Importers: Pay Attention to New Rules as Customs Processing Becomes Modernized
The Automated Commercial Environment (ACE) is U.S. Customs and Border Protection’s (CBP) restructured, paperless system, which is designed to facilitate trade while enhancing border security. It improves the collection, sharing, and processing of information submitted to CBP and the 47 different Partner Government Agencies (PGAs).
As the ACE mandate nears finalization, manual practices will become obsolete. With the December 2016 deadline for full implementation, paper filing will be eliminated in favor of more efficient and coordinated processes.
The new environment will deliver many advantages, including the opportunity to reduce paperwork transfers and processing times.
The launch of CBP’s document imaging system (DIS) will reduce the likelihood of lost documents and the frequency of messenger runs to deliver paper documents to CBP.
Likewise, all post summary adjustments are now made electronically via the post summary corrections process – eliminating the hassle of a letter submission to amend an entry.
Though the new automated system brings many benefits, challenges may also arise during the transition period. To illuminate the path forward, importers must remain vigilant to assure their customs broker is experienced with ACE requirements and submissions. Importers can do this by recognizing and understanding the new partner government agency (PGA) requirements.
Many PGAs that did not collect electronic data in the past now require comprehensive information in ACE for the products that they regulate, and some information that was formerly optional is now mandatory. For example, the Food and Drug Administration (FDA) now strongly encourages that the Intended Use Code, Device Listing Number and active pharmaceutical ingredients be included in submissions for regulated products.
By the end of the year, CBP mandates that PGA-specific data elements be submitted through ACE to obtain release. An experienced customs broker can assist an importer to meet these requirements by obtaining and filing the necessary information. This involves the collection and processing of additional data elements by customs brokerage professionals.
One step that importers can take in working with their customs broker to provide proper submission of required data elements in ACE is to establish an Electronic Data Interchange (EDI). By initiating an EDI, importers can share pertinent shipping information electronically to accelerate the submission process. For importers that currently participate in EDI, it’s imperative that they confirm that newly-required PGA data elements are included as part of the EDI transmission.
If an importer is not established in EDI, it should make data elements part of its product database for use by its broker. Such a database should include manufacturer information, responsible contact parties and importer location.
It’s important for importers to practice diligence as they convert to ACE to make certain their shipments are admissible. Importers should work with their respective global vendors to confirm the shipping paperwork reflects the required data elements at the product level.
Customs brokers will be looking at these sources for data, which must be reported to CBP and the appropriate PGAs. If any required information is not available when the cargo arrives, it’s likely the shipment will incur clearance delays until the customs broker is able to obtain the correct information. Such delays can result in storage and demurrage charges during holding, and if the delay exceeds a certain time period, it’s possible that the shipment could be returned to the sender.
William Schweitzer is managing director, customs brokerage services at FedEx Trade Networks, which filed its first ACE entry in 2009 as part of a small group of early filers that helped test the system.