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Aug.24, 2015

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CUSTOMS UPDATE THE JOURNAL OF COMMERCE 19 Susan Kohn Ross WILL ACE HIT THE MARK? FROM TRADE DEALS with Europe and Asia to the situation in Iran, there are any number of pressing international issues, but the one on every U.S. trader's mind right now is ACE. Unless you've been living on a remote island with no connection to the outside world, you know Cus- toms and Border Protection set Nov. 1 as the deadline by which all entries and cargo releases must be filed in its latest computer system, the Auto- mated Commercial Environment. Customs has rolled out most of its modules, but the partner government agencies with jurisdiction over trade are lagging. Those 10-plus partner agencies at the forefront of this effort, it should be noted, have been work- ing diligently, but with some program requirements not being released until June — and others still unpublished — software vendors have no time to program, test and then roll out the new technology to their customers, who also need time to train and test before going live. In the latest example that Cus- toms can be its own worst enemy, the agency's original response to the dilemma was to say, "Well, change vendors." The agency has since come to understand the silliness of that idea, but the question remains: What's the solution? The Advisory Committee on Commercial Operations, the private- sector group that advises Customs about import and export issues, has produced recommendations that seem to make sense. Will they be accepted? First, COAC notes, only certain entry summaries currently can be filed in ACE: consumption, anti- dumping/countervailing duty and informal. In the face of "unforeseen trade or government systems issues," COAC says the process should be rolled out in a manner similar to the Importer Security Filing, that is, over a period of time rather than immediately requiring implementa- tion or compliance. Filers unable to use ACE should have to develop an action plan, but Customs also should create a compliance plan for those entries currently not able to be filed in ACE, such as those involving part- ner government agencies. ACE does include a cargo release f unction. For f ilers who don't attempt to use it in conjunction with entry summary filing, an aggressive action plan should be needed, but otherwise, COAC recommends an action plan reflecting the reality of the filer's situation and the capabili- ties of the system itself. Recognizing that many of the delays in implementing ACE result from the late issuance (or non- issuance) by partner government agencies of their prog ramming requirements, COAC proposed the implementation target date for those partners should be extended by 90 days. Some partner agencies, such as the Food and Drug Administration, have been working toward being ready by Nov. 1. Others, such as the Fish & Wildlife Service, have admit- ted they can't make the deadline and have put off implementation until early 2016. A major concern for COAC, and the trade community in general, is whether the ACE platform will be able to timely and smoothly handle the increased volume the Nov. 1 date portends. With that idea in mind, COAC recommended that Customs vigorously test the document imag- ing system to ensure it can handle the load, and provide alternative means for importers to convey necessary documents so trade isn't interrupted if it cannot. COAC also asked Customs to provide regular briefings and status reports, along with metrics about rollouts by the partner government agencies, the general readiness for the Nov. 1 deadline and Customs' vision for ACE in the future. As various modules in ACE rolled out, Customs established war rooms to deal with the glitches any new software program causes. COAC recommended that Customs con - tinue with the war room concept, but also should clarify the processes to be used at a national level when inter- ruptions occur, and the role outlying agents, ports and technical staff will play in those circumstances. COAC also asked Customs to issue clear and concise messages when problems are identified that address actions filers should take so trade continues uninterrupted. This situation occurred repeatedly with the air manifest rollout, underscoring that the absence of national guidance is a disaster waiting to happen. To its credit, Customs has been partnering with organizations at the 20 largest ports to present a variety of programs about ACE implemen- tation to the trade community, and the agency's May Trade Sympo- sium in Tacoma included a session that was well worth the time. In addition to Customs presentations, representatives from the FDA and the Consumer Product Safety Com- mission offered insight while also setting up a video link to include presentations by other partner gov- ernment agencies. For a sense of context, there are currently 3,144 filers for entry sum- mary and cargo release. As of June, about 60 percent of import entry summaries and 10 percent of import cargo releases were filed through ACE. Imagine what will happen to the system when export manifests are added to the system, a process in development. The question of what to do next is being considered at the highest levels of Customs and at the White House. Customs can't simply demand filings on Nov. 1 when the system isn't ready. Likewise, it can't just say, "Only kid- ding. You can wait awhile." Stay tuned to see what happens, but the general consensus is that Customs should require the use of the system for modules and partner agency programming that are ready by Nov. 1, and phase in the rest. Any- one have a better idea? JOC Susan Kohn Ross is an international trade attorney with Mitchell Silberberg & Knupp in Los Angeles. Contact her at

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