NOTE: COMMENTS REGARDING ANY FEDERAL REGISTER NOTICE MUST BE SENT TO THE ADDRESS INDICATED IN THE DOCUMENT. ANY COMMENTS ON THE RAPID INFORMATION BULLETIN BOARD SYSTEM (RIBBS) ABOUT ANY FEDERAL REGISTER NOTICES WILL NOT BE USED OR CONSIDERED IN THE COURSE OF ANY RULE MAKING. ------------------------------------------------------------------------------- =============================================================================== [Federal Register: April 21, 1997 (Volume 62, Number 76)] [Rules and Regulations] [Page 19223-19224] From the Federal Register Online via GPO Access [wais.access.gpo.gov] [DOCID:fr21ap97-6] ======================================================================= ----------------------------------------------------------------------- POSTAL SERVICE 39 CFR Part 20 Global Package Link AGENCY: Postal Service. ACTION: Final rule. ----------------------------------------------------------------------- SUMMARY: The Postal Service, after considering comments submitted in response to its request in 61 FR 55 572 (October 28, 1996) for comments on an interim rule establishing a charge for harmonization of catalog items for mailers using Global Package Link, hereby gives notice that it is adopting the interim regulations on a permanent basis, with modification. EFFECTIVE DATE: 12:01 a.m., April 21, 1997. FOR FURTHER INFORMATION CONTACT: Robert Michelson, (202) 268-5731. SUPPLEMENTARY INFORMATION: On October 28, 1996, the Postal Service published in the Federal Register interim regulations establishing a charge of $1.25 per item for catalog harmonization work performed by the Postal Service for the mailer. Harmonized items are needed for most GPL destination countries to ensure an expeditious customs clearance and to allow the USPS to settle the customs charges on behalf of the mailer. The service includes expedited customs clearance through use of a software-based information system containing all the applicable duty and tax rates for specific products being mailed to destination countries. Of the current GPL destination countries, Brazil, Canada, Chile, Germany, Japan, and the U.K., only Japan does not require harmonized items for a GPL clearance. Comments were due on or before December 15, 1996. Comments were received from one commenter, a company engaged in international package mail order, J.C. Penney [[Page 19224]] International Catalog, Inc. After considering the comments, the Postal Service has decided to adopt the rule with modification. J.C. Penney asserts that harmonization is a basic component of the GPL service and therefore is included in the GPL rate chart. The Postal Service does not agree that harmonization is included in the GPL rate chart. When GPL, then called IPCS, was first implemented in December 1994, Japan was the only destination country and did not require a harmonized datafile to be transmitted for customs clearance. All subsequent rates for GPL to other destinations were developed without inclusion of customs harmonization costs, with the knowledge that at a later date a specific harmonization fee would be implemented when the costs to perform this service were fully revealed. By late summer of 1996, the Postal Service had determined its customs harmonization costs and took action to publish a specific fee in the Federal Register (October 28, 1996). The Postal Service does not feel it is appropriate to include these costs in the rate charts for GPL because GPL mailers have very different levels of need for harmonization. For example, if the harmonization costs were in the rate charts, a high volume GPL mailer with a small number of catalog items would be paying for harmonization services not fully utilized, while a lower volume GPL mailer with a large catalog and many more harmonized items would be receiving more services and paying the same rate. Also, some customers may already have a fully harmonized database of their catalog items at the time of initiating GPL service, and as such should not be paying higher rates for a harmonization service that they will not use. J.C. Penney also asserts that billing for this portion of the service causes an unnecessary accounting step (separate billing, invoicing, etc.), creating numerous invoices for small specialty catalogs (hundreds of dollars) and a disincentive for larger catalogers with thousands of items. The Postal Service disagrees that invoicing for small amounts will be an unnecessary accounting step. To our knowledge, most companies do not excuse payment from customers owing small amounts just because it is extra effort. The USPS has developed an accounts receivable infrastructure and as such is able to generate invoices in an automated manner. In its last assertion, J.C. Penney claims that a number of private customs brokers in Canada are already set up to handle pre-customs advisory and package processing for catalog shipments and do not charge separate small fees for harmonization but rather incorporate this feature in the overall rate per package. J.C. Penney asserts that if the USPS were to add this new fee, GPL service would no longer be competitive. The Postal Service will not dispute that some Canada customs brokers include this charge in the overall package delivery fee, but the USPS is also aware that other Canada customs brokers do charge separately for harmonization and do not include these charges as part of the per package fee. Harmonization fees alone are a relatively small investment for an international mailer to make and therefore is unlikely to make the GPL service noncompetitive in the marketplace. After carefully reviewing J.C. Penney's comments and input received from other sources, the Postal Service has decided to modify the policy regarding harmonization fees to allow each GPL mailer to have 2,500 catalog items harmonized by the Postal Service at no cost during the first 12 months after signing a GPL agreement to a destination country that requires harmonization. This free service will be offered only once to each customer and only during the first 12 months after signing a GPL agreement. Any harmonization service performed in excess of 2,500 items and/or after 12 months will be assessed a per-item fee of $1.25. Accordingly, the Postal Service adopts the following amendments to the International Mail Manual, which is incorporated by reference in the Code of Federal Regulations. See 39 CFR 20.1. All other interim changes in the rule for Global Package Link service which were published in the Federal Register as amendments of the interim rule remain in effect as interim rules. List of Subjects in 39 CFR Part 20 International postal service, Foreign relations. PART 20--[AMENDED] 1. The authority citation for 39 CFR part 20 continues to read as follows: Authority: 5 U.S.C. 552(a); 39 U.S.C. 401, 404, 407, 408. 2. Chapter 6 of the International Mail Manual is amended to read as follows: 626.4 Customs Clearance * * * * * 626.421 Catalog Harmonization Services The Postal Service will provide free catalog harmonization services for the first 2,500 catalog items presented for harmonization during the first 12 months following the GPL customer signing an agreement for a GPL destination country that requires harmonization. Any harmonization work performed in excess of 2,500 for each customer and/ or after the first 12 months of signing a GPL agreement will be charged a fee of $1.25 per item. The mailer has the option of performing their own harmonization, provided it is done in a format compatible with the Postal Service's Customs Pre-Advisory System (CPAS) software. * * * * * Stanley F. Mires, Chief Counsel, Legislative. [FR Doc. 97-10250 Filed 4-18-97; 8:45 am] BILLING CODE 7710-12-P