Uncertainty for Trade as CBP Poised to Deploy Quota, Shut Down ACS Over Weekend

Concerns over potential technical and procedural issues related to the deployment of as-yet-unproven quota systems in ACE are leaving customs brokers uncertain on the eve of the July 23 ACE deadline for most remaining entry types, said brokers in interviews. A lack of real world testing and changes to quota business practices means some brokers aren’t entirely sure what’s going to happen after the deadline. The uncertainty is compounded by the simultaneous decommissioning of legacy Automated Commercial System, which leaves filers without a fallback that has been particularly valuable in the truck environment.

CBP will begin rejecting entry summaries filed in ACS at 4:00 a.m. eastern time on July 23, it said in a recent message to filers (here). Quota queries will get rejections after that time as well. CBP will begin rejecting ACS cargo release that evening at 9:30 p.m. eastern time. Filers in ACS will receive the reject message “4AP – USE ACE TO ADD/REPLACE ENTRY,” CBP has said (see 1607200048). ACE will be completely shut down at 10:00 p.m. on July 23 for CBP to complete a deployment of new functionalities, including quota, and will come back online at 4:00 a.m. on July 24, with quota filing available in ACE from that point forward, said CBP in another message (here).

Filers of entries that must currently be filed in ACS, including entries related to quota under entry types 02, 06, 07, 12, 21, 22, 23, 31, 32, 34 and 38, should either file their entries today or wait until July 25 to avoid an issues related to the complex task of simultaneously deploying quota and shutting down ACS for entry and entry summary, said CBP’s Steve Zaccaro on the agency’s July 22 ACE technical call. “My best suggestion is get everything taken care of today that you can,” he said. “Do your best not to file entries on Saturday. We rarely ask filers not to file entries, but if you have to file something that is currently in ACS, it is in everyone’s best interest complete the process in ACS and just wait and file the rest in ACE,” he said.

Filers with cargo arriving after the weekend on July 25 should file their entries on that date if they can, said a CBP official on the call. Filers with cargo arriving over the weekend should try to file their entries on July 22 before the weekend begins. If issues are found with an ACS entry and those issues can’t be corrected before ACS entry capabilities are taken offline, the entry will need to be canceled and refiled in ACE, said a CBP official. In some circumstances – such as when an ACS entry has been filed but the filer is still waiting on a tariff preference level (TPL) certificate, or if the ACS quota entry was filed on July 23 after ACS entry summary is shut off – CBP will direct filers to submit an entry certified from summary in ACE, said a CBP official. That will generate an error for duplicate cargo release data, but will get CBP the quota information found in the entry summary, the official said.

CBP will work with filers to keep trade flowing in spite of issues during the complex transition, said CBP’s Brian Lewandowski, also on the technical call. The agency has been telling the ports that there “may be interactions that nobody foresaw or planned” as filers that are playing by the rules try to get their cargo “facilitated and released,” and the ports need to “figure out how to facilitate cargo,” and allocate quota until things stabilize after the transition period. Zaccaro noted that, as of July 21, 98.5% of entries were being submitted in ACE cargo release, and over 99% of entry summaries were being filed in ACE, so the vast majority of cargo will be unaffected by the change.

CBP has been successful in its effort to bring the largest entry filers into ACE before the final transition, said a CBP spokeswoman. Given how high filing rates have risen, CBP is very comfortable with how ACE will handle any increase in volume, she said. "CBP is committed to ensuring the transition to ACE continues to occur with no disruption to the flow of legitimate commerce. In order to ensure fair treatment across the international trade community with respect to quotas, the processing of quota entries/entry summaries can only occur in one system. So once these entry types move into ACE all quota filings need to migrate to ACE," the spokeswoman said.

But unlike previous transitions, where filers could file live in ACE before the capability became mandatory, ACE quota presents a new challenge because “nobody knows exactly how it’s going to behave,” said Sandra Langford-Coty, a director of the Los Angeles Customs Brokers & Freight Forwarders Association. “The problem is that nothing is embedded in production for quota the quota stuff,” she said. “Typically, before we went mandatory we always had practice time.” CBP’s “certification” testing environment does not always behave the same way that the live ACE “production” environment does, she said. “It’s not the real McCoy.”

Beyond any technical issues that could arise, filers that submit quota face challenges implementing the changes to procedures required under the new ACE quota regime. For example, “the fact that CBP has determined that all quota must be summary certified for release is a change of many years of practice,” said Amy Magnus of A.N. Deringer. “Tariff rate quota or TPL has been filed using the two step process for many years,” said Magnus, who is also vice president of the National Customs Brokers & Forwarders Association of America. The ACE deadline will also bring changes to how filers handle African Growth and Opportunity Act visas, which will no longer be sent to CBP, and entries for filled quotas will now be filed type 01, noted Langford-Coty. “It’s just a matter of operationally, people being aware,” she said. Hopefully the system will reject and point them in the right direction.”

More broadly, though the vast majority of entries are filed in ACE, the elimination of ACS as a backup presents problems to all filers, particularly on the land border, said Magnus. “I would say no one is comfortable with not having ACS available as a backup,” she said. “This week, yet again, we have experienced issues with delays in FDA processing. On the land borders, a two or three hour delay is not a minor problem; these delays start a cascade of events that have a costly effect on trade,” Magnus said. “Truck drivers cannot sit for several hours waiting for their entries to process, and if it takes too long, the load has to be returned because the driver has run out of hours. As always, the trade will work through these problems, but we are all becoming increasingly concerned about the frequency of ACE or FDA down times,” said Magnus. The NCBFAA recently requested CBP leave ACS online after July 23 as a fallback in cases of downtime, slow processing or software issues (see 1607190032).

The deployment of an unproven system, alongside the elimination of ACS as a backup system, means any system issues around the July 23 transition could be magnified, said Langford-Coty. “The current contingency plan is decommissioned. If you have a problem you’re going to paper,” she said. While it’s a “non-issue” if everything works, it could cause serious issues if there are full-scale failures, said Langford-Coty. “Are they going to be able to revert and get ACS up and running?”

If something unexpected does occur that makes it "impossible to file the additional entry types in ACE on July 23rd, ACS could be made available," said the CBP spokeswoman. "However, we do not expect any such thing to occur." CBP is "already are processing the most commonly filed entry and entry summary types in ACE and are close to 100% of the overall volume,," she said. "The additional entry types that become mandatory on July 23 are those associated with quota and have been thoroughly tested in partnership with the trade community in the CERTIFICATION environment and found to be operating largely as intended," said the CBP spokeswoman. "Minor fixes have been made to address issues found during this lengthy testing period. As we have with prior ACE milestones, CBP will stand up a war room to quickly address any issues that may arise."