CBP Still Discussing Need to Eliminate Hybrid Filing as Part of ACE Transition, Says Smith

PHOENIX -- Plans for a rulemaking to eliminate hybrid filing as part of the ACE transition remain unsettled, said Brenda Smith, executive assistant commissioner of CBP’s Office of Trade in an interview at the West Coast Trade Symposium on May 25. The agency is being "very careful because that would be a significant change in policy," she said. "Right now we're trying to decide, does it make sense," she said. CBP is "still having that internal discussion," but will "need to communicate" a decision in "the fairly near future," Smith said. CBP previously sought input on prohibiting filings that are a combination of electronic and paper filings (see 1510090017), which drew some concerns within industry (see 1511100030).

CBP is in "very good shape" for the coming May 28 mandatory use date for ACE, said Smith. Starting May 28, ACE will be required for electronic entries of types 01, 03, 11, 23, 51 and 52 when not paired with PGA data (other than Lacey Act and NHTSA). Entry and entry summaries for entry type 06 (Consumption Foreign-Trade Zone), absent the same PGA data, will also be required to go through ACE (see 1602080042). The ports are also well prepared for the transition, as the agency rolled out training without any "hiccups," said Todd Owen executive assistant commissioner of CBP’s Office of Field Operations.

There's more focus on the July 23 date and there's a lot of "angst around that" related to "the hard cutover related to quota," Smith said. The number of quota-related entries is relatively small -- less than three percent across all entry types -- but are "highly sensitive," she said. "Doing quota in two systems doesn't make a lot of sense for a variety of reasons," she said. There's also a couple Partner Government Agencies "that are planning a cutover but what I think what we need to do is" over the next 30 days "make sure we do the deep dive on that and now that people know what the plan is, let's get the feedback on that plan," said Smith. "If we need to adjust, as we've said all along, we'll listen, we'll figure out if there are adjustments that will mitigate any concerns and move forward."

CBP is largely willing to let industry take the lead in responding to a recent ACE-related Department of Energy proposal on filing requirements for energy efficiency standards, said Smith. DOE recently said it is considering alternatives to the data elements it identified in its controversial Dec. 29 proposed rule (see 1605130022). "We're pretty comfortable that our trade partners are actively engaged in that comment process," Smith said. "I don't believe this is the last time we will have this conversation" and CBP will continue to "make sure that the stakeholders we engage with are aware of and engaged with the other agency's comment process" while working to educate "around supply chain issues and impacts" within the interagency process.

The customs reauthorization law has not meant for major changes "operationally," said Owen. Much of the emphasis within the law aligns with ongoing efforts within the agency to "enhance our trade enforcement posture," he said. While "people are pushed" at the moment to put in place the new law, "we knew the enforcement focus needed some attention and we actually were working that quietly and internally," said Smith. CBP's regulatory group is also now more nimble and it no longer takes three years for the agency to get to a final rule, she said.

There will need to be multiple interim final rules for CBP to meet the statutory implementation deadlines, said Smith. In addition to an interim rule on antidumping and countervailing duty evasion regulations (see 1605190030), CBP plans to issue an interim final rule related to provisions for donations of technology to help enforce intellectual property rights, she said. As for the new importer identification database, also required to be in place Aug. 22, the agency's update to Form 5106 may be largely sufficient, she said. CBP is about "80 percent" done with the process to have changes to that form finalized (see 1604200017).

It's still too early to discuss plans for expanding the Centers of Excellence and Expertise beyond post-release processing, said Owen. "We've got the structure in place, we have all the import specialists in place" but "we need to still bring over the entry specialists and the work that they perform that's center related," he said. "There's still some work that they would perform in the ports separate from the Centers" so "we need to make sure those responsibilities are still covered," he said. CBP also still need to decide where drawback and the fines and penalties processes fit within the CEEs, he said. "We still have quite a bit of work to in the post-release side of things" before "we would ever talk about what comes next," he said.

With Commissioner Gil Kerlikowske set to step down ahead of the change in Presidential administration (see 1604200019), the agency is already well-positioned to deal with that transition, said Owen. Having in place the senior leadership at the agency is the most important part of the planning, said Owen. Kerlikowske "made it his focus to fill all of the career positions and leadership before he goes out the door," he said. Still, it will be important to have a new commissioner nominated a confirmed quickly, said Owen. "Transition planning happens regularly" within agencies, said Patrick Schmidt, an adviser to Kerlikowske.