COMMERCE ACE/ITDS DRAFT IMPLEMENTATION PLAN

October 17, 2007

This draft plan is in three segments to include each of Commerce’s operating units that are participating in Automated Commercial Environment/ International Trade Data System (ACE/ITDS), the Census Bureau, the International Trade Administration, and the National Oceanic and Atmospheric Administration (NOAA) Fisheries. The missions and roles of each of these operating units are distinct and their participation in ACE/ITDS is likewise unique.

Census Bureau Import and Export Programs

• The U.S. Census Bureau collects and compiles merchandise import and export data from various electronic and paper sources in order to compile the official merchandise trade statistics, which measure goods traded between the United States and other countries.

• The Census Bureau's data collection needs have been integrated with that of U.S. Customs and Border Protection (CBP) and its predecessor agency, the U.S. Customs Service (USCS), since the days of paper. The Census Bureau was heavily involved in the development of several current CBP systems including the Automated Commercial System (ACS collecting imports), and the e-214 program recently developed for Foreign Trade Zone admissions. The Census Bureau, the USCS, and the Bureau of Export Administration (now the Bureau of Industry and Security), jointly developed the Automated Export System (AES).

Census Bureau Statutes and Regulations

• CBP Authority (Imports)

• Title 13 United States Code, Chapter 9 (Census Bureau Export authority)

• Title 15 Code of Federal Regulations Part 30 (Census Bureau Export authority)

Census Bureau Information Collections and Rulemaking Actions:

• Imports – No Census Bureau data collections affected.

Rulemaking – to be determined. The Census Bureau has requested some additional data elements from CBP. Depending upon how these elements are incorporated, it may be necessary for the Census Bureau to incorporate some or all of these elements in the Foreign Trade Statistics Regulations.

• Exports – Shipper's Export Declaration , OMB Number 0607-0152.

Rulemaking - Revisions will be needed to the Foreign Trade Regulations (15 CFR Part 30) to reflect the change from AES to ACE, to provide a timeframe for filers to transition to the new system, to reflect any changes to the data elements collected by the Census Bureau and to reflect any data elements to be collected by the Census Bureau on other agencies’ behalf.

Assumptions underlying Census Bureau implementation of ACE

• That ACE will provide for all data elements requested by the Census Bureau.

• That ACE will incorporate all functionality in the Census Bureau's Concept of Operations plan.

• That some functionality in ACS will not be provided by CBP under the announced Edit Lite plan.

• CBP will continue to provide the file containing duty rates and trade program eligibility information.

• That the Department of Homeland Security concurs with the proposed final rule mandating the electronic filing of export information through the Automated Export System in time for the development of exports in ACE.

• Many of the details of ACE are in flux. This plan will need to be modified, perhaps substantially in the future.

Census Bureau Business Processes

Import business processes to integrate with ACE/ITDS, including “As Is” and “To Be”:

• Data Collection – by the completion of ACE/ITDS Census expects to be collecting all of electronic import information through ACE/ITDS including entry summary, foreign trade zone admissions (more detail below), vessel repairs, and bunker fuels. Currently, there are still some transactions that cannot be reported electronically. By the completion of ACE in 2011, all import and export transactions will be able to be reported electronically through ACE.

• Editing – enhanced up-front edits from current system will be incorporated in ACE/ITDS to ensure that the data are complete and accurate.

• Filer Overrides – The burden of confirming records flagged by Census edits will be shifted from CBP to the trade community. Currently, although the trade community can correct an erroneous entry flagged by Census Bureau edits, only CBP can "override" that edit and allow the record to be accepted. ACE will incorporate a system whereby the trade community will submit override codes explaining why the data are acceptable.

• Corrections – Census expects to receive electronic corrections from the ACE, corrections known and submitted shortly after filing and "reconciliation" corrections, which are typically made on an aggregate basis several months after entry. Neither of those is currently available in a usable electronic form. (Reconciliation worksheets, while submitted electronically, are not done in a form that Census can process without manual review and intervention.) Census also expects to receive all corrections regardless of in which ACE module they are made.

• Reference Files – ACE/ITDS will incorporate processes by which the Census Bureau can maintain the reference files for which it is responsible (for example, the parameters used by Census edits). With more agencies involved in ACE/ITDS than with ACS, the responsibility for maintaining some of the files (such as foreign port codes) that the Census Bureau maintains in ACS may be moved to the source agencies.

• Extraction – Census expects to revamp the current ACS process. Census plans to do little or no reformatting on the ACE system, instead moving those functions to the Census Bureau to give us more flexibility and the ability to react more quickly to issues that arise.

• Foreign Trade Zone Process – Census is currently in the process of moving companies from the Census Bureau's Automated Foreign Trade Zone Reporting Program (AFTZRP) to the new CBP e-214. While Census expects to eliminate the AFTZRP during the next calendar year, some companies continue to file paper documents.

• Reports, Analysis and Ad Hoc Extractions – Census expects to have great flexibility to monitor the trade data, do special tabulations and ad hoc extractions in ACE, primarily though not exclusively, through the portal.

Census Bureau exports business processes to integrate with ACE/ITDS, including “As Is” and “To Be.”

• The export business processes to be integrated are essentially the same as those for imports. There are several important differences, however, between imports and exports. The authority to collect the Shipper's Export Declaration (SED), collected electronically through the Automated Export System is collected under the Census Bureau’s Title 13 authority (OMB Clearance No.0607-0152). Title 13 requires that the Census Bureau not disclose this information unless the Secretary of Commerce (delegated to Census Bureau Director) issues a National Interest Determination.

• Access to data in ACE - The trade community and several ITDS Participating Government Agencies (PGAs) are pressing to have AES information loaded into the ACE portal in the same manner as import data have been loaded. However, Title 13 imposes unique restrictions upon access to SED information. These restrictions will require programming changes as well as changes to the MOU procedures.

• Low value exemptions - The CBP has proposed changes to some of the Census Bureau’s exemptions from export reporting requirements for low-valued goods. The changes proposed would significantly increase the Census Bureau’s costs. The Census Bureau cannot yet estimate how they would impact its ACE/ITDS costs.

• Other exemptions, such as the exemption for exports to Canada, may impact other PGA requirements. Because nearly all ACE Support Team resources are focused upon imports, these issues have not yet been discussed by the developers, CBP and the PGAs.

• Post-departure filing - The CBP has proposed changes to the existing AES post-departure filing (Option 4) program negotiated between CBP, the Census Bureau and the trade community. Whether the post-departure filing program is still viable in the current security environment and if so what changes are needed must be resolved prior to integrating AES into ACE.

• Internet Reporting - The Census Bureau has developed an extensive set of free programs allowing filers to submit information to AES without investing in communication lines, software or programming, and to provide for integration of AES filing into company customer service programs, such as air express couriers shipping software. The Census Bureau and CBP need to determine the best way to maintain these services in ACE/ITDS. As of July 2007 statistics, 97 percent of AES filers filed via these Census Bureau Internet reporting programs.

• These issues need to be resolved with CBP and any other PGAs that have export data collections that will be integrated into ACE. However, there have been few discussions to date on these issues due to an ongoing data sharing impasse between the Department of Homeland Security and the Commerce Department and the fact that CBP has not yet focused on export requirements in ACE.

• It is possible that Census may need to reengineer its edits and analytical review if Census must take over significant editing responsibilities from CBP under the Edit Lite scenario. These changes to the transaction level data would not be available to CBP or other PGAs. Depending upon the edits dropped by CBP, this could, over time, lead to a substantial increase in analytical and post-publication investigations if filers react to the loss of these edits by either being less careful in their filing or by falsely claiming duty provisions to which they are not entitled.

Census Bureau Issues/Concerns

• Edit Lite – CBP has recently announced that some of the functionality in the ACS will not be carried over to ACE. While CBP has not identified the edits that will be dropped, what the Census Bureau has been told appears to indicate that some of the edits it counts on to ensure that it gets accurate usable data will be dropped. These include verifying that the all required HS codes are reported for transactions requiring more than one commodity code, and that both the country and commodity are eligible for claimed duty reduction or additional duty provisions. When these records are rejected by ACS, the filer is required to correct the error before the entry summary is accepted. If these errors are not caught by ACE, the Census Bureau (and most likely other PGAs as well) will have to either recreate these edits at considerable time and expense or risk publishing data showing trade preferences being granted to ineligible countries or commodities.

• Paper Filing – The Census Bureau must key all statistical paper documents received. As the number of documents has dropped, the per document costs of its keying operation has skyrocketed. Census would like ACE to provide for filing any import transaction electronically and to mandate electronic reporting of all import transactions. Failure to do either of these things will force the Census Bureau to maintain a very expensive keying operation and deprive other PGAs of complete access to such records. (Paper documents will be scanned, but the information will not be included in data queries or extractions and cannot be electronically processed.)

Census Bureau Performance Measures:

• Increase electronic reporting of imports by 0.5 % by one year after full implementation of ACE.

• 50 % of commodity analysts will have access to the ACE portal by one year after A2 implementation for analytical research.

• Complete detailed export requirements by January 2009.

• Meet at least 95% of CBP deadlines for ACE development (requirements submission, testing, etc.)

Census Bureau Resources Required

• Significant staff resources are currently being expended on ACE development including assigning staff to work with the ACE Support Team when needed. Census expects this to continue throughout the development of ACE.

• Staff resources will probably increase when AST/CBP turn their attention to exports. There are significant issues in exports (see above) that do not apply to imports and that will not be resolved quickly. In addition to subject matter staff, this will include significant senior management and legal counsel support.

• Census may also incur significant additional costs depending upon which edits CBP drops under Edit Lite. Beyond the initial requirements and programming work, there could be substantial ongoing staff resources required to resolve problems that are currently resolved before Census receives the data.

• Reimbursements to CBP – unknown at this time. Based on earlier statements, Census does not anticipate having to pay for any functionality on ACE. However, there has been no final determination of how ACE/ITDS costs will be allocated.

Census Bureau Schedule

International Trade Administration (ITA) / IA Import and Export Programs:

The International Trade Administration’s utilization of the International Trade Data System (ITDS) is limited to one of its constituent agencies, Import Administration (IA). IA administers the U.S. antidumping (AD) and countervailing duty (CVD) programs, which serve as trade remedies designed to offset foreign price discrimination or subsidization. The following program units within IA are involved in, and affected by CBP’s cargo and entry modernization effort:

• IA Operations - responsible for enforcing the AD and CVD laws through the conduct of investigations and reviews. IA Operations conducts comprehensive analyses of case information submitted by respondent foreign companies, calculates AD/CVD margins for purposes of duty collection, and operates the Customs Unit, which serves as IA’s liaison with CBP.

• IA Office of Policy - formulates policies governing IA’s administration of the AD/CVD statute. Three units, the Steel Import Monitoring and Analysis, the Statutory Import Programs, and the Bilateral Agreements Unit, communicate with CBP in their normal course of business.

• Office of Textiles and Apparel (OTEXA) - oversees programs and strategies to improve the domestic and international competitiveness of the U.S. fiber, textiles and apparel industries and determines when market disruption factors exist in the domestic fiber, textiles and apparel marketplace. OTEXA uses the ACE portal in to pull reports and perform queries. Currently, OTEXA’s use of ACE is limited, since ACE does not yet provide it with the functionality it needs.

• Foreign Trade Zones (FTZs) - Foreign-trade zones are designated sites licensed and monitored by the FTZ Board. FTZ Board procedures allow domestic activity involving foreign items to take place in an FTZ prior to formal customs entry. Duty-free treatment is accorded items that are re-exported and duty payment is deferred on items sold in the U.S. market, thus offsetting customs advantages available to overseas producers who compete with producers located in the United States. FTZ activity also remains under the direct supervision of CBP.

ITA/IA Statutes and Regulations:

IA operates its AD/CVD, textiles and FTZ programs under various statutory, regulatory, and policy requirements. These requirements will also govern the use and functions of activities performed within ACE. The following is a list of the main statutory, regulatory, and policy requirements under which IA operates; an exhaustive list along with the authority granted by these requirements is included IA’s and FTZ’s CONOPs.

• AD/CVD

o Title VII of the Tariff Act of 1930, as amended

o Uruguay Round Agreements Act (URAA)

o Antidumping Duties/ Countervailing Duties, Final Rule (19 U.S.C. 351), May 19, 1997

• OTEXA

o Executive Order 11651 of March 3, 1972, Textile Trade Agreements

o Executive Order 13191 of January 17, 2001

o Executive Order 13277 of November 19, 2002

• FTZ

o FTZ Act of 1934, as amended

o FTZ Regulations (15 C.F.R. Part 400)

ITA/IA Information Collections and Rulemaking Actions:

At this time, ITA/IA does not anticipate any Paperwork Reduction Act (PRA) information collections or rulemaking activities to be necessary for purposes of automating its business processes under ACE.

ITA/IA Business Processes to be Automated by ITDS, including “As Is” and “To Be”:

ITA/IA identified more than 30 business processes in its “as is” state. Not all of these business processes will be relevant in ACE. In the “to be” state, IA identified the following 18 business processes relevant to the usage of the ACE portal (listed below).

• Duty-free Benefit for Insular Watch Producers

• Duty-free Entry of Articles for the Handicapped

• Extract and Aggregate Data for Publication

• Monitor Suspension Agreements

• Monitor Cement Agreement

• Determine Admissibility – Uranium

• Administer Quota or Special Provision

• Determine Admissibility Under Quota or Special Provision

• Prepare and Transmit Email Messages

• Update AD/CVD Module

• Request Entry Documents

• Protest Process

• Process Changes to HTS Numbers

• ACE Data Query

• Create and Maintain Zone Account Master Data and Zone Reference Data

• Perform a Data Review and Monitoring of Ongoing Zone Activity

• Validate Zone Account Information

• Track and Report on the use of the FTZ program

In addition, ITA/IA identified and submitted to the ACE Support Team (AST) a list of the reports and queries that it desires under ACE. A list of such reports and queries is provided below:

Report Worksheets

• AD/CVD Tariff Number Report

• OTEXA Wool TRQ Report

• CBP E-Mail Instructions and Status Report

• OTEXA Quota Detail Data Report

• OTEXA Quota Summary Data Report

• Duty-Free Articles for the Handicapped Report

• Jewelry Report

• Byrd Amendment Claims Report – Disbursements

• Protest Report

• Evasion Report

• OTEXA Textile Detail Data Report

• CDSOA Report – Uncollected Duties

• CDSOA Report – Clearing Account Balances

• Consumption Entries by Foreign Trade Zone Identifier

• Consumption Entries by Foreign Trade Subzone Identifier

• FTZ Consumption Entries by Tariff Classification Number

Standard Data Queries

• Entry Summary Data Query

• Case- and Company-Specific Query

• Manifest Data Query

• Liquidation Status, Duties and Interest Collected Query

• Ad Hoc Query by FTZ Identifier

ITA/IA System Interface

Unlike other government agencies, IA will not have a system-to-system interface with ACE. Similar to today’s environment wherein IA inputs information into and communicates with CBP via ACS, IA will continue to use CBP’s own system to input case-specific information and will communicate with CBP electronically via the ACE portal.

ITA/IA Performance Measures:

• Percent increase in the number of data queries processed by IA, tracked quarterly.

ITA/IA Resources Required

Currently, ITA/IA does not expect to incur any ACE-related expenditures, which CBP staff have confirmed. It is possible that CBP may introduce user fees to access the ACE portal at some point in the future. Although, in order to ensure that the requisite number of IA staff will be able to access ACE, additional security clearances may be needed. There are no other resource requirements.

ITIA/IA Schedule:

NOAA Fisheries Import and Export Programs:

NOAA Fisheries Service currently implements several trade-monitoring programs under the requirements of international agreements and associated U.S. implementing legislation. Trade-monitoring programs consist of blanket permits issued to importers and/or transactional permits issued for each shipment. Permitted importers have a responsibility to submit transactional permits (certificates) and periodic summary reports to NOAA Fisheries. Specific commodities subject to monitoring include primarily the following:

• bluefin tuna

• swordfish

• yellowfin tuna

• bigeye tuna

• Antarctic toothfish

NOAA Fisheries Statutes and Regulations

• International Treaties and Conventions

NOAA Fisheries Information Collections and Rulemaking Actions:

NOAA Fisheries has several trade-monitoring programs that include information collections subject to OMB approval under the Paperwork Reduction Act. These collections include:

• blanket permits

• transactional permits

• periodic dealer reports

In most cases, NOAA Fisheries expends considerable staff time to perform data entry of information submitted in hard copy. It is anticipated that the public reporting burden will decrease with electronic submissions, primarily through a decreased time per response. Additionally, cost savings to NOAA Fisheries will accrue when data entry is eliminated. NOAA Fisheries plans to undertake an omnibus rulemaking that will consolidate and/or amend all existing regulations for trade monitoring programs so as to allow electronic submissions, either directly to NOAA Fisheries or through the ACE portal.

NOAA Fisheries Business Processes to be Automated by ITDS, including “As Is” and “To Be”:

As Is

• No processes are currently automated with CBP. Under an existing MOU, NOAA Fisheries receives a monthly CD-ROM from CBP that documents entries for selected seafood commodities. NOAA Fisheries uses entry summaries to perform a cross-check with blanket permits issued and transactional permits received. Entries without corresponding permits are flagged for investigation, although the product has already been released by CBP and is not likely available for re-delivery. The importer of record is responsible for addressing any reporting discrepancies and is subject to NOAA Fisheries enforcement procedures.

• In cooperation with the ACE Support Team, NOAA Fisheries has completed its Functional Assessment which describes the “As Is” business processes of the several trade monitoring programs. The next step will be to review each of the business processes to determine how the submission of, or access to, information can automated through the ACE Portal. Currently, most blanket and transactional permits are issued/collected via fax or mail.

To Be

• ACE will perform a system-to-system cross-check with NOAA Fisheries National Permitting System to verify that blanket permits have been issued to importers for those seafood commodities subject to import monitoring.

• Customs brokers and/or importers will attach electronic versions of transactional permits directly in ACE, and NOAA Fisheries will retrieve these documents electronically.

• Electronic retrieval and validation of transactional permits by NOAA Fisheries for commodities requiring pre-arrival notification and pre-approval.

• Data entry of blanket permits, transactional permits, and periodic dealer reports information will be performed electronically wherever possible.

NOAA Fisheries Performance Measures:

• Percent increase in compliance with permitting requirements (blanket and transactional) – Quarterly

• Percent reduction in the number in missing data elements – Quarterly

• Percent increase in number of shipments cleared on a pre-arrival basis – Bi-annually

• Average reduction in number of days required for Customs release of inbound shipments – Bi-annually

• Percent reduction in the number of FTEs required for data entry. – Bi-annually

• Percent reduction in the number of imports for which admissibility criteria are not met – Quarterly

NOAA Fisheries Resources Required

NOAA Fisheries has designated a senior executive responsible for ITDS integration. Additionally, an ITDS working group has been established that consists of staff responsible for the respective trade monitoring programs, for data management, for information technology, and for rulemaking support. Funds have been applied to existing IT contract vehicles to provide systems development assistance for permitting and reporting programs. NOAA Fisheries will examine the need for additional staff and funding in FY09 given the accelerated ITDS integration schedule.

NOAA Fisheries Schedule: