ACE deadline moved back

   Responding to industry concerns, U.S. Customs and Border Protection recently announced it’s postponing the Nov. 1 deadline for electronically filing standard customs entries in a sophisticated, new trade management system to give other government agencies and businesses more time to integrate data requirements in their internal systems.
   Officials were previously firm that the deadline for the Automated Commercial Environment (ACE) would be met and represented a major milestone towards the December 2016 Obama administration mandate that all agencies with import/export jurisdiction operate through the International Trade Data System (ITDS). Instead, they will now phase in the requirements over eight months to give users more flexibility and allow CBP to fully test all functions.
   CBP and the private sector have done a good job in many areas preparing for the migration to ACE from a creaky legacy system, but “have not achieved across-the-board implementation success for a variety of reasons,” Brenda Smith, assistant commissioner for international trade, said in a conference call with industry representatives.
   The December 2016 deadline for full implementation of ITDS will not be impacted by the new ACE timetable, Commissioner Gil Kerlikowske insisted.
   In late June, the National Customs Brokers and Forwarders Association of America and the Trade Support Network—a large group of trade compliance professionals that serves as a sounding board for CBP on automation issues—formally requested a delay on the grounds that many importers and their agents were not prepared to file cargo release and entry summary documents in ACE, partly because many of the other agencies they also deal with have not made the necessary preparations yet.
   ACE is a massive new IT system designed to help CBP better manage the volume and complexity of international freight and parcel shipments and provide security. It offers a simplified process for reporting shipment data, and communicating with federal agencies, in the process eliminating the use of paper-based forms. And it will serve as the platform for ITDS, which is the single window through which information will be shared with other relevant agencies and businesses in a streamlined fashion so that redundant filings to multiple agencies are no longer necessary.
   For the past year, CBP officials have been urging importers and customs brokers to upgrade their systems to synchronize with ACE and get certified, or risk getting cut off and losing business because their goods can’t enter the country.
   The ACE entry summary function has been available for six years, but only about 60 percent of the entry summaries on which duty calculations are based are filed through ACE, according to Customs. About 10 percent of cargo release entries are filed through ACE.
   About 3,150 entities electronically file entries with CBP through ACE or the legacy system.
   The NCBFAA and TSN said companies need more time to fully integrate ACE cargo release and entry functions into their business processes after CBP exceeded expectations in developing software and releasing functional tools. The primary concern is that most government agencies haven’t made their technical specifications available yet to allow software vendors to program the new functionality into their products and traders to train their employees on the new system. Many participating government agencies are just beginning pilot projects to test their functionality, and still need to publish notices about the pilots or finalize implementation guidelines.
   After reviewing the situation, Customs agreed that pushing importers to comply when so many are not ready would disrupt trade, Smith said. CBP also realized it was not operationally ready either, in part because it had to throw a lot of resources this summer to fix glitches with the transition to mandatory filing of electronic air manifests in ACE. The delay is also a recognition that many agencies participating in ITDS do not have the policies and procedures in place to message back to CBP and importers through ACE that cargo is eligible to be released for pick up at the port, she added.
   “This is a brave new world for them,” she said.
   Under the new schedule, industry users by Feb. 27 will need to file entries for cargo release and entry summaries through ACE/ITDS for shipments that require authorization from CBP, the Food and Drug Administration, the National Highway Traffic Safety Administration, and the Animal and Plant Health Inspection Service for Lacey Act documentation showing proof that goods do not include illegally sold wildlife, fish and plants, according to Debbie Augustin, executive director of the ACE Business Office.
   At that time, transmissions will no longer be permitted in the old system for most entry types.
   The remaining agencies will be brought on board by July, at which time CBP plans to implement a policy under which companies will be required to file electronically through ACE/ITDS or on paper. 
   Smith said the hybrid policy of allowing part of a document package to be transmitted electronically and the rest on paper added operational costs for CBP and was inefficient for both sides. A notice of proposed rulemaking will be issued early next year. 
   Paper-based entries will continue to be accepted in recognition that some small customs brokers and importers might not have the resources or understanding to automate their entry filings, Smith said.
   Assistant Commissioner Todd Owen said CBP is addressing concerns that some ports of entry may not be properly informed about how to operate in the ACE environment by rolling out webinars to some of the busiest ports and in the future conducting more hands-on training for officers where they will be exposed to simulations of different kinds of entry processes they will encounter.
   Kerlikowske said CBP is disappointed in the number of traders participating so far in pilot projects with participating government agencies to demonstrate how data is transferred through ITDS. The commissioner said he and some top lieutenants planned to personally recruit more companies to sign up for the trials and welcomed others to join the effort.

This column was published in the October 2015 issue of American Shipper.