Automated Commercial Environment ACE and Cargo Release Simplified Entry

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 1

Making the Single Window to Trade a Reality Single Window Security and Safety Provides new tools for anti-terrorism and trade targeting and risk segmentation U. S. Economic Competitiveness Reduce transaction costs in U. S. supply chain • Increased USDA food • Up to 33% faster truck seizures 30 fold during processing with ACE first year of ACE use • As high as 68% of • $46 M/yr savings to duties and fees paid CBP from ACE; able to interest free via ACE; dedicate more time to significant cash flow suspect cargo benefits to filers 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 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 National Export Initiative Support U. S. manufacturing growth by facilitating exports • Saving ocean export manifest participants ~$900 K/year in reduced courier costs Automated Commercial Environment Critical to Multiple Missions and Priorities 2

What is ACE? Arrival Expands data available to assess safety, security, compliance • Air Manifest • Rail Manifest • Sea Manifest • Truck Manifest • • • Exports Modernizes data requirements to validate trade law compliance 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 • • • ES Validations Liquidation Remote Location Filing Quota and Protest Remaining Entry Types • • • Finance Modernizes processes and enhances assessment of cargo for safety, security, compliance Post Release Enables speedier release of legitimate imported cargo Pre-Arrival Streamlines payment mechanisms 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 • Simplified Entry Pilot • Document Image System • PGA Interoperability • 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 • DIS Sea Manifest Pilot 30% faster truck processing with ACE More than 76, 000 Simplified Entries filed 22% of Entry Summaries filed in ACE Reduced courier/printing costs saving each participant ~$900 K/year 68% duties & fees collected via ACE 3

ACE Development Roadmap Agile Pilot – Increment 1 January 31 to May 7, 2013 Sprint 1 Sprint 2 Sprint 3 Sprint 4 Sprint 5 Sprint 1 Agile Pilot PGA Message Set Entry Corrections / Cancellations Initial ES Validations Sprint 0: Increment Planning Team 4 Sprint 0: Increment Planning Team 3 Sprint 6 Sprint 2 Sprint 3 Sprint 4 Sprint 5 Sprint 6 AES Re-engineering Team 1 Team 2 Increment 2 May 8 to August 6, 2013 PGA Message Set (continued) Entry Corrections / Cancellations (continued) ES Validation - Classification 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 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. 4

Development Process 4 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 4 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 4 Work is ongoing to re-engineer the Automated Export System (AES) - Completion planned for end of 2013 calendar year 5

Don’t Wait – Migrate 4 Core functionality will be completed within approximately three years 4 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 4 Stay engaged, migrate NOW 4 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 4 Getting started is easy: - Visit us online at ww. cbp. gov/ace - Call your Client Representative - Call your Service Provider 6

ACE Stakeholder Engagement Sprint 1 Sprint 2 CSN Sprint 3 Sprint 4 CSN Sprint 5 Sprint 6 Sprint 1 Sprint 2 CSN CSN Sprint 3 Sprint 4 Sprint 5 Sprint 6 CSN CBP Subject Matter Experts On-Site Weekly Field Readiness Network Updates CBP Webinar Feb. 26 -28 (all stakeholders) PGA Message Set Webinar March 20 Webinar May 16 (all stakeholders) NSS ITDS NSS ITDS Board ITDS Board PGA Subject Matter Experts On-Site TLC Trade TLC TLC On-site Sprint 4 Review March 27 -28 Webinar Increment Planning May 13 CSN = Monthly ACE meeting with CBP Support Network NSS ITDS = Monthly National Security Staff ITDS Task Force meeting TLC Release 1 Planning Week of July 24 -30 (PGAs, Trade) Software Developer Conference May 21 ITDS Board = Monthly ITDS Board of Directors meeting TLC = Monthly Trade Leadership Council meeting 7

Cargo Release/Simplified Entry Pilot 4 Simplified Entry (SE) is the first phase of Cargo Release developed in ACE. - Cargo Release/SE pilot covers entry data 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. 4 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 8

Cargo Release/SE Overview 1. Filers Submit a Streamlined Data Submission 2. Filers Can Provide the Information in Advance 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. 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 4. More Detailed and Earlier Messaging It allows filers to update entry information, providing CBP more accurate data and enhancing cargo security. 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. 9

Simplifying the Entry Process 4 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: 10

Cargo Release/SE Pilot Status 4 The Cargo Release/Simplified Entry pilot began in May 2012 in the air mode of transportation. 4 As of May 29, 2013, over 113, 500 Simplified Entries have been successfully filed for 1, 094 importers at 16 airports. 4 Document imaging capabilities were deployed in November 2012, allowing participants to electronically provide documentation supporting their Simplified Entries via e-mail. 4 The following documents can be transmitted via e-mail to support Simplified Entry: Document Label Code 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 4455 - 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 11

Cargo Release/SE Next Steps 4 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 4 Expansion of SE pilot to ocean targeted for 2014 12

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