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President Orders Completion of International Trade Data System by End of 2016

Thursday, February 20, 2014
Sandler, Travis & Rosenberg Trade Report

President Obama issued Feb. 19 an executive order requiring that the International Trade Data System be finished by Dec. 31, 2016, three months after the transition to the Automated Commercial Environment is projected to be fully complete. While the development of ITDS has been underway for some time, the order establishes a deadline for completion, requires relevant agencies to transition from paper-based to electronic data collection, and calls for enhanced transparency by requiring public posting of implementation plans and schedules. The order also expands the functions of the Border Interagency Executive Council to aid in these efforts.

ITDS. According to a White House fact sheet, ITDS will allow businesses to electronically transmit through a “single window” the data required to import or export cargo. It is anticipated that this will “dramatically reduce the time and expense” associated with clearing shipments by eliminating the need for businesses to submit information to dozens of government agencies through different channels, often on paper forms. This streamlined process, in turn, should allow more efficient government decision-making along with coordinated and automated messaging about such decisions, thus increasing predictability for the private sector.

The executive order states that by Dec. 31, 2016, agencies participating in ITDS must have capabilities, agreements and other requirements in place to utilize ITDS and supporting systems, such as ACE, as the primary means of receiving from users the standard set of data and other relevant documentation (other than applications for permits, licenses or certifications) required for the release of imported cargo and clearance of cargo for export. Also by this date the Department of Homeland Security must confirm that ITDS has the operational capabilities to enable users to (a) transmit a harmonized set of import and export data elements to be collected, stored and shared via a secure single window, to fulfill U.S. government requirements for the release and clearance of goods; and (b) transition from paper-based requirements and procedures to faster and more cost-effective electronic submissions to, and communications with, federal agencies.

The order directs the ITDS Board, in consultation with participating agencies, to define the standard set of data elements to be collected, stored and shared in ITDS and to continue to periodically review those data elements so they can be updated as necessary. Efforts to create what is being called the participating government agency message set are already underway, with two pilot tests recently initiated. The Board is also required to make publicly available a timeline outlining the development and delivery of the secure ITDS capabilities as well as agency implementation plans and schedules.

BIEC. The order formally establishes the already-existent Border Interagency Executive Council and assigns it the following functions.

- develop common risk management principles and methods to inform agency operations associated with the review and release of cargo at the border and encourage compliance with applicable law

- develop policies and processes to orchestrate, improve and accelerate agency review of electronic trade data transmitted through relevant systems and provide coordinated and streamlined responses back to users to facilitate trade and support and advance compliance with applicable laws and international agreements

- identify opportunities to streamline federal government systems and reduce costs through the elimination of redundant capabilities or through enhanced utilization of ACE capabilities as a means of improving supply chain management processes

- assess the business need, feasibility and potential benefits of developing or encouraging the private-sector development of web-based interfaces to electronic data systems, including ITDS, for individuals and small businesses

- engage with and consider the advice of industry and other relevant stakeholders regarding opportunities to improve supply chain management processes, with the goal of promoting economic competitiveness through enhanced trade facilitation and enforcement

- encourage other countries to develop similar single window systems to facilitate the sharing of relevant data across governmental systems and with trading partners

- assess opportunities to facilitate the electronic payment of duties, taxes, fees and charges due at importation

Reports. Each agency that utilizes ITDS will be required to (a) include in its retrospective review report due to the Office of Information and Regulatory Affairs on July 14, 2014, a determination of whether any regulations should be modified to achieve the above requirements and (b) promptly initiate rulemaking proceedings to implement any such regulatory modifications.

Within 180 days of Feb. 19, agencies with border management interests or authorities will be required to report on their anticipated use of international standards for product classification and identification.

By July 1, 2014, and every year thereafter until July 2016, the BIEC will have to report on the implementation of the responsibilities outlined above.

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