Concern Growing Among Drawback Filers Over Uncertain ACE Timing

The timing for ACE programming related to changes to drawback from the Trade Facilitation and Trade Enforcement Act is uncertain due to a lack for funding to cover such programming, said Michael Cerny, a lawyer with Cerny Associates. CBP said in its most recent newsletter on drawback progress (here) that the agency discussed TFTEA and ACE during an April 13 teleconference and that similar calls will occur biweekly with a drawback-focused working group that helps advise CBP on drawback in ACE. Cerny, who is also in the drawback working group, said by email that "the trade has concerns about there being enough time for CBP to complete that programming in order to accept claims" by Feb. 24, 2018, as required in TFTEA (see 1603010043).

CBP stopped programming the TFTEA drawback pieces in mid-March due to a decision that such programming is "post core," which means it isn't covered in CBP's existing budget, Cerny said. "We are recommending that CBP consider a contingency plan to at least make some rather minor changes to ACE so that TFTEA claims can be accepted on [Feb. 24, 2018], allowing the claims to be paid by accelerated payment and allowing Drawback Specialists to see during claim review that a claim is being made under the TFTEA changes," he said. Several updates will be necessary by the statutory deadline "because some changes (for example, the new 5-year statutory timeframe) affect all types of claims, not just claims under the new 8-digit substitution." CBP's path forward for ACE programming is unclear on several fronts (see 1703070036).

There also is concern among drawback filers that the initial deployment of drawback could be pushed back until fall, Cerny said. That would make it "very difficult to roll out a new system in ACE at a time when many drawback claims are traditionally filed in order to make end of year deadlines," Cerny said. "Also, this deployment would involve reconciliation and many companies file reconciliation entries in the August to October timeframe based upon reconciliation due dates." That fall timeframe created similar concerns when drawback deployment was originally set for Oct. 1, 2016 (see 1608310049). CBP most recently postponed the deadline in January just days before ACE was to become the only electronic system for filing liquidation, drawback, reconciliation, duty deferral, collections and statements, as well as Importer Security Filings (see 1701110039).

Despite earlier expectations that a deployment announcement would come soon (see 1702090046), CBP hasn't yet set a firm date for that deployment. "If these deployments slip much further than July, the trade is concerned about substantial delays with filing both drawback and reconciliation because we all know there will be a time with trial and error with this latest deployment," Cerny said. "Unlike import entries, there has been no time to use drawback or reconciliation in production, or live in ACE, before it is deployed. While there has been testing in the certification environment, that is not as complete as testing in production, when the system is live. Thus, we will be testing in production for the first time when this deployment takes place. "