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Tecma Talks to customs broker, Joe Alcantar, about the new US Customs Automated Commercial Environment

Tecma Talks to customs broker, Joe Alcantar, about the new US Customs Automated Commercial Environment

The Automated Commercial Environment (ACE) replaces a the Automated Commercial System (ACS), which has been in place since the late 1980s

Tecma Group of Companies:

Hello, and welcome to another installation of Tecma Talk podcasts. If you are a frequent listener to these recordings, you know that they consist of discussions between Tecma and individuals that have expertise in issues that have to do with manufacturing in Mexico, or topics that are related. You also know that the folks that we speak with are experts in their fields, both internal to the Tecma Group, as well as folks from the outside.

Today we happen to have an external expert with us. His name is Joe Alcantar. I’ll let Joe introduce himself, and say a little about his company in order to inform you as to what Joe’s expertise is.

Joe Alcantar:

My name is Joe Alcantar. I am president and owner of Brown, Alcantar and Brown, Inc. Customs Brokers. A customs broker is a company that provides import and export clearance services through US Customs. I have been involved in doing this since 1973, and earned my customs broker’s license in 1974. The history of the company begins with my father, one of the original founders. He started this business in 1949. To say the least, there have been a lot of changes from that time to the present day.

Tecma Group of Companies:

Joe, back in the older days that you mentioned, things consisted of pushing a lot of paper. Surely, things have changed, at least in that realm. Today technology is at the forefront. That comment is a good segue way into today’s discussion. What we are going to talk about, and you are going to have to explain the particulars of this, because I have no expertise in this area. I’ve been reading recently that at the beginning of this month, November 2015, there were some changes made to what is known as the Automated Commercial Environment of the US Customs and Border Protection Service. There are some changes that are going to be coming up. Today, we are going to be talking about the Automated Commercial Environment, as it is known by its acronym ACE. The first question to get into the topic is, what is ACE an why is Customs changing what is going on in the environment?

Joe Alcantar:

That’s an excellent question. The Automated Commercial Environment (ACE) is a totally new system, a new software system, for processing imports as well exports. It is going to replace the system that is currently being used and has been in place since the late 1980s. That system is called Automated Commercial System, which is “ACS.” As you can imagine, this system has been around for a long time, and, because of that, there have been many efforts to do patches and upgrades. The Automated Commercial Environment (ACE), however, is going to be a totally new operating system for
Customs and people that file entries for imports and exports through Customs. Such parties include customs brokers, exporters and importers. Customs has been working very hard on this. It is a huge, multibillion dollar project. In a nutshell, that is what the Automated Commercial Environment (ACE) is.

Tecma Group of Companies:

The answer to the question of why is Customs changing things is due to the fact that, as you mentioned, the system that has been in place since the late 1980s has been jerry rigged and patched. Would that be an accurate assessment?

Joe Alcantar:

Yes, that would be accurate.

Tecma Group of Companies:

So that the listeners have an idea of time frame, can you provide information that has do with Automated Commercial Environment implementation dates?

Joe Alcantar:

Yes, that is a really critical question. The ACE implementation dates are very important. Actually, the first date has already been pushed back. Originally Customs wanted to “go live” with the Automated Commercial Environment at certain entry times and with certain other, what they call, “partner agencies.” That was going to take place in November. Now, this has been postponed back to February 28th of 2016. According to Customs’ own documents, that is when they are saying that ACE must be used and ACS will no longer be available for filing electronic and associate entry summaries. In addition, FDA, NHTSA, APHIS must be filed in ACE and ACS will no longer be available. That happens, again, on February 28, 2016. So that is the next date that people are looking forward to, or maybe dreading. This may be so just because of the ramifications of that date.

One of the things that ACE is doing is, as I mentioned, implementing a whole new operating system. For example, for a company like mine, we are customs brokers that clear shipments and are experts on these operations. We know rules and regulations, and classification. We have to have a software company, a third-party vendor, that is working with the programmers at Customs and other agencies to program the Automated Commercial Environment (ACE). It is a challenge to say the least. When these dates are coming up, it causes everyone to get a little bit nervous. The November
date was postponed because multiple appeals were made by brokers, importers and exporters to Customs. Those parties said that, especially the programmers, that they felt that not enough testing had been done on certain new modules that Customs was wanting. That is the next date. Then, in July of 2016, when they publish what they call their “final rule,” ACE must be used for filing multiple with other, what are called, “Government Partner Agencies.”

Tecma Group of Companies:

Joe, what are Government Partner Agencies?

Joe Alcantar:

They use the acronym PGAs. What these are other government agencies. For example, now, in the present system (the ACS system), entries are filed for Customs purposes, and also for Food and Drug (FDA). So there is an interface through the ACS Customs system and the FDA, and data can be transmitted between Customs and the FDA. Customs can then release the shipments electronically. Under the new Automated Commercial Environment, that is going to be expanded to include other Government Partner Agencies (PGAs). Among them are the USDA, the USDA Agriculture Marketing Service, the Food Safety and Inspection Service, the Center for Disease Control, the Alcohol and Tax and Trade Bureau, and the National Marine Fisheries Service, for example. Additionally there will be defense controls, DEA, or Drug Enforcement interface and the Fish and Wildlife Service. These are all new Partner Government Agencies that have never had an interface to the Customs electronic processing system.

You can imagine. We are going from a couple of government entities that are presently processing and releasing electronically to adding all of these other Partner Government Agencies. This is why so many people involved in this process are pretty nervous. The switch is going to flip which adds all these other government agencies that each have their own requirements. To say the least, the implementation of the Automated Commercial Environment is a huge undertaking.

Tecma Group of Companies:

This does sound complex. For people that are in manufacturing, or that are doing importing and exporting, other than calling someone like you to make sense of all of this, what should they be doing to prepare themselves for the implementation of the Automated Commercial Environment? How should they approach this?

Joe Alcantar:

If you are an importer or an exporter, I think that the first thing that you do is be sure that your present service provider is participating at 100% in the ACE program, and that they are participating in what are called the “pilot” programs. Pilot programs are programs that are being rolled out with the PGAs for testing purposes. For example, Food and Drug presently can be tested through the Automated Commercial Environment (ACE) pilot program. Our company is participating in that test with our software service provider with Customs, and with Food and Drug. It is a pretty complicated process, because we have to coordinate with each of the agencies involved. They want to be able to observe and to make sure that the data is transmittable and visible to everyone that is involved. It is critical that the companies being used in the implementation of the software is working diligently on the new ACE system and that they are working with the Government Partner Agencies’ pilot programs and Customs. In terms of our service provider, they have a conference call on a weekly basis with Customs’ programmers and all of these other Partner Government Agencies.

There is a lot of education going on back and forth, and information is being shared. For example, one of the new Government Partner Agencies is the USDA Marketing Service. If they have not been electronic up to this point, they are required to, for the shipping of produce such as tomatoes, or onions or grapes that have to be graded. When, at first, they talked to our programmers, they were saying that they needed the data from us, the broker, two days before the shipments arrive. Of course, we are on the southern border, shipments of produce cross within hours of being picked, packed and put in a truck and shipped to the border. We had to explain to them that to get data to them two days prior to the shipment arriving was not feasible. That isn’t the “real world” in
which we live. In the real world things on the border move within minute and hour time frames. This being the case, they had to adjust how this is going to be done.

With regard to the Automated Commercial Environment, it is very important to make sure that your company is “in the loop.”

Tecma Group of Companies:

This sounds incredibly challenging. As is the case with all of the Tecma Talk podcasts that we do, we take on topics that we hope provide useful and relevant information to listeners. Most of the time, if not all of the time, however, we just scratch the surface of some very complex issues in an introductory manner. That being the case, Joe, if someone wants to give you a call to be able to dive in a little deeper on this subject, how can they get in touch with you to talk about the Automated Commercial Environment?

Joe Alcantar

Thank you for asking. You can get in touch with me directly on my office phone, which is 915-298-6938, or my cell phone, which is 915-727-2993. Of course, our company website is www.babinc.com.

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