ACE Finishing the Core and Developing New Capabilities

ACE – Finishing the Core and Developing New Capabilities MODERATOR: Myra Reynolds ITSA General Counsel/Sandler, Travis & Rosenberg, PA PANELISTS: Cindy Allen Monica Crockett Randy Mitchell James Swanson VP, Regulatory Affairs & Compliance Fed. Ex Director, Entry Summary, Accounts & Revenue (ESAR), CBP Director, Commercial Operations, Revenue & Entry Division, CBP Director, Cargo Security and Controls, Cargo & Conveyance Security, CBP

Cindy Allen, VP, Regulatory Affairs and Compliance, Fed. Ex Monica Crockett, Director, Entry Summary, Accounts & Revenue (ESAR), CBP Randy Mitchell, Director, Commercial Operations, Revenue and Entry Division, CBP James Swanson, Director, Cargo Security and Controls, Cargo and Conveyance Security, CBP Moderator: Myra Reynolds, Director of Corporate Import Compliance, John S. James Co. ACE: Finishing Core Trade Processing and Developing New Capabilities 04/04/2017

Single Window Implementation via ACE May 2016 March 31, 2016 Finalized migration of Automated Export System (AES) and July 23, 2016 AESDirect portal from U. S. ACE mandatory for Census remaining entry and entry summary types. ACE mandatory for filing select entry summary types without PGA data. December 31, 2016 Executive Order 13659 Streamlining the Export/Import Process for America’s Business deadline August 2015 Began rollout of PGA pilots 2015 May 1, 2015 ACE mandatory for all electronic manifest filings 2017 2016 February 28, 2016 CBP accelerated divestment of the legacy Automated Commercial System (ACS) May 28, 2016 ACE mandatory for additional entry types, and entry summaries for type 06 entries. TBD 2017 August 27, 2016 ACE mandatory for electronic protests ACE mandatory for all remaining electronic portions of the CBP cargo process 3

Path to ACE Core Trade Processing Coordination & Development ACE Core Deployment Status ü Developed 5. 3+ million lines of code [VALUE]% ü Automated more than 250 paper forms ü Conducted targeted phone calls to 1, 000+ trade filers across the country ü Coordinated with 40+ vendors to update software in support of their customers ü Trained 7, 500 CBP field users ü Published over 100 Federal Register Notices to support required policy and legacy framework [VALUE]% 89% Pre-Arrival Manifest Arrival Cargo Release Post Release Entry Summary Exports PGA Integration Legacy Systems Divested 2014 2016 2015 2017 May 2015 March 2014 Retired Automated Export System (AES) with transition of export manifest into ACE. Retired Automated Manifest System (AMS) with transition of air manifest into ACE. May 2016 TBD 2017 Worked with U. S. Census to integrate the final component of export filings, via the portal, into ACE and retired the legacy AESDirect. ACE becomes CBP’s system of record for all trade processing transactions. 4

Determining Post-Core Automation Priorities Step 1: Compile requirements Step 2: Map requirements Step 3: Prioritize Compile list of automation requirements from trade partners, CBP, and Partner Government Agencies Map requirements to agency strategic goals for FY 17 and legislative mandates Leverage governance bodies to adjudicate and prioritize future automation capabilities and identify funding 5

NCBFAA ACE Request List

NCBFAA ACE Request List What Trade is asking for Benefit to Trade Issue What this is Release Date Update Issues Stability in the system to address multiple problems The way the system tells in this area to determine an Assurance that importers and brokers that the freight is accurate date. Accurate the freight is released. This dates to ensure penalties release lawfully, also controls the date that are not issued in error due and duty is paid duty payment is due. timely to this issue. Release or Entry/Entry Summary ID procedures versus entry procedures Elected date of entry SE field 11 Benefit to CBP Status Assurance that the freight is release lawfully, and duty is paid timely CBP issued programming fixes, but all issues are not resolved. Ability to automatically determine the compliance with the law. Open receipt of the needed A clear concise message Clear instructions information to that indicates what actions enable actions to address issues Messaging Clarity The automated messages that the trade should take expeditiously eliminating sent to the trade to to address CBP's requests address concerns additional determine the action CBP or or actions, rather than and get contacts and another govt agency has codes or unclear general information to unnecessary taken on a file/entry basis messages. CBP requests. Declaration ate of duty payment selection typically An automated process for used on the northern border this declaration, which is outlined in law. now manual Trackable and traceable requests for declaration

NCBFAA ACE Request List Issue What this is What Trade is asking for The ability to release manifested Reduced storage goods at the lower level of costs and reliable shipment, rather than just at the consolidated level. This exists in The ability to be extended to all information in the air environment already. supply chain modes of transportation Allowing for an automated process, rather than a manual one which When a carrier inadvertently companies are leaves cargo off the manifest, the challenged to The ability to file an automated support in the broker is unable to file an automated entry and receive the entry even if the carrier automated release. neglected to manifest the goods. environment. Temporary imports must be Electronic designation of the Trackable designated for exam waiver upon export. This occurs exam determination at time of responses to ensure at time of release import release compliance The de Minimis entry/release Level playing field, process. Currently this is only ability to screen automated in truck manifest and other government air courier hub manifest The ability to release di Minimis agency subject applications goods electronically in ABI. Electronic capabilities to Electronic records, Informal entries of low value transmit the release and entry processes and goods that are consolidated summary, and automated streamlined together in the courier hubs payment of these entries. information Benefit to Trade Benefit to CBP Increased visibility into the supply chain to identify risks at a lower level than currently able. Automated processing including targeting abilities, electronic tracking and identification of these shipments. risk based reporting ACE programming information to changes made and ensure compliance policy issued Automated information to complete risk based targeting

NCBFAA ACE Request List Issue The current capabilities of the system is 999 lines or a Megabyte of data The systems experience delays in processing at peak times during the day. These events are not considered "downtime" but do cause delays at the borders. Carriers arrive at ports other than the expected port due to many issues. Currently the system prevents the data from some types of freight to be transferred to the new port If freight is not released within 15 days after arrival of the freight, it is transferred to the general warehouse requiring additional steps to release, and costs of storage to be covered. What this is What Trade is asking for No need to break up file transmission which cause additional costs and time Benefit to Trade Benefit to CBP Ability to process a larger line limit as was shipments in their identified in the earlier phases entirety rather than of ACE development (9, 999 as smaller parts of lines) and high MB limits the shipment. Less impact to A stable system with Reduced follow up officers at the Less impact than predictability in ensuring a level due to system borders. Reduced of performance commensurate issues. Elimination follow up due to previously with the private sector of penalties. system issues. experienced Ability to transfer data from one The ability to port to another if the carriers transfer previous Elimination of arrive at a port other than the targeting results duplicate data entry from the original expected port. The other due to a carrier government agencies data transmission to the arrival issue. should also be transferrable. new entry port. Reduced additional Correct information follow up to prove to ensure the correct date Enforcement actions based on carrier Correct calculation of the date arrival records, are warranted. that this is measured by in all Reduced research to many times in a modes of transportation. manual fashion. respond to the trade.

NCBFAA ACE Request List Issue Remote Location Filing (RLF) has allowed the trade to structure their business activities in a manner that makes sense for their business. However there are payment limitations. The ability to transmit invoice information to CBP to support shipment analysis and review. Many times this information originates with the shipper, seller or importer. The release and entry of warehouse entries of goods which take advantage of this regulatory option for importation. The new functionality to support the process of requesting refunds for goods that have been exported or destroyed as allowed by statute. What this is What Trade is asking for Benefit to Trade Benefit to CBP Status Reduced manual payments, ability Reduced processing times The ability to remove an RLF to meet entry from the statement guidelines without for checks, and pay it via another visibility and to penalty automated method. unnecessarily. the payment. Reduces manual processes such as printing and Ability to screen scanning's forms electronic data which represent rather than electronic data. scanned paper Reinstatement of this ability Allows truly forms, allowing in an automated fashion. It electronic further automated was eliminated in ACE. processes. Ability to screen electronic data rather than manual forms, Automate a allowing further process that An electronic entry and automated risk release capability for the allows the warehouse withdrawal. This withdrawal of the and targeting evaluation. is currently not automated. goods. Ability to screen electronic data An electronic rather than system that is stable, works as manual forms, and Ensure that the drawback intended without reduced time to process is completely research and automated without manual additional work facilitate the information required for all required to facilitate the process problems processes. There are process due to a system several major issues with the current ability system issues. issue.

NCBFAA ACE Request List Currency Conversion RLF-pay type 1 Automated invoice interface (AII) Warehouse withdrawals Automated process with predictable results rather than The tables that calculate currency at The currency conversation that CBP reliance on nonthe time of importation were regulations outline should be government data to eliminated within ACE. available in the ACE system. calculate the value. Remote Location Filing (RLF) has Reduced manual allowed the trade to structure their payments, ability to business activities in a manner that makes sense for their business. The ability to remove an RLF entry meet guidelines without penalty However there are payment from the statement and pay it via limitations. another automated method. unnecessarily. The ability to transmit invoice information to CBP to support shipment analysis and review. Many Reinstatement of this ability in an times this information originates with automated fashion. It was eliminated in ACE. the shipper, seller or importer. The release and entry of warehouse An electronic entry and release entries of goods which take capability for the warehouse advantage of this regulatory option for withdrawal. This is currently not importation. automated. Predicable and reliable currency conversation rates that are correct based on data provided. Reduced research time for CBP. Reduced processing times for checks, visibility and to the payment. Reduces manual processes such as printing and scanning's Ability to screen forms which represent electronic data rather electronic data. than scanned paper Allows truly electronic forms, allowing further process. automated processes. Ability to screen electronic data rather Automate a process than manual forms, that allows the allowing further withdrawal of the automated risk and goods. targeting evaluation.

NCBFAA ACE Request List Drawback Reconciliation The new functionality to support the process of requesting refunds for goods that have been exported or destroyed as allowed by statute. The process of flagging goods that have estimated information at time of release, allowing for further clarification to CBP after the information is known. Post Summary Corrections for payment Currently the system limits the ability of additional duty later of trade to make electronic payments than 270 days for corrections past the 270 day mark. Protest in ABI not just the Portal The protest module was only built in the ACE Portal application and not in the ABI application which brokers utilize. An electronic system Ability to screen that is stable, works as electronic data rather Ensure that the drawback process intended without than manual forms, and is completely automated without additional work reduced time to manual information required for all required to facilitate research and facilitate processes. There are several major the process due to the process problems system issues. due to a system issues with the current ability An electronic system Ability to screen that is stable, works as electronic data rather intended without than manual forms, and reduced time to Further automated tools that ensure additional work this process works in the electronic required to facilitate research and facilitate environment. There are several the process due to the process problems due to a system issue. major issues with the current ability. system issues. Reduced manual payments, ability to Reduced processing The ability to facilitate payments at meet guidelines times for checks, all times, regardless of the point in without penalty visibility and to the process. unnecessarily. payment. Automating a process that builds upon records already transmitted to CBP in the ACE ABI environment, rather than duplicate the Linkage within ACE to Protest ability built and deployed in input efforts outside of the ABI records already existing ABI to facilitate the filing by the directly from the ABI majority of the participants. electronic records. filer.

NCBFAA ACE Request List Protest Receipt Message Reports for visibility ITRAC status Paperless Statement Type 1, no revenue collection Ensures compliance with the filing deadlines as outlined in the law. Available analysis that is currently pulled Brokerage company reports are not Ability to work with manually by local available to brokers in the normal An ACE replacement for the broker CBP to ensure ongoing officers to ensure course of management and review as management reports in the ACE compliance with statistics for review they were previously in ACS. environment. broker responsibilities purposes. Currently due to questionable reliability of payment, refund, corrections, and missing information Current ITRAC should remain Ability to work with Complete data to the ACE Portal reports that were on available until such time that the CBP to ensure ongoing review and analyze an the ITRAC reports, the current ACE portal reports are accurate and compliance with the importer for reports are not seen as reliable for reflect all needed information importer's compliance and risk internal compliance use by the trade. already available through the ITRAC. responsibilities purposes. When the trade files a protest in the new ACE Portal application, there is no acknowledgment of receipt. Messages from the system to ensure that the protest is received timely. Ensures compliance with the filing deadlines as outlined in the law. Currently the trade is required to track Elimination of this process without Reduced processing and submit a non revenue statement penalty as no review is collected at and paperwork without of entries for payment. this time. a revenue implication.