Desperately needed relief arrived for U.S. importers and exporters in January 2017 when the U.S. Customs and Border Protection (CBP) agency’s “Single Window Initiative” (SWI) was fully implemented. The initiative, officially known as the “International Trade Data System” (ITDS), which had been in the pipeline for more than two decades, is poised to streamline the border clearance process by providing a single venue through which all shipment data and documentation will be entered and managed.
The Single Window effectively replaces a multitentacled process marked by redundancy, inefficiency, and red tape; the process has been a significant and growing source of frustration for the trade community. As the CBP agency itself noted: “Forty-seven agencies are involved in the trade process, and among these agencies, nearly 200 forms are required for imports and exports. The current processes are largely paper-based and require information to be keyed into multiple electronic systems. As a result, importers and exporters are often required to submit the same data to multiple agencies at multiple times.”
“Forty-seven agencies are involved in the trade process, and among these agencies, nearly 200 forms are required for imports and exports…” – Source: ACEopedia, U.S. Customs and Border Protection
While CBP has long recognized the need to revamp and modernize its capabilities, namely through an electronic filing platform called the Automated Commercial Environment (ACE), the issue came to head in 2014 when President Barack Obama put the issue firmly on CBP’s front burner through an executive order, directing the completion of an electronic Single Window by December 2016.
Going forward, the Single Window — which operates via the ACE platform — is the only platform through which cargo information can be submitted. All other previously maintained databases and filing systems have either been deactivated or will be in the near future.
Throughout the development process, CBP communicated regularly with U.S. businesses, providing updates and urging them to become familiar with evolving system capabilities. The Single Window — through the ACE platform — was introduced incrementally, with different government agencies, known as Partner Government Agencies (PGAs), coming online at different stages. CBP was methodical in addressing the specific needs of each agency. Import requirements for the Food and Drug Administration, for example, are very specific and different from Consumer Products Safety Commission requirements.
Following is an overview of ACE and the Single Window process, including important information about what the new filing system means for U.S. businesses. Going forward, shippers will benefit from an easier process with existing bottlenecks largely eliminated.
But ACE is more than just a way to streamline the import/export process. It is an integral part of CBP’s strategy to strengthen border security through advance knowledge of incoming shipments. This advance knowledge allows CBP to make informed resource allocation decisions to ensure that high-risk, suspect shipments are afforded greater attention, while low-risk shipments can be quickly cleared for entry.
Important to note is most businesses entrust customs compliance responsibility to an experienced logistics provider or customs broker. While this is generally a smart decision, since it alleviates the need for a business to expend internal resources on customs compliance, a general understanding of ACE functionality is useful. Among other reasons, a business is liable for all information submitted to CBP on its behalf.
Before a shipper can ensure compliance with Single Window requirements, it’s necessary to have familiarity with, and a basic understanding of, key terminology. Terms commonly associated with Single Window include:
When President Obama signed Executive Order 13659, mandating completion of the International Trade Data System by December 2016, he cited the damaging effect of existing processes on the nation’s trade community. “Today, businesses must submit information to dozens of government agencies, often on paper forms, sometimes waiting on process for days to move goods across the border,” the statement accompanying the executive order read. “The new electronic system will speed up the shipment of American-made goods overseas, eliminate often duplicative and burdensome paperwork, and make our government more efficient.”
According to CBP, specific benefits of the Single Window include:
For many in the trade community, ACE — and the Single Window it provides — is a dream come true. And news that the system is now the law of the land will hopefully not come as a surprise.
This is because, for the past several years, CBP has communicated regularly with the trade community about ACE development, with clear updates about testing phases and compliance dates, and steps required to get ready. In November 2015, for example, CBP announced the beginning of a “voluntary compliance period,” during which members of the trade community were encouraged to familiarize themselves with ACE functionality by using available capabilities, establishing user accounts, and offering feedback about the system’s capabilities.
In April 2016, electronic filing of import data via ACE became mandatory, with different government agencies scheduled to come on board in the following months. The Food and Drug Administration (FDA), for example, became ACE-compliant in June 2016, meaning information that had previously been submitted via ACS was now transmitted directly via ACE.
ACE functionality permits electronic processing for shipments arriving across all venues, with capabilities for manifest, cargo release, entry summary, exports, and protests.
Manifests for all modes of transportation — truck, ocean, rail, and air — must be filed in ACE prior to a shipment’s arrival at the border. Truck carriers are able to file manifests via the ABI/Electronic Data Interchange (EDI) and the ACE Secure Data Portal, while ocean, rail, and air manifest data can only be transmitted via ABI/EDI.
Among the key benefits identified by CBP for ACE manifest capability are:
According to CBP, the agency streamlined the cargo release process by working with representatives of the trade community to compare data elements necessary for releasing cargo with data available during the pre-departure environment. “The result of this work,” CBP notes, “is a reduced data set consisting of fewer required data elements.”
Among the benefits of the revamped cargo release process are:
Electronic entries must be filed in ACE for all entry modes. In addition, filers can also submit post-summary corrections, and utilize ACE capabilities to edit information, as a way to validate data accuracy and alert users about data errors.
Among the benefits of ACE’s entry summary capabilities are:
Through ACE, CBP has modernized the process for submitting and managing decision protests. Going forward, protest filers (e.g., attorneys, brokers, importers, etc.) can electronically submit protests and attach supporting documentation electronically instead of via paper packets. In addition, protest submissions can be updated electronically with additional or modified information.
Key benefits of electronic protest submission capability include:
Prior to ACE, all export documentation was filed through the Automated Export System (AES). But as of March 2014, AES functionality was transferred to ACE, and ACE is now the primary filing system for exporters. According to CBP, by working with partner software vendors, exporters are able to interface with ACE to file all necessary export data and supplementary information.
The first step in ACE compliance is to become familiar with the two technology systems that drive the process, the Automated Broker Interface (ABI)/Electronic Data Interchange (EDI) and the AES Secure Data Portal:
The Single Window Initiative was in the development stages for many years, and during that time, CBP provided numerous updates to members of the trade community. CBP updates included key information about system capabilities and implementation dates. The reason for communicating this information was to keep the trade community informed and to encourage filers to prepare for the eventuality of mandatory ACE filings.
Smart businesses heeded this advice and took steps early on to prepare. These businesses opened accounts in the ACE Portal and conducted extensive testing to ensure seamless filings. In addition, necessary software upgrades were implemented, with extensive testing conducted to ensure full functionality.
Since most businesses rely on a logistics provider or a customs broker to submit documentation to CBP on their behalf, it’s important to ensure that a provider is well versed on ACE filing deadlines and systems requirements. In other words, you want to sign on with a trade partner that heeded CBP’s advice to proactively get ready for ACE. An ACE-prepared logistics provider will already understand the intricacies of the Single Window and be prepared to ensure a seamless filing process for its customers.
Similar to other government programs, failure to comply with ACE filing mandates could result in fines and penalties. According to BluJay customs management firm, “the master of any ship, driver of any vehicle, or the pilot of any aircraft found not to be in compliance with the advance notification rules will be subject to a monetary fine.” A first-time violation will trigger a fine of $5,000, and subsequent violations will trigger fines of $10,000.
While these are not insignificant amounts, the major impact could be felt in the clearance delays likely to result from missing or incomplete filings. “Missing data will generate an immediate fail, which will result in goods being turned away or detained with the associated additional costs, including labor, storage, and fuel, while the situation is resolved,” BluJay warns customers.
In fact, the overall impact of having a shipment delayed at the border could easily run into tens of thousands of dollars and have an impact that could reverberate throughout an entire supply chain. There is much to lose by not complying, and there is much to gain from successful ACE participation.
As much as the SWI will facilitate the import and export process for the U.S. trade community, much of its functionality cannot be shared with the rest of the world. It is, in effect, an American-made product not eligible for export. This is because ACE was built to meet the specific needs of the U.S. government and trade community.
Similar Single Window Initiatives are in place in dozens of countries around the world, with the World Customs Organization (WCO) — the Brussels-based organizations charged with maintaining the international trade community’s listing of tariff classifications — citing in its 2015– 16 Annual Report that more than 50 percent of the world’s customs administrations use Single Window systems. WCO assists countries in developing Single Windows and maintains a library of initiatives in place around the world. In some instances, Single Windows can be integrated among nations. The ASEAN Single Window, for example, connects the national Single Windows of each of its 10 member states.
Closer to home, the United States and Canada are considering steps to integrate their trade processing systems to the extent feasible. With almost $600 billion worth of goods crossing the U.S./Canadian border annually, the trade community has long complained about redundancies in the customs process. Shippers are often required to submit identical documentation and shipment information both to the U.S. CBP and the Canada Border Services Agency (CBSA).
Efforts to streamline data collection processes received a boost in early 2011 when U.S. and Canadian leaders announced the Beyond the Border initiative, which, among many provisions, committed each country to development of a Single Window that would then be used, where possible, to integrate data between the two countries.
Canada’s Single Window, which will operate from the Advance Commercial Information (ACI) trade-processing center, is scheduled for full implementation in early 2017. However, a government-sponsored audit found the trade community has been slow to implement Single Window processes. “The Canada Border Services Agency anticipated that within Single Window’s first year of operation, eight members of the trade community, representing 40 percent of regulated goods, would be using Single Window. We found that as of May 2016, only one of those members, representing 17 percent of regulated imports into Canada, was using Single Window,” the audit noted.
The report further noted that adoption of Canada’s Single Window has been slower than expected because it is not mandatory and because traders must make a considerable investment in technology in order to use the system. While certain progress has been made in facilitating certain aspects of the cross-border trade process, it seems traders will have to wait a bit longer for the meaningful relief they expected from the Single Window Initiatives.
The U.S. Commerce Department estimates that less than 1 percent of America’s 30 million companies export, and of those that do, 58 percent export to only one country. When asked why, companies cite a range of issues, but concerns about the “complicated process” and “overregulation” consistently top the list.
This is why final implementation of the International Trade Data System — aka the Single Window Initiative — is such good news for the trade community. With the Single Window in place, traders are freed from the redundancies and confusion that too often defined the customs process.
CBP Deputy Commissioner Kevin McAleenan referred to the Single Window as a “shining example” of the progress made possible by technology while addressing a December 2016 trade symposium. “It serves as the foundation of the coordinated border concept: to enable the entire U.S. government to work together across departments and agencies through a coordinated approach to move imports and exports rapidly and securely across our borders,” McAleenan added.
As U.S. businesses adjust to the new reality of Single Window processing, traders will soon wonder how they ever got along without this tremendous milestone.
Purolator is the best-kept secret among leading U.S. companies who need reliable, efficient, and cost-effective shipping to Canada. We deliver unsurpassed Canadian expertise because of our Canadian roots, U.S. reach, and exclusive focus on cross-border shipping.
Every day, Purolator delivers more than 1,000,000 packages. With the largest dedicated air fleet and ground network, including hybrid vehicles, and more guaranteed delivery points in Canada than anyone else, we are part of the fifth-largest postal organization in the world.
But size alone doesn’t make Purolator different. We also understand that the needs of no two customers are the same. We can design the right mix of proprietary services that will make your shipments to Canada hassle-free at every point in the supply chain. Contact us today!
Artificial intelligence (AI) can streamline operations in shipping, with significant applications including automated processing and…
Once upon a time, traditional brick-and-mortar business was king. That is, it was until e-commerce…
Shipping internationally can be daunting due to the extensive document requirements. In many cases, forgetting…
New customs broker education requirements help customs brokers remain knowledgeable about cross-border shipping regulations. Federal…
The advent of eCommerce has revolutionized how consumers shop, transforming traditional brick-and-mortar retail into a…
Aircraft on Ground (AOG) shipping refers to the urgent transportation of critical aircraft parts, equipment…