The U.S. Customs and Border Protection agency (CBP, a branch of the Department of Homeland Security) issued an interim final rule October 13 that effective November 1 has authorized the Automated Commercial Environment (ACE) filing system for export/import data to phase out the Automated Commercial System (ACS) which has been in place since 2001. In its announcement, CBP notes that the “ACE Cargo Release and the Entry Summary, Accounts and Revenue tests on entry and entry summary requirements are part of the CBP regulations.”  

Any person, company, or other entity who imports or exports nonwovens from or to the U.S. will be impacted by this action.  

While CBP says many ACS filers have already made the change to ACE formatting, the agency also estimates that some 150 businesses will need to make software modifications in their transition to ACE formatting and, according to an estimate cited by CBP, it could cost $25,000-$90,000 to make that change (including systems costs and training).  

This estimate includes all the costs of converting to ACE, however, not just the cost of making the changes needed to file entries in ACE format, so any added costs needed just to file in the ACE format alone are likely to be lower CBP reasons.

At Issue
Under the Tariff Act of 1930, importers of record are required to file regular reports on merchandise to be imported to the U.S.  Customs has shared this information with other government agencies.

The Customs Modernization Act of 1993 allowed documentation to be submitted to CBP electronically. According to CBP, the term “electronic entry’’ is defined as “the electronic transmission to CBP of entry information required for the entry of merchandise.” This information is required for the classification and appraisement of the merchandise, the verification of statistical information, and the determination of compliance with law.”   

The key system behind all this is the Automated Commercial Environment (ACE), which CBP refers to as “the backbone” of its trade data processing and risk management activities. CBP also notes that ACE provides a single, centralized access point to connect CBP with other International Trade Data System (ITDS) agencies, and the trade community.

In February, 2014, President Obama issued Executive Order (EO) 13659 which was intended to streamline the export/import process by “reducing unnecessary procedural requirements to commerce” while continuing to protect national security, public health and the environment.  

With this EO, the Obama Administration mandated use of the International Trade Data System and supporting systems—including the ACE—as the primary means of receiving data from users and created deadline—December 31, 2016—for CBP to adopt ACE as the standard set of data and documentation needed to release imported cargo and clear it for export.

CBP says it will complete the development of “core trade processing capabilities” in ACE and “decommission corresponding capabilities” in the older system—ACS—by the end of 2016. At that time, CBP says ACE will provide a single window for processing trade data, and become the primary system through which the international trade community will submit export/import data for government use and to determine admissibility of goods into the U.S.

CBP has been developing and testing ACE for several years, and has provided “significant public outreach” through events and online information to help ensure that the international trade community is fully engaged in the transition from ACS to ACE and, during the transition, people who use the system have been submitting data to ACS and ACE simultaneously. Some, in fact, have already adopted ACE as their sole means of reporting data according to CBP.  

With the interim final rule now in place, and all testing completed on the ACE system, CBP has determined that the ACE system is fully functional and is encouraging filers to adjust to ACE as of November 1. ACS will continue to be functional through of end of February 2016, but, after that, ACS will no longer be supported for entry and entry summary submissions.

That said, CBP is also accepting public comment on the transition until November 12, 2015.  

CBP says it is interested in comments related to all aspects of the interim final rule and invites comments related to the economic, environmental or federalism effects that might result from this transition. Comments that CBP says will provide the greatest assistance in finalizing this change would “reference a specific portion of the interim rule, explain the reason for any recommended change, and include data, information or authority that support such recommended change.”

Comments must cite docket number USCBP-2015-0045, and can be filed through www.regulations.gov or by mail addressed to the Trade and Commercial Regulations Branch, Regulations and Rulings, Office of International Trade, U.S. Customs and Border Protection, 90 K Street NE, 10th Floor, Washington, DC 20229-1177. All comments will be posted—without change—to the docket on www.regulations.gov. For detailed instructions on submitting comments and additional information on the rulemaking process, please see the “Public Participation’’ section under the “Supplement Information” portion of the interim final rule which can also be found on www.regulations.gov.  

Comments can also be inspected in person between 9 a.m.-4:30 p.m. at the Office of International Trade, Customs and Border Protection, 90 K Street NE, 10th Floor, Washington, DC.

For policy questions: Josephine Baiamonte, director, Business Transformation, ACE Business Office, Office of International Trade, through e-mail addressed to [email protected]. For technical questions: Steven Zaccaro, Client Representative Branch, ACE Business Office, Office of International Trade, at [email protected]. Legal questions should be directed to Robert Altneu, Chief, Trade and Commercial Regulations Branch, Regulations and Rulings, [email protected].