Steve Hilsen Lead Executive Single Window Program Office Deborah Augustin Acting Executive Director ACE Business Office (ABO) ACE Status National Customs Brokers and Freight Forwarders Association of America (NCBFAA) April 22, 2015

Historical Timeline It’s Time! ACS Implementation Customs Modernization Act Enacted Automated Commercial Environment (ACE) program initiated with Modernization contract Trade Act of 2002 Enacted Executive Order Requiring implementation of the Single Window by 2016 ACE Program Re-baseline; initiation of Agile development methodology 2006 1984 1993 SAFE Port Act Enacted Trade Support Network established 1994 2001 2013 2014

Complex and Challenging! What trade is saying… Complex and Challenging! Primary topics: Transition period for mandatory dates PGA readiness/pilot programs Technical implementation guidance CBP business process clarity Understanding key changes Changes to CBP and industry business practices Software vendor readiness

…What trade is also saying Business Decisions! “A small minority of brokers has been really engaged in ACE and is doing the majority of transactions in ACE. A large number have done little or nothing.” “With the changing customs and security requirements, and ACE in particular, we recognized we had to improve our customs system and revise business operations. You sometimes have to spend money to make money.” “I’ve talked to brokers in the last three months who still say it’s been 15 years, I’m not sure it’s going to happen on that date. But that to me means that they’ve not been keeping the pulse of what’s really happening.” "It is unlikely that CBP will show leniency towards those that do not comply, particularly not for large businesses that have no real excuse for being unprepared.“ “Implementing a new system runs a risk of business disruption, or a drop in customer service levels…Risk management <is> crucial.”

Key Dates for ACE Transition Commitment to Milestones! January 2015 Electronic import manifest for air and export manifest for air/ocean/rail May 3, 2015 ACE mandatory for all electronic manifest filings ~1 week away June 2015 All entry types delivered November 1, 2015 ACE mandatory for all electronic cargo release and related entry summary filing 7 months away October 1, 2016 ACE mandatory for all remaining electronic portions of the CBP cargo process 18 months away July 2016 All remaining core trade processing capabilities delivered ACE Mandatory Dates Deployment of Key ACE Capabilities 2016 2014 2015

ACE Progress Successful Agile Delivery!

Functionality Available in ACE for 2015 Mandatory Dates Process Available in ACE Now Coming Soon Pre-Arrival (Manifest) Filing of truck, ocean and rail manifests Air import manifest processing will be transitioned to ACE May 3rd Arrival (Entry) File 01, 03 and 11 entries for any mode File an ACE entry at any port Coming in June 2015: All Remaining entry types Pipeline entries Non-ABI Entry Post Release (Entry Summary) File 01, 03, 11 entry summaries Pay duties/fees on a monthly basis Ability to file an electronic correction via Post Summary Corrections All remaining entry summary types Remote Location Filing Non-ABI Entry Summary Exports File Commodity Data Software has been developed to allow for electronic export manifest filing in air, ocean and rail modes These capabilities will be piloted upon publication of FRNs PGA Integration 5 PGA Pilots underway EPA, FSIS and NMFS pilots underway now Capabilities for 15 agencies needed for November 1 to be delivered June 2015, except for APHIS non-Lacey Additional PGA pilots planned; scheduled available on www.cbp.gov All capabilities needed to meet the May 3rd mandatory date have been deployed All capabilities needed to meet the November 1st mandatory date have been or will be deployed by June 27, 2015

Technical Specifications for November 1 CATAIR chapters and Implementation Guides for CBP functionality being made mandatory on November 1st have been posted to CBP.gov since January 2015. PGA Message Set IGs will be posted by May 12, 2015 Also included on this page is a listing of all software vendors certified to file entries and entry summaries in ACE. Available Guidance! Go to: www.cbp.gov/ace and click “Technical Documentation” in the left hand menu

PGA Readiness for November 1 CBP and 15 PGAs identified with requirements that must be incorporated into ACE in order to meet the November 1 date for mandatory filing of entry and entry summaries Department Agency Department of Agriculture Agricultural Marketing Service (AMS) Food Safety and Inspection Service (FSIS) Animal and Plant Health Inspection Service (APHIS) Department of Commerce National Marine Fisheries Service (NMFS) Enforcement and Compliance (E&C) Department of Defense Defense Contracts Management Agency (DCMA) Department of Health & Human Services Centers for Disease Control and Prevention (CDC) Food and Drug Administration (FDA) Department of Homeland Security U.S. Customs and Border Protection (CBP) Department of the Interior Fish and Wildlife Service (FWS) Department of Justice Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF) Drug Enforcement Administration (DEA) Department of State Directorate of Defense Trade Controls (DDTC) Department of Transportation National Highway Traffic Safety Administration (NHTSA) Department of Treasury Alcohol and Tobacco Tax and Trade (TTB) Independent Agencies Environmental Protection Agency (EPA) PGAs with Requirements for Nov. 1

PGA Forms for November 1 Available at www.cbp.gov/ace PGA Guidance! Lists all forms that must be submitted in ACE in November and the mechanism: PGA Message Set (EDI Transmission) Document Image System (DIS) Available at www.cbp.gov/ace

PGA Pilot Schedule

PGA Pilot Schedule (cont.)

Process Clarification! CBP and PGA Readiness for November 1 - Field Readiness, Cross Agency Pilots Pilot Goal Process Clarification! Validate Business Process Documents, inclusive of Desk Reference Guides, for CBP and the Trade in advance of November 1st deadline. Pilot Details Internal meetings begin in May with PGA interests, port officials and the CEE to discuss the piloting scope and schedule, discussing the pilot opportunity with the trade community and sharing upcoming ACE dates at key pilot ports with CEE and company locations. After these meetings, the team will work to consolidate comments to the Business Process Documents, providing to participants in DRAFT form before the pilots begin. The Business Process Document will be further enhanced once the pilots kick off, as they will identify overlapping PGA issues/authorities that occur in any one given industry. This document, and reference guides, will be updated as the pilots run. Participants Auto: EPA, CBP, DOT/ NHTSA Elec: FCC, CBP, FDA, CPSC Medical Devices: CBP, FDA

CBP & PGA Readiness for November 1 Desk Reference Guides . Business Process Documents ACE Training and Deployment Field Readiness Coordinators Cargo Release Support Network Cross Agency Pilots The Business Process Documents capture current, interim, and to-be processes for cargo release and entry summary. This cargo release portion has been guided by the Cargo Release Support Network, with input from policy equities. Supplemental reference guides will provide the field with PGA-specific policy guidance. This will be further enhanced with ACE training efforts, coordinated by the Field Readiness Coordinators. The Business Process Documents will be further enhanced by the Cross-Agency pilots, which will identify overlapping PGA issues/authorities that occur in any one given industry. This document, and reference guides, will be updated as the pilots run.

Filer Transition Strategy Trade Outreach!

ACE Adoption Highlights as of March 31, 2015 Software Vendors Adopting! ACE Adoption Highlights as of March 31, 2015 Software Vendors who File Entries/Entry Summaries Certified to file entries 55% Certified to file entry summaries 95% ^ Entry Summary Submission Rates Cargo Entry Submission Rates Top 200 Filers in FY 2014 Approved to file entries in ACE 18% Have filed an entry in ACE 33% File > half entries in ACE Approved to file entry summaries in ACEs 100% Have filed an entry summary in ACE 77% File > half entry summaries in ACE 40% File Now! ACE entry summary submission rate for the month of March reached an all time high of 50%. Volume of eligible ACE entry summaries increased by 26% while volume of ES filed in ACS only grew by 14%. ACE cargo entry submission rate for the month of March remains relatively flat at 4%. Volume of eligible ACE cargo entry increased by 18% while volume of cargo entries in ACS grew by 21%.

Monitoring Progress Single Window/ACE Program Oversight: White House/National Security Council/National Economic Council/Office of Management and Budget Congressional Oversight Committees Deputies Committee Border Interagency Executive Committee International Trade Data System Board of Directors Department of Homeland Security U.S. Customs and Border Protection Managing for Success!

Adopt and benefit now! Benefits to the broker community Don’t Delay! Benefits of ACE Cargo Release Entry: Eliminate submitting paper Form 3461 (entry document) File shipment data prior to carrier notifying CBP of departure Receive status updates prior to cargo arrival No need to submit corrections through a paper form Make corrections to cargo entry data electronically Benefits of ACE Entry Summary: Eliminate submitting Form 7501 (paper entry summaries) Request ACE cargo entry certification from ACE entry summary File Antidumping/Countervailing Duty entry summaries (Entry Type 03) using Remote Location Filing (RLF) Process Census warning and overrides electronically through ACE Transmit Post Summary Corrections (PSC) electronically, receive refunds quicker Gain access to an expanded AD/CVD query Obtain more information from the ACE Entry Summary query

Key Dates for Nov. 1 Readiness Working in Partnership! Remaining PGA IGs Finalized – May 12th Cargo Release Process and Procedure Document – May 15th Remaining Nov. 1 Functionality Available for Testing (i.e., in CERT) – May 20th* Remaining Nov. 1 Functionality in Production – June 27th* Remaining Software Vendors Certified for Cargo Release – July 10th Nov. 1 APHIS/Non Lacey Act Functionality Available for Testing – August 10th Nov. 1 APHIS/Non Lacey Act Functionality in Production – September 20th PGA and Cross Agency Pilots – Ongoing; ref. Published PGA/Cross Agency Pilot Schedules NOVEMBER 1 MANDATORY USE OF ACE FOR ELECTRONIC ENTRY AND RELATED ENTRY SUMMARY FILINGS * Does not include APHIS-Non/Lacey Act Functionality ACE Filings