Importers, brokers and Customs are behind on software integration and testing of CBP’s Automated Commercial Environment and the Feb. 28 deadline for filing entries needs to be postponed to avoid cargo delays in ports, according to the NCBFAA.
The trade community this century has loudly complained about government foot-dragging over a next-generation Customs system, but now an industry segment is saying U.S. Customs and Border and Protection needs to slow down its roll out of the Automated Commercial Environment (ACE).
In an open letter to members that was publicly released Tuesday, the National Customs Brokers and Forwarders Association of America expressed some serious reservations about the current ACE implementation schedule and took issue with CBP’s characterization of completed work.
“We have said that live testing of software by importers and exporters, by brokers and forwarders, by software providers, and by CBP jointly, without any further changes whatsoever, demand a minimum of sixty days,” the NCBFAA wrote. “Customs now says that its work is complete; the facts, however, suggest otherwise.”
Software refinements continue and system updates are being issued on an almost daily basis. In fact, some entry functions (such as the process for placing goods in a bonded warehouse), will not be available until Feb. 28, the transition deadline when the old Automated Commercial System (ACS) is scheduled to be shut off, the NCBFAA said.
Vendors, brokers, importers and CBP all need to reprogram their systems to send information through the new ACE channel. If the system is not functioning smoothly, the NCBFAA warned, companies could be harmed by delayed cargo shipments.
In its letter, the NCBFAA asked for a complete stop to all software changes for processes going into effect on Feb. 28. The halt is necessary “so that software developers can field a final product and so that we, and you, can adapt our own automation systems to these new ACE functions, sufficiently test that software through use in an operating environment and work in partnership with our customers to develop business processes to successfully transition to the new system requirements,” it said.
Last summer, CBP pushed back the Nov. 1 deadline for electronically filing standard customs entries in the new trade management system to give other government agencies and businesses more time to integrate data requirements in their internal systems. Filing basic entries in ACE is a major milestone towards meeting the Obama administration’s mandate for all agencies with import/export jurisdiction operate through the International Trade Data System by the end of 2016. CBP said at the time that phasing in the requirements over an eight-month period would give users more flexibility and allow CBP to fully test all functions.
The NCBFAA was among those that formally requested a delay last year because many importers and brokers were not prepared to file cargo release and entry summary documents in ACE. Updating internal systems was in limbo, they said, because many other government agencies besides CBP have not made the necessary IT preparations yet.
The NCBFAA and an industry sounding board to CBP said at the time that companies needed more time to fully integrate ACE cargo release and entry functions into their business processes after CBP exceeded expectations in developing software and releasing functional tools. The primary concern is that most government agencies haven’t made their technical specifications available yet to allow software vendors to program the new functionality into their products and traders to train their employees on the new system. Many participating government agencies were just beginning pilot projects to test their functionality, and still need to publish notices about the pilots or finalize implementation guidelines.
After reviewing the situation, Customs agreed that pushing importers to comply when so many are not ready would disrupt trade. CBP also realized it was not operationally ready either because resources had to be shifted to address other technical issues. The delay was also a recognition that many agencies participating in ITDS do not have the policies and procedures in place to message back to CBP and importers through ACE that cargo is eligible to be released for pick up at the port.
Under the new schedule released in late August, industry users by Feb. 28 need to file entries for cargo release and entry summaries through ACE/ITDS for shipments that require authorization from CBP, the Food and Drug Administration, the National Highway Traffic Safety Administration (NHTSA), and the Animal and Plant Health Inspection Service (APHIS) for Lacey Act documentation (showing proof that goods do not include illegally sold wildlife, fish and plants). After Feb. 28, transmissions will no longer be permitted in the old system for most entry types.
There is increasing doubt now in some quarters of the trade community whether ITDS and ACE will be fully functional across the government by the December 2016 deadline.
“Our goal is success for ACE, but more important is our commitment to our clients to achieve an uninterrupted flow of commerce. We have reached a critical juncture in the life cycle of this project. In order to avoid unprecedented delays and unnecessary out-of-pocket expenses, developmental work – to include meaningful testing and process development by the private sector – must be completed before use of the new system is mandated and the existing system is terminated,” the NCBFAA letter said.
ACE is a massive new IT system designed to help CBP better manage the volume and complexity of international freight and parcel shipments and provide security. It offers a simplified process for reporting shipment data and communicating with federal agencies, in the process eliminating the use of paper-based forms. And it will serve as the platform for ITDS, the “single window” through which information will be shared with other relevant agencies and businesses in a streamlined fashion so that redundant filings to multiple agencies are no longer necessary.
For the past 18 months, CBP officials have been urging importers and customs brokers to upgrade their systems to synchronize with ACE and get certified, or risk getting cut off and losing business because their goods can’t enter the country.
The ACE entry summary function has been available for six years.
The number of entries and users successfully filing in ACE has grown faster in recent weeks. As of November, 11.5 percent of cargo release entries were filed through ACE and about 70 percent of the entry summaries on which duty calculations are based were filed in ACE. Now, cargo releases in ACE are trending towards 25 percent and 77 percent of entry summaries are filed in ACE, Maria Luisa Boyce, senior advisor for private sector engagement at CBP, said last week in a briefing before a Commerce Department advisory committee on supply chain issues.
About 3,150 entities electronically file entries with CBP through ACE or the legacy system.
As of mid-January, 92 percent of filers are associated with a software vendor who is piloting, or is ready to pilot, transmissions with the FDA, said Boyce. About 60 percent of filers are working with vendors participating in the APHIS pilots and 67 percent of filers are tied to vendors doing NHTSA pilots.
Some customs brokers have procrastinated with transitioning from the legacy filing system to ACE because they want to make sure it works perfectly first or want to make sure that other government agencies are ready and won’t cause their cargo to be held up, but CBP officials are urging everyone to start filing as soon as possible and work out any kinks as they go along.
CBP officials agreed last week, during a meeting in New Orleans with their own industry advisory group, to come up with contingency and transition plans so there is flexibility in the system in case other government agencies aren’t ready for the switch over from ACS. The contingency plan will soon be presented to the Border Interagency Executive Council, comprised of agencies with import safety responsibilities, Boyce said.
The remaining agencies are supposed to be brought on board by July, at which time CBP plans to implement a policy under which companies will be required to file electronically through ACE/ITDS or on paper.
Broker association urges slowdown in ACE roll out
