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Post-Summary Corrections (PSCs)

Get the latest scoop on CBP’s Simplified Processes Initiative

Friday, March 31st, 2017

On March 24, the NCBFAA sponsored a webinar on the Simplified Processes Initiative, presented by Randy Mitchell, Director, Commercial Operations and Entry Division, US Customs Office of Trade Policy & Programs.  Here’s a summary:

In 2011, CBP launched the Simplified Processes Initiative, a collaborative effort to develop innovative solutions to critical issues emerging at the intersection of trade facilitation, enforcement, and national security.  An early success was the implementation of the Simplified Entry (Cargo Release) pilot aimed at simplifying the importation process.

CBP reengaged the Simplified Processes Initiative in 2014 to advance border security and management; enhance U.S. competitiveness by enabling lawful trade and travel; and promote organizational innovation.

A Simplified Processes Working Group was established to identify challenges and discuss potential solutions to critical trade needs; gather requirements; and develop a proposed alternative. To date the group has identified five post-release areas of opportunity:

Monthly Summaries and National Statements

  • Filers may submit a monthly summary that includes releases over a calendar months’ time.
  • Each line of a monthly summary is considered a “reconfigured entry” that is subject to liquidation, protest and any other downstream process.
  • A separate National Financial Monthly Statement will include debits (duties, taxes, fees, bills and interest) and credits (refunds) netted as a total balance due for a calendar month.

If an importer elected to participate they would receive only one statement per month covering all ports of entry and there would be no Daily Statements to approve.  Also, the statements could include both Debits and Credits.

Liquidation

  • Allow for deemed liquidation of all consumption entries at one (1) year from the date of entry.
  • Implement processes to accommodate line-level liquidation.
  • Allow for the importer to obtain liquidation status details from their ACE portal account or CBP.gov.

This will allow lines within an entry to liquidate without having to wait for lines subjected to AD/CVD case reviews to be resolved.  Also, it would benefit Drawback filings since they are also filed at the line-level.

Protest

  • Transition the protest process to an electronic format (this has already occurred and all Protests must now be filed in the ACE Portal.)
  • Expand the electronic protest filing to a broader range of trade stakeholders such as attorneys, importers, and sureties.
  • Auto-populate numerous Entry Summaries onto one protest while providing protest statuses on ACE.

Reconciliation

  • File all reconciliation data electronically and only with necessary data elements.
  • Eliminate the requirement of having to file an 09 entry and extend liquidation for flagged entries/lines an extra year from the date of entry.
  • Manage reconciliation by account and permit filing at any Center or POE.

The vision is that Reconciliation entries will be replaced with Post Summary Corrections.  One of the biggest benefits would be that the Trade would only need to provide the reconciled amounts and not the original amounts since ACE already knows the original amounts.  Also, if no PSC is made, it indicates no changes are needed on the reconciled entry and is then subjected to liquidation. Finally, the process would allow a filer to retroactively flag/un-flag an entry/line through a PCS in ACE up to the deemed liquidation date.

Drawback

  • Develop a process for the claimant to submit a “drawback profile” electronically along with automating other Drawback processes in ACE.
  • Track/validate if the bond coverage is sufficient prior to processing an Accelerated Payment requests.
  • Initiate the Desk Review and response processes electronically, to include DIS.

ACE controls will track and validate if the bond coverage is sufficient prior to processing an Accelerated Payment Request.  Drawback profiles will be submitted electronically using the 5106 form.

These process improvements are continuing to be reviewed and approved as necessary and are subject to budget approval.  Therefore, there is no firm date on when they will be rolled out.   Meanwhile, here’s the PowerPoint presentation from the webinar > Simplified Process Initiative_Webinar_March_2017

Screen Shot 2017-03-22 at 8.54.41 AM

 

New guidance on post-importation claims for preferential tariff treatment

Friday, March 3rd, 2017

claimOn February 28, 2017, US Customs issued CSMS# 17-000110 – Post-Importation Claims for Preferential Tariff Treatment.  The message announces a change in policy as a result of a recent Court of International Trade decision

Specifically, the court determined that CBP must allow the claimant, Zojirushi America Corp., to claim a post-importation claim for preferential treatment (Generalized System of Preferences in this case) according to 19 U.S.C. § 1514(a) which means they can file either a Post Summary Correction or Protest to recoup duties paid on GSP eligible entries not claimed at the time of entry.

Prior to the CIT decision, CBP’s policy was much more restrictive on post-importation claims.  In August 2014, US Customs  issued guidance specifying that when the implementing legislation for several preference programs specifically provides for post-importation claims, set forth in 19 USC §1520(d), such claims are the only appropriate mechanism to seek preference when not claimed at the time of entry.

This interpretation by CBP precluded the filing of a PSC or Protest for those preference programs that do not specifically allow for post-entry claims under 19 USC §1520(d).  In other words, since the GSP implementing legislation did not require post-importation claims to be satisfied via the 1520(d) CBP was essentially not allowing for post-entry claims for GSP.

However, the CIT decision changed this.  Now,

  • For those preference programs that do not specifically provide for claims under the statutory post­ importation mechanism of 19 USC §1520(d), CBP will permit use of the protest mechanism set forth in 19 USC §1514 to submit initial post-importation preference claims.
  • CBP will continue to allow un-liquidated entries to be amended by filing a PEA or PSC prior to liquidation in accordance with current PEA and PSC procedures.
  • For preference programs that by law have a post-importation provision, a 1520(d) post­ importation claim remains the only appropriate mechanism to seek preference when not claimed at the time of importation.

Also on February 28, 2017, the CBP Port of Los Angeles issued Public Bulletin number LA17-011 Post-importation Claims for Preferential Tariff Treatment which reiterated the language in the CSMS and which included a better table for interpreting when a post-importation claim should be made under the 1520(d) process versus the 1514(a) process:

blogchart

 

 

 

 

Coincidentally, on March 1, 2017, US Customs issued a message clarifying the process for making post-importation claims for NAFTA under the 1520(d) process.

ACE implementation winding down

Friday, February 24th, 2017

seal_ace

After several tumultuous years there is finally a light at the end of the ACE tunnel.  The next significant release falls into the “Post Release” bucket and covers drawback, liquidations, duty deferral, reconciliation, eBond, as well as a few more housekeeping measures.  This release, originally scheduled for January 14, 2017, was postponed in order to provide the trade with more time to code and test the changes.  CBP has not announced a deployment date.

Beyond these updates, the ACE Deployment Schedule lists only “TBD: Mandatory use of ACE for electronic filing of remaining PGA data, pending PGA regulatory updates” as outstanding work to be done.

Many in the trade are enjoying the respite from the barrage of changing functionality and requirements and looking forward to stabilizing their import programs while enjoying the benefits of ACE (ie: Post Summary Corrections, ACE Portal Reporting, etc.)

At CustomsNow™, our programmers, after some well-deserved down time, have returned to upgrading the functionality within our systems and we’re very excited about some of the coming enhancements including web-based functionality, the ability access our applications using phones and tablets, and much, much more.

ACE: CustomNow’s Nic Adams on FDA’s new final rule on import entry

Tuesday, December 6th, 2016

fdalogo

 

The FDA just published a Final Rule in the Federal Register regarding requirements for the submission of information to the ACE.

It is now mandated that select data elements be submitted into ACE at the time of entry for FDA-regulated articles to include foods, human and animal drugs, medical devices, biological products, human cells, tissues, and cellular and tissue-based products (HCT/Ps), radiation-emitting electronic products, cosmetics, and tobacco products.

Nic Adams, Vice President of Client Services of CustomsNow, with over 30 years of strong customs compliance and global supply chain industry experience, adds the following commentary:

Nic Adams

Nic Adams

  • Much of the new rule is codifying the way things are today.  But it also shows the interplay between the FDA, who many would say did a ‘data grab’ with FDA message set, and the trade.  And, it clarifies the changes from the old process and the new.  Many are pretty exciting for us that have been battling/frustrated with the FDA for many, many years.
  • The fact that FDA is moving to a risk-based system is something the trade has been clamoring for over many years.  And to let the system make the determination in the majority of instances vs an FDA employee speeds things up greatly.
    • The average time for an FDA-reviewer to manually review and issue a “May Proceed” determination in ACS from August 27 to October 22, 2015, was about 28 hours and that has been reduced to under 2 hours in ACE
  • FDA rejected comments that it should make Device Listing Numbers (LSTs) publicly available, and decline to make the requested revisions to the requirement to submit the LST (i.e., permit the use of “UNK” instead of the LST).  This is problematic because importers often do not have access to this information at the time of entry.  But it appears that FDA erred on the side of keeping LSTS confidential: “The confidentiality of LSTs serves important public health interests and helps to prevent the importation of substandard, mislabeled, and counterfeit medical devices.”
  • It’s quite surprising that no one commented on radiation emitting devices.  I would have also requested that the registration information be made available to the public, but FDA probably would have used the same argument as they did with LSTs.
  • FDA has revised § 1.90 to allow FDA to provide notice of sampling directly rather than through the “collector of customs” which will normally happen through a secure electronic system.  No more waiting for your detention notice to show up in the mail!  Very nice.

 

 

 

Webinar: Top 10 things to do if you receive an Informed Compliance letter from CBP

Thursday, September 15th, 2016

URGENTCritical information from our friends at DeLeon TradeBraumiller Law Group, and the Law Office of George R. Tuttle.  who are hosting a free webinar on September 29 from 11:00am – 12:30pm CST to discuss how to respond to a US Customs Informed Compliance letter.  Register here.

CBP has begun to issue informed compliance notification letters to importers. The receipt of an informed compliance notification letter means Regulatory Audit has identified specific problems with the company’s import transactions and is “strongly considering” the company for a comprehensive audit. These audits may include both substantive transaction testing and internal control testing.

These letters advise importers that, while they are not required to make a prior disclosure, they may elect to file a disclosure with CBP. The letters go on to state that, because the company has been provided information relating to specific problems with their import transactions, “violations that may occur in the future could result in seizures and forfeitures of imported merchandise and/or the assessment of monetary penalties.”

Below is a summary of the top 10 actions to consider once receiving an informed compliance letter. 

  1. Consider the Meaning of the Letter. CBP has explained that these letters are a courtesy notification that an audit and/or investigation may be forthcoming. These letters are not random. Why did they send you the letter? Don’t blind side your management, tell them about the letter and what it might mean for the company. Should your company sign and return the letter? What does it mean if you do?  Who should sign? Is there another way?
  2. Get Educated! Have you read the CBP Informed Compliance Publications provided to you via the letter and other sources available on CBP’s website to understand your legal requirements? Attend training and webinars to increase your knowledge and understanding of CBP requirements.
  3. Conduct a Risk Assessment. Focus on the risks identified in the Informed Compliance letter as well as Anti-dumping Duty and Countervailing Duty risk. We also recommend confirming any corrective actions in prior disclosures are working as intended, and review the results of CBP Form 28s, CBP Form 29s, post summary corrections submitted to CBP, as well as any internal post entry audits conducted by the company.
  4. Test and Measure Your Compliance Level. Are you audit ready in all risk areas? CBP may start with the risk area identified in the letter but, if audited, CBP auditors can and frequently do expand and review all risk areas. Conduct targeted sampling based on risk.
  5. Get Management Buy-in. Use data metrics, identify possible loss of revenue and corresponding penalties for your management team.
  6. Evaluate Your Internal Control Program. Include all 5 components of COSO-based internal control. Ensure you have a manual that is audit ready, develop/implement a robust post entry audit process, and ensure you have strong broker management procedures and a dedicated, well-educated compliance team.
  7. Consider a Prior Disclosure. If you find past non-compliance consider the pros and cons of filing a Prior Disclosure to protect the company from penalties. Statistical sampling is a valuable tool to use to limit work. To ensure prior disclosure rights are not cut off, consider filing an initial notice, which would then be completed via a perfected prior disclosure.
  8.  Develop a Corrective Action Plan. Make a plan that will strengthen internal controls to ensure errors do not reoccur. When they do, conduct a root cause analysis.
  9. Implement Corrective Action. Make sure that your corrective action plan is working. Retest compliance levels to validate new controls are working and are effective.
  10. ACT NOW! Don’t wait until CBP is at your door!

CustomsNow™ enhances the PSC process in ACE

Friday, July 22nd, 2016

pencilOne of the most valuable benefits of ACE is the Post-Summary Correction (PSC) process, which not only is paperless (electronic) but allows importers to file corrections up to 270 days after the date of the entry.  Even better, CustomsNow™ is pleased to announce our PSC stand-alone solution now provides you with the ability to process a PSC for an entry that was created by another filer!  Many importers have been looking forward to this ability so they can correct entries filed by their brokers quickly and easily.

To learn more about the PSC process generally, or to determine whether your entry qualifies for the PSC process, check out US Customs’ PSC resource page.  And please contact us if you’d like to learn more about our new PSC stand-alone solution!

 

 

CBP about-faces on submission of omitted invoices for PSCs, PEAs

Friday, August 7th, 2015

genericInvoice

Back in January 2014, as reported in this blog, US Customs instructed the trade to not to use a Post-Summary Correction (PSC) (or Post Entry Amendments (PEA)) filing to submit invoices that were omitted from an entry filing.  Rather, filers were directed to file a new entry with the missing invoice(s).

Now, however, CBP has reversed course as ACE gets closer to serving as the agency’s official system of record for trade transactions.  In CSMS 15-000521, has advised that omitted invoices are now permitted for submission on both PSCs and PEAs.

US Customs has updated the ACE Entry Summary Business Rules and Process Document accordingly.

 

ACE: Updates on Cargo Release and Entry Summary

Monday, April 20th, 2015

seal_ace

 

The deadline of November 1, 2015, for the filing of all entries in ACE is rapidly approaching.  Here is a quick recap of where things stand at this time.

ACE Cargo Release

CBP and ABI software providers are diligently working on ACE Cargo Release functionality.  Today, you can file ACE Cargo Release for entry types 01, 03, and 11, in almost all ports for all modes of transportation (see our previous blog post as well as CSMS# 15-000198).  Some of the most compelling features are:

  • Corrections & Cancellations
  • Partial Quantities
  • In-Bonds
  • Split Shipments
  • Query entries via ABI
  • Certified from Summary
  • Single filing to include Importer Security Filing (ISF) data (ocean)

However, there are limitations on ACE Cargo Release which are listed below.  Almost all of these restrictions should be lifted on June 27, 2015, after Deployment E (Increment 9.)

  • Remote Location Filing for brokers
  • AII/EIP processing for self-filers
  • Entry Types 02, 06, 07, 12, 21, 22, 23, 31, 32, 34, 52
  • Participating Government Agency declarations for:
    • AMS – Agriculture & Marketing Service
    • EPA – Ozone Depleting Substances
    • EPA – Vehicles
    • FDA – Regular
    • FDA – Prior Notice for Food
    • FWS – Deploying January, 2016
    • NHTSA – DOT
    • USDA – FSIS
    • USDA – LACEY, VET, PPQ, ETC.

The Diversion Process is scheduled for January 2016.  You will no longer have to cancel an entry if the carrier decides to call a different port.  Simply change the port of entry and away you go!

ACE Entry Summary

Like ACE Cargo Release, you can only file entry types 01, 03, and 11 at this time.  In June, the additional entry types will be allowed including 02, 06, 07, 12, 21, 22, 23, 31, 32, 34, 38, 51, 52.

Reconciliation processing is scheduled for January 2016.  Drawback, Protest and more are scheduled for July 2016.

Many of our clients are already enjoying some of the increased functionality offered with ACE include entry type corrections, split shipment processing, and Post Summary Corrections.  After the June 27 implementation, we anticipate most, if not all, of our clients will be filing their Cargo Release and Entry Summaries in ACE.

NAPlease contact Nic Adams, Vice President, Client Services at CustomsNow™  if you would like to learn more about ACE and its many benefits to the trade.   (nic.adams (AT) customsnow (DOT) com).

ACE: PSC process is a breeze for correcting entry type

Tuesday, April 14th, 2015

seal_aceRecently, a client of CustomsNow™ inadvertently filed an ‘01’ type entry for product that was subject to ADD (type ‘03′).  In the past, the importer could correct this only by requesting that CBP cancel the original entry (a manual process which can take several days) and create a new, corrected, entry.

Fortunately, however, the client is direct filing their entry summaries in ACE and we were able to show them how to make the correction using the Post Summary Correction process.  What used to be an arduous process is now a very simple fix.  One of the many benefits of ACE filing….

How many shippers are filing in ACE and how are they using it?

Thursday, February 5th, 2015

In US Customs’ latest ACE Monthly Trade Update (January 2015), CBP provides the most recently available statistics in its ACE Adoption Rate Monthly Report for December 2014.  Among the data is a general overview of ACE user statistics, showing primarily an uptick in activity in most categories:

Screen Shot 2015-02-05 at 10.16.58 AM

In addition, the report demonstrates an increase in both cargo entry and entry summary submission rates (see tables below).  Note the difference in the total entries submitted in ACS vs. ACE for both categories.  For entry summary, nearly half of entry summaries were filed in ACE, compared to less than 4% of cargo entries.

This disparity makes sense in that CBP has been focusing its technical efforts on entry summary first, which is further along in implementation than cargo entry functionality.  Currently, ACE cargo entry is still lacking a tie-in to all 47 Participating Government Agencies (PGAs), so importers with non-CBP agencies having jurisdiction over their import shipments cannot yet file cargo entries in ACE, and are relegated to ACS.  Even so, it is clear that a notable portion of these importers file their entry summaries in ACE to take advantage of ACE’s many benefits, including enhanced, robust reporting, e-bonds, as well as the ability to file electronic Post-Summary Corrections (PSCs) in ACE up to 270 days after the date of entry.

Screen Shot 2015-02-05 at 12.18.15 PM

In any event, soon this distinction will be moot.  On November 1, 2015, CBP will mandate use of ACE for all electronic cargo release and related entry summary filing.  Since this deadline is just 9 months away, make sure that your ABI system (or your broker’s, if you’re not direct filing yet) is ACE-Certified.  (The first ACE deadline is May 1, 2015, when CBP will mandate the use of ACE for all e-manifest filing.)

For more statistics — and other ACE updates — see the ACE Monthly Trade Update (January 2015).