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Trade Questioning Readiness for Feb. 28 Deadline for Mandatory ACE

Monday, January 18, 2016
Sandler, Travis & Rosenberg Trade Report

Members of the trade community are again expressing concern about whether both they and participating government agencies are ready for the Feb. 28 deadline for mandatory use of the Automated Commercial Environment. U.S. Customs and Border Protection has already postponed this step once to allow industry and PGAs more time to test and provide feedback as they fully transition to the new system.

Currently, as of Feb. 28 filers will be required to file in ACE and no longer permitted to file in the Automated Commercial System virtually all electronic entries and associated entry summaries. In addition, electronic data for the Food and Drug Administration, the National Highway Traffic Safety Administration and the Animal and Plant Health Inspection Service (for Lacey Act transactions) must be filed in ACE as of that date. Further, CBP anticipates that sometime in July import data for a number of other agencies will have to be filed in ACE and hybrid submissions (those involving both paper forms and electronic submissions) will no longer be allowed. Oct. 1 remains the deadline for mandatory use of ACE for all remaining electronic portions of the CBP cargo process.

At recent meetings of CBP’s Advisory Committee on Commercial Operations trade members cautioned that there is still much work to be done to ensure a seamless transition on Feb. 28. CBP is seen as largely ready and said this week that it has deployed nearly all of the capabilities needed to meet the Feb. 28 deadline. Instead, concerns center largely on the PGAs. Most are currently running pilot programs to ensure that the data they require for admissibility can be submitted through ACE, but there is some question as to whether the problems these pilots have experienced can be resolved within the next few weeks.

Tom Gould, senior director, customs and international trade, for Sandler, Travis & Rosenberg, says that some importers are worried that the ACE transition will have a material effect on their operations and that those who are not probably should be. ACE will require importers to provide some data elements that they have not previously been required to produce at entry and that therefore may not reside within their existing automated systems, and importers can expect to incur costs to make the programming changes needed to address this situation. ST&R attorney and COAC member Lenny Feldman said the problem could worsen unless PGAs, in coordination with CBP, respond to trade community requests to curtail “data creep,” or the continuing additions to the list of data elements required in ACE. Even then, Gould noted, difficulties could persist unless PGAs issue formal policy guidance and further harmonize definitions of key data elements.

Customs brokers have also expressed doubt that they will be ready to meet the Feb. 28 deadline. Trade representatives noted that the ACE cargo release adoption rate continues to be relatively low despite this functionality having been available for some time and that increasing this rate will be a challenge. They also pointed out that the cargo release process under ACE is very different than under ACS and that further work is needed to update the electronic data interchange links between importers and brokers.

Given these uncertainties, there is some concern about what could happen on Feb. 28 if, for example, a PGA system goes down or a piece of ACE functionality stops working. Importers that have already invested resources in transitioning to ACE could face further expenses if their shipments are delayed due to problems with the system.

Trade community members are therefore asking what contingency measures CBP is developing to ensure that trade flows do not slow unduly or stop if there are problems with the ACE transition. Concerned that not enough work appears to have been done in this area, some in the trade community have raised the idea of delaying the transition for certain functionality or data sets or for CBP to exercise enforcement discretion after Feb. 28. CBP officials have responded that they intend to remain flexible and make any adjustments needed to avoid a shutdown.

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