CBP deputy outlines progress on modernization effort

Getting importers and brokers to let go of the legacy CBP trade processing system and start filing in ACE has been a challenge, but in recent months ACE adoption has taken off. CBP Deputy Commissioner Kevin McAleenan
   The leading edge of U.S. Customs and Border Protection’s (CBP) modernization campaign is the Automated Commercial Environment (ACE) system and Deputy Commissioner Kevin McAleenan on Monday said the switch over of international trade transactions to the new system is reaching new heights.
   The agency in the past two years has delivered a large amount of functionality for automating the collection and review of import and export information, providing earlier visibility to shipping data, faster decisions on admissibility, and better data for more targeted trade enforcement and cargo security screening. ACE also serves as the backbone for the International Trade Data System (ITDS), which is designed to streamline regulatory requirements by allowing traders to transmit documentation one time for routing to relevant agencies rather than sending redundant data to multiple agencies. Officials insist that the 47 federal agencies with an oversight role in trade are on track to meet President Obama’s end-of-year deadline to handle all transactions in ITDS.
   Getting importers and brokers to let go of the legacy CBP trade processing system and start filing in ACE has been a challenge, but in recent months ACE adoption has taken off.
   On May 28, CBP began requiring routine customs entries to be filed through ACE. As of Friday, 86 percent of cargo release entries were filed in ACE compared to 25 percent in January, while entry summary filings topped 98 percent, McAleenan said in a keynote address to the American Association of Exporters and Importers’ annual conference in Washington.
   Entry summaries are submitted after goods arrive in port and provide more details about the shipment for compliance and duty-collection purposes.
   McAleenan said Customs has listened to input from the trade community and pushed back ACE transition deadlines as necessary to ensure all parties had their systems working properly to exchange data.
   CBP has also made significant progress on the export side with enhanced automation and streamlined processes for reporting and licensing. In the past year, CBP and the U.S. Census Bureau have transitioned the Automated Export System and its web-based version, AESDirect, to ACE and transferred all exporters accounts to the new platform.
   McAleenan said ACE offers many benefits over AES, including a new electronic proof-of-export and access to export reports with data looking back over five years. Shippers can now directly access ACE and make sure information entered by their freight forwarders is accurate and create other activity reports to analyze their compliance history.
   ACE will also automate export processing for other government agencies. Within the next few months, CBP will be able to identify which agencies regulate commodities for exporting by their Harmonized Tariff System number and provide the required information electronically, he said.
   Ongoing pilot testing of an electronic export manifest capability for air, ocean and rail carriers has already allowed CBP to more accurately assess risk, the deputy commissioner said.
   Customs is also working with the Census Bureau, the Commerce Department’s Bureau of Industry and Security, and industry representatives on a CBP federal advisory committee to make improvements to the post-departure filing rules.
   Under the Option 4 filing program, CBP receives no advanced data. Commodity data about exports is generally received up to five days after a cargo shipment has been exported. There is no process to validate or determine if information provided by companies – typically those with agriculture products that are often sold and delivered to the port hours before vessel departure. Perceived abuses of the Option 4 filing program led CBP to suspend acceptance of new entrants in 2003. CBP wants to modify Option 4 to obtain pre-departure data, without which it says the government cannot conduct risk assessments to verify that the shipments are low-risk.
   McAleenan said CBP and its partners are exploring several options, including collecting information through electronic export manifest, implementing a trusted trader approach in the export environment and a system for receiving limited pre-departure data prior to departure of the conveyance – with the balance of the data required within five days of export.
   CBP’s transformation effort extends beyond information technology to encompass processes changes that improve efficiency and better align the agency with business practices in the private sector.
   Toward that end, Customs several years ago created Centers of Excellence and Expertise (CEE) organized around 10 industry clusters to increase processing consistency across all ports of entry, speed up resolution of compliance issues and enhance CBP’s understanding of supply chain issues so officials can facilitate trade transactions and resolve enforcement issues. The CEEs, or industry integration centers, enable the agency to provide account-based processing to importers for post-entry compliance reviews and revenue collection rather than simply deal with individual transactions. They also provide knowledgeable points of contact that ensure compliance requirements are uniform no matter which port a container goes through.
   These remote command centers are lowering costs through centralized decision-making, McAleenan said.
 The CEE for Petroleum, Natural Gas and Minerals has experienced a 15 percent reduction in the number of protests and a 65 percent reduction in processing time. Meanwhile, the Apparel, Footwear and Textile center has cut detention times in half, the deputy commissioner said.
   All 10 CEEs are now fully operational and CBP is adding sector specialists and other key personnel so they are fully equipped to handle the volume of transactions, he said.