NCBFAA Says ACE Can't Work Without Six High-Priority Fixes

In order to facilitate the roll out of the Automated Commercial Environment (ACE), CBP needs to complete the edits to ACE, said the National Customs Brokers and Forwarders Association of America in a White Paper it submitted to Commissioner Alan Bersin and then again to Deputy Commissioner David Aguilar outlining the position of the NCBFAA and the 900 companies it represents. It said the top priorities must be implemented before CBP even thinks about putting an end to ACS. NCBFAA said the top priorities include:

• Reducing the number of edits is critical. It said edits can create the potential for large problems for external stakeholders. Edits in ACE are so important to day-to-day operations many brokers will not even consider moving to ACE until edits are in place, it said.
• Complete release is expected in the ACE platform. Simplified entry is a baby step in release but the trade will require that the Release message be complete for all PGAs, NCBFAA said.
• ACE is to be the one window for all processing. Several PGA's are moving to develop their own systems through non-ACE/ITDS solutions, the paper said, and it's critical that CBP move swiftly to bring in the PGAs into ACE.
• NCBFAA said it's "pleased that CBP is starting on M1 but we are concerned that the other types of manifest are still far behind if started at all." For example, without Air Manifest information ACE will be far from a complete platform, it said.
• The Document Imaging System in its present form "is not functional and is not being used by the trade," the paper said. There are several issues involved in the current DIS system, including required metadata that is an additional burden on the brokers and must be revised before DIS is accepted by the trade, NCBFAA said.
• The eBond is important especially for Single Entry Bonds, and "has been long overdue," it said. With the requirement of the Importer Security Filing (ISF) the eBond is even more necessary for compliance of the ISF rules, the paper said.

NCBFAA said other, lower priorities include liquidation, warehouse withdrawal, drawback, quota, reconciliation entries, protest, export reporting, and other entry types.

Meanwhile, the ACE Advisory Committee on Commercial Operations found that 87% of the respondents to a November survey of brokers utilized vendor supported software and that only 31% of the responding Customs brokers currently were filing ACE entry summaries. The advisory group said it's "important to be aware that a significant number of brokers (76%) in response to the survey responded that functionality for all entry types was required before any transition period." It said "the outcome of the analysis is the recommendation that, upon completion of the prerequisite functionality, a minimum 24-month transition period should be provided to convert the filing of the ACE entry types 01, 03 and 11 from ACS to ACE."

The COAC ACE Communications Strategy Work Group white paper on the topic said any transition period would be dependent on the complexity of the individual entry filer's requirements. For example:

• Basic implementation (acquisition of software) would take 18 months
• Major customization would take 24 to 31 months
• Self-development would take 24 to 31 months

It also said the transition timetable could be affected by whether the software is purchased or self-developed. And, as long as there are entry types not in ACE, any system must have the capability to provide reportings between both ACS and ACE, it said, and any transition plan needs to incorporate a testing phase for the interface with ACE and with business systems. As a result, upon completion of the prerequisite functionality, a minimum transition period of 24 months should be provided to convert the filing of ACE entry types 01, 03 and 11 from ACS to ACE, it said.

The Subcommittee on Antidumping and Countervailing recommendations included:

• That CBP research and co-create, with input from the trade community, a new AD/CVD reporting tool or database.
• Placing continued emphasis on outreach and bi-directional education such as the recent intra-agency webinar presented by CBP and the Department of Commerce.
• That CBP work with other agencies (U.S. Department of Treasury and Department of Commerce) to jointly design a prospective AD/CVD duty assessment and collection system. Because such a system will require legislation, the subcommittee said that the agencies should also consult with the relevant Congressional committees of jurisdiction throughout the development process.

The COAC AD/CVD and Bond Subcommittees concluded it would not be practical for CBP to initiate a Single Transaction Bonds (STB) requirement for suspected AD/CVD evasion pre-lading. The STB initiative may help to reduce or deter evasion, but will not resolve the under collection issue, it said. It said things that make it impractical include:

• Information at the point of lading is not fully available to make a determination of duty liability.
• It may not be known if the goods are destined to the U.S.
• The cargo may be sold in transit, so the responsible party/obligation changes.
• There is no obligation until release.

The subcommittees agreed that the June 13 proposal "is the first step in attempting to protect the revenue related to AD/CVD evasion by requiring the securing of a bond in advance of release," they said, but "it is still not known how frequently CBP would require a separate STB as CBP cannot quantify how often evasion occurs. CBP must ensure that the STB initiative is handled uniformly across all ports. The initiative must not disrupt the legitimate flow of trade for legitimate importers."

The Advisory Committee on Commercial Operations of Customs and Border Protection said the suggested new data collection surrounding the CF 5106 "has raised attention in both the bond and broker sub-committees. ... The potential for unintended consequences of certain data collection are of concern to the broker sub-committee as they might relate to 'sold to' and 'ship to' parties who are not responsible for the payment of duty as an importer of record." It said the potential new requirements of validating the parties being reported on a 5106 "will present significant difficulties for service providers who have no contractual arrangement with ship to or sold to parties, neither of which function as an importer of record and neither of which are a client of the Customs broker."

Email ITTNews@warren-news.com for a copy of the summary from the December COAC meeting, which is also available on the CBP "What's New" page under "ACE Communications Strategy Work Group ACS to ACE Implementation White Paper" and attachments.