Introduction
U.S. Customs and Border Protection (CBP), part of the Department of Homeland Security, announced on October 16, 2025, a modification to its National Customs Automation Program (NCAP) test for Periodic Monthly Statements (PMS). This update requires test participants to pay supplemental duty bills electronically through Automated Clearinghouse (ACH) methods, eliminating the option for check payments. The change aims to streamline CBP's payment processes and promote efficiency. Effective December 15, 2025, the modification affects importers and brokers involved in the PMS test, which allows monthly deposits of estimated duties, taxes, and fees. This development builds on a program established in 2004 and refined through multiple updates, reflecting ongoing efforts to modernize customs operations under the Customs Modernization Act.
Background on the National Customs Automation Program and PMS Test
The NCAP originated from the Customs Modernization Act, enacted as part of the North American Free Trade Agreement Implementation Act in 1993. This legislation, codified in 19 U.S.C. 1411, directed CBP to develop automated systems for trade compliance, leading to the creation of the Automated Commercial Environment (ACE). ACE serves as an electronic data interchange system designed to streamline trade processes, enhance security, and reduce costs for stakeholders.
The PMS test, first announced in a February 4, 2004, Federal Register notice (69 FR 5362), enables importers or their designated brokers to deposit estimated duties, taxes, and fees on a monthly basis via ACH. Over the years, CBP has issued 14 modifications to clarify and expand the test, addressing aspects such as payment timelines, eligible entries, and technical requirements. For instance, updates in 2005 and 2006 refined entry processing rules, while more recent changes in 2017 and 2019 integrated advancements in ACE functionality.
Key players include CBP's Revenue Division, which oversees policy and billing, and participants such as importers and brokers who must meet eligibility criteria like internet connectivity, ACH payment capability, and a valid bond. The test operates under the authority of 19 CFR 101.9(b), allowing CBP to waive certain regulations for evaluation purposes.
Key Changes in the Modification
The primary update mandates electronic payment of supplemental duty bills arising from underpayments of estimated duties, taxes, and fees. Previously, these bills could be settled by check. Now, participants must use ACH Debit via Pay.gov or ACH Credit after obtaining instructions from CBP at a specified email address. For both methods, participants provide the bill number and payment amount.
This change applies only to supplemental bills tied to entries originally paid monthly through PMS. CBP justifies the shift as a means to enhance operational efficiency in payment processing. The notice republishes the full test description, incorporating the new requirement in section IV, paragraph i, with subsequent paragraphs redesignated.
No alterations affect the core PMS process: Participants schedule entries for monthly payment, receive preliminary and final statements, and settle via ACH by the 15th working day of the following month. Entries ineligible for PMS, such as those involving excise taxes or certain trade agreements, remain excluded.
Legal and Regulatory Context
The modification aligns with broader customs modernization goals but involves waiving inconsistent provisions in 19 CFR parts 24, 141, 142, and 143 for test duration. For example, standard entry summary filing rules are suspended to accommodate monthly payments. However, recordkeeping requirements under 19 CFR part 163 persist.
Precedents include prior NCAP tests that tested electronic payment systems, contributing to ACE's phased rollout. Politically, the push for automation reflects bipartisan support for trade efficiency, as seen in the original 1993 act and subsequent funding for CBP technology. Different perspectives emerge: Importers may appreciate reduced paperwork but face adaptation costs, while CBP emphasizes security and speed. Brokers, as intermediaries, must ensure clients comply to avoid penalties.
Implications for Participants and Operations
In the short term, participants must establish Pay.gov accounts for ACH Debit or contact CBP for ACH Credit setup by December 15, 2025. Failure to adapt could lead to late payments and liquidated damages, as outlined in the test's misconduct provisions. CBP provides contact points for questions, including email for comments and phone for policy inquiries.
Long-term, the change could reduce administrative burdens and errors associated with physical checks, aligning with digital trends in federal payments. Potential challenges include technical glitches in ACH transmissions or accessibility issues for smaller importers. Broader debates involve balancing modernization with equitable access, as not all stakeholders may have seamless internet or banking capabilities.
The notice also addresses special cases, such as split shipments under 19 CFR 141.57 and 141.58, confirming they remain eligible for PMS with payment tied to entry or release dates.
Forward-Looking Conclusion
This modification underscores CBP's commitment to efficient, electronic customs processes. Key takeaways include the mandatory shift to ACH for supplemental duties and the test's continued evolution. Future steps may involve further integrations with ACE or expansions to other payment types. Ongoing challenges could center on participant adaptation and system reliability, while debates persist on the pace of digitization in trade compliance.