U.S. Customs and Border Protection’s comprehensive new Automated Commercial Environment is a historic step toward modernizing inefficient customs procedures. But it also puts a greater burden on shippers and their customers to keep their data orderly and up to date.
The ACE launch date has been pushed back to Feb. 28, 2016, from Nov. 1, 2015, to give everyone more time to prepare. We should all use those extra four months wisely. Get your records in order now.
Many parts of ACE already are up and running, and it’s critical for importers, exporters and customs brokers to be ready for the complete transition early next year. Customs brokers must update their software to properly file paperwork and clear goods on behalf of their customers. Importers must be up to speed on customs requirements and all other applicable government agency requirements. Importers also must work with their customs brokers to guarantee they have solid procedures in place to get required data and documents to the broker.
Once ACE is implemented, as many as 47 regulatory government agencies will have greater visibility into U.S. import entries, raising the risk of penalties against those importers who knowingly or unknowingly commit violations.
Compliance enforcement is intensifying. Those who aren’t prepared face fines and delays in getting items cleared across U.S. borders. From 2011 to 2014, total penalties assessed increased 140 percent, from $385.4 million to $925.9 million, far more than the corresponding increase in imports. Under ACE, these penalties could increase, raising the ante for importers.
This marks a new era of efficiency, transparency and, ultimately, compliance in U.S. customs. By the end of 2016, Customs’ comprehensive new paperless system will be the primary system for the trade community to report imports and exports. The U.S. government will use the information to determine whether shipments are legal.
Here are some tips to help importers prepare for the ACE transition:
— Assess risks. As a first step, importers should conduct a risk assessment, particularly taking a fresh look at their imported parts database. It’s critical to keep the database updated because an importer’s commodities are subject to change. The proper classification determines the duty rate on goods. And, just as important, it should address whether a Partner Government Agency is involved, given their new level of visibility of ACE entries. Do anti-dumping duties apply to your products? Enforcement is a primary trade enforcement issue for customs. By not keeping your database and classifications updated, your level of risk increases and can lead to an assessment or audit from customs or similar intervention by a PGA. It’s especially important to do this data checking and cross referencing in advance of the official ACE deployment deadline to limit the possibility of future problems.
— Analyze your entries. The next step involves analyzing your customs entries. As an importer, are you taking advantage of all free trade agreements? If so, are your claims consistent and supportable? Just because you import from a country with a free trade agreement involving the United States doesn’t mean your products automatically qualify for duty-free treatment. You need to verify the rules of origin for specific goods. It’s important to look at all your past claims and check for any unusual or inconsistent historical patterns. Doing so will help assess your level of complexity and can determine whether Customs or a Partner Government Agency will audit your entries. One common misconception among importers is the notion customs clearance will run smoothly after goods are cleared and enter the United States. This isn’t the case. There is now a five-year statute of limitations on customs auditing. After ACE is implemented, this process will be much easier for government agencies, which will have more information at their fingertips. Remember getting goods cleared at the border is just step one. Customs relies upon post-entry auditing of entries and documents to enforce compliance.
— Leverage resources. Importers should leverage their internal and external resources to prepare for ACE. Your customs broker can help analyze the cleared entries and evaluate post-entry work. It also can serve as a great resource moving forward. Trade management consultants and attorneys can provide additional external support across all your entries.
Preparing for the ACE platform integration is no easy feat, and as an importer, you are responsible for knowing every customs requirement and for making sure you’re compliant. By partnering with a customs broker that has the expertise, resources and tools for the seamless implementation of ACE, you can turn the hard work over to them while you focus on growing your business across borders.
Taken from the JOC; written by Greg Maddaleni – Customs brokerage marketing manager/licensed customs broker at UPS.