ACE Deadline Extended – Update

Source:  JOC.com

WASHINGTON — U.S. Customs and Border Protection will extend deadlines for certain criteria that will be required after the rollout of its “single window” initiative on Feb. 28, according to the brokers, forwarders, importers and exporters who say they simply won’t be ready to meet those requirements by the end of the month.

Customs has already extended the deadline once before for the initiative, long-delayed and over budget by more than $1 billion, after a rash of similar complaints and concerns. The agency, though, has not said one way or the other whether it will hold fast to its February deadline. The agency said only that it continues to evaluate industry readiness and intends to move forward with the transition in “a way that does not disrupt the flow of commerce.”

The single window system, otherwise known as the automated commercial environment, or ACE, promises to consolidate, automate and modernize border processing. When complete, its single, electronic portal will allow importers and exporters to share trade documents with government agencies, saving shippers and brokers time and money.

“But it isn’t ready,” Jon Kent, spokesman for the National Customs Brokers and Forwarders Association of America, told JOC.com.

Kent’s group represents more than 1,000 freight forwarders, customs brokers, ocean transportation intermediaries, NVOCCs and air cargo agents. The association sent a letter dated Jan. 8 to CBP requesting the agency halt all software developments tied to the rollout of ACE on Feb. 28.

According to the group, because the single window is being constantly updated, with some changes slated to be introduced on the transition date of Feb 28., shipper software will not be able to handle some changes, which could result in bugs and other technical problems that may delay shipments and create costs. Should there be problems with the single window, shippers will be left without recourse to file customs paperwork because the old system for filing this necessary documentation is set to be shut down on the same day the single window takes effect.

Moreover, just 17 percent of imports are currently being processed through ACE, according to customs broker Livingston International. It’s a far cry from full implementation, said Livingston’s CEO Steven Preston.

It’s not just shippers and brokers, he added. Some of the largest partner government agencies aren’t prepared. Some, such as the Food and Drug Administration, had planned to be online by November of last year. Others, such as the Fish & Wildlife Service, admitted early on they could never make that deadline and put off implementation until early 2016.

“Even FDA is still in pilot, there is still program activity occurring,” Preston said. It’s understandable, he said, given the “vast and complicated” migration and the fact “there are so many different kinds of goods that require FDA clearance.”

“This is a big deal,” said Preston.

“Whether it’s not ready because the trade isn’t ready or not ready because Customs isn’t ready, the deadline needs to be modified,” Kent said.

Kent and Preston said CBP has welcomed the idea of “carveouts,” extended deadlines for certain functionalities that a broad section of filers will have challenges implementing, or that may cause commercial hardship to filers or the supply chain.

It wouldn’t mean delaying the rollout of a general rollout for ACE on Feb. 28. Customs would still get to keep its historic “milestone,” Kent said. It would just mean an extended deadline for certain functions and requirements.

“They should be able to look at all the different things that ACE is doing and should do, pick up problem areas, and make a carve out for those functions,” Kent said. “Not for them all, not across the board and not for specific types of importers.”

Such “carveouts” were suggested at CBP’s meeting with its advisory COAC in January.

“We know that in the COAC meeting CBP said, ‘Yes, we’ll act on this in two weeks.’ But, in two weeks you’re staring down that Feb. 28 deadline,” said Marianne Rowden, president and CEO of the American Association of Exporters and Importers.

Rowden, Kent and Preston believe they have CBP’s support, or at least the support of the agency’s advisory committee. But, there’s no way to know for sure as CBP has yet to make its contingency plans public.

Rowden’s association has sent a letter to Customs Deputy Secretary Alejandro Mayorkas, requesting the agency make that contingency plan public sooner rather than later.

“Whatever carveouts, contingency plans, how CBP is approaching this Feb. 28 deadline, please make that public as soon as possible,” Rowden said.

Both Kent and Preston are confident it will be.

“I think they’re listening. They’ve been very open to talk to the industry,” Preston said.

It’s a level of certainty, though, that is not apparent in official statements from the federal agency that will ultimately decide the matter.

CBP has not said whether it intends to hold fast to the February deadline or not.

“CBP has established an approach in coordination with trade to address any new technical issues that may be identified as new filers come on board for the February milestone,” the agency told JOC.com in a statement.

The ACE implementation was originally was set for November of last year. But, in last August, CBP extended the deadline another four months, after customs brokers and software providers said the slow release of technical specifications did not give them enough time to conduct the necessary programming, integration, testing and revisions.

Now, nearly four months later, the agency said it is fielding input from stakeholders and is aware there remain concerns. CBP said it is evaluating industry readiness and intends to move forward with the transition in “a way that does not disrupt the flow of commerce.” It would not say whether that meant another deadline extension, a partial extension for certain criteria or something else entirely.

It bears noting that up until August, when CBP extended its original deadline, the agency maintained it hadno intention of backing down from its November rollout date. Up until it announced the change, the agency told JOC.com only that it was “actively assessing the stakeholder readiness.”

Contact Reynolds Hutchins at reynolds.hutchins@ihs.com and follow him on Twitter: @Hutchins_JOC.

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