WEDNESDAY, SEPTEMBER 7, 2016

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NMFS Working on Targeting, Messaging Prior to Sept. 20 ACE DeadlineThe National Marine Fisheries Service is working on screening and targeting criteria to determine

what entries subject to new International Fisheries Trade Permit (IFTP) and ACE filing requirements it will select for manual review, said Christopher Rogers, assistant director of the international fisheries division of the NMFS Office of International Affairs and Seafood Inspection, during a Sept. 1 webinar. Given the large number of entries the agency will have to review once ACE filing becomes mandatory for NMFS data on Sept. 20, the agency will rely on the criteria to decide whether to review entries before or after the shipment is released, he said.

NMFS also has to work out its messaging with CBP to indicate to importers whether delays are the result of manual review, Rogers said. Normally, if the NMFS partner government agency (PGA) message set has been received, the IFTP validates, and any required document imaging system (DIS) submissions

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have been received and associated with the entry, the filer will get a “may proceed.” NMFS will only elect to manually review the entry if, in “real time,” it has questions for the importer or concerns, he said. In that case it will notify CBP and ask the agency to put a hold on the shipment to prevent release until NMFS’s concerns are satisfied, which may include contacting the importer for clarification. If NMFS decides to re-view an entry, it will notify CBP as well as the importer of record and the entry filer that it is taking action, Rogers said.

Under the Aug. 3 final rule that created the IFTP, the new permit is required for imports of fish regulated under the Highly Migratory Species (HMS), Antarctic Marine Living Resources (AMLR) and Tuna Tracking and Verification Program (TTVP) programs only, Rogers said. These programs cover about 35 Harmonized Tariff Schedule (HTS) numbers, he said. All other marine products imported and export-ed, which cover more than 700 HTS codes, do not require that the importer hold an IFTP or the filing of additional information via the NMFS PGA message set or DIS, he said. Importers and filers should con-sult these HTS codes to determine whether their products are covered. For example, despite the inclusion of many species of tuna under both the HMS and TTVP programs, some species of fresh tuna may not be subject to the new permit and filing requirements. A proposed rule issued by NMFS in February would also require the IFTP for seafood NMFS deems high-risk, but those regulations are yet to be finalized.

NMFS has been contacting importers that hold an HMS or AMLR permit with instructions to con-vert their existing permits to the new IFTP using the National Permit System, Rogers said. TTVP does not currently require a permit, so importers of covered products will have to apply for a new one via the Na-tional Permit System, he said. Though NMFS data isn’t required in ACE until Sept. 20, Rogers said ACE filing is available, and encouraged filers to try the new system before it becomes mandatory. NMFS posted slides from an identical presentation used in a webinar held in August (here). — Brian Feito

CBP Spells Out Coming Liquidation Processes in ACECBP released a list of “high level changes for processing liquidations “in ACE (here). An interim

final rule on the addition of liquidation capabilities in ACE will be released ahead of the Oct. 1 deployment, it said. Among the changes are an electronic replacement for paper liquidation bulletins, more frequent liq-uidation processing and temporary importation under bond extension filing through ACE.

CBP Posts ACE Reconciliation HandbookCBP posted a new reconciliation handbook for ACE (here) ahead of the Oct. 1 switch from the Au-

tomated Commercial System. This guide represents an updated version of the ACS Reconciliation Proto-

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type Guide, often called the reconciliation handbook, it said in a CSS message (here). CBP recently said it expects the coming changes to the reconciliation program to streamline the process.

CBP Updates ACE Entry Summary Business Process DocumentCBP posted an updated version of its ACE Entry Summary Business Rules and Process document,

dated Sept. 1 (here). “The updated version of the document includes a rewritten Liquidation section, a revised and expanded Protest section, and minor edits to the Drawback section (more updates to this section will be coming soon),” CBP said in a CSMS message (here).

Proposed FDA Regulations Make Already Costly ACE Requirements More Burdensome, Trade Groups Say

Additional data elements required by the Food and Drug Administration for ACE entries are increas-ing costs and staffing needs for the trade community, companies and trade associations said in comments on FDA’s proposed rule to codify the new requirements (here). FDA’s ACE requirements “represent an economically significant greater burden on the trade community compared to the data required in the pre-vious Automated Commercial System (ACS),” the Express Association of America said (here). One EAA member calculated an increase of 50% in the time required to process an FDA entry in ACE over the time required in ACS, “from 16 to 24 minutes,” the EAA said. “In order to continue to meet the strict delivery deadlines in the express environment for FDA-regulated products, the increased processing time has result-ed in a requirement for a 40% increase in staffing for these shipments,” it said.

Though FDA’s proposed rule says submission of these additional data elements can “significantly increase” the chances of getting an automated “may proceed” from the agency, it “provides no details on why this is likely to occur or what processes FDA intends to change to ensure it does occur,” the EAA said. “FDA statistics indicate that 75% of regulated shipments do not receive an automated may proceed, a figure that has remain[ed] at this high level over many years,” despite the optional submission of some of the newly required data elements in ACS for some products, including medical devices, it said. “The conclu-sion is unavoidable” that the failure to receive an automated “may proceed” is tied not only to data quality, but also the targeting rules in FDA’s PREDICT system, the EAA said. “If FDA believes an automated may proceed will occur more frequently in an ACE environment with the submission of additional information, the agency must commit to reviewing its entire targeting process and working with the trade community to ensure that result is achieved.”

Several of the proposed data elements required under FDA’s proposed rule are unnecessary and duplicative, the Grocery Manufacturers Association said (here). “To the extent additional data are needed to facilitate FDA’s evaluation of the relative risk of food products, GMA generally agrees that they should be included as required data elements for food importers so long as providing this information is not duplica-tive. We are concerned, however, that several of the proposed data elements required would be duplicative of information importers already provide to CBP,” it said. “In addition, FDA has not explained how cer-tain data elements will improve the efficiency of the agency’s review, including in particular the agency’s

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review of food, and GMA questions the utility of providing this information in light of the burden it will impose on importers.”

FDA’s proposal to make several currently optional data elements mandatory could make matters worse, said both the United Parcel Service (here) and FedEx (here), echoing earlier comments from the Na-tional Customs Brokers & Forwarders Association of America. Making them mandatory “will cause a pile up of shipments waiting for the additional data” to be obtained by the filer from the importer, FedEx said. Currently these data elements, including intended use, are optional, so CBP can still process the ACE entry and release the goods to the importer’s premises before FDA says the entry “may proceed” into commerce. “This new process may prevent the goods to move to the importer’s premise[s] pending a request for infor-mation from the filer to the importer if the data is rejected up front,” UPS said. “The very real cost of stor-age and demurrage incurred waiting to obtain FDA information from an importer can amount to thousands of dollars within a matter of days.”

FDA has “virtually ALL” of the additional information “already within its own database(s),” the American Association of Exporters and Importers said (here). “FDA is now requiring the trade to place, on every single line item, virtually the full FDA database for every single line item,” it said. FDA should instead have a “simple indicator and code” linking to the FDA system ID for that combination of product and importer, which the importer could then reference for FDA to match against its internal systems, AAEI said. “This would be a tremendous relief of reporting requirements for both the trade and the FDA,” it said. AAEI also noted its displeasure with FDA’s “prompt” decision (here) not to grant its request for more time to file comments. Comments on FDA’s proposed rule were due Aug. 30. — Brian Feito

CBP Evaluating TSN Request for Grace Period for ACE Drawback, Reconciliation FilingsCBP received and is considering how to respond to a Trade Support Network leadership council re-

quest to allow for a grace period for drawback and reconciliation filing after deployment in ACE, an agency spokeswoman said. “CBP is continually evaluating the readiness around this transition and is committed to ensuring that the transition does not disrupt the flow of commerce,” she said. “ A response will be provided to the trade community upon further assessment of these considerations.” The TSN asked for a 60-day “grace period” during which filers could use the Automated Commercial System while testing ACE for drawback and reconciliation.

CBP Posts ACE Protest FAQsCBP posted a list of frequently asked questions about protest filings in ACE (here). As of Aug. 27,

protests filed electronically must be filed through ACE.

Miscellaneous CBP Releases (September 1, 2016)CBP issued the following releases on commercial trade and related matters:

• Updated APHIS-Core ACE PGA Message Set Implementation Guide (here)

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• FDA Clarification for (Animal) Drug Registration Descriptions (here)• Reoccurrence of ACE Processing Issue, but is now RESOLVED (here)• ACE CERTIFICATION Liquidations deployment Aug. 31 (here)• ACE PRODUCTION deployment, Thursday, Sept. 1 (here).

Trade Support Network Calls for CBP Grace Period After Oct. 1 ACE Deadline for Drawback, Reconciliation

CBP should give the trade community a grace period of 60 days to file in the legacy Automated Com-mercial System after it deploys drawback and reconciliation in ACE on Oct. 1, the Trade Support Network leadership council said in a letter to the agency dated Aug. 26. Current plans to deactivate ACS for drawback and reconciliation at the same time CBP launches drawback and reconciliation in ACE do not leave enough time for testing and training, and the agency still hasn’t issued the required policies and regulations, it said.

If CBP moves forward as planned, companies could take a hit to the pocketbook in the form of delayed refunds and penalties for missed deadlines, the letter said. Drawback filers faced with statutory deadlines may have to file on paper if they’re unable to file electronically, causing not only expense to the trade community but also to CBP officers that have to manually input paper claims. Many reconciliation filers won’t be ready by Oct.

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1 either, and could face liquidated damages for missing the deadline to “close out” flagged entries within 21 months. Both situations are compounded by the decision to set the mandatory use date at the end of some com-panies’ fiscal year, when many file drawback claims or reconciliations based on newly available information.

Despite the approaching deadline, software testing is only just beginning, with CBP only recently deploying drawback and certification in the ACE “certification” testing environment. Business rules and policies are “still under development” by CBP, and “no regulations have been issued or revised,” the TSN leadership council said. “We also understand that the training of CBP personnel is not expected to take place until a week or two before the mandatory date,” it said.

CBP should still implement drawback and reconciliation in the “live” ACE production environment on Oct. 1, “allowing companies that are ready to file despite the short testing period to begin testing the sys-tem in production,” the TSN leadership council said. However, the agency should “allow at least 60 days of testing in production before any mandatory date and the shutting down of ACS filings,” it said. Any busi-ness rules, policies and regulatory changes should be in place at least 60 days before the deadline, and CBP should also have its personnel trained by that time, the letter said. The TSN leadership council requested that CBP respond to its letter by Sept. 1. CBP didn’t comment.

Email ITTNews@warren-news.com for a copy of the letter.

Miscellaneous CBP Releases (August 31, 2016)CBP issued the following releases on commercial trade and related matters:

• Deactivation of CBP Boston Port Codes 0181, 0409, 0499, 0601, 0602, 0603 for Cargo (here)• ACE CERTIFICATION Outage, Wednesday, Aug. 31 (here).

CBP Updates ACE Entry Summary Business DocumentCBP posted the two most recent versions of its ACE Entry Summary Business Process document

(here). The most recent version (here), dated Aug. 26, includes a new section on drawback in preparation for the Oct. 1 deadline mandating ACE for electronic drawback filings.

ATF to End ACE PGA Message Set Pilot; Mandatory Use Date UndeterminedThe Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF) will end its partner government

agency message set pilot for data submission in ACE, ATF said in a notice (here). While the pilot will end as of Aug. 31, “the mandatory filing date for filing entries in ACE has yet to be determined,” ATF said. The agency began the pilot last summer. “Importers should be aware that no changes have been made to the requirement that importers submit their copy of the Form 6A (with Sections I and III completed) to ATF within 15 days of release from CBP custody,” ATF said.

(Federal Register 08/31/16)

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Miscellaneous CBP Releases (August 30, 2016)CBP issued the following releases on commercial trade and related matters:

• ACE Importer Security Filing CATAIR (here)• New FRN Concerning Electronic Drawback and Duty Deferral Entry and Entry Summary

Filings (here)• HTS query testing in ACE-Certification (here)• Updated ACE Documentation Available (here)• Entry Summary processing delays have cleared (here)• RESOLVED—The delay in the routing of Cargo Release SO Notifications (here).

CBP Announces in Federal Register Oct. 1 ACE Deadline for DrawbackCBP issued a Federal Register notice (here) announcing its previously announced plans to require

filing of electronic drawback claims in ACE on Oct. 1. As of that date, the legacy Automated Commercial System “will no longer be a CBP-authorized [electronic data interchange] system for purposes of process-ing” drawback claims, CBP said. The notice also announces the creation of new entry type 47 for all types of drawback, replacing entry types 41 through 46. CBP has previously said the importer will separately specify the type of drawback being claimed. CBP is also “removing the reference to NAFTA from the name of the ACE filing code 08 for duty deferral,” it said. Liquidation is also set to be deployed in ACE on Oct. 1, and electronic reconciliation will be mandated in ACE on that date as well. For now, reconciliation sum-maries must still be filed only in ACS, and CBP will publish “a subsequent Federal Register Notice in the future” when reconciliation “will be transitioned in ACE,” it said.

(Federal Register 08/30/16)

Miscellaneous CBP Releases (August 29, 2016)CBP issued the following releases on commercial trade and related matters:

• Delayed routing of ACE Cargo Release SO status notifications (here)• CORRECTION to ACE CERTIFICATION Reconciliation Deployment, Tuesday, Aug. 23 (here)• 2016 ACE Trade User Satisfaction Survey (here)• NPRM Published on TSCA Chemical Substance Import Certification Process Revisions (here)• FDA system issues have been resolved (here)• Reconciliation Technical Discussion for Software Developers (here)• ACE Export Reports: Revised Certification of Authority (here).