Background

U.S. Customs and Border Protection is seeing “exciting” results from its work to develop the next-generation Automated Commercial Environment, including a focus on allowing all types of systems to participate in supply chain activities without forcing industry into one technology.

In a paper submitted to a recent meeting of CBP’s Commercial Customs Operations Advisory Committee, CBP said ACE 2.0 will not be a refresh of ACE or a set of incremental changes but instead is intended to be a new system based on a rethinking of how current and future technologies can be used to meet the agency’s mission most effectively. ACE 2.0 will ensure that CBP has the technology to implement the reimagined trade processes developed as part of the 21st Century Customs Framework. Among other things, the new system will allow CBP and its partner government agencies to receive better quality data much earlier in the supply chain, often in near-real time from traditional as well as non-traditional actors, which will facilitate faster government responses with earlier determinations on cargo.

For the past few years CBP has worked on ensuring the interoperability of ACE 2.0, which means the system will work with a variety of technologies so it can communicate with legacy and future systems, blockchain, and distributed ledger technology. For example, CBP currently has five projects under the Silicon Valley Innovation Program to test the feasibility of DLT.

- a steel project will track steel from manufacturer to import, assist with origin compliance under the U.S.-Mexico-Canada Agreement, and improve product identification

- a pipeline oil project will affirm free trade status no matter how many times oil is sold on the open market

- a natural gas project will facilitate origin determination and eliminate goods entering from prohibited countries

- a food safety project will track perishable goods from farm to import, reduce importer waste, and allow identification of packing materials used in shipping food products

- an e-commerce project will enhance traceability of goods bought and sold by online retailers and ensure that importers comply with CBP and other PGA requirements

CBP states that through these commodity-focused projects it seeks to (1) introduce interoperable standards, (2) expedite acquisition of data, (3) increase transparency, security, and facilitation in supply chains, (4) enhance identification of trade entities, and (5) increase security and facilitation throughout the trade process.

CBP is also pushing for global standards to facilitate the development of interoperability; e.g., in July 2022 the World Wide Web Consortium accepted CBP’s recommendation for a decentralized identifier.

Looking ahead, in 2023 CBP plans to test the first two SVIP programs that will connect CBP with trade users. In 2024 CBP will test the ability to transmit data to PGAs, which will produce an upgraded single window. These two testing periods will inform CBP’s development of ACE 2.0, which could begin as early as 2025.

For more information on ACE 2.0, please contact attorney Lenny Feldman at (305) 894-1011 or via email.

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