Major Concerns Lodged with CBP Proposal to Eliminate 'Hybrid' Filing

The elimination of "hybrid" customs filings that are both in paper form and electronic may force some companies to revert to paper filing, a worrisome prospect that "could severely impact the economy," said UPS in comments to CBP (here). Any "process that requires a full paper submission seems to contrast" with CBP's automation goal, the company said." Neither CBP, the [Partner Government Agencies] nor the Trade have the human capital to return to such an antiquated process," it said. The company's comments were in response to CBP's interim final rule and proposal that outlined the agencies plans to make the Automated Commercial Environment mandatory and wind down the Automated Commercial System (see 1510090017).

CBP should reach a consensus with the trade and other agencies on the proper timing to require ACE before eliminating the hybrid filings, said UPS. "CBP seems to have established an unattainable arbitrary date based on the fact that [Consumer Product Safety Commission] does not plan to initiate their pilot until after the deadline date," it said. "Other agencies are just now establishing their system requirements. Maintaining a process where electronic data may be submitted where feasible, supplemented by paper or image submissions where needed maintains the integrity of the process." While not mentioned in proposal, CBP should maintain the current process of non-Automated Broker Interface entry process for express carriers, it said.

While CBP seems to be focused on effects of the changes outside the agency, CBP should take a close look at how it will be impacted, said the U.S. Council of International Business (here). "We feel that the internal cost to CBP has been overlooked," it said. For example, CBP would likely need to ramp up training and other costs for CBP personnel handling of paper entries during a "short transition period," said the USCIB. "Elimination of the hybrid option will also require CBP officers or entry specialist to have to enter the data into ACE," which raises a question as to who is responsible for errors made by CBP, it said.

CBP needs to "approach ACE implementation with a policy of flexibility and facilitation," said the USCIB. CBP should also take into consideration that large companies, not just smaller businesses, may require flexibility for taking on the new processes associated with ACE, said the USCIB. "For example, a large broker or importer may be faced with training a large and possibly new staff on new processes and procedures in a short period of time, or a large importer might be faced with the need to key in a significant amount of data that currently resides on paper. A large importer with thousands of PGA regulated products could be in a position where they will have to review thousands of paper documents and enter data for all products into a new system."

The American Association of Exporters and Importers (here) called on CBP to reconsider the hybrid elimination plans. "AAEI believes that the elimination of hybrid filings is an extreme measure" and "that a more moderate solution could provide the same results with less impact to the trade, CBP and the PGAs." Among other potential problems, the "PGAs could be pressured to release functionality that is not fully tested and not tested at all in a production environment," the association said.

CBP needs to better define any exemptions to the agency's recent proposal to eliminate hybrid filings, the Northern Border Customs Brokers Association said to CBP in comments submitted (here). CBP has acknowledged to NBCBA that there are certain times where "hybrid" filings may be necessary, the group said. For example, CBP, partner government agency or broker system outages may force the use of both paper and electronic filling, it said. Unlike CBP's proposal, "the final rule should address multiple scenarios and consider the implications of each in this rule," it said.

CBP should also consider the scenario in which an importer or broker must file a paper document as required by another agency, said the NBCBA. CBP should also "address the need for all entities to be automated to receive the data necessary to facilitate the movement of cargo in the supply chain" and consider "entities not directly involved in the filing of the entry and entry summary, which have to date refused to automate," it said. The agency must also provide recordkeeping guidance for data within ACE, said the association.

The NBCBA also took issue with the CBP's cost estimates. "It is inaccurate to say that software developers absorbed the additional costs of development without passing this on to their consumers," it said. Most of this cost is in fact being past to the filers in the form of higher costs and fees." Many companies "have not made the changes to the software yet, and continue to struggle to keep up with the changes that CBP publishes to the CATAIR records in addition to the changes that the PGA’s will require," said the NBCBA. The National Customs Brokers & Forwarders Association of America raised a number of similar concerns in its comments (here), as did other commenters (here).

Car-makers are especially concerned with the "ability to meet the pending February 2016 deadline for integration of the National Highway Transportation Safety Administration (NHTSA) message set into ACE," the Customs Automotive Roundtable (CART) said in its comments (here). "One NHTSA data element -- the fabricating manufacturer -- is not currently included in our import-related data records, so CART members must trace back through our supply chains to obtain this information, and must then integrate this new data element into our records through internal programming changes." The current timetable doesn't allow for sufficient time for car-makers to complete the necessary programming work "required for the fabricating manufacturer data element," it said.