Craig Seelig, WiseTech Global’s Product Manager for Customs and Government Compliance Americas, explains that the ACE extension doesn’t mean Brokers should delay implementation.
US Customs recently announced a delay until March 31 for mandatory filing of all entry summary transactions in US Customs’ Automated Commercial Environment (ACE), the single window processing of trade that is to automate and enhance interaction between international trade partners, CBP, and Partner Government Agencies (PGA) across the cargo import and export process.
Meanwhile, ACE Cargo Release for non-PGA entries will now be mandatory on May 28. The next stage of ACE becomes mandatory in a staggered approach this year. ACE is to be used for all electronic entries and related entry summary filings. Customs has long been advising industry providers to “Embrace ACE,” and I continue to say “it’s on its way!” as strongly as I can. While CBP has just pushed back some mandatory dates, the overall mandatory filing deadline is quickly approaching, and its arrival is going to be bumpy for companies who aren’t ready. If you’re not proactively preparing for the changes, you will need to “Brace for ACE.”
And if you’re thinking all you need to do is wait for your software vendor to say the functionality is ready, and to “just switch on and you’ll be automatically compliant,” you’re in for a bit of a shock. There’s a learning curve to dealing with ACE. And beyond the software, you’ll have significant operational changes to incorporate into your business. If you haven’t yet filed your first entry, you may experience a rough landing when ACE filings become mandatory.
ACE Comes with a Steep Learning Curve
Even for those who have been using the Automated Commercial System (ACS) for decades, the codes and terminology coming out of Customs for the ACE-driven transactions are different. To keep operating at the same level, uninterrupted, you’ll need to be able to adjust immediately to these changes when things switch over. ACE Entry Summary has been active for five years, and is pretty stable. The ACE Cargo Release, introduced two years ago, has had a much lower adoption rate. Although that rate has increased from 4 to 30 percent of eligible transactions in the last year, participation is still not widespread. To illustrate how brokers can quickly get confused, there’s a status called ‘Admissible’ embedded in ACE CR (I’ll leave you to find out what that means). When Customs throws the switch this summer, those who are not already well versed in the system may find it takes extra time and extra effort to get up to speed and navigate through the new processes and compliance.
The Complications of PGAs
CBP has moved to a staggered approach for making the PGAs mandatory. Starting March 31, two of the agencies that are currently part of the ACS system, APHIS Lacey Act and the Department of Transportation (now referred to as NHTSA), will be mandatory in ACE. The FDA’s new mandatory date is not yet known, neither is the mandatory filing date for the other dozen or so PGAs also coming online.
The number of changes in FDA alone is significant. There are eight different programs within FDA filings now, and brokers need to know which program each product goes into. Then there’s the additional data elements that brokers will now be required to collect, such as brand name, intended use code, and different affirmation of appliance codes. There are also restrictions on when you can replace an entry, particularly if there’s a PGA involved. By the end of this year, 30 to 40 PGAs may be added to the mix. And even more new data elements will be required to comply with each agency’s requirements.
Multiple Sources of Information Add to the Complexity
While ACE itself is a single window, there’s no single window for information. Customs has produced some operational guides, but they’re behind in explaining the specific changes and policy clarifications. For that, you have to investigate each PGA. But even that won’t provide easy answers. For example, the FDA provides only a technical information guide, which is over 300 pages!
Customs is still training its own people, and they are having to deal with the extra workload and new system. Two different calls with the same question are likely to turn up two different CBP replies. It will take practice to pick up knowledge on how to fulfil ACE CR’s new processes. To be more effective, you’ll need to know as much as you can before you call Customs so you can ask the right questions and keep drilling until you get the more definitive answer. As yet there are no down-to-earth webinars, manuals, or kits from the government agencies explaining how to navigate this new world. The PGAs can give you the specifications but nothing designed specifically to assist the desk level person.
It Will Get Better
When brokers embrace ACE, huge improvements are expected to follow. Rather than sending a runner down to Customs to deliver paper documents, you’ll be able to cancel and replace entries electronically. Rather than waiting on courier deliveries, Customs packets will transfer electronically. If you submit an entry and Customs has a question, instead of finding a note in your box at the Customs house, they will send you the question electronically and you can respond in kind. And it’s all there in the system, regardless of who’s dealing with any one file or importation. Start practicing the system now, put it through its paces, get used to its rhythm and processes. There are, after all, plenty of eligible transactions that every broker can file right now. Otherwise, with ACE quickly approaching, if your Customs clearance process is not braced for the change, your business could be significantly impacted.