1 Automated Commercial Environment (ACE) and Cargo Release/Simplified Entry Update New York/New Jersey Brokers June 5, 2013 Monica Crockett, Director, Entry Summary, Accounts & Revenue ACE Business Office U.S. Customs and Border Protection

2 Making the Single Window to Trade a Reality Critical to Multiple Missions and Priorities National Export Initiative Support U.S. manufacturing growth by facilitating exports Single Window Security and Safety Provides new tools for anti-terrorism and trade targeting and risk segmentation Increased USDA food seizures 30 fold during first year of ACE use $46M/yr savings to CBP from ACE; able to dedicate more time to suspect cargo Saving ocean export manifest participants ~$900K/year in reduced courier costs One U.S. Government at the Border Streamline interagency processing through collaboration and less paperwork Four Partner Government Agencies (PGAs) receiving automated data via ACE PGA Interoperability U.S. Economic Competitiveness Reduce transaction costs in U.S. supply chain Up to 33% faster truck processing with ACE As high as 68% of duties and fees paid interest free via ACE; significant cash flow benefits to filers Global Supply Chain Strategy Strengthen the global supply chain to protect U.S. interests and enhance prosperity Pre-arrival data linked and available via ACE Automated Commercial Environment Automated Commercial Environment

3 What is ACE? Pre-Arrival Expands data available to assess safety, security, compliance Air Manifest Conveyance Mgmt PGA Reporting PGA Hold Requests Entry Integration w/ truck Entry integration w/ air Truck integration w/ SE PGA Holds Entry integration w/ sea Entry integration w/ rail PGA Integration Entry Corrections/ Cancellations Simplified Entry Pilot Document Image System PGA Interoperability Initial ES Types AD/CVD Entry Summaries AD/CVD Case Mgmt Automated Forms Post Summary Corrections Export Truck Manifest Export Rail Manifest Export Sea Manifest Export Air Manifest AES Re-Engineering DIS Sea Manifest Pilot Bonds and Bond Processes Creation/Issuance of Periodic Monthly and Daily Statements Financial Components of Entry Liquidation and Drawback Fines and Penalties Interface (SEACATS) Importer Record Maintenance Red Flag Reporting Periodic Monthly Statement 68% duties & fees collected via ACE 22% of Entry Summaries filed in ACE More than 76,000 Simplified Entries filed Reduced courier/printing costs saving each participant ~$900K/year Rail Manifest Sea Manifest Truck Manifest 30% faster truck processing with ACE ES Validations Liquidation Remote Location Filing Quota and Protest Remaining Entry Types Arrival Enables speedier release of legitimate imported cargo Post Release Modernizes data requirements to validate trade law compliance Exports Modernizes processes and enhances assessment of cargo for safety, security, compliance Finance Streamlines payment mechanisms

4 NOTES: * The Product Backlog is a list of all core trade functionality for development in current priority order. Schedule is subject to change as priorities for backlog items change. High confidence in projects scheduled for the next six months. All core functionality is identified in ACE Product Backlog. Next items on ACE Prioritized Product Backlog * SE integration with In-bond Ocean/Rail Manifest integration with SE Cargo Release data build out ES Validation - Duty Calculations Export Manifest foundation PGA Message improvements ABI Profiles Sprint 1 Sprint 2 Sprint 3 Sprint 4 Sprint 5 Sprint 6 Sprint 1 Sprint 2 Sprint 3 Sprint 4 Sprint 5 Sprint 6 AES Re-engineering Team 1 PGA Message Set Initial ES Validations Team 2 Team 3 Team 4 Agile Pilot Entry Corrections / Cancellations PGA Message Set (continued) ES Validation - Classification Entry Corrections / Cancellations (continued) Sprint 0: Increment Planning ACE Development Roadmap Agile Pilot – Increment 1 January 31 to May 7, 2013 Increment 2 May 8 to August 6, 2013

5  Began January 2013 to test CBP’s ability to build ACE using Agile development methodology  Smaller pieces of functionality more frequently, resulting in a more flexible, user-focused development process  Development underway with 4 teams; will scale to 9-12 teams by 2014  CBP has successfully developed, tested, and demonstrated:  Electronic Entry Corrections and Cancellations Reduces time and cost associated with former paper process Allows officers to assess risk associated with data change  Partner Government Agency (PGA) Message Set Facilitates more rapid decision making by multiple agencies Successfully integrated PGA Message Set with the Environmental Protection Agency  Initial Entry Summary Validations Increases integrity of data submitted and compliance of revenue collected Identified by the trade community as key to their adoption of ACE entry summary filing  Work is ongoing to re-engineer the Automated Export System (AES)  Completion planned for end of 2013 calendar year Development Process

6  Core functionality will be completed within approximately three years  Draft deployment plans are being created for stakeholder feedback  December 31, 2015: Mandated use of Manifest and Cargo Release in ACE  December 31, 2016: Mandated use of all remaining ACE features  Stay engaged, migrate NOW  More than 99 percent of entry summaries can be filed in ACE. Numerous benefits:  New ACE capabilities available only for ACE entry summary filers  Remote Location Filing for Type 03 Entries  Electronic Census Overrides  Electronic Post Summary Corrections  Transaction data available through Enhanced Reports  Getting started is easy:  Visit us online at ww.cbp.gov/ace  Call your Client Representative  Call your Service Provider Don’t Wait – Migrate

7 ACE Stakeholder Engagement Sprint 1 Sprint 2 Sprint 3 Sprint 4 Sprint 5 Sprint 6 Sprint 1 Sprint 2 Sprint 3 Sprint 4 Sprint 5 Sprint 6 CSN CBP Subject Matter Experts On-Site Release 1 Planning Week of July (PGAs, Trade) ITDS Board NSS ITDS PGA Subject Matter Experts On-Site TLC CBP PGA Trade CSN = Monthly ACE meeting with CBP Support Network NSS ITDS = Monthly National Security Staff ITDS Task Force meeting ITDS Board = Monthly ITDS Board of Directors meeting TLC = Monthly Trade Leadership Council meeting Webinar Feb (all stakeholders) PGA Message Set Webinar March 20 (all stakeholders) On-site Sprint 4 Review March Webinar May 16 (all stakeholders) Weekly Field Readiness Network Updates Webinar Increment Planning May 13 Software Developer Conference May 21

8  Simplified Entry (SE) is the first phase of Cargo Release developed in ACE.  Cargo Release/SE pilot covers entry data for formal and informal consumption entries in the air mode of transport.  CBP will continue to build upon the success of Simplified Entry to achieve full Cargo Release capability in ACE.  Benefits of Cargo Release/Simplified Entry  Enhances Cargo Security Allows CBP and the trade community to identify and address potential risks earlier in the process  Streamlines Release of Cargo Earlier risk assessment decisions Earlier and more detailed messaging  Reduces Transaction Costs Reduces transaction costs for importers and CBP by requesting filing data once Greater predictability; allows importers to make logistical arrangements in advance of arrival Reduces “exceptions” needing special processing after arrival Cargo Release/Simplified Entry Pilot

9 1.Filers Submit a Streamlined Data Submission Prior to the arrival of the merchandise, filers submit a reduced amount of information – 12 required and 3 optional data elements – for transporting the cargo to the United States. 2.Filers Can Provide the Information in Advance The Simplified Entry can be filed earlier in the import process, allowing an expanded window of opportunity to identify potential risks earlier. 3.Filers Can Update the Data for Accuracy It allows filers to update entry information, providing CBP more accurate data and enhancing cargo security. 4.More Detailed and Earlier Messaging Document requests will look to identify specific documents as appropriate and can begin while goods are still overseas. This simplifies the merchandise release process, allows for more streamlined electronic transmission for the filer, and assists importers in finalizing cargo logistics. Cargo Release/SE Overview

10  Cargo Release/Simplified Entry reduces the number of duplicative data elements required to obtain release of products for cargo, eliminating the current entry (CBP Form 3461)  This promotes the concept of “the owner knows the data best,” resulting in more accurate information  The following SE data set replaces the CBP Form 3461: Simplifying the Entry Process

11  The Cargo Release/Simplified Entry pilot began in May 2012 in the air mode of transportation.  As of May 29, 2013, over 113,500 Simplified Entries have been successfully filed for 1,094 importers at 16 airports.  Document imaging capabilities were deployed in November 2012, allowing participants to electronically provide documentation supporting their Simplified Entries via .  The following documents can be transmitted via to support Simplified Entry: Document LabelCode Packing List 01 Commercial Invoice 02 Other 03 Passport/Driver’s License/Government Issued ID 04 CBP-CF 3299 – Declaration for Free Entry of Unaccompanied Articles 05 CBP-CF Certificate of Registration 06 CBP-CF 4457 – Certificate of Registration for Personal Effects Taken Abroad 07 CBP-CF 3299 – Certificate of Origin 08 Vehicle Titles, Certificates 09 Permit 10 Cargo Release/SE Pilot Status

12  CBP is working to enhance the Cargo Release/Simplified Entry functionality in 2013 to include additional capabilities:  PGA Message Set Automates the collection, processing, and sharing of information required by PGAs Will replace the myriad of paper forms currently submitted to Federal agencies by the trade community during the cargo importation process Piloting with Environmental Protection Agency and Food Safety Inspection Service later this year  Entry Corrections and Cancellations Provides the capability for CBP to accept (or deny) corrections and/or cancellations sent by the trade community via EDI to Simplified Entries on file with CBP  Expansion of SE pilot to ocean targeted for 2014 Cargo Release/SE Next Steps

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