notice on April 13, 2017, requesting public comment on EPA regulations that may be appropriate for repeal, replacement or modification, 1 40 C.F.R (a)(2).

4 ii. the NAFTZ submitted comments on May 15, 2017, recommending EPA exempt engines, including engines incorporated into vehicles & equipment, manufactured in a U.S. Foreign Trade Zone from the 19 CFR entry/entry summary reporting requirement. Eliminating this duplicative requirement would not compromise compliance with the Clean Air Act. As is the case with all U.S.-based manufacturers of engine-powered vehicles and equipment, manufacturers in U.S. FTZs are subject to all applicable EPA Regulations and reporting requirements under the Clean Air Act. This compliance regime requires FTZ manufacturers to provide separately to the EPA the same information required by section As such, compelling U.S.-based FTZ manufacturers to submit entry/entry summary reports with engine and vehicle data through EPA Form on ACE Type-06 entries from a U.S. zone into U.S. customs territory is duplicative, creates an additional and unnecessary data collection and reporting burden with attendant compliance costs on U.Sbased FTZ manufactures, and does not enhance enforcement of EPA laws and regulations. c. In a letter dated , NAFTZ requested the following commitment from EPA: i. Exempt engines, including engines incorporated into vehicles & equipment manufactured in a U.S. Foreign-Trade Zone, from the 19 CFR entry/entry summary reporting requirement as eliminating this duplicative requirement would not compromise compliance with the Clean Air Act. 6) Bureau of Alcohol Tobacco Firearms & Explosives (ATF) b. Requires product information based on specific identity and does not allow reporting by UIN/FIFO methodology. c. Form 6a may not be submitted electronically in message set or DIS. 7) Alcohol and Tobacco Tax and Trade Bureau (TTB) b. Requires product information based on specific identity and does not allow reporting by UIN/FIFO methodology. 8) Food & Drug Administration (FDA) b. Has a unique and separate formal Weekly Entry Filing (WEF) pre-vetting application process that FTZ filers must go through before using Weekly Type 06 entries to withdraw FDA-regulated merchandise from FTZs. c. NAFTZ recently asked FDA to accommodate the following: i. Provide more advanced notice to the trade of new/changed HTS flagging updates. When FDA fails to provide sufficient notice to the trade, FTZs are particularly negatively impacted because they must quickly review, collect additional information for a large number of articles and perform mass updates

5 to their systems and product libraries for clearance of shipments out of a zone. Such merchandise may or may not have been previously approved by the FDA for WEF, and, if it was not previously approved, the FDA WEF application process typically requires several months for approval. 9) National Highway Transportation Safety Administration (NHTSA) a. Currently attaches its message set to: 1) the cargo release transaction for Regular Type 06 entry filers; and 2) the weekly entry summary transaction for Weekly Type 06 entry filers. b. NAFTZ and NHTSA have worked together for two years to develop industry-specific procedures and reporting mechanisms to satisfy NHTSA s ACE reporting requirements. c. NHTSA recently confirmed in writing it intends to attach its message set to the e214 when available in ACE, which will cause the entire automotive industry using FTZs to switch the point of transmission of NHTSA data from entry to admission. d. In a letter dated Sept. 9, 2017, NAFTZ requested that NHTSA reconsider its position on switching the point of transmission once ACE is operational, which NHTSA rejected in a response dated Nov. 2, ) Consumer Product Safety Commission (CPSC) a. Currently attaches its message set to 1) the cargo release transaction for Regular Type 06 entry filers and 2) the weekly entry summary transaction for Weekly Type 06 entry filers. b. Continues its pilot on data collection in ACE. CPSC will initiate a Beta pilot soon, in which Type 06 entry filers will be allowed to participate. c. Has never formally acknowledged/approved the unique aspects of FTZ operations, namely UIN/FIFO reporting methodology, adjustments, scrap/waste, etc. 11) Fish & Wildlife Service (FWS) b. Has confirmed in writing it intends to attach its message set to the e214 when available in ACE. c. Has not made filing of its message set in ACE mandatory. d. In a letter dated Jan. 6, 2017, NAFTZ outlined the following issues and open questions for FWS, to which FWS has never responded: i. Collection of FWS importation message sets must be before or at the time of FTZ admission (e214) and not at the time of Type 06 FTZ entry. ii. edecs confirmation numbers should not be required at time of Type 06 entry. iii. FWS should mirror its interim FTZ filing requirements after APHIS Lacey. 12) Drug Enforcement Administration (DEA) a. Currently attaches its message set to the cargo release transition for Regular Type 06 b. Has confirmed verbally that it intends to attach its message set to the e214 when available in ACE. Also has verbally confirmed that DEA import declarations will be required to be filed prior to Type 06 entry for DEA-regulated products that are

6 manufactured in an FTZ from materials that are not DEA regulated (i.e., certain pharma products). c. NAFTZ awaiting DEA s written response before taking further action. General PGA Issues/Discussion Admission Types o Standard Admission vs. Direct Delivery Admission Conditionally Admissible Flag on Admission Avoidance of Double Reporting: o If PGA collects import data at time of admission, then Type 06 entry PGA reporting should not be required. o If PGA collects import data at time of Type 06 entry, then admission PGA reporting should not be required. There are also additional outstanding issues on how the PGAs through ACE will handle adjustments, zone-to-zone transfers, and the unique aspects of manufacturing zones. We welcome the opportunity to work with the BIEC, CBP, and the PGAs to find solutions to these issues that will support effective enforcement by the agencies and facilitate compliance by the trade. Sincerely, Nate Herman Sr. Vice President, Supply Chain American Apparel & Footwear Association (AAFA) (202) nherman@aafaglobal.com Erik O. Autor President National Association of Foreign-Trade Zones (NAFTZ) (202) ex. 226 eautor@naftz.org Jonathan Gold Vice President, Supply Chain and Customs Policy National Retail Federation (NRF) (202) goldj@nrf.com Julia K. Hughes President United States Fashion Industry Association (USFIA) (202) jhughes@usfashionindustry.com