Canada-U.S. Blog Trade Lawyers Cyndee Todgham Cherniak and Susan K. Ross

More Changes Are Coming

Posted in Agriculture, Customs Law

Originally published by the Journal of Commerce in September 2011.

In the August 17, 2011 Federal Register, Customs announced it was eliminating paper courtesy notices of liquidation (CBP Form 4333-A). It claims to be spending $3+ million a year in printing and mailing these notices which advise importers when individual entries are liquidated or finalized. Customs will now store data in ACE about entries filed in the current fiscal year and go back historically four (4) years and no more due to storage size limitations. Older data can be obtained through an ABI query, or via the ITRAC or Importer Trade Activity reports which Customs will provide. If you are an Importer Self-Assessment member, there is no charge. Otherwise, there is a cost associated with getting the reports that is currently assessed per IRS number per year.

The proposed change raises the question of where should importers now go to get their liquidation data? According to Customs, it wants every importer to sign up for an ACE Secure Data Portal Account and obtain the information that way, see http://www.cbp.gov/xp/cgov/trade/automated/modernization/ace_app_info/ for more details. The deadline to do so is September 30, 2011 at which time this proposal takes effect. Of course, if you file paper entries and do not use ABI, you will still get your liquidation notices. Here are some factors to consider about what this change means to importers.

First, something like 95% of all entries are filed through ABI, the Automated Broker Interface, which is part of the Automated Cargo System (ACS), the old computer system. ACE or the Automated Commercial Environment is the new computer system, the one that has long been promised, but is very late in being delivered, and then with far fewer features than originally promised. As we go to press, the M-1 drop, the one providing sea and rail manifest data to be tied to release data, is supposed to be activated this week, but was already delayed several times. Without this manifest data in the system, ACE cannot be fully utilized so a good deal of effort has been put into its development and implementation by Customs.

Second, it was only a matter of time (and cost) before we started hearing Customs say ACS had to be turned off as the agency cannot continue to support both systems. In comments to the trade recently in Los Angeles, Commissioner Bersin made clear that will happen. However, wisely, Customs is not going to unilaterally decide when. According to Commissioner Bersin, the demise of ACS will be decided in concert with the trade, but keep in mind Commissioner Bersin was a recess appointment, meaning if the U.S. Senate does not get off its tusch and affirm him, he will leave office when this Congress ends its term in December. One has to hope he gets affirmed and, if not, that his successor is as level-headed about where the agency needs to go.

Third, these courtesy notices of liquidation are not the official or legal notice issued by Customs that a given entry has liquidated. The legal notice (the one required by statute) remains the bulletin notice which is printed and posted at each Customhouse, see 19 C.F.R. 159.9. How much longer will that practice continue? We are now hearing the Port of Los Angeles/Long Beach is going to run a test from October 5, 2011 through December 2, 2011 in which it will save the official liquidation data to a computer which will be made available for access and viewing at the Customhouse. If one wants copies of data for a specific entry, it will be necessary to ask a CBP staff person to provide it. Access to the computer and providing the requested print-outs will be provided free of charge, but how much longer will it be before Customs proposes to change the law and eliminate these bulletin notices altogether?

The proposal as made by LA/LB is not clear when it comes to whether the printed bulletin notices will continue to be published and posted. One would think so, since the law has yet to change, but the real concern is the inconsistent data currently available. The data in ACE regarding entry liquidation does not always match the data in ACS. Which one is official? correct? ACE currently does not contain a history about an entry, so if it was scheduled to liquidate and then suspended, that information is not available, but is critical when protesting. Very few people still go to the customhouse to check liquidation data so accuracy of data is more critical now than ever before. If you do not have an accurate liquidation date, you may lose your right to protest. What is Customs doing to upgrade the quality of the liquidation data it is providing in ACE? Since it is generally the lawyers who need this data as most often they are the ones dealing with challenging Customs’ determination, it has been suggested there should be a lawyers portal in ACE.  It is highly unlikely Customs would find the funding to provide such a feature, especially since importers are free to give their lawyers (and other designated individuals) access to their ACE accounts.

Another thought was importers should rely on their broker for the data. Since the proposal to eliminate courtesy notices is not a new one, the appeal of this option has not gotten better over time. Such an approach raises potential liability issues for brokers, such as missing an entry or reporting the wrong data, and fails to address the hurdle of what happens when the parties part ways acrimoniously. Why not create a portal in ACE where all the liquidation data is posted? Access could then be controlled by a combination of IRS number and password. If we are truly in the age of computers, let’s rely on them instead of patchwork solutions.