Will Your Company Ace ACE Implementation?

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U.S. Customs and Border Protection's new Automated Commercial Environment is designed to streamline import and export documentation moving it from a paper system to a computer portal using "the single window" concept. Starting Feb. 28, the import and export community will file all forms through a single portal to reach all 47 U.S. partner government agencies impacted by shipments that enter and exit our borders. Think FDA, USDA, EPA, TSA and ATF. Years in the making and billions invested, will your company ace ACE implementation?

Many parts of ACE already are up and running. U.S. Customs and Border Patrol announced this week it will stagger implementation of mandatory entry summary and filing from March through May. We have been aware of the changes for several years and have been taking changes a step at a time to ensure compliance, including testing key processes that do not involve partner government agencies. Here are key facts for businesses that import and export goods:

ACE requires registration. All U.S. agents and freight forwarders must be registered in the ACE system to have access to reports, respond to customs forms, create a blanket declaration for customs agents and manage other pertinent information. There is an online form on the U.S. Customs and Border Protection website.

Technology must be in place. ACE relies on a computerized portal. Having the right software in place is essential. Software vendors had to receive U.S. government approval before they could launch ACE programs. Check the U.S. Customs list of certified software vendors if you choose to use your own software system.

Check the depth of your freight forwarding company's expertise. Most large companies depend on a freight-forwarding partner to manage their import and export cargo. Be sure your partner has a customs broker on staff. We’re the point person who has the ACE registration, software and knowledge to properly file paperwork and clear goods on behalf of customers.

Review your import parts database. It’s critical to keep your product database updated. Change is normal at companies—including product changes. The proper classification determines the duty rate on goods. And, just as important, it should address whether a partner government agency is involved, given the new level of electronic visibility for ACE import entries. By not keeping your database and classifications updated, the level of government enforcement increases, risking a smooth entry. It could lead to an assessment or audit from customs or similar intervention by partner government agencies.

Know and input the right cargo shipment details. With 47 partner government agencies involved in ACE, getting the information correct on the import or export shipment is essential. With proper classification in place, be sure to use the right federal identification numbers for companies receiving deliveries. Often shipments entering the United States do not go straight to your business. They go to a warehouse for storage and are timed with the supply chain needs. If a delivery address is different than your address, a federal identification number for the receiving company must be supplied for entry. Invoices with detailed descriptions of the product must be prepared. It is important to classify the products correctly to eliminate any discrepancies; thus review your database as outlined above. Also worth noting, a federal identification number is now optional on the "ship to" field.

Plan ahead. Send documents prior to arrival of the shipment to allow time for review. If there are questions or issues, this gives time to provide clarifications and keep cargo moving.

Know the rules from the country of origin.  Verify the rules of origin for specific goods. There is a five-year statute of limitations on customs auditing. Since ACE relies on computers, government agency staff will have easily searchable information at their fingertips. Customs relies on post-entry auditing of entries and documents to enforce compliance. From 2011 to 2014, total penalties assessed increased 140 percent from $385.4 million to $925.9 million. There is no doubt the government will be watching and assessing.

Be patient; there will be hiccups. Preparation is important, yet with a new system, 47 government agencies and a variety of factors in play, there will be hiccups. The trade community has requested a contingency plan from U.S. Customs and Border Protection. If all else fails, paper entries can be filed, which will take patience due to longer clearance times.

Leverage the resources around you. Don’t go it alone. Companies that import should leverage internal and external resources to prepare for ACE. A certified customs broker can help move your cargo, analyze cleared entries and evaluate post-entry work. Trade management consultants and attorneys can provide additional external support.

Importers are responsible for knowing every customs requirement and ensuring compliance. By partnering with a customs broker and other professionals with the expertise, resources and tools for ACE implementation, your company can focus on daily business leaving the details to the experts.

Diana Kepler is a License U.S. Customs Broker for Indianapolis-based Cargo Services Inc., a freight forwarding company. 

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