ACE Program Update Deborah Augustin Executive Director, ACE Business Office U.S. Customs and Border Protection Office of International Trade

Trade Processing at a Glance In FY 2015, U.S. Customs and Border Protection processed… • 33 million imports (entries) worth over $2.4 trillion. • $1.5 trillion+ worth of U.S. exports. • 26.3+ million imported cargo containers through the nation’s ports of entry – an increase of 2.6 percent from FY 2014. • $46 billion in collected duties, taxes, and fees – the highest amount collected in the last five years.

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ACE Progress

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Priorities for 2016

• Complete actions to divest ACS • Complete mandatory transition to ACE

– Complete development of remaining core processing capabilities and deploy in ACE – Complete all PGA integration requirements for the 22 agencies with data requirements at time of entry/entry summary – Full transition of legacy AESDirect to ACE by May 20, 2016

• Continue to transition users to ACE – Extensive outreach to filers continues in order to transition more filers to ACE prior to mandatory dates

• Implement necessary trade legislation per the February 2016 Trade Facilitation & Trade Enforcement Act (TFTEA) 5

Key Dates for ACE Transition

ACE Filing Status: Entry/Entry Summary

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ACE System Performance • Our ACE overall system availability of 97.3% (continuous 365 day period as of 2/2016) exceeds the Key Performance Parameter threshold of 97%. • Transparency on system issues is being provided via daily trade calls and listings of issues are posted to CBP.gov/ace. • Application dynamics have been implemented in the ACE system and metrics reporting is currently underway.

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Partner Government Agencies in ACE

Status of PGAs with Entry/Entry Summary Requirements (4/11/16)

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ACE Quota Highlights • Paper will not will be required. • ACE will automatically process and allocate quota. • Quota module is currently in CERT environment for Trade testing, focusing on controlled opening moment scenarios.

Key Dates for ACE Transition

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Highlights for Post Release Processing • • • • •

Protest Filer Account for trade to submit protests to CBP and view protests that have been submitted Integrated with DIS to allow for documents to be uploaded and attached to a protest Will allow for seamless movement of work Will send electronic notifications to the protest filer based on specified protest events (Protest Added, Amended, Denied, etc.) Will allow for broader trade participation

Liquidation

• • • •

Entry Summaries will no longer display liquidated when the liquidation date is in the future Liquidations will process weekly, Entry Summaries will liquidate every Friday Liquidations will post weekly to the electronic bulletin on cbp.gov Suspensions and extensions

Reconciliation

• • •

Reconcilable issues and timeframes will remain the same All data will be submitted electronically, including data from the line item data spreadsheet Only reconciled amounts will need to be submitted, Trade will no longer be required to submit original amounts

Drawback

• • • • •

Allow for electronic submission of entire Drawback Package via ABI transmission or DIS upload Filings allowed at the 10 digit HTS line level System Validations will be implemented Tighter integration with post release processes Improve system controls for preventing over refunding

HTS

• •

HTS database will migration to ACE Draft CATAIR of HTS ACE ABI Query will be posted by end of April

Statements

• •

All Statements will be processed in ACE Statement view for Trade will continue to be via Report

Protest

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Post Core Enhancements • The ACE Business Office will work with CBP policy offices to identify priority areas for automation. • As priorities are established, pre-existing requirements that are currently in the backlog will be evaluated in light of the policy offices vision for that functionality. • Resources for new development will continue to be limited, and requirements will be determined based on agency priorities. • CBP will continue to maintain the requirements backlog and leverage trade to map requirements for our future automation priorities. 14

Benefits of Filing with ACE

Upcoming ACE Outreach Events • Border Interagency Executive Council (BIEC) Outreach to Southern Border – May/June 2016 – The Office of Trade Relations will be sponsoring outreach with ports located along the southern border to address low filing rates experienced at these locations

ACE Resources Outreach

Training

Stay up to date on community events and webinars. www.cbp.gov/aceoutreach

Find user guides and online courses on the ACE Portal and system functions. www.cbp.gov/trade/ace/training-andreference-guides

E-mail Alerts

FAQs

Receive automatic updates on ACE on: system outages, new capabilities, technical documentation and more. www.apps.cbp.gov/csms/csms

Answers to some of our most frequent questions on: ACE Portal, manifest filings, cargo release, and more. www.cbp.gov/trade/automated/acefaq

Questions

Support

For non-technical inquiries please submit questions to: [email protected]

For technical inquiries please call 866-530-4172.

www.cbp.gov/ace

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QUESTIONS? [email protected]

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Back-Up Slides

Getting Ready for ACE As the next mandatory date approaches, make sure to take all necessary steps. Software Vendors and Self Filers  Software configured to CATAIR guidelines on CBP.gov  Software configured to supplemental PGA CATAIR guidelines on CBP.gov  All capabilities tested in CERT  Clients informed of software updates and aware of ACE transition

Brokers  Software package from vendor is updated for ACE transition  Entries have been filed in ACE Cargo Release successfully  Entry Summaries have been filed in ACE successfully  Confirm software vendor has successfully tested all capabilities in CERT  Clients informed of software updates and aware of ACE transition

Importers  Broker has updated software  Broker can confirm that entries and entry summaries have been filed in ACE successfully (including new data elements for ACE entries/cargo release: Buyer Name and Address, Buyer EIN, Seller Name and Address, and Manufacturer/Supplier Name and Address)

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Additional Talking Points

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ACE What to Expect Now Sandy Coty, OHL International Lenny Feldman, Sandler, Travis & Rosenberg, P.A.

State of ACE • In-Bond Fix o o o o

Permit to Transfer to a CFS in same district but different port code Unlading port and entry port different but in same district Hub entries Port association and port clusters

• Interim Process o o o o o

Drug Enforcement Administration (DEA) National Marine Fisheries Service (NMFS) Environmental Protections Agency (EPA) Alcohol Tobacco & Firearms and Explosives (ATF) Fish and Wild Life Service (FWS

State of ACE • “Admissible” - “Under CBP Review” • Bill Holds in ACE • Report to ABI Rep and Request a Trouble Ticket – CBP needs visibility • Border Clearance Challenges • System Down Time Guidelines (ACE/DIS) • General Order - Hand Carry – House Bill • FTZ – PGA’s • HTS Flags o F&W – FW2 – Must Certify Disclaimer • Apparel, Footwear, Jewelry, US Goods, Luggage o CPSC - Asking for Intended Use Code

• DIS – Unsolicited vs. Unknown

Exam • Designated Exam Port Code - SE 11 Record • Elected Exam Site: (FIRMS) Filer’s preferred CES location if cargo needs to be examined (optional) • Only available if transmitting ACE Cargo Release 2 step? “DSGNTD EXAM SITE NOT ALLOWED - NOT RLF”

Rail Entry Processing •

CBP regulations require that all cargo arriving on non-split conveyances not be entered with cargo from another non-split conveyance. This applies to the importing conveyance, and not, for example, to ships arriving into a foreign country such as Canada, and then split onto multiple trains

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For CBP purposes, each train is a unique consist, and cargo from one such train may not be entered on the same entry with cargo from another such train (trains are not considered to be split BOL’s under the regulations)

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ACE Cargo Release was coded to enforce this, and consequently any entry that has bills of lading from more than one importing conveyance will be rejected

• • •

Broker Download – Trip Number and Conveyance details Consist = Manifest

“U” Update “U” Update

After 15 days?

Correct manifest /bill related information including split indicator

Up to 15 days from Arrival/Release

Yes

Update Port of entry (Timeframe?)

Entry Summary on File

Delete Summary – Update Port Code in Cargo Release – Add Summary

No

ACE Cargo Release Business Process Document 6.2. Correcting Entries What data elements can be updated? SE10,11,15,16

Update Port code in Cargo Release -

“R” Replace Correction after initial submission but before arrival

Prior to Arrival, No Document Review, No Intensive, No Hold

Document Review, CBP Review Intensive or other Hold Correction after arrival but before release

Correction after both Arrival and Release

FDA

No more “R” Replace “No correction after arrival and Release”

“R” Replace action for ACE Cargo Release accepts for validation and processing sent to targeting and selectivity

CBP turns the “R” Replace into a “Correction request that requires manual CBP user adjudication “Correction Under Review”

Approved

Rejected Admissibility

Cancel -> Refile

Further changes must be made by via entry summary

Replace up to 5 days prior to Arrival date sent to FDA If FDA system Rejection “Bucket 2” can replace same rule apply Can not Correct Entry Number or Importer of Record

PGA Correction – Future • Allows submission of PGA corrections apart from the entry • Ability to submit a full replace • Ability to submit by agency • Future Vision: Only actual changed data submitted

PGA Correction – Future • PGA standalone corrections may be submitted up until 10 days after release • Corrections to CBP entry will affect the whole entry as it does today • Add, Replace, Delete • If less than full replace, only those agencies submitted will have their rules re-run

ACE/ACE Cancellation ACE Cargo Release Business Rules 6.1. Cancellation of Entries

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Quota • Deploying in late July • No paper will be required in ACE (?) • Conducting controlled opening moment scenarios o Pre-file as per § 132.12 Procedure on opening of potentially filled quotas (?)

• Presentation Date o Date Entry summary was transmitted o Date goods have arrived. Note: Quota will be using the same Arrival date as Cargo Release o Date in which payment is scheduled or paid

• UC (Status Response) quota conditions

Recordkeeping • ACE Recordkeeping Policy Data required for CBP Form 7501, CBP Form 3461, CBP Form 214 and CBP Form 7512 for Transportation Entries is transmitted electronically in discrete data sets, not in paper form, • Once transmitted and accepted by CBP, that data is stored by CBP. The filer’s electronic transmission of that data through ABI fulfills the filer’s entry and FTZ admissions obligation for these particular data sets. However, the filer must maintain, as is currently required, the underlying backup or supporting information from which the submitted information is derived. o Versions o Accessibility

TIB • New TIB Flag

o An indication that the Temporary Importation Under Bond (TIB) conforms to the conditions required for this type of Entry Summary. o Y = “I certify that the articles are to be used according to the terms, conditions and provisos of the HTS subheading as declared herein and applies to the articles entered, that the articles will not be used for any other use and that the articles are not imported for sale or sale upon approval. I declare that the articles will be exported or destroyed within the applicable 6month or 1-year period from the date of importation, unless extended.”

TIB •

Submit a paper copy of the CBPF 3461 or 7501 to be physically ANNOTATED for either: (TIB’s releasing without Document Review) o Export Exam Required, or o Export Exam Waived

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Upon filing the associated Entry Summary, provide a copy of the ANNOTATED CBPF 3461 or 7501 through the Document Image System (DIS). Designate “CBP” as the Agency Code, and CBPF_3461” as the Official Document Name/Description

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Interim measures for the processing of Temporary Importation Bond (TIB) Entry and Entry Summary type 23 http://www.cbp.gov/trade/automated/technical/news

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Future Export Exam Required / Waived will be automated Future “Close” TIB electronically

Post Release • Reconciliation • Drawback • Liquidation 1 Year – “Deemed Liquidation”

• Protest Portal

Legal, Regulatory & Policy Considerations

LAW & POLICY

In the Beginning…there was NCAP • 19 U.S.C. §1411. National Customs Automation Program • Automated, electronic system for processing commercial importations • International Trade Data System (ITDS) – eliminate redundant information requirements to efficiently regulate the flow of commerce and to effectively enforce laws and regulations…. • Consultation with private sector stakeholders, including COAC, in developing uniform data submission requirements, procedures, and schedules for the ITDS • Interagency Steering Committee shall periodically review the data elements in order to update the standard set of data elements, as necessary

NCAP - Forging New Ground in Automation Existing

Planned

Entry

Filing and Status of Protests

Entry Summary

Remote Location Filing

Invoice Information

Import Activity Summary Statements and Reconciliation

Manifest Information

Filing Bonds

Paying Duties, Taxes and Fees

Penalty Process

Liquidation and Reliquidation Status

Filing Drawback Claims, Records or Entries

Selection of High Risk Entries for Examination (Selectivity)

Other Components to Carry Out CBP Goals

Fast Forward…E.O. 13659 Streamlining the Export/Import Process • Increase efforts to complete the development of efficient and costeffective trade processing such as ITDS to modernize and simplify how agencies interact with traders…while reducing unnecessary procedural requirements that add costs to both agencies and industry…and promote new opportunities for trade facilitation.

• Establish the Border Interagency Executive Council (BIEC) to develop policies and processes to enhance coordination across customs, transport security, health and safety…to measurably improve supply chain processes and improve identification of illicit shipments.

Recordkeeping : 19 CFR 163 – (a)(1)(A) List of Records Required for the Entry of Merchandise • Customs has tried to identify all the presently required entry information or records on the following list. However, as automated programs and new procedures are introduced, these may change. • The following records (including any statement, declaration, document, or electronically generated or machine readable data) are required by law or regulation for the entry of merchandise and are required to be maintained and produced to Customs upon reasonable demand.

• Information may be submitted to Customs at the time of entry in a Customs authorized electronic or paper format.

A Regulatory Fix? • ACE Filings for Electronic Entry/Entry Summary (Cargo Release and Related Entry). Vol. 80, No. 197, Federal Register, October 13, 2015. o “ACE will be a CBP-authorized EDI System. ACS is being phased out.” • ACE as the Sole CBP-Authorized Electronic Data Interchange (EDI) Systems for Processing Certain Electronic Entry and Entry Summary Filings o “ACE will be the sole EDI system authorized by CBP for processing certain electronic entry and entry summary filings.”

Amends regulations to allow filers, alternatively, to submit electronic equivalent of CBP Forms, including 28, 29, 247, 434, 3229, 3289, 3299, 3311, 3461, 4315, 4455, 4457, 4647, 7501, 7533 and 7552.

CBP Recordkeeping Policy • CBP will not request filer to produce the data (previously 7501, 3461, 214 or 7512) previously transmitted to and retained by CBP...unless it has a need for such records. • Filer may retransmit or otherwise provide the data electronically or reproduce the entry/entry summary data using an ACE report. • Filer must maintain supporting documentation used to create the data transmitted to CBP. • Original documents must be retained by entry filer and produced to CBP upon demand even if digital copy of original was previously transmitted electronically to CBP. • Entry data and information previously presented to and retained by CBP is not subject to a recordkeeping penalty for non-production if such data or information is subsequently requested. • Filers must retain all versions of entries. CBP will no require the production of the non-final version of a data submission unless it is necessary for analytical, statistical, investigative or other purposes.

Hybrid Rule • Proposal to eliminate hybrid filing allowing for forms electronically via EDI, by paper or a combination of both (hybrid). • Would require importers to choose between submitting entirely electronically or by paper, except in limited circumstances. • Considerations: o o o o o

Implementation costs (IT, training and compliance) Net benefits (processing enhancements and qualitative/quantitative benefits) Time to comply Regulatory flexibilities/phased in approach Documentation and data exceptions

Customs Brokers & PGAs? • 19 U.S.C. §1484: IOR to make entry with information enabling CBP and PGAs to determine whether merchandise may be released from CBP custody and file an entry summary with information necessary for CBP to determine whether any other applicable requirement of law is set. • Considerations: o How much data is necessary? Data Creep o When is the data needed? Policy Creep

PGAs & Broker Liability • Standard: Responsible Supervision and Control • Inform Importer of Necessary Data • Obtain Necessary Data from Importer • Provide Necessary Data to CBP • What if…. o Don’t’ Inform? o Don’t Obtain? o Don’t Provide?

PGAs & Section 321 19 CFR §10.151 and §10.153 • Trade Facilitation & Trade Enforcement Act – Section 901, De Minimis Value. $800 shipments exempt form customs duties and taxes and from certain entry documentation requirements as appropriate. • The Past: Manifest level, targeting. Limited, if any, interest. • The Present: New policy due to increased value? • The Future: New regulations?

• Current regulatory exclusions: o o o o

alcoholic beverages perfume containing alcohol cigars and cigarettes subject to absolute or tariff rate quota

Other “Hot” Issues • Protests – Place of filing, DOJ honoring protests filed other than at POE. 19 U.S.C. §1514 • Liquidation – Electronic bulletin notices of liquidation with Internet access; One year “deemed” liquidated. 19 U.S.C. §1504 • Quota – Quota priority status and presentation determined at time of presentation of entry summary. 19 C.F.R. §132.11 • Split shipments – May be accommodated on a single conveyance, accepted by carrier in exporting country under one B/L or AWB, and intended to arrive in U.S. as single shipment. 19 C.F.R. §141.57. • Beyond “Core” ACE – Simplified Summary/Process; Broker Reporting & Importer Vetting; Rulings, Decisions & Petitions

THANK YOU!