NCBFAA Says Revised Drawback in ACE Won't Be Ready by February; Regulations Seen Progressing

CBP won't be able to accept drawback claims filed in ACE under the revised processes that come from the Trade Facilitation and Trade Enforcement Act when they take effect on Feb. 24, 2018, the National Customs Brokers & Forwarders Association of America said in a May 9 email. The agency lacks the funding to complete the TFTEA-related programming and "CBP believes that it needs a full year to program all agency requirements," according to the NCBFAA. Still, CBP is expected to finish necessary regulatory changes by the statutory deadline, even if ACE isn't ready for the TFTEA changes.

The NCBFAA said it discussed drawback with CBP officials on a May 8 call, during which "CBP advised that it will not be able to accept and process TFTEA drawback claims in ACE by February 24, 2018," the trade group said. "CBP also stated that the agency has no contingency plan to allow TFTEA claims to be filed in some manner on February 24, 2018, and does not expect to provide such a plan." A lack of funding for new ACE programming has hampered the agency's ability to add drawback (see 1705020050) and other previously planned functionalities (see 1703070036).

While the ACE programming remains a question mark, the regulatory changes associated with TFTEA are progressing. "That is a regulation that is well under development," said Alice Kipel, executive director of CBP's Office of Regulations and Rulings, during a May 8 interview. While Kipel declined to provide a time frame, she said CBP has been working on the "regulatory package" for "quite a long time now." CBP didn't immediately comment on the NCBFAA's email.

The "good news is" TFTEA was written "to separate ACE from the law," said David Corn, vice president of Comstock and Holt, during a May 5 interview. That's good "because the regulations can move forward as ACE is kind of stalling," he said. Drawback filers are hopeful that the drawback regulations will be proposed by the end of the summer, Corn said. "Our understanding now is that we are on target for that February, 24, 2018, date to have regulations completed," he said.

A proposed rulemaking would likely need to be out by late August or early September to allow enough time for public comments in order to meet the statutory deadline, Corn said. CBP may also seek to make some changes to drawback regulations to clarify when Merchandise Processing Fees can be claimed and other things that reflect a 2004 Miscellaneous Tariff Bill, he said. While CBP already follows the provisions from that bill, some of the changes had not been included in the regulations, Corn said.