Imports and Exports Held for Non-Compliance at Ports Around the Globe Could Create Chaos
Manufacturing Talk Radio has recently uncovered that ACE, the Automated Commercial Environment of the International Trade Data System being implemented by the Department of Homeland Security is $1 billion over budget and badly behind schedule for a February 28, 2016, cargo implementation deadline. This situation creates the potential for many imports to get locked up by U.S. Customs and Border Protection at ports across the country, creating chaos in the economic supply chain.
The commercial trade system, designed to automate import and export paperwork processing and replace outdated cargo processing systems, enhance border security, and bolster our nation’s security, involves 47 Partner Government Agencies (PGAs) and thousands of freight forwarder and customs broker service providers, using a “single window” paperless concept intended to create a more efficient and streamlined filing system for U.S. import and export documentation.
System glitches that delayed the November 1, 2015 start bring the February deadline into question, and may jeopardize the December 2016 full implementation deadline. More importantly, it could create a logjam at U.S. ports where import and export containers are frozen while the conversion from paper to digital documentation is sorted out.
Once ACE is up and running, all entry summaries will be mandatory through the new “single window” system, and the outdated Automated Commercial System (ACS) will be decommissioned. The ACS has been holding importers/exporters back, and a more efficient and streamlined system is necessary to keep up with the fast-paced global market of the 21st century.
To prepare for the rollout of ACE, U.S. Customs and Border Protection (CBP) worked with the 47 PGAs to ensure participation between the PGAs. The release will partially depend on PGA participation to ensure all systems are working properly, and all parties are on the same page. However, the PGAs have rejected electronic filing systems in the past, so President Obama forced the issue through Executive Order 13659 issued on February 19, 2014.
On Tuesday, January 26, Manufacturing Talk Radio interviewed Celeste Catano, Senior Global Strategist at Kewill, a provider of multimodal transportation supply chain execution software, and Amy Magnus, Director of Customs Affairs & Compliance at Deringer, a service provider for streamlining logistics. Both individuals are on the committee on U.S. Customs and Border Protection advising the government on the crafting and implementation of ACE. Both were equally concerned that the system is not ready for release, although the February 28, 2016, deadline has not budged.
Manufacturing Talk Radio will update this story in late February and try to determine if ACE will be implemented with the same fleeting glory as the Affordable Care Act portal www.healthcare.gov. All prior shows are stored for listeners at www.mfgtalkradio.com including this episode, S5-E18.
SINGLE WINDOW ISSUE PAPER OVERVIEW: • Executive Order (EO) 13659 requires the implementation of the International Trade Data System (ITDS) Single Window by the end of December 2016. • ITDS is being implemented through the Automated Commercial Environment (ACE), the advanced trade processing system being built by the Department of Homeland Security (DHS) via its component agency, U.S. Customs and Border Protection (CBP). • The Border Interagency Executive Council (BIEC), has been established to develop policies and processes to enhance coordination across U.S. Government agencies to improve supply chain processes and improve identification of illicit shipments. • To support implementation of the EO, DHS has established three deadlines by which the trade community must file transactions in ACE: o May 1, 2015: Mandatory use of ACE for all electronic manifest filing. o November 1, 2015: Mandatory use of ACE for all electronic cargo release and related entry summary filings o October 1, 2016: Mandatory use of ACE for all remaining electronic portions of the CBP cargo process.
BACKGROUND • Executive Order (EO) 13659: Streamlining the Export/Import Process for America’s Businesses established a December 2016 deadline for completion of the International Trade Data System (ITDS), the United States’ version of a national “Single Window.” The new capabilities to be delivered through this effort will simplify and speed-up cross-border commerce while reducing the costs of importing and exporting goods. In addition, the EO challenged the Department of Homeland Security (DHS) and other agencies to find ways to better orchestrate operational processes at the border, streamline data needs, and take other concrete steps to achieve measurable improvements in trade facilitation and enforcement. Some specific examples of these improvements that the Border Interagency Executive Council (BIEC) is working to implement are new unified messaging capabilities from the government to filers regarding the status of a shipment, enhanced coordination of risk management activities across agencies to speed review and decision-making processes, and improved alignment with global best practices and standards to enable future inter-operability with other national Single Window systems.