On January 18, 2018, US Customs and Border Protection (CBP) published in the Federal Register a general notice announcing, as of February 24, 2018, that certain previously announced modifications to the National Customs Automation Program (NCAP) test regarding reconciliation will become operational, and that the test program will transition from the Automated Commercial System (ACS) to the Automated Commercial Environment (ACE).
Section 637 of Title VI of the North American Free Trade Agreement (NAFTA) Implementation Act (Pub L. 103-182, 107 Stat. 2057, 2170, December 8, 1993), commonly known as the Customs Modernization Act or Mod Act amended Section 484 of the Tariff Act of 1930 to establish a new section (b), entitled “Reconciliation”, a planned component of the NCAP. (19 U.S.C. 1484(b), 19 U.S.C. 1411(a)(2)(C)). Reconciliation is the process that allows an importer, at the time an entry summary is filed, to identify indeterminable information (other than that affecting admissibility) to CBP and to provide that outstanding information at a later date. The importer identifies the outstanding information by means of an electronic “flag” which is placed on the entry summary at the time the entry summary is filed and payment (applicable duty, taxes, and fees) is made.
The Security and Accountability for Every (SAFE) Port Act of 2006 (Pub. L. 109-347, 120 Stat. 1884) modified the Mod Act and added subsection (d) to 19 U.S.C. 1411. This subsection established the International Trade Data System (ITDS) which allows for the collection and distribution of standard import and export data required by CBP through a single portal system. The Automated Commercial Environment (ACE), the “single window,” is an automated and electronic system for commercial trade processing which is intended to streamline business processes, facilitate growth in trade, ensure cargo security, and foster participation in global commerce, while ensuring compliance with U.S. laws and regulations and reducing costs for CBP and all of its communities of interest. The ability to meet these objectives depends on successfully modernizing CBP’s business functions and the information technology that supports those functions.
Over the last several years, CBP has tested ACE and provided significant public outreach to ensure that the trade community is fully aware of the transition from ACS to ACE. On December 12, 2016, CBP published a notice in the Federal Register (81 Fed. Re. 89486) announcing modifications to the reconciliation test and the transition of the test from ACS to ACE, effective January 14, 2017. CBP subsequently published notices in the Federal Register announcing that the effective date for the modifications to the reconciliation test and for mandatory filing of reconciliation entries in ACE had been delayed until further notice.
This notice announces that, beginning February 24, 2018, all reconciliation entries must be filed in ACE regardless of whether the underlying entry was filed in ACS or ACE and regardless of whether it is a replacement, substitution or follow-up to a reconciliation entry originally filed in ACS, and ACS is decommissioned for the filing of such entries. In addition, as of February 24, 2018, the test modifications announced in the December 12, 2016 notice will become operational.
